Prevailing business environment under scrutiny

Dar es Salaam & Dodoma. Unpredictable business environment has been cited as a major barrier that scares away both local and foreign investors.

This was disclosed yesterday at the ongoing parliamentary session in Dodoma and the University of Dar es Salaam Business School (UDBS) when marking the 14th Operation Research for Sustainable Industrial Development in Tanzania. The Member of Parliament for Ilala Constituency (CCM), Mr Mussa Azan, called on the government to address deficiencies in the business environment, particularly tax issues, which he said have forced some investors to close their businesses.

In his contribution on the proposed 2019/20 Development Plan, Mr Azan said the country’s taxation system for importers at the Dar es Salaam port was unfriendly for traders and transporters.

“The cost of a 20-foot container through the Dar es Salaam port costs $170 (about Sh400,000), but our neighbours Kenya charge $80 (slightly over Sh180,000),” he told the parliament.

According to him, handling charges for the same containers is $100 (about Sh230,000) in Tanzania while on the Kenyan side, the cost is $60 (approximately Sh140,000).

This, he said is a disincentive for traders from landlocked countries to import and export their goods through the Dar es Salaam port.

“Most of the traders look for affordable tariffs, so, I request the minister to revisit taxes in order to ensure that the business environment is friendly for both local and foreign investors,” he said.

For his part, Nzega Urban MP (CCM) Hussein Bashe said ministers and government experts were to blame for the prevailing unfavourable business environment, stressing they have failed to guarantee markets for agricultural products.

The firebrand legislator cited instability of cashew nuts and tobacco prices as among the factors that discourage investors.

“I think something is wrong with our ministers and experts. It is either they can’t think outside the box or someone is sleeping on the job,” said Mr Bashe.

“Well, we can’t control the global price, but we need to come up with the price stabilisation fund if we are to rescue the agricultural sector.”

However, Ukonga MP (CCM) Mwita Waitara said unscrupulous businesspeople were the ones complaining. “It is not business as usual in the fifth phase government. Businesses that do not abide by rules and regulations will collapse,” said Mr Waitara.

Speaking during the commemoration of the 14th Operation Research for Sustainable Industrial Development in the country held at the University of Dar es Salaam Business School (UDBS), researchers echoed similar sentiments.

Associate Professor of Business Analytics from the University of Nairobi, Prof Gituro Wainaina, said most African countries create conditions that make it difficult for businesses to thrive, discouraging investors and slowing growth.

“We can’t make a stride if you wake up today and find you can’t import or export something that would have been possible yesterday, there must be rules and regulations that govern the way business is conducted to ensure predictability,” said Prof Wainaina.

Another researcher, Dr Ambrose Itika, the Acting Deputy Vice Chancellor for Research and Knowledge Exchange at the University of Dar es Salaam, said: “A country cannot achieve economic development by doing business with itself, so, I think there is a need for countries to remove business barriers.”

The president of Operations Research Society Of Eastern Africa (ORSEA), Prof Isaac Mbeche, stressed the need for EA countries, including Tanzania, to create favourable conditions for businesses and have a common strategy to benefit from natural resources.

In May, the cabinet passed the blueprint for regulatory reforms to improve the business environment in Tanzania.

The blueprint contains key challenges affecting the business environment in Tanzania and a raft of recommendations to reverse the situation.

Reported by Sharon Sauwa in Dodoma and Glady Mbwiga in Dar es Salaam