Influx of regulatory bodies burdens industrialisation

SYLIVESTER DOMASA in Dodoma

Tanzania Private Sector Foundation (TPSF) Deputy Chairman Salum Shamte

THE influx of regulatory authorities, unreliable legislations and existing multiplex taxes is a big concern and the private sector is worried over the state of industrial drive.

Tanzania is rooting for industrial powered economy, having posted growth at 7 per cent in the last few years, however the sector is concerned that dozens of existing challenges would undermine the 2025 development target. “As a result, private sector is now in serious crisis.

The sector is in fragile situation,” Tanzania Private Sector Foundation (TPSF) Deputy Chairman Salum Shamte announced at a forum here yesterday.

Despite increased records of investments, the actual strategic investment has slowed down and several businesses are closing operations, according to Mr Shamte. He said the Private sector had been taking a backseat in industrial drive owing to poor support and coordination from the government.

“There is lack of trust between the public and private sector. There has been unsettled claim from the private sector yet the government has remained reluctant to settle the debts,” he said. Lack of sufficient consultation between private sector and the government on key decision has equally affected investment climate yielding cash crutch in the country.

A report by World Bank (WB) suggested unstable policy and laws had a serious impact on foreign direct investment (FDI). The local investors says the current tax policy is limiting competitiveness as it focus on increasing revenue collection.

Citing the recently executive order on withholding mineral sand pending further investigation, the investors says such impromptu decision won’t go well with the development ambition thus a need for comprehensive agreement between both parties.

The other areas that dominated Private Sector- Government forum yesterday was unreliable power supply, continued bureaucracies in state corridors and limited government funding at the TIB investment bank and Tanzania Agriculture Development Bank (TADB).

Mr Shamte however acknowledged the sectors readiness to support the government towards realizing its economic growth targets. Finance and Planning Minister Dr Phillip Mpango assured the private sector over the government commitment to remove investment barriers.

He said the country has made huge strides including ending tax and custom duty evasion, austerity in government spending, increase funding to development projects especially infrastructure and energy as well as addressing ghost workers cases “The government has also abolished business as usual syndrome,” he said the fifth government remain committed to working with the private sector towards attaining an industrial development.

The Finance Minister’s sentiment was however echoed by Industry, Trade and Investment Minister Charles Mwijage who rushed to defend that such decision by the government meant to improve the economy. He said a number of legislation had been in operation for years “just that the new government had moved to fully implement them.”

Mr Mwijage admitted the national is passing through a number of challenges considering more efforts currently put in place are coming as a surprise. “We’re working on the shortfalls that are why the government decided to invite the private sector to deliberate on the best approach to address such challenge for the benefit of the nation.”

TPSF Chairman Dr Reginald Mengi was of the view that industrial growth will be brought by Tanzanians and not foreigners and therefore the government and private sector must work together to realise such dream.