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Measures needed to boost business

26th October 2012
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Editorial Cartonn

The new report by the World Bank on ease of doing business that surveys a number of countries around the globe must prompt Tanzania’s policy makers who read it to critically revisit actions taken in this area to see if the situation is improving at all.

Tanzania has been ranked 134th out of 185 nations tracked in the survey, indicating that there is still a lot of work ahead of us.

Indeed one of the major challenges that the country is facing is still that of creating conditions which will attract more investors by improving facilitation on the ground.

It is about how efficiently investors are guided through the formalities they are required to fulfill before they go on to execute projects.

It is about the laws and regulations, tax regimes, the various hierarchies of administration they have to deal with.

It is also true that the country’s full potential has not been well highlighted by the limited investment facilitation that has been in place until recently, nor have the various hurdles that investors have faced efficiently dealt with, leading to unwarranted complaints.

President Jakaya Kikwete has been in the forefront in ensuring that concerns raised by investors are addressed. We know that many have been addressed, including extending the facilitation infrastructure to zonal level, injecting in a positive dose of rapid response to the needs and concerns of investors.

The report praises some of the efforts taken by the country, but also concludes that more needs to be done to attract investors who need to be sure that the territory they are going into is not unnecessarily costly and that it offers certainty to their businesses.

World Bank notes that Tanzania has made starting business easier by eliminating the requirements for inspections by health, town and land officers as a prerequisite for business licensing.

But it has also made dealing with construction permits more expensive by increasing costs when obtaining building permits.

It has also made importing business more difficult by introducing certificate of conformity before the goods are shipped in.

Of course there are various reasons that have prompted and justify the above policy decisions. However some of them may actually be seen as encouraging bureaucracy and slowing down the pace of business.

But it is also true that the decisions may have boosted revenue collection and guarded against harmful economic actions such as turning the country into a dumping ground for substandard stuff. We all know that the economy faces a serious threat from the inflow of fake goods, making it necessary to tighten rules governing entry of goods into the country.

Yet the challenge is to be able to see the hurdles, such as those cited above and deal with them in a manner that would ensure the end result is all round economic improvement.

As the World Bank director for global indicators and analysis Augusto Lopez-Claros says: “Doing Business is about smart business regulations, not necessarily fewer regulations.”

The policy makers must at all times apply this rule to the decisions they make affecting business operations in the country, if we are to make it easier to do business in Tanzania, without compromising our development.

SOURCE: THE GUARDIAN
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