The ease or not, of doing business in TZ

What you need to know:

  • Welcome to Tanzania today in which, the truth is competing with alternative truth, or false news. I have no idea whether Mr Zitto Kabwe was embellishing truth as, at the time of writing, the Kigoma North legislator was said to be in and out of the hands of police and had not replied to my confirmation question, as to whether this was absolutely true.

A few days ago, Kigoma Urban Member of Parliament Zitto Kabwe claimed via his Twitter account that one entrepreneur has been forced to close shop thereby occasioning the loss of 500 jobs.

Welcome to Tanzania today in which, the truth is competing with alternative truth, or false news. I have no idea whether Mr Zitto Kabwe was embellishing truth as, at the time of writing, the Kigoma North legislator was said to be in and out of the hands of police and had not replied to my confirmation question, as to whether this was absolutely true.

Doing business continues to be extremely challenging in environments where factors that affect businesses are extraneous to business itself. You are talking here about the challenges with for instance registering a business.

Two years into President John Magufuli’s term of office which was celebrated two days ago, it would be remiss not to celebrate among others, investors, more so local investors who, have weathered the storm that is the investment climate in Tanzania, to continue steering their vessels against a very challenging environment.

In this columnist humble views, Tanzania continues to lie in the lower ranks of the Word Banks Ease of Doing Business Report due to well known factors key to which is uncertainty. If there is one thing that business does not go well with--it is uncertainty.

At No 137 in the overall Rankings, Tanzania is only ahead of Burundi and Southern Sudan in the East African region. Ahead of Tanzania is Uganda at position No 122. The leading country when it comes to business in the region is tiny Rwanda.

I was not surprised to find these last few days that there is an increasing number of Tanzanian businessmen choosing to spread their investments into Rwanda. It will not take much to establish why for all their love for good old country they are choosing to spread their wealth across. It is based on one major factor--zero tolerance to corruption.

With our own President Magufuli as a staunch anti-corruption fighter, we have to ask ourselves why two years into his presidency, we continue to register a slow climb out of the lower ranks of the Ease of Doing Business Report.

With corruption as a bottleneck accounted for, one has to agree that we have a major challenge with corruption fighting back. This columnist receives regular feedback from readers who complain about a relationship between unscrupulous Tanzanian partners and official authorities in an unholy alliance which leads more often than not to cancellation or denial of work permits. It is a familiar ground if you know what I mean.

However, other factors that deny Tanzania the improvements it deserves in growth include officialdom and government bureaucracy. This continues to exhibit itself through the current situation where senior and junior government officials do not want to take action.

Then there is a tax regime that is unfriendly to business. You see taxation is akin to feeding the cow which gives one milk. Without feed and water that cow would not give milk. This particular challenge has been on the radar of chamber of commerce among others for a long time with very little solution.

On the matter of government decree that is followed by laws that are used to take over percentages of mining operations and now the mobile companies are worrying trends.

Simply put the government must try to do all in its powers to try and rebuild its relations with the private sector--give it breathing space in which to peacefully conduct their businesses.

Rebuilding its relations with the private sector will make sense given the fact that we are always out there inviting investors to our country.

As we celebrate two years of an unconventional leadership that does not condone corruption nor tolerate lethargy, we have to take a different view to how we are going to deal with investments be they local or international.

The government, on its own, has no capacity to create jobs not wealth that can sustain the economy. It is time now not to demonise those that are saying we need a clearer understanding of what it takes to do business in Tanzania.

Lets walk the talk to improve the ease of doing business in Tanzania. It can be done.

Kasera Nick Oyoo is a research and communications consultant with Midas Touché East Africa.