UK warns on business climate as govt gives reassurances

Dar es Salaam. There could be a severe lack of confidence for business prospects over the next two years if nothing is done to improve business environment predictability, British High Commissioner Sarah Cooke said on Wednesday May 29.

Speaking during a Tanzania-Britain business dialogue in Dar es Salaam, Ms Cooke said British investors yearned for policy predictability, less bureaucracy and faster approval of new investments or projects.
But the Minister of State in the Prime Minister’s Office (Investment), Ms Angellah Kairuki, said although change was inevitable, it should be effected carefully.
“Pursuing policy reforms has its challenges and everybody should understand that the government’s intention is to strike an appropriate balance between the rights and obligations of investors,” she said at the event that brought together government officials, British investors and UK government representatives to discuss the business environment in the country.
The UK is the second biggest investor in Tanzania after China with investments valued at $5.64 billion (Sh12.9 trillion), according to Ms Cooke.
She said businesses thrive when policies and regulatory and taxation frameworks are predictable and transparent.
“Investors plan for the long term when it comes to investments, and need to manage their cash flows in the short term.
“As it is, they need to know the rules of the game will not change abruptly without consultation.”
On bureaucracy, Ms Cooke said reducing the amount of time spent by businesses to give the same information to various regulatory bodies performing more or less the same duties would improve efficiency and productivity.
She added that reducing delays in approving investments or issuing work and residence permits would also boost investor confidence.
“Doing otherwise, there is the risk that they will simply give up and take their investments elsewhere,” Ms Cooke warned.
For her part, Ms Kairuki said policy reforms were inevitable, and urged investors to be ready to adopt to policy changes so that they could make good decisions on investing in Tanzania.
“We need to provide sufficient protection to foreign investors while at the same time ensuring that legal obligations are upheld,” she said.
In case of misunderstanding between the government and investors, they should seek resolution as equal partners through consultations and dialogue with the view to cementing cooperation.
The minister added that the government would start implementing the blueprint meant to streamline licensing procedures, taxes and levies in the next six months.
“This is in line with addressing the cumbersome procedure of dealing with numerous regulatory agencies that investors are currently grappling with.”
Over 900 British companies are operating in Tanzania, with the British High Commission revealing that nearly 300,000 jobs were created in the past ten to 15 years.
British investors have invested in diverse sectors, including energy, infrastructure and construction, manufacturing, tourism, agriculture and agri-business, fast moving consumer goods, financial services and telecommunications