Yes, state needs private sector, but the formulas matter

26Apr 2021
The Guardian
Yes, state needs private sector, but the formulas matter

DIFFERENT reactions have been received from stakeholders to take up the call for changed approaches of state regulatory institutions to the private sector, with two aspects being visible.

On the one hand there are individual propositions from different quarters reflecting specific interest groups, and on the other hand, there is a recycling of elements of a regulatory agenda or private sector participation that has not worked in the past. And if it arguably was working to an extent, it scarcely provides a solution to issues.

The contention of ideas has started following an appeal by President Samia Suluhu Hassan, this time when making her maiden address to Parliament, setting out a vision of strong economic growth on the basis of a dynamic private sector and appropriate regulatory methods. These goals will not attract debate or dispute, but a lot of care will have to be exercised about the methods, so that those tuned to the same methods whose solution led to a massive regulatory crisis are kept at bay. There is hence going to be a tussle between change and mild innovation, as various groups stand to lose from changing regulations.

One line of thinking which came up lately from non-state actors said that the country stands a better chance of delivering on the vision set out by President Samia if the private sector is involved in key projects. At first a person coming face to face with this suggestion thinks that the commentator is talking about bringing in large capital infusion in various projects instead of relying on state coffers, for instance   shifting from loans to equity. That lessens our freedom but we obtain large amounts of capital that way.

One area where floating ideas for the government to take on board and map out corrective action in relation to policy is the fact that those who offer ideas are tied up with specific interest groups.  Take for instance the issue of unlocking the country’s agriculture and livestock sectors by increasing productivity, and what some non state actors wish the government would do, if one takes up ideas by the Agriculture Non-State Actors Forum (ANSAF).. Its director said in media remarks that if the government wants the country to reach 1.2m hectares of irrigated farmlands by 2025, this can only be achieved with private sector in the development of irrigation schemes, the remarks noted, taking up from Samia’s propositions.

“The president said the government will start charging farmers using its schemes. We suggest that it allows us to also build schemes and charge farmers to recoup investment,” the group’s executive director underlined. ANSAF has a point in that area, but large scale irrigation risks flooding the market with crops.  We can’t have a vocation to produce massively in the hope that those surrounding us need the products, due to this or that set of circumstances.  The net idea that the private sector is just a long list of producers setting up projects is likely to lead to poor results, as numerous producers for a narrow market leads to failure. We also need rational approaches to immovable property like farmland and urban land, widening bonafide buyers to include Tanzanians living outside or people who can come with capital to live here. Migrant purchases of landed assets add net wealth, unlike bank loans which only recycle existing wealth.

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