LEGAL REFORMS SHOULD BE ENFORCED ON GROUND

The government’s move to reform the legislation governing investment in Tanzania is a step in the right direction as it looks to improve the business environment in order to attract more investors.

Furthermore, its decision to create a more welcoming pathway for local investors is a major reform which will see Tanzanian businesses thrive alongside foreign firms. The minimum capital which was previously benchmarked at $100,000 (Sh230 million) has been reduced by half to $50,000 (Sh115 million) for local investors to enjoy the benefits and protection provided under the Investment Act. This spells good news to local businesses looking to tap into the available advantages availed under the law.

Additionally, the tabling of the investment Bill in Parliament comes at a time when the investment climate needs a boost as the global economy continues to open up following the adverse impact of Covid-19. As such, it is prudent for Tanzania to provide incentives to prospective foreign and local investors as it looks to enhance the economic recovery efforts.

However, despite all the positive development in the business realm, what is prescribed under the law needs to be practiced on ground. These legal reforms shouldn’t just be mere words enacted on a piece of paper as a matter of procedure. They must be implemented by those directly involved in the work chain.

Often there have been concerns that what the law says and what is being practiced are two different things. This is especially expressed by members of the business community who encounter various challenges contrary to what is written by the governing laws.

When stakeholders met in Dar es Salaam a fortnight ago to address the challenges facing the implementation of the Blueprint which aims to rid Tanzania of all investment hindrances, it was pointed out by more than one foreign investor that one of the major challenges is authorities contradicting what the law says.

He expressed that the predictability of laws is still very much a challenge because some officials choose to ignore legal processes and instead act on their own whims, which include needless bureaucracies that eventually lead to corruption.

That being the case on ground, the government should ensure the proposed Investment Act of 2022 is implemented to the last letter. There shouldn’t be room for anyone to abuse the law by deciding to ignore legal prescription. This is one of the ways of creating transparency, accountability and promoting a sustainable business and investment climate.

Turning a new page

The fear that Tanzania operates under unpredictable laws should be a thing of the past. We need to change perception by being more intentional in how we are reforming these various sectors as we try to move in accord with global standards.

The anthem of economic reform should go beyond verbal and written rhetoric. The government should walk the talk and it is through practical actions that we will be able to gauge the effectiveness of these reforms. Feedback from key players, which include local, foreign investors as well as other representatives of the government will give us a clear indicator of where our business and investment ecosystem is headed.