OPINION: Don’t punish business for state failings

Morogoro Urban MP Abdulaziz Abood has been in the news lately following the stated goal of the government of President John Magufuli to repossess privatised factories that are no longer operating.

Our sympathies are with such businesspeople (and there are a number of them. Abood gets the end of the stick as he is smack in the centre of Morogoro Municipality and is relatively more well known than the others).

We all know that if there is one thing governments do badly it is business. When a government dares to enter the business fray, the fray enters the scene too. There are many brands whose names are similar but that has not prevented the competing brands from doing well in the market.

One of the major hurdles to industries in this country is the multiplicity of laws, regulators, agencies and tax regimes. Not long ago, Forrestal Topsoe, a prominent fertiliser manufacturer, was forced to withdraw from a proposed multi-billion-shilling investment because of the challenge of dealing with a multiplicity of agencies from the national government all the way down to local government.

We have no business making the East African region a haven for international investors if we do not support local investors. As leading businessman Mo Dewji says, “We are happy to compete, and not to be shielded by government authorities from competition.”

The trouble that faces the Fifth Phase government’s industrialisation agenda remains the same. Businesses like the edible oil firm that Mr Abood bought and is reviving were grossly affected not by their inability to sustain themselves but by the failings of the government.

There is absolutely no way a sunflower oil manufacturer in Morogoro can produce oil, meet costs of production, including wages, and remit all taxes and still be able to compete in a market dominated by importers who pay no taxes and sell their merchandise for a song.

The result is that firms such as Moproco of Morogoro could hardly sell the oil they manufacture while importers made a kill. In other words, government action or inaction could have caused the failure of Moproco. To therefore blame the businessman of failing to continue operating the firm is to be grossly unfair.

In the wider scheme of things, the various arms of government have been increasingly rabid in the manner of implementing their various mandates just as the duplicity of laws has made Tanzania a businessman’s nightmare.

If you include the verbal tirades against both local and international investors, you have a veritable mix of an environment in which doing business becomes a real challenge. Despite the good intentions of Industry, Trade and Investment Permanent Secretary Adolf Mkenda, environmental impact assessments continue to be a major barrier in that they are egged against the overall cost of projects.

In a recent social media post, Prof Andrew Temu, an economist, debated the challenges that face Tanzania and said what made Mauritius an attractive investment environment was nothing more than incentives.

The Acacia Mining case, of course, reminds us that yesterday’s incentives can come back to bite you. Here is where it becomes imperative to have rigorous and progressive policies to guide not just small and medium enterprises, but also large manufacturing concerns so that their robustness overrides the interests of individual regulators or tax collection agencies.

Mr Adolf Olomi, who runs Banana Investments Ltd in Arusha, has had several run-ins with the taxman despite at least 17 compliance certificates decorating the firm’s reception area. With an employee base of over 380, Banana Investments is among the leading indigenous taxpayers. These are the kind of investors that need incentives, given that they are home-grown, repatriate no funds and contribute greatly to reducing unemployment.

The time to sit with, not circle over Abood Oil Industries like a vulture waiting to strike, is now. It is not just Abood. Industry, Trade and Investment minister Charles Mwijage needs to hold a roundtable with business to hear its side of the story.