$2mn funding boost for Tanzanian manufacturing sector

Tanzanian manufacturers have a reason to celebrate as they can now access a significant $2 million in funding through a partnership between the Confederation of Tanzania Industries (CTI) and the UK government’s Manufacturing Africa program. This initiative is part of a broader £1.2 billion foreign direct investment goal aimed at boosting the growth of the manufacturing sector in Tanzania. To delve deeper into this groundbreaking partnership and its potential impact, CNBC Africa's Tabitha Muthoni spoke with Ali Selemani, Partner at BDO East Africa. Selemani shed light on the importance of the $2 million ticket size, emphasizing that it was carefully chosen to support as many businesses in Tanzania as possible. The ultimate goal for Tanzania is to mobilize between $1.25 million to about $600 million, with several deals in the pipeline. While Tanzania has not yet closed any deals, other countries under the Manufacturing Africa program have successfully secured funding, creating thousands of new jobs. Selemani highlighted that the $2 million funding is part of the larger £1.2 billion investment pool designated to bolster the manufacturing sector across Africa, ensuring significant investments in equity or debt. In terms of measuring success and return on investment, Selemani stressed the significance of achieving developmental impact, particularly in sourcing raw materials sustainably. The program focuses on supporting manufacturers with technical assistance to enhance investor readiness through business planning, financial modeling, and market intelligence. Additionally, environmental considerations such as green business practices are becoming increasingly important for attracting investors, aligning with global ESG standards. Manufacturers in Tanzania seeking access to this funding must meet specific criteria such as operating in the country, demonstrating a commitment to expanding their businesses, and aligning with key sectors including agribusiness, forestry, light manufacturing, trading, and logistics. The program does not provide direct funding but aids manufacturers in preparing for and securing investment. Selemani also highlighted the challenges faced during program implementation, including delays in gathering information and misunderstandings about the program's role, with manufacturers mistakenly viewing Manufacturing Africa as a lender rather than a facilitator of investor-led projects. Enhancing corporate governance and aligning on-ground operations with proposed business plans are key areas of focus. Despite these challenges, the program has been well received in Tanzania, with engagements ongoing with key stakeholders to ensure the success of manufacturing in the country and the broader African region.