BY CTI executive director, Christine Kilindu, on behalf of CTI, Vibindo Society and TCT, FRIDAY, 6TH JULY 2012, Dar es Salaam
1.
Introduction
The Confederation of
Tanzania Industries, the Voice of Industry, is a private sector association
whose main objective is to advocate for an enabling business climate within
which Tanzania’s businesses can become competitive. Competitive businesses are
key to national wealth creation: they generate employment and pay taxes that
are essential for economic development. We are not alone in our endeavour of advocating
for a conducive business climate. That is why today, we have teamed up with two
other business organisations: the Tourism Confederation of Tanzania (TCT) and VIBINDO,
our allies, friends and strategic partners in the cause of our advocacy. We may represent different constituencies,
but our mission is the same: we want our constituents to do their businesses
with ease and at affordable cost.
2.
Tanzania’s
Ranking in the World Bank Doing Business Report
It is true that the public
and private sectors are talking to each other, both of them pronouncing the
need to make Tanzania the investment destination of choice, for local and
foreign investors. Yet, follow through and outcome of the engagement seem to
bring about little impact as can be seen from the World Bank’s Doing Business Reports
in which Tanzania’s ranking has been consistently low. From these reports, Tanzania is seen as a
difficult place in which to invest and do business.
The Business Leaders
Perceptions Report that is produced to capture specifically the views of the
Tanzanian business community also points out to the difficulty of doing
business, highlighting power, roads, water and corruption as hindrances to the
ease of doing business, among other challenges. There are other reports that carry the same
message: doing business in Tanzania is not easy.
3.
Responses
to the Reports
3.1 Government’s Response
What we in the private
sector have observed is that whenever adverse reports are sighted, the
Government forms committees and task forces to propose improvement measures. Unfortunately, after a while, the committees and
task forces seem to disappear and it is business as usual, little change is
made. Actual improvement on the ground is minimal and short-lived. A good
example is the National Steering Committee on the Implementation of the Roadmap
for Improving the Investment and Business Environment in Tanzania that was
established in 2010. At the beginning, the Committee which comprised very
senior government officials made a number of decisions that led to some improvements,
particularly at the port. In October
2011, some private sector associations, including CTI and TCT were co-opted
into the Committee.
What the private sector
observed was that reports submitted to the Steering Committee differed
substantially from what businesses were experiencing. We pointed out what the
reality on the ground was and we were all up-beat about our involvement. Unfortunately, we have not been invited to
subsequent meetings, if any have been convened.
Delays at the port of Dar es
Salaam have returned such that some shipping lines are avoiding the port
altogether while others are imposing extra charges for calling at Dar es Salaam
port.
3.2 The Private Sector’s Response
We in the private sector
also respond to adverse reports. For
example, we at CTI engage responsible ministries through correspondence and
meetings. We propose what needs to be done and agree on the way forward. And
then?? Nothing much changes. Why? We
think our engagement is ad-hoc and more, often, reactive.
There are no continuous and
consistent reminders by the private sector calling for sustained improvements.
4.
What
the Private Sector Needs
The private sector must be
serviced by sound economic infrastructure in order to do business efficiently
at affordable cost and contribute to wealth creation. Such infrastructure
includes reliable power, all weather roads and sufficient water. In addition,
an enabling legal and regulatory framework is essential.
4.1 Infrastructure
We appreciate that power,
roads and water demand strategic long term planning, heavy public and private
investments and a commitment to implement planned projects. Calls for improved
economic infrastructures were being made by CTI and VIBINDO as early as the mid
1990s and TCT since 2002 because no business can operate without reliable and
affordable power supply, efficient transport infrastructure and adequate water
supply. We urge more public and private
sector involvement and investment in the development of power, water and transport
infrastructure because although there are ongoing projects, there is still a
long way to go and the pace is slow.
4.2 Enabling
Legal and Regulatory Framework
Businesses grow and develop
if they are governed and monitored by an enabling legal and regulatory
framework. Though this factor is not generally understood and acknowledged, it must be pointed out that the
lack of strict enforcement of properly established laws and regulations
accounts for a lot of corruption in Tanzania.
There is too much discretion for influential, powerful people to get
exemptions (protection) from the law that are granted by high people in office,
usually politicians and very senior civil servants. Politicians and civil servants have too much
power to flout the law. The practice is rampant in Tanzania and is contributing
to huge losses of government revenue. The practice causes injustice because it
shields latent common criminals. Not only
that, corruption is a cost to businesses and brings about a distorted playing
field that is tilted in favour of those who benefit from such malpractices.
Unfortunately, corruption
is spreading even to lower rank civil servants.
Businesses are visited by inspectors from multiple authorities. We see
little value for numerous inspections by different authorities which often end
with threats of closure of businesses unless some payment is made. Many of
these inspections are avenues for harassment, extortion and corruption.
4.2.1
Improving the Framework
In the year 2000, CTI
prepared a report on the legal and regulatory framework which pointed out to
numerous laws and regulations governing business. Some of the laws and regulations contradict
each other, confusing those who have to comply. That report contributed to the
formulation of Business Environment Strengthening for Tanzania Programme (BEST
Programme). Because more needs to be done, CTI is conducting another study with
BEST-AC’s support to propose a better way of regulating businesses. Our
consultants have been to Ghana and Rwanda to study some best practices in
regulation. We will certainly propose the adoption of the obligatory regulatory
impact assessment (RIA) and/ or Regulatory Guillotine. These are mechanisms
that other countries, including some East African partner states, have successfully
embraced to enhance the ease of doing business. A consequence of embracing such
mechanisms is improved economic performance in those countries.
5. Why
We Support Wacha Masihara
As mentioned earlier, there
is often little follow through on the private sector’s representations and
submissions to the Government as issues tend to be forgotten or just ignored. That is why TCT, VIBINDO and CTI are most
delighted to be associated with Wacha
Masihara Programme that we are launching here tonight. We believe that a
sustainable media campaign that constantly points out, in a humorous way, the misery and hassles of doing business and
what needs to be done to make things better, will be the beginning of the positive changes
we are all hoping for.
We wish to recognise and
commend all artists who took the trouble and spent time to participate in the cartoon
contest. The number of contestants
testifies to the interest and understanding of the subject at hand. We look
forward to knowing the winners whose work will be used in the campaign. The use
of cartoons will add zest and humour to the campaign. Tanzanians laugh at messages that cartoons
convey. They don’t just laugh, but they also
appreciate and acknowledge the messages. The cartoons will ensure that the
messages are not quickly forgotten.
6. BEST-AC’s
Role in Supporting the Private Sector
We are indebted to BEST-AC
for the support it is rendering to the private sector. This support has been in
the form of funding for undertaking various studies, training and other
capacity building projects to improve the private sector’s advocacy. Today,
BEST-AC is taking our advocacy to another level, the use of the media. Nobody
can deny the power of the media. Through the media more people will be informed
and understand what businesses are going through. We are certain that once the
public at large understands and laughs at what businesses are subjected to, it will
add its voice and support to the need of making Tanzania more business
friendly. We are hopeful that the
campaign may someday be rolled out outside Dar es Salaam so as to expose bad practices
in implementation, interpretation and enforcement of laws and regulations that
govern businesses.
We thank BEST-AC for
funding this campaign and for their choice of the media consultant, Indigo-MTPC
that coordinates the exercise. We look forward to a hilarious campaign that
will send out our message calling for a better way of regulating businesses and
improving the business climate. Doing business should not be a mystery or
misery. Doing business should be enjoyed and appreciated as businesses create
the wealth that every nation aspires for.
We, representatives of the Tourism
Confederation of Tanzania (TCT), VIBINDO and Confederation of Tanzania
Industries (CT) commit our support to this campaign and our availability.