The municipality lies is about 1,600 feet above sea level. With exception of very few slopes, the municipality is relatively homogeneous with gently undulating plains intersected by seasonally streams. In the extreme southern-east and western part of the district gives way to mountainous land covered by forest, commonly known as Uluguru Mountains and Mindu mountains respectively. The flat belt located in the central and northern parts.

1.3.3 Climate

Despite the variation of climatic conditions throughout the year the weather is attractive because of its high altitude.  The Municipality experiences average daily temperature of 30^oC degrees centigrade with a daily range of about 5^oC degrees centigrade.

The highest temperature occurs in November and December, during which the mean maximum temperature is about 33^oC degrees centigrade.  The minimum temperature is in June and August when the temperatures go down to about 16^oC degrees centigrade. The mean relative humidity is about 66% and drops down to as far as 37%.  The total average annual rainfall ranges between 821mm to 1,505mm.  Long rains occur between March and May and short rains occur between October and December each year

1.3.4 Physical Features

The major physical features include the famous Uluguru Mountains, which lie in the south-eastern part, and Mindu mountains, which lie in the western part.

There are three main rivers with several tributaries, which form a number of alluvial flood plains.  These rivers are the Morogoro, Kilakala, and Bigwa. Other sources of water are the Mindu Dam which was built in the late 1980s to serve for the industrial activities as well as domestic purposes

1.3.5 Soil

The Municipal is covered by loam, sand loam and clay soil. The soils vary between red lateritic earth grey sand to silt hardpan and iron crust “mbuga”. Moreover, there are sandy clay loam and reddish coloured soils on inter flute slopes that are saturated with water within 100 cms of the surface during the growing season. The majority of these soils have high nutrient contents and are considered suitable for a wide range of food and cash crops and therefore have the potential for profitable cultivation.

1.4 Demography

Like other councils in Morogoro region, the population of Morogoro Municipality has experienced a significant increase in growth. The Council’s average annual growth rate of the population during the 1978 to 1988 intercensal period was 4.6 percent, but decreased to 4.2 percent during the 1988 to 2002 intercensal period. According to the 1978, 1988, 2002 and 2012 Population and Housing Censuses the population of the district increased from 74,114 in 1978 to 117,760 in 1988 and reached 315,866 in 2012. It results in a big increase of 205,705 people or an average annual growth rate of 3.86 percent during 1988 to 2012 compared to 4.7 percent during 1988 to 2002 intercensal period. Population projection for year 2019 is 396,481 people.

1.5 Main Economic Activities

In Morogoro municipalitythe major economic activities include:

1. Industrial economic activities
2. Agriculture (both for subsistence and commercial farming)
3. Trade and commerce.
4. Livestock keeping (cattle, goat, sheep, pigs and poultry are some of the livestock kept under zero grazing in the municipal)
5. Fisheries

2.0 ANALYSIS OF MOROGORO MUNICIPAL COUNCIL STRENGTH, WEAKNESS, OPPORTUNITIES AND OBSTACLES ON INVESTMENT

The SWOT analysis was performed to seek and identifying Strength, Weaknesses, of Morogoro Municipal Council’s ability on attracting investment. Furthermore, Opportunities and Threats towards investment were clearly analyzed. The analysis was based on Criteria that will be able to target and win new potential investment such as budget, skilled and knowledge staff, ability to service investors’ needs, Leadership and management experience, stakeholder and community involvement, councils Policies, by-laws etc.

The purpose of the Organizational SWOT Analysis is:

to assess how well current institutional arrangements, meet the need for the Council to carry out proactive investment promotion

to identify whether the budget, skills, staffing levels, procedures, and processes, including Website, are adequate to the mandate and purpose of the investment promotions

Identify potential opportunities to create partnerships and alliances to strengthen investment promotion capacity

Identify any threats to smooth and effective functioning of the council level investment promotion strategies

2.1 Strengths and Weaknesses

The following table show the strength and weaknesses identified in Morogoro Municipal Council

Table 1:Strength and Weaknesses of Morogoro Municipal Council

2.2 Opportunities and Challenges

The following table show the identified opportunities and threats in Morogoro Municipal Council

Table 2:Opportunities and Challenges of Morogoro Municipal council

3.0 REASONS TO INVEST IN MOROGORO MUNICIPALITY

3.1 Presence of various tourist attractions

The following are the tourist attractions in Morogoro municipality; morning site (Old Germany settlement build in 1911), Water falls, bush shrike, three horned chameleon, Uluguru endemic toads, German tower, Lukwangule plateau, grave of Morogoro founder, curves,graves of the warriors from South Africa (ANC) e.t.c. More over the Municipality is nearby Selou game Reserve, Mikumi national Park andUduzungwa national park.

3.2 Existing infrastructure

The Municipality has a large internal network of all-weather roads making easy movement of people and goods. The road network makes it easy to conduct business activities. The Municipality is further well connected to the productive hinterland and business hubs of East Africa. Morogoro Municipality is served by a variety of communication facilities capable of servicing the business community within and outside the Municipality. Communication services that are available in the Municipality include postal services, mobile and landline telephones, private carriers and internet. The Municipality has a road network of km 582.03 of which 27.77 km are tarmac, 36.40km are covered with gravel and 517.86 km are earth roads.

3.3 Presence of Financial Institutions:

They comprise of both formal and informal institutions. Among the financialinstitutions areCommercial bankslike CRDB, NMB, Exim Bank, TPB, NBC, Standard Chartered Bank, Backlays bank Tanzania, Stanbic bank e.t.c, co-operative bank, non-bank financial institutions, financial NGOs, insurance companies, SACCOS and Rotating Savings and Credit Schemes. The wide range of financial institutions makes it easier to meet the diverse financial needs of the business community. This location provides unlimited choices of business opportunities.

3.4 Administrative support/attractive regime

Being part of The United Republic of Tanzania (Morogoro municipality in particular) is politically, socially and economically stable. Private investments are constitutionally protected as well as through international conventions. Morogoro municipality dwellers continue to live in peace and with a sense of a common national identity without ethnic or tribal division.  Furthermore, good governance that creates good environment for investment both Local and Foreign Investors

3.5 Access to Raw materials or Resources

In the municipality a variety of raw materials are available for investment. Both human and non-human resources. Both skilled and unskilled labors are available, the resources like fertile land, minerals, fruits and vegetable within municipality and the surrounding areas like avocado, water melon, coconuts, Mangoes, sweet potatoes, cassava, tomatoes, green vegetables, oranges, sugar cane, pineapples etc.; skin

3.6 Presence of Basic social Utilities

In the municipality the basic social utilities are present in many parts. The utilities like electricity, water supply

3.7 Other Reasons to invest in Morogoro Municipality

• It is the prominent intersection for both road and railway transportation systems of the entire country
• Favourable climatic conditions
• Assurance of the market for the products
• Presence of high learning institution and research institutes

4.0. MOROGORO MUNICIPALITY INVESTMENT OPPORTUNITIES AND PROMOTIONAL STRATEGIES

4.1 Investment Opportunities

Morogoro municipality is among the growing cities in the country attracting investors in social, cultural and economic development areas. Table 3 to 12 bellow highlights the potential areas for investment in various sectors in the municipality

Table 3: Proposed Investment Opportunities on Industry Sector in Morogoro Municipality

Table 4: Proposed Investment Opportunities on Livestock and Fishing Sector in Morogoro Municipality

Table 5: Proposed Investment Opportunities on Trade and Commerce Sector in Morogoro Municipality

Table 6: Proposed Investment Opportunities on Tourism, Culture, arts and sports in Morogoro Municipality

Table 7: Proposed Investment Opportunities on Environment Sector in Morogoro Municipality

Table 8: Proposed Investment Opportunities on agriculture Sector in Morogoro municipality

Table 9: Proposed Investment Opportunities on Education in Morogoro Municipality

Table 10: Proposed Investment Opportunities on Energy in Morogoro Municipality

Table 11: Proposed Investment Opportunities on Health Sector in Morogoro Municipality

Table 12: Other Proposed Investment Opportunities in Morogoro Municipality

4.2 Morogoro Municipality Investment promotion Strategies

In this part the issues that should be done in order to increase the level of investments in the city are discussed.

4.2.1 Vision

The vision of MMC is to have “A community with a higher standard of living provided with a sound and quality sustainable socio – economic services by 2025”

4.2.2 Mission

The MMC is “To offer ‘adequate’ socio- economic services to people while creating trust by managing its resource base effectively and efficiently for the benefits of the council’s residents and beyond.”

4.2.3 Investment promotion strategies

• Utilization of Agriculture, Irrigation and Cooperatives Societies Avenue
• Proper Utilization of Livestock Resources
• Utilization of Fisheries Resources
• Create enabling environment to foster business growth and marketing activities in the Municipal
• Provision of land at affordable cost (Star City will provide industrial area of 3,200 Acres, commercial 1200) Acre, (Municipal will provide industrial area of 20 Acres
• Provide incentives based on projects’ merits to encourage competitiveness enhancement activities such environmental protection
• Promote and coordinate human resources development to support industrial sector
• Coordinate basic social utilities for industrial development
• Provide information and consultation services
• CMT to enhance the links between investors with education institution in Municipality
• Coordinate problem solving

5.0 MOROGORO MUNICIPAL COUNCIL INVESTMENT PROMOTION ROADMAPS AND FUTURE PLANS

Any council aims at attracting investors at their place by creating conducive and attractive environment for investment. In other to meet the goal, the council has stated some of roadmaps towards investment promotion and development as sown in table 13 below

Table 13: Morogoro Municipal Council Investment Promotion Roadmaps

6.0 MOROGORO MUNICIPAL COUNCIL INVESTMENT POLICY AND INCENTIVES IN PLACE

6.1 Investment Policy

Tanzanian Investment Policy, Tanzania has a body of statutes that govern investment (both local and foreign), foreign trade (imports and exports), customs duties, business licensing, Investment Policy, Performance and Perceptions in Tanzania intellectual property rights, export control, competition policy, and other related matters. Tanzania investment policy was established in 1990 to govern investment in the country through developing clear policy of openness to investment, although a successful investor must still go through some procedures.

The Investment Act of 1997 was enacted to help create an attractive commercial environment, and to provide incentives for inward investment.  This act also established the Tanzania Investment Centre (TIC) as the sole investment promotion agency in the country to perform as a one-stop agency to coordinate and facilitate investment within the country

The central government and town council are interested to promote local and foreign investment to stimulate economic growth, reduce poverty and obtain more social and economic benefits especially in rural areas where most people live. This area describes investment incentives that have been adopted and there are policies, management procedures and legal framework to facilitate investors and economic activities in Morogoro municipality

6.2 Investment Incentives

Tanzania recognizes the importance of investment in stimulating economic growth and development in the country and creating a potential for sustainable future revenue generations. A number of investment incentives are granted to both local and foreign investors in a variety of sectors in order to encourage investment. The incentives provided under the law are accessible to investment in areas which are basically considered for economic development. These sectors have included agriculture, agro based            industries, mining, health, education, economic infrastructures, telecommunication, banking and insurance. With respect to investment incentives themselves, most date back to the Investment Act of 1993 (Amended in 1996). Investment Incentives and exemptions are categorized into fiscal incentives and non-fiscal incentives.

6.2.1 Fiscal incentives

Are tax measures geared to encourage investors development, these incentives are designed to assist investment opportunities due on qualify criteria outlined in the fiscal incentives. It is also known as tax incentives enhancing capital deduction and tax allowances.

Tax incentives will facilitate various investment policy objectives. Types of incentives under this category include corporate taxes, cooperative society taxes,

Re-investment allowance on capital expenditure , with-holding tax on dividends, royalties and interest, personal income tax, indirect taxes , infrastructure allowance, double dedications of specified approved costs and expenses, accelerated depreciation allowances, specified tax incentives and investment allowances on capital expenditure that include non-designated area, local participation in the equity, export oriented project , project generating significant local employment, project depending on domestic resources , sartorial linkages, new technology and training.   

Some of incentives available to the holders of certificates of incentives

On 23 June 2016, the Tanzania Parliament passed the Finance Bill, 2016. The proposed Finance Act, 2016 is subject to the President’s assent.

This Alert only highlights some changes to the Finance Bill, 2016 as previously reported. Once the Finance Act, 2016has been assented by the President, a comprehensive Alert covering all the changes in tax laws will be issued. The following amendments proposed are;

Income Tax Act, 2004 (ITA, 2004)

• Services rendered by nonresidents outside the United Republic of Tanzania are not subject to withholding tax (WHT). The proposed change of including all services in the WHT regime has been dropped.
• Petroleum operations will be subject to 30% tax, the proposed change to 35% has been dropped.

Tax Administration Act, 2015

• To validate an objection to tax decisions, a payment of the tax not in dispute or one third of the assessed tax whichever is greater remains unchanged. The proposal of payment of the whole amount of tax in dispute has been dropped. The payment to validate the objection has to be made within 30 days from the date of service of the tax decision.

6.2.2 Non-fiscal incentives

Refers to the services and assistance provided to investors by government departments to facilitate a registered enterprise's operation and entry into the market. The government will provide an assistance in order to improve investment productivity. To facilitate this government will make taxes affordable and provide investment allowances that allow investors to contribute to government revenue.

The assistance provided by government includes

• Recognition of private properties and protection against any noncommercial risks
• Automatic permits for employing an initial quota of 5 foreign nationals on the project holding Certificates of Incentives.
• Access to dispute settlement frameworks
• First track services to obtain permit such as residence and work permit
• Recognition of strategic investors status so that assistance from all government ministries is offered in timely and efficient manner
• Priority access to land, utilities, markets, transportation and communication

The incentives are broadly standardized to avoid the high administrative costs associated with large number of incentives differentiated by activities and sectors. The MorogoroCouncil LGA has expressed a desire to re-assess incentive policy so as to make it more cost-effective and allow it to benefit a broader spectrum of the LGA’s population. The LGA continues to carry out the Financial Sector Development Plan, which has increased access to financial services through the promotion of microfinance, mobile and rural banking. The government is also committed to spending the percent of the budget on social sectors and infrastructure, financing this through increased domestic revenues. It also offers a well-balanced and competitive package of fiscal incentives in comparison with other Tanzania regions

In terms of legal framework, the Tanzanian Government has a favorable attitude towards foreign direct investment (FDI) and has made significant efforts to encourage foreign investment. Generally, foreign investors use the social services available as local investors does, for instance in MorogoroCouncil the service available are transport and communication system, buildings, water tapes, electricity power.

The Tanzania Investment Centre (TIC) is the focal point for all investors’ inquiries and facilitates project startups. It further provides joint venture opportunities between local and foreign investors and disseminates investment information.

The legal framework underlying the investment policy in MorogoroCouncil is provided by the investment facilitation Act of 1996 with its amendments of 2010 and the new code designed to facilitate the promotion of all forms of investment activities in Tanzania to both local and foreign investors.

6.3 Procedures of Acquiring Land for Investment

6.3.1 Procedures for acquiring land for local investors

Under Section 19 (1) of the Land Act, 1999 citizen investors or group of them may acquire land by a granted right of occupancy or a derivative right or by obtaining a sub – lease from private sector.

The procedures to be followed by local investors when applying for farm land:

1. Application submitted to District Authority
2. Consideration by District Land Allocation Committee for land up to 500 acres
3. Recommendations by Minister of Lands for land exceeding 500 acres
4. Application approved or rejected by Minister of Lands or District Land Allocation Committee.
5. Applicant notified
6. Letter of Offer issued stipulating fees for approved application
7. Certificate of Occupancy prepared
8. Certificate registered
9. Duplicate given to the occupier of land

The procedures to be followed by local investors when applying for urban land

1. Application submitted to Urban Authority
2. Application submitted to Urban Authority Allocation Committee
3. Application approved or rejected.
4. Applicant notified
5. Letter of Offer issued stipulating fees for approved application
6. Certificate of Occupancy prepared
7. Certificate Registered by Registrar of Titles
8. Duplicate Certificate given to occupier of land

The procedure to be followed by both local and foreign investors when applying for Tanzania Investment Centre (TIC) Derivative Rights. It applies to both urban and farm land:

1. Land identification by Ministry of Lands, Urban Authority, District Authority, TIC or An Investor.
2. Land gazettement by the Ministry of Lands
3. Land designation to TIC by the Commissioner for Lands
4. Submission of application to the Executive Director TIC
5. Application approved or rejected by TIC
6. Investor(s) notified
7. Preparations of Derivative of Rights for approved application
8. Derivative Title registered
9. Duplicate Derivative title given to occupier of land.

6.3.2 Procedures for acquiring land for foreign investors

Occupation of land by non-citizens is restricted to lands for investment purposes under the Tanzania Investment Act, 1997. Under the Land Act, 1999 a foreign investor may occupy land through:

1. Derivative rights under section 20(2) of the Land Act, 1999
2. Application to the Commissioner for Lands for grant of Right of Occupancy under section 25(1)(h) and (i) of the Land Act, 1999
3. Sub-leases from private sector
4. Licenses from the Government
5. Purchase from other holders of granted Right of occupancy.

Land designated for investment purposes shall be identified, gazzetted and allocated to TIC, which shall create derivative rights to investors. Instances of grant of right of occupancy to a non-citizen are recognized under section 19(2) of Land Act, 1999. Section 22(1) (ii) allows the granted right of occupancy to be capable of being a subject of disposition.

In this later case a right of occupancy can be disposed off from one holder to another provided the land will be sold to and acquired by a non-citizen if it is for investment purposes endorsed by TIC. Another way in which non-citizen investors can acquire land is by obtaining sub-leases from the private sector or through Government Licenses.

The procedures to be followed by foreign investors when applying for grant of right of occupancy. It applies to both urban and farm land

1. Application submitted to the Commissioner for Lands accompanied by Certified copy of Certificate of Incentives issued by TIC and photograph of the applicant(s)
2. Application approved or rejected by Commissioner for Lands
3. Investor(s) notified

Note: The acquired land either for farm land or urban land is subject to payment of stamp duty, survey fee, registration fee, preparation fee and land rent charges. These fees are subject to changes with time and location.

7.0 POLICY AND INSTITUTIONAL ISSUES TO BE WORKED ON

Discussions with CMT, TIC and TCCIA representatives and other investment stakeholders raised some of the policy and institutional issues. The issues that were raised were seen as challenges to investment promotion in Morogoro municipality at local government level and central government at large. The issues are

• There is no airport strip to facilitate easy air transport by the investors
• Little amount of land that has been already reserved for investment purpose. Most of the land that are sought to be areas for investment are owned by individuals/communities for instance Star Infrastructure Development Limited under EPZA has offered 1000 acres for commercial purpose, 500 acres for dry port, 3200 acres for industries, 1200 acres for education and 100 acres for hospital investments.
• Unreliable supply of social utilities especially water supply and other services. And if they are present, they are cost-full.
• The land for investment is cost full.
• Capacity building is highly required on issues of investment to the local communities as well as the CMT especially on the procedures to invest.
• The conflicts between investors and MMC should be resolved
• Procedures to invest are bureaucratic
• Clear flow of information from top to bottom (CMT to street leaders) on the issues relating to investment.
• Procedures to acquire loan are difficult and require collateral, in which most of the farmers fail to meet those obligations
• MMC should rethink on establishing Investment Promotion Agency at council level
• Political interference on investment issues
• Lack of investment policies
• Un reliable market especially to the perishable items
• Other areas are owned by the individuals/communities but are not developed for a long time