Unlocking businesses potential by implementation of the ‘Blueprint’

Thursday March 26 2020



Raphael Mgaya

Raphael Mgaya 

By Raphael Mgaya

Just as job seekers compete in the jobs market, so, too, do countries. In a globalizing world, countries compete against one another for capital and technology, poor and rich alike. It is a race for survival. It is not different from the race in the jungle between a lion and a gazelle. This phenomenon has been well captured by the Ruler of Dubai, Mohamed Bin Rashid Al Maktoum in his book My Vision: Challenges for Race of Excellence he points out that each day a gazelle must outrun the fastest lion in order to survive, equally a lion, in order not to starve it must outrun the gazelle. The same way is for nations, from time immemorial, nations that were faster than others in the race for attracting or accumulating capital or technology have prospered while their counterparts faltered.

Modes of accumulation of wealth or capital have evolved and changed throughout history. Bourgeoisie thinkers had it that the original wealth was accumulated through the abstinence, hoarding and savings undertaken by the diligent, intelligent and frugal elite as opposed to lazy rascals who had nothing but to sell themselves.

Of course, this thinking did not square well with Marx, who criticized it in his Critique of Political Economy as nursery tale that was aimed at obscuring and legitimizing the emerging capitalist relations.

Some of the notorious ancient means of accumulation of wealth, which are more or less universally acknowledged were the use of slave labour and oversea plunder mostly through colonization.

From several centuries ago to the recent times, countries deployed and still deploy protectionist trade policies to protect the national manufacturers and other industries. In England, laws against vagabondage were passed and enforced whipping the disposed producers into factory as a wage labourers.

In a technologically-driven globalized world, nations struggle against one another for capital, talents and technology. The means with which nations compete in this struggle is the creation of a good environment for doing business. As capital looks for cheaper labour markets and raw materials, Africa is becoming acknowledged as a new frontier, where the raw materials and labour are relatively cheap. With the youngest population on earth, burgeoning middle class and expanding infrastructure, Africa is unrivalled in terms of opportunities for business expansion. Tanzania, being among the top ten biggest economies in Africa in terms of gross GDP and the sixth most populous country in Africa, it could tap into these immense emerging opportunities. However, for this to happen, Tanzania must create an attractive business environment.

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The World Bank’s Doing Business Report of 2020 reported that Tanzania has a less friendly business in the East African region, pointing out that starting of the new business was associated with challenges relating to cumbersome procedures, debilitating fees and time-consuming process. The World Bank’s Doing Business 2020 Report shows the following results among 190 economies for East African States with their positions in the brackets, Rwanda (38), Kenya (56), Uganda (116), Tanzania (141) and Burundi (166). This means, Rwanda and Kenya are leaders in the region while Tanzania and Burundi trail from afar. In terms of its potential, in terms of geographical size, population (market) and natural resources wealth, Tanzania is a ‘sleeping giant’ of the region.

There is a ray of hope at the end of the tunnel though. In April 2018, Tanzania published the Blueprint for the regulatory reforms to improve business environment in the country (Blueprint). This came after a recognition by the authorities that the business environment in the country was not attractive to both local and foreign businesses.

The Blueprint seeks to address the legal and regulatory challenges facing the businesses in the country, including the multiplicity of regulatory bodies with consequent conflicting roles and plethora of charges and fees which has proven quite burdensome to businesses. For instance, a 2016 report by the Confederation of Tanzanian Industries showed that there are more than 16 government authorities at the Dar es Salaam port each of them charging separate fees. The Blueprint also points out to the duplicative roles among various government agencies. For instance, inspection for illegal workers at workplaces is undertaken by various institutions, namely: the police, the labour office and the immigration department. This has been a source of nuisance, inconvenience and wastage of time for business owners. Besides, the overlapping of roles of OSHA and the Fire and Rescue Force on the one hand and OSHA and TFDA, TBS and the Tanzania Dairy Board(TDB) on the other in inspection of premises and the accompanying exorbitant fees, has been a long time concern for businesses.

The government’s initiative to address some legal and regulatory challenges facing businesses is praiseworthy and will attract foreign capital, technology and talent and ultimately unlock the country’s economic potential and accelerate the government’s industrialization agenda. Crucially, it must be emphasized that, time is of essence in this race. The Blueprint was published two year ago, but we are yet to see its full implementation. The Doing Business Report shows Tanzania’s business environment has deteriorated since 2017. The historical position of Tanzania among 190 economies in the world in the Doing Business Report over years since 2017 as shown in bracket for each year were 2017 (132), 2018 (137), 2019 (144) and 2020 (141).

The weaknesses pointed out by the Blueprint must be addressed through reforms of the existing legal and regulatory framework as a matter of urgency if the economic potential of our great country is to be unleashed anytime soon. It is relishing to know that the private sector is being involved in the processes towards the implementation of the Blueprint, but it is important to emphasize that, involvement of private sector is not in itself sufficient unless the actual concerns and inputs of the private sector are taken on board during the implementation.

Raphael Mgaya is the executive director of Tanzania Association of Oil Marketing Companies(Taomac)

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