CEOs cite three factors that affected businesses in 2017

Monday December 4 2017

Home Affairs minister Mwigulu Nchemba (right)

Home Affairs minister Mwigulu Nchemba (right) greets CEO Roundtable of Tanzania (CEOrt) chairman Ali Mufuruki during the CEOrt 2017 Annual Gala Dinner in Dar es Salaam on Saturday evening. PHOTO | SALIM SHAO 

By Alex Malanga @ChiefMalanga

        Dar es Salaam. Doing business in the country was challenging this year, according to business leaders, who have cited at least three issues that compounded the situation.

They include a liquidity crunch, imprecise customs duty and cheap imports of some products which are also manufactured locally.

Speaking during the CEO Roundtable (CEOrt) 2017 Annual Gala Dinner, CEOrt chairman Ali Mufuruki said the operating environment was challenging for a number of companies this year largely due to a liquidity squeeze.

Mr Mufuruki, who also announced that he was stepping down as CEOrt chairman, said companies were finding it difficult adapt to the current environment. “The economy is undergoing profound changes, and we are still struggling to adjust to the new normal,” noted Mr Mufuruki.

“On some days things are tough. On other days, they are even tougher, but the private sector is known for its resilience.”

Home Affairs minister Mwigulu Nchemba, who attended the gala, declined to comment.


“I have been invited just like everybody else who is here. What can I comment on?” he quipped.

Mr Mufuruki pledged to continue working with the government to improve the business environment so that businesses could thrive and build a better future for the country.

“We have come a long way. The job is far from done. I urge you to not to despair or give up altogether,” he said.

The government’s decision to take tough cost-cutting measures, including restricting foreign trips by civil servants, banning the holding of government meetings in hotels and a crackdown on corruption have been linked to a decrease in money in circulation.

Mr Gabriel Casas, CEO of Aramex Tanzania, a logistics and supply management firm, attributed poor business performance in 2017 to new regulations on customs duty.

He said there were many changes related to tax issues, citing the introduction of duty on some items this financial year, adding that rates were also unclear in some instances.

“The problem is not whether or not to pay duty, but how to deal with inconsistencies. This needs clarification to attract players in the industry,” Mr Casas said.

However, he said his business was still surviving in the market due to transparency and honesty.

Mr Mehdi Hameer, general manager of IT solutions provider Cats Tanzania Ltd, said business performance was generally low this year.

“Poor performance of the general economy is to blame. With low liquidity, customers are hesitating to spend,” he said, adding that he hoped the situation would normalise next year.

Mr Godfrey Mramba, managing partner and CEO at Bail and Alred, an audit and tax consultancy firm, said the decision by banks to reduce credit to the private sector had affected business.

“With insistence on tax compliance, we had more customers coming to us this year, but the problem was their ability to pay for the services.”

Mr Mramba said the cost of doing business was also high this year due to, among other things, “a multitude of nuisance taxes”, but added that the situation was likely to improve next year.

“2018 is likely to be better as the government is working to address issues raised by the private sector. We recently met with ministers and other senior government officials, which is an indication that the government is listening.”