Why private sector welcomes the review of 22 laws

Dar es Salaam. Members of the private sector are optimistic that President Samia Suluhu Hassan’s pro-business approach will attract more investors to Tanzania.

The Head of State has repeatedly issued statements expressing her commitment towards improving the business environment, with her target being regaining investor confidence by tackling the hurdles they are grappling with.

Last week, Industry and Trade minister Kitila Mkumbo said the government was about to review some 22 laws under his ministry, a move that is expected to set a stage for a friendly business climate.

The pronunciation of the plan was greeted with cheers by the members of the private sector who said, if the plan on card came true, it would restore the investor confidence and morale.

In an exclusive interview with The Citizen earlier this week, Prof Mkumbo said some of the laws to be reviewed were the Investment Act, Companies Act, Standards Act and Tanzania Shipping Agencies Corporation (Tasac) Act.

Furthermore, he added, the government was planning to review all institutions that were overlapping and making it mandatory for all of them to automate their operations.

Tabling his Sh105.6 billion budget for the 2021/22 financial year, Prof Mkumbo said the review was in line with protecting local industries.

The proposed Trade Remedies Act of 2021 will also control importation of products and market distortion by subsidised products which get to the local market at lower prices.

Prof Mkumbo said the proposed law was already submitted to responsible government organs for further action.

“We are committed to working on nuisance laws that impede the establishment of new businesses, and flourishing of the existing ones,” Minister Mkumbo told The Citizen over the phone.

Tanzania Private Sector Foundation (TPSF) executive director Francis Nanai commended the government for responding to the private sector’s long cry to review unfriendly laws that were hampering investments.

“It is high time the government harmonised our internal standards so that they can comply with regional and internal standards,” noted Mr Nanai.

In doing so, Tanzania’s products would be competitive enough to compete in the global market.

The TPSF boss also suggested that the law reviews should seek to set a stage for policy predictability with a view to boosting investor trust.

“If we are to attract investors, we must create a win-win situation,” suggested Mr Nanai.

“Investors need to be sure about their tomorrow and for this to happen, we need stable laws, policies and regulations.”

On the question of Tasac, Mr Nanai recommended the government to restrict itself to remaining the regulator instead of also undertaking the same business competing with players it is supposed to regulate.

Under Section 7(1) of the Tasac law, the corporation is exclusively mandated to carry out clearing and forwarding functions for the import and export of minerals, mineral concentrates, machinery and equipment for the mining and petroleum sector, products and/or extracts related to minerals and petroleum; arms and ammunition, live animals and government trophies.

Apparently, this has been a bone of contention between agents and Tasac. More so is the case today as Tasac is about to be given a mandate on additional imports, including fertilisers, sugar (both industrial and domestic), cooking oil, wheat, oil products, liquefied gas and chemicals related to the products.

The law provides that any person who performs any function which is exclusively mandated to Tasac may, upon conviction, be fined not less than $20,000 and/or imprisonment for not less than two years.

With the amendments made in 2019, execution of the clearing services was set to start on March 15, this year.

But, again, this was delayed after the private freight forwarders association – the Tanzania Freight Forwarders Association (Taffa) – expressed grave concerns on the move.

Taffa President Edward Urio told The BusinessWeek that Tasac’s exclusive mandate on the shipment was against the East African Customs Management Act whereby the consignee was allowed to choose own custom agent in regard to clearance.

He applauded the sixth phase government for its decision to go into a dialogue with the private sector to collect views with regard to how they can improve the Tasac Act 2017 and how they can reconsider the amendment Act no 3 of 2019.

In April, Transport ministry’s permanent secretary Gabriel Migire called a meeting with private stakeholders to collect views on how they can work together to decongest the Dar es Salaam Port.

Among many issues that were discussed was the Tasac Act 2017 whereby he ordered that Tasac should arrange a consultative meeting with the private sector members to collect views on how to improve the Act and make tangible improvements to the country’s economy.

In a swift rejoinder, on May 15 the Tasac called upon the port stakeholders to share their sentiments on the same.

On Monday the permanent secretary had another meeting with stakeholders, whereby he collected views on how to improve Tasac Act 2017.

Among issues which were put forward for improvement was how Tasac had gone way far from what was meant in the Act.

The Act gave Tasac to handle about five imports--minerals, petroleum, ammunition, government trophies and live animals, all of which the government has interests.

Citing an example of live animals, Mr Urio said the law concentrated on wild animals exported outside the country, but now the Act has taken until domestic animals.

“Tasac had overlapped and started working beyond what was in the Act,” he said, noting that it now moved from the item ‘petroleum’ to petroleum products.

“We look forward to the government working on collected inputs so that it can be beneficial for both the government and private sector in a win-win situation.

“This will also help to improve the economic environment of the Dar port and the nation’s at large.”

Confederation of Tanzania Industries’ (CTI) trade policy specialist Frank Dafa is optimistic that the government will also work on overlapping regulations between those under local government and central government.

“The overlapping increases costs of doing business,” he said, citing an example of health inspection which is done by Occupational Safety and Health Authority (Osha) and municipal/district councils.

Mr Dafa was also of the view that the review of laws will consider looking at loading and unloading charges levied by municipal council.

He said for a 2.6-3 tonne of lorry for-instance, it costs Sh300,000 per month.

Mr Dafa added that the CTI members were crying foul over high inspection fees by Osha which stood at Sh70, 000 per person on the annual basis.

In a bid to repair ties with investors and open up as well as cementing Tanzania diplomatic relations with the outside world, the President has been using the approach of meeting personally with other country’s Heads of State and those of bilateral organisations.

Additionally, she has been holding meetings with key players in the international economy, foreign traders and visiting neighbouring countries like Uganda and Kenya.