Thursday, July 16, 2009

MPs to legalise Constituency Development Fund soon

MPs to legalise Constituency Development Fund soon


The introduction of Constituency Development Fund (CDF) which flopped last year even after it was slotted in 2008/9 budget is set to be legalized despite all odds.

Almost all MPs in unison are in support of the move that may become a reality the end of this month.

CDF is a fund that will be controlled by each MP in his/her constituency.

Reports have it the Bunge will legalise CDF between 30th and 31st of July .

The members of civil society, led by Policy Forum have been opposed to the move for years and they argue what needs to be done is empowerment and capacitation of local government authorities.

The idea to introduce the fund started in 2006 but the parliament is yet to decide whether to give it a go ahead. However the Government allocated “some unknown amount” for the fund as the Policy Forum (PF) said.

According to the Policy forum, CDF was unconstitutional and adopting it would mean that the MPs were assuming Government's role.

“We do not have powers to prevent the MPs from passing CDF but once they do, we shall take the issue to court because citizens do not want it and it is unconstitutional,” said Hebron Mwakagenda, executive director of PF at their office.

Mwakagenda elaborated that if CDF is passed, the MPs would assume Government's roles of implementing development projects.

Constitutionally, MPs roles are to make laws, to monitor the Government and accelerate development projects. They are supposed to work with the government at central and local level and be accountable for resources allocated to solve development problems in their constituencies.

He noted that with the CDF, MPs would have the responsibility of implementing development projects which is the Government's role. This implies that no one would monitor the government.

The director stressed that adopting CDF would weaken the ability of the MPs to question failures to implement projects.

“If the MP is in charge of the fund and implementing development projects, can he query him/herself?”

cautioned Mwakagenda.

He explained that when the idea started PF in collaboration with FEMCA, TANGO, TAKOSODE and all and other NGO's (in total 75) started visiting commonwealth countries to understand CDF was.

Mwakagenda noted evaluations of such fund that started in 2005 in Uganda and Kenya was unimpressive.

For instance, in Uganda MPs failed to account for the funds and later in 2007, they decided to suspend. instead, the Ugandan decided to re-introduce it and made some updates. they asked each MP to select a committee that would help them running CDF.

in his view, the coming of CDF would bring conflicts between MPs and local government authorities.

he elaborated that local government have a duty of implementing projects that are of interest to people but in case the CDF is put into place, MPs would be prioritising the projects of their interest.

Policy Forum's accountability monitoring manager, Marcossy Albanie said there was a big possibility that MPs had some intention with the CDF.

Albanie said Policy Forum educated the mass through Television stations and radio programmes and have come to understand the possible impact of the CDF.

“Every citizen who has understood this fund has signed against it,” said Albanie. he however expressed disappointment lack of Government's response to possible allegation of the the fund.

Albanie said Forum policy had been issuing leaflets and book lets that were distributed to the parliamentarians last year but no response has been given.

Among the arguments that that the Forum give include that the fund is unconstitutional, Mps would be attempted by the funds and by the end of day fail to account for the fund.

Others are priority would be given to the MP's needs and not those of the citizens; the money is not really an addition as it is assumed.

Albanie explained that the CDF are driven from the normal budget and said the formula is equal to “normal budget minus government's debts times 2.5 per cent.”

“I am afraid that this may be a burden to taxpayers as the money is generated internally,” noted Albanie.

The Policy Forum stands for the interest of the citizens and has stood against the idea of introducing CDF due to CDF's negative effects to the nation.

However, the MPs according to a leaflet by Policy Forum on CDF, claim to act as ATM machines in their constituencies as the citizen assume they have money to solve all the problem. Therefore the MP says their income was not sufficient to solve such problem. The MP expected CDF to be relieved from the burden.

The PF argue that the role of role of MP was to work with citizensto hold to the government at central and local level.

Govt steps in to rescue cement manufacturers *Help in reduction of production costs underway *Spirit of competition to stay


The government has set the stage for development of a plan to rescue 'crying' cement producers from collapse, Business Times can report.

The producers have been crying foul for months over cheaply imported cement claiming it was slowly driving them out of business. Actually, two of the main producers in the industry have suspended productions in the recent months.

In an exclusive interview, Permanent Secretary for Ministry of Industries, Trade and Marketing, Joyce Mapunjo said the plan will entail among other things measures towards reduction of production costs for local cement and strengthening government's ability to combat tax evading portion of imported cement.

She mentioned steps towards cost reduction as including connecting the industries to the Compressed Natural Gas (CNG) system and improving the infrastructure so as to reduce the cost of transportation.

“We also appeal to TRA to strengthen its supervision against cement importers who evade paying taxes” Mapunjo said adding that the goal is always to ensure fair competition in the country.

Concerns about the failure of local cement to compete with imported ones have been at the forefront of local manufacturers' minds since the end of last year, when the government suspended restrictions on importation of cement into the country.

The government was reacting to 'overblown' scarcity that occurred last year pushing the price of a 50 kilogram bag of cement in Dar es Salaam to Tshs 20,000 and 25,000 upcountry.

Basing on claims of expensive power supply system in the country, presence of 'dumping' game in the market (competitors' cement getting subsidies in source countries) and imported cement enjoying tax evasion, local manufacturers argued the market was unfair to them.

There hasn't been a proof of dumping 'tale' yet, but the government appears to 'suffer' from ambivalence on whether some cement from the Far East makes its way to the country without paying taxes.

Tanzania Revenue Authority (T.R.A) has declared not knowing if there was any information about imported cement tax evasion on the part of the Mainland.

The authority advised this paper to contact Zanzibar Revenue Board (ZRB) for clarification of a claim by local cement manufacturers that Zanzibar was the favourable route of the tax evading cargo.

On the other hand, Ministry of Industries, Trade and Marketing said imported cement paid taxes, by all accounts its price in the market would have been higher than the locally made.

Business Time's survey in the city yesterday, showed that the imported cement mainly from Pakistan, India, China, and Egypt was sold the same price as the locally made.

A 50 kgs bag of cement at GongolaMboto area in the outskirts of Dar es Salaam sold at Tsh12,500 in retail price, regardless of where it came from.

According to Mapunjo, if proper taxes were paid, the price of 50 kgs bag of imported cement from India would have sold at Tsh13,400, while the current price of local cement specifically from Tanzania Portland Cement Company Limited (TPCCL) in most parts of the city is Tsh11,400.

Between January and April this year a total of 49 companies imported 100,453 tons of cement whose value was Tshs 10.4 billion mostly from Pakistan, India, China and Egypt.

Recently two out of the three Tanzania's major cement producing companies closed down as two new prospective investors, Maweni Limestone Limited of Kenya and Dangote Limited of Lagos, Nigeria, canceled their investment plans.

It has been alleged that the closure was necessitated by over-flooding of cement in the godowns of Mbeya Cement and Tanga Cement after demand drastically fell down.

Although manufactures have devoted the whole portion of blame to cheaper imported cement from the Far East, consumers have said local cement must substantially improve quality if it has to compete with the imported one.

DAr es Salaam - Out of 4 million residents 3.2 million live in slums


Using the term “slums” to describe the sorry state of Dar es Salaam unplanned and unserviced settlements might sound improper in political spheres, but not in the eyes of Dr. Badiane, the Director of UN-HABITAT for Africa and the Arab States.

Majority of Dar residents live in unplanned areas where houses are of low quality and are constructed haphazardly.

Basic services such as roads, drains, and water networks are missing, solid waste uncollected, and land for public amenities such as open spaces, schools and health centres is almost impossible to find.

Most people depend on poorly constructed pit latrines and open dumping of solid waste in open spaces. They live in houses that are not connected to piped water and electricity.

According to UN-HABITAT, life under these conditions is exactly what can be referred to as slum life.

Cities Alliance with technical assistance from UN-HABITAT, in collaboration with the Government of Tanzania has designed a citywide action plan for upgrading unplanned and unserviced settlements in Dar es Salaam by 2015.

The plan was validated by stakeholders who included government leaders and members of parliament meeting in Dodoma, after a workshop that took place in Dar es Salaam last week.

The process of preparing the citywide action plan took 3 years, with “all the stakeholders being involved to support the process and identify their areas of interest” according to Badiane.

Dar es Salaam covers a total area of 1,800 km2. Only 20% of this area is planned. According to a recent survey by Cities Alliance about 63% of Dar is unoccupied. Yet, over 80% of its residents live in unplanned settlements.

Only 30% of the population gets clean and safe water, and fewer than 30% are linked to the National Grid.

In simpler terms, out of the 4 million residents of Dar es Salaam, over 3.2 million live in unplanned areas!

The action plan has deliberated on various issues including land use standards to increase affordability, extension and improvement of residential licences, incremental generalisation of occupancy certificates, new land development with cost recovery and cross-subsidies, improved collection of property tax, water kiosks managed by communities, private toilets, waste management services through public-private partnerships, road improvement, the creation of housing departments in each municipality, a review of building standards, and the encouragement of small scale rental housing.

The plan also included a detailed time frame and mechanism to ensure that the activities are delivered within the agreed schedule, according to Badiane.

Its financial strategy outlined the required resources, sources and means of acquiring them, the total cost of upgrading the city being estimated at 1.4 Trillion/- apportioned to three terms; short, medium and long.

Financial possibilities considered included borrowing from banks, active engagement of local and international development partners, issuing municipal bonds, property tax and land rent.

In the validation meeting with members of parliament last weekend in Dodoma, it was stressed out that if properly planned and managed, land can be a major resource. Unlike the current situation; whereby, the major part of the country is unserviced and unplanned and therefore adding to the obstacle of income generation, particularly Tax collections.

The members of parliament also cautioned that implementation of the plan should not be left entirely to the Government. Instead, they insist that its success will mostly depend on outsourcing to the private sector as the Government does not have the needed capacity.


From Business Times

SWEDISH COMPANY IN BAGAMOYO Multibillion biofuel project under fire


THE HOPE of establishing a sugarcane plantation and ethanol project on a 22,000 hectare land in Bagamoyo by a Swedish energy company SEKAB, is likely to fade in thin air due to irregularities already noted in preliminary procedures, Business Times can now reveal.

The leased site of the huge project lies near Zaraninge Forest reserve in Bagamoyo, with projections to expand it to 400,000 hectares or more to include also areas in Rufiji.

According to Prof Seif Madoffe of Sokoine University, SEKAB's project is one of several that are intended to be located near the coast so that ethanol or vegetable oil may be easily exported by sea.

The done recently wrote that the plantations are also placed where there is good availability of fresh water, and in places remote enough to make it 'easier' to marginalise local villagers and move them out of their traditional areas at a low cost to the rich corporations (if indeed any compensation is paid at all.

Available information from Sweden shows SEKAB had hired Orgut, an international environmental consultancy firm to do the mandatory Environmental Impact Assessment (EIA) and submit report to the National Environmental Management Council (NEMC) for approval.

According to Melinda Fones Sundell, who is Orgut’s Team Leader their firm experienced 'serious' contractual problems with SEKAB right from the start.

Sundell told Development Today, a Swedish paper, that when Orgut signed the contract to carry out the EIA, SEKAB had not yet completed feasibility study for the project, but Orgut accepted to go ahead with the EIA, on the basis of a promise by SEKAB that feasibility study was forthcoming and would be concluded before Orgut finishes its study.

But until the completion of the work in May last year, Orgut had not received any report from SEKAB, Sundell said.

On top of that, instead of handing over Orgut's report to NEMC for evaluation SEKAB altered some information, according to Sundell.

"After receiving Orgut’s report, SEKAB made changes to the conclusions, downplaying Orgut’s prediction that there was not enough water to support irrigation of such a large area of sugar cane," said Sundell.

The feasibility report was crucial because it would have provided important facts about technical details on the proposed plant, the use of bagasse, the sugarcane waste and irrigation and according to procedures it is always recommended that feasibility study precedes EIA.

The original report had identified several environmental problems, for example, that water supply was insufficient, but these problems were subsequently glossed over and played down in SEKAB’s altered version of the report, according to Sundell.

She asserted that SEKAB “rewrote the conclusions in the best light: you get a different flavour”. Consequently, Orgut decided to distance themselves from the altered version of the study, she said.

According to Orgut, SEKAB was unhappy with strong language about water issue. However, the fact was that Wami River, which would provide water for irrigation would be dry or supply insufficient water during the dry season.

“SEKAB chose not to put all our conclusions there," said Sundell. “They wrote the conclusions in the best light. You get a different flavour."

The way forward

On the positive side the project may provide employment to the residents and provide new export product to the country although experience shows that any such benefits tend to accrue to educated immigrants from other areas.

In this case, SEKAB might produce "green energy" for the rich of the world while poor Tanzanian smallholders and pastoralists will lose their livelihood basis.

Also agriculture would receive modern technology, unused land would be put into service and local communities would be strengthened by some new sources revenues.

According to information that is available on the internet, two years ago President Kikwete toured areas that SEKAB wanted to invest “and talked about many benefits”.

But on the negative side if left to continue with the project thousands of Tanzanians around Bagamoyo area are likely to lose arable land, a situation likely to exacerbate hunger crisis.

And, it is anticipated that the plant would increase emissions of carbon dioxide.

Other impacts include endangering species of birds and at least 34 mammalian of species of the IUCN “red list” would be affected.

The Wami River would be dry as sugar needs much water for irrigation. By all accounts, demerits outweigh merits.

There has been a wave of foreign investors acquiring huge hectares of land for biofuels in Africa since 2000’s. For instance, DAEWOO,a Korean company acquired one million hectares in Madagascar. This represents half of the arable land of the country.

In Tanzania there has been an increasing demand of land for biofuel companies since 2005.

Most of these companies promise to carry social and environment responsible programmes.

SEKAB’s original plan had been to establish 400,000 hectares of sugar cane plantations.

But recently the company has been on the verge of bankruptcy when its owners in Sweden decided to end the flow of money into the company in the country.

SEKAB is now trying to procure aid funds from Norway and Sweden in order to continue with its activities.

The company is negotiating with rural leader in Rufiji to get huge hectares of land for the same project. SEKAB promises healthcare, schools, roads and employment among other things.

According to a study by OPEC Fund for International Development (OFID) “Biofuels and Food Security: Implications of an accelerated biofuels production” of March this year, the biofuel companies have increased the hunger problem worldwide.

It says millions of hectares in rural areas in the world have been taken away from local farms and allocated for biofuels. By last year, at least 100 million people were undernourished.

“In biofuel target scenario about 140 million people are threatened by hunger...the results for 2020 still show an increase of 80million people,” predicts the OFID study.

From Business Times

Grand graft contributing to Tanzania’s stunted economy

By Karl Lyimo

TANZANIA boasts – if this is the correct epithet and not a Nixonian expletive – a rare socio-econo-political status. One of the world’s countries which are extraordinarily endowed with natural resources, the United Republic is also among the world’s Top Ten poorest nation-States… No; I shall rewrite that for the sake of accuracy and honesty of purpose…

The country is rich; but its people, 44 million of them, are abjectly poor, despicably ‘unschooled,’ desperately disease-ridden – and despondently hapless, living on hope, empty political rhetoric and posturing day after day, year in, year out!

One does not need to be a modern-day Socrates (470?-399BC) to realize the (Socratic) irony underlying such ridiculous arrangements whereby a stinking-rich country (potentially so) harbours as their home a stinking-poor population (in reality).

In other words, the bulk of the people have been brought to their socio-economic knees – and may sooner than later hit the hard ground with a thud – NOT through deprivation by Mother Nature and the Sisters of Fate…NOR by a lack of suitable public policies and a hard-working, never-say-die folk…

No, Sir (and Madam – if I am to be politically-correct!). Most Tanzanians are today collectively leading a life of deprivation basically because of grand, institutionalized corruption that is routinely perpetrated by public officials in high positions of power and privilege, period!

There indeed have been attempts from different quarters – governmental and religious leaders, political and academic players, international donor/creditor community and anti-establishmentarians – to rationalize the situation. The attempts have been to little or no avail, thanks to two of the Four Estates of the Realm.

The two are an alert but hopelessly outnumbered Opposition and a sprinkling of neo-independent-minded CcM members in the Legislature, and a few fearless members of the independent mass media fraternity that is slowly being strangulated out of its independence and impartiality by a nervous Executive…

Look at it this way… On page-10 in the last issue of this weekly paper was an ‘Open Letter’ to President Jakaya Kikwete on how the latter can ‘turn Tanzania around.’

The writer – one ‘Emmanuel D Tayari [<> what a beautiful turn of phrase: ‘Tayari Tanzania Wealth’], notes that ‘the Government and the whole political system (in Tanzania) are much polarized, whereby everything is done to score political points or acquire personal gain and interests – not done for the benefit of the people who hired (sic) the institutions.’

For the president to perform his job well, Tayari counsels, ‘you need ‘to look outside the box by freeing yourself from (being an) institutional hostage… I understand how complex it is to accomplish your goals of helping needy Tanzanians to get out of poverty. This is because you operate in institutional failure…

The man gives counsel on how Kikwete should go about improving the lot of his hapless compatriots… ‘We can only win the war on poverty once we have inclusive economic policies which would clearly define the role of our youth, a solid Economic Machinery… making them viable productive partners…’

There is much more of such gems in the article, one that one would not like to have missed! [Business Times: July 10, 2009].

But, do we really need more, or new, policies today? What happened to all those zillion policies which begun with the founder of Tanzanian nationalism, the late Mwalimu Julius Nyerere? Land and people we do have in plenty… Our politicians in the corridors of power keep at it that we indeed do have good policies and leadership.

That is why (our leaders-in-perpetuity tell us ad nauseam) the same party – man and boy (CcM and TANU) – has been returned to power as regular as you like throughout the last half-century of our country’s ‘Independence’ life!

These four were the criteria which Mwalimu proclaimed in the 1960s as prerequisites to meaningful and sustainable socio-economic development. What happened since then?

I’ll tell you… There has been phenomenal progress in the Art and Science of holding on to power by hook or by crook for those who are already in there. Secondly, that growth has been phenomenally matched by escalating grand corruption. The two feed off each other.

Unless and until – as Tayari says – the president effectively and drastically disengages himself and his (very few) mass development-minded aides from being a hostage of an institutionalised corruption system, Tanzania will continue to wallow in abject poverty, ignorance, disease and sleaze.

What we also need in this day and age is Tanzania’s own editions of Socrates. These would revive the philosophical method of systematic doubt and questioning of our public leaders and law enforcement organs to reveal their hidden agendas on graft-fighting, and eventually elicit a clear expression of the truth – and nothing but the rational whole truth! [].

Business Times

Thursday, July 2, 2009

Adopt electronic document processing or drop out, TRA tells clearing agents


AFTER postponing execution of the mandatory measure requiring clearing and forwarding agents to process all their import documents electronically for Tanga-based agents, the Tanzania Revenue Authority (TRA) is in no mood to tolerate such agents who would not comply with the directive issued way back in 2007.

A senior TRA official in Tanga said while opening a training seminar for Tanga-based freight forwarders recently that the authority would take punitive measures against defaulters, including de-registration if they fail to learn and implement the change from manual to the mandatory Electronic processing of all import documents.

The official, an Assistant Regional Manager (Customs) Ben Usaje Asubisye reminded Tanga-based Clearing and Forwarding Agents to realize that they were living in a changing global situation dominated by changing operations that use new communications technology aimed at minimizing time and curbing corruption.

The training was aimed at introducing clearing and forwarding agents to lodge the electronic IDF with TISCAN, the company that carries out customs valuation and classification on behalf of the TRA and also the organizers of the training in cooperation with the Tanzania Freight Forwarders Association (TAFFA) and the TRA.

“Tanga Agents must adapt to the new technology or face the possibility of disappearing like the dinosaur,” Asubisye stressed. For those who cannot learn the new technology, he urged them to employ expert personnel because the business was becoming more professional.

The Commissioner General of the Tanzania Revenue Authority (TRA) slapped a ban on use of manual IDF starting September, 2007 allowing July and August of the same year as a grace period where both the manual and electronic IDF were supposed to run parallel.

The introduction of the Electronic IDF, which applies to all transactions subject to TISCAN processes is part the TRA’s plan to progressively implement measures to modernize the import documentation process.

The objectives of modernization measures are to facilitate trade while improving revenue collection,” he said adding that the introduction of the Electronic IDF is ahead of the implementation of a Web-based Pre-arrival Document (PAD)system towards the end of 2007.

Speaking at the same occasion, the Vice President of the Tanzania Freight Forwarders Association (TAFFA), Manfred Mtitu said that clearing agents should be thankful to the TRA for postponing execution of its modernization plan in Tanga three times at the request of TAFFA.

Mtitu said that the move to introduce the Electronic IDF was a result of a general Universal Commerce and Trade which is now conducted through the internet. He stressed that the whole world was not operating along those lines and those who would not comply would be forced to drop out of the business and should not blame the Government for that.

“TRA has decided to involve us as stakeholders. We must not allow time to get ahead and leave us behind,” he said, stressing that whether they liked it or not they have to change to take advantage of the obvious benefits of modernization.

Mtitu mentioned the advantages and benefits as including hastening and opening up operations, offering chances off ground fair play and furthermore reducing human interaction that allows for possibilities of corruption.

He said that Dar was way ahead in introduction of the new technology and that a few of the 500 registered companies have been forced to drop out due to compliance problems including failing to use the electronic process.

Speaking at the training, the Tanga TISCAN Office Manager, Atubone Wilson said that the new system offers hope for Optimization of TRA’s revenue collections, Simplification of the clearance process, improved clearance speed and Optimal application of modern technologies.

He said that Tiscan Ltd is an active partner with TRA, and collaborates with TAFFA and other stakeholders such as, Necor Data Ltd which operates the Asycuda++ an Electronic Link set up between Tiscan and TRA since January 2007 and the Tanzania Ports Authority (TPA).

From Business Times
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TPSF presenting a unified voice for the private sector in Tanzania(Part 1)

TPSF presenting a unified voice for the private sector (Part 1)

The Tanzania Private Sector Foundation (TPSF) was established on 4th November 1998 as a result of multi-folded efforts by various stakeholders of the private sector. Business Times interviewed, the foundation’s Communication adviser, Dr Felician Ifunja on cross cutting issues: Excerpts.

Question: Briefly tell us about TPSF and what it’s doing of late to steer up the private sector?

Answer: TPSF was established as a company limited by guarantee in order to promote private sector-led social and economic development in Tanzania by: i) providing member organizations with services they value; ii) understanding and representing their common interest; and iii) engaging in effective advocacy with the Government.

Of late, TPSF has developed a strategic plan 2009-2011 that focuses on policy impact, members services , outreach and membership development and enterprise development.

The Policy impact : seeks to raise issues, participate in and influence Government policy formulation and implementation in favour of the Private Sector while theMember services: aims to assist TPSF members in building their institutional capacities in order to enhance their ability to provide technical support to their members.

Consequently, the Outreach and membership development: is designed to reach out and support members with a range of standardised and customised private sector development services through membership drive and strategic partner development, training and the Development of the private sector and private sector development initiatives databank.

TPSF is also implementing on behalf of the Government of Tanzania component two of the Private Sector Competitiveness Programme. The Enterprise Development Programme that is supported by the IDA credit seeks to develop the enterprise micro-level drivers and is designed to improve the capacity of the Private Sector in Tanzania to respond positively to local and international market trends.

Question: Can you tell us of some TPSF achievements in advocacy and lobbying government for better business environment?

Answer: TPSF has made the following achievements in its Public-Private Dialogue initiatives: initiated and succeeded in establishing the Tanzania National Business Council (TNBC); the Foundation was instrumental in the launching of the Business Environment Strengthening of Tanzania (BEST-BRU) and its advocacy capacity building component, BEST-AC.; various Business Environment Strengthening projects are being implemented as part of the TPSF initiative; lobbied successfully for substantial changes in the Income Tax Act 2004 etc, continuous efforts are underway to even improve further the tax regime in Tanzania; advocated for reducing business informality that has resulted in the establishment and the refinement of the Business Activities Registration Act.

It has also initiated and continuing to advocate for de-congesting the Dar es Salaam port and participated fully in the policy formulation for Public Private Partnership in infrastructures development in Tanzania; participated fully in influencing the government on tax reforms one being to abolish exemptions and reduction of the VAT rate to 18% from the previous rate of 20%, and finally we have also initiated and finally convinced the Government on the Agriculture first ( KILIMO KWANZA) strategy

Q: We have other business organizations like TTCIA, CTI, and so on. Is there a duplication of roles and how are you working together, because at times the objectives are similar?

Answer: I do not see any duplication of roles. TCCIA, CTI, ACT, TCT, Bankers Association, and others are our members. They are the associations that decided to form TPSF as an apex body and enable them to Dialogue with the government with a unified voice. Sector associations are designed to tackle sector and professional issues such as quality product, standards, self-regulations, etc...While the core function of an apex like TPSF is strategic advocacy for a business enabling environment and a knowledge source for private sector/enterprise competitiveness.

Q: The world is facing unprecedented economic meltdown ---- what is TPSF answer to the crisis, what are you advising the private sector and the government to do so as to mitigate its effects?

TPSF did a research on the impact of a financial crisis to the private sector and the economic growth of Tanzania and involved its stakeholders to validate the findings that concluded that the financial crisis was an opportunity and at the same time a threat to the private sector.

Some of the challenges identified were (a) reduced household incomes resulting in a demand slow down, b) Increased Inventories - Production cutback, c) Increased competition from Imports as countries from emerging markets look for new export markets, d) Increased local competition, e) Pressure on margins, f) as financing gets difficult, investments and expansions would be put on hold, g) Unutilized excess capacities would force downsizing, h) Decrease in Foreign Domestic Investments.

On the other hand, following opportunities were identified (i) a wake-up call or eye opener-i.e. questions on broader policy and strategic issues have to be reassessed , ii) fall in oil prices, iii) rising gold and food prices and the rates of return on FDI still high in Africa.

The advise to the Public Private Partnership is: i) Public-Private Dialogue is critical in designing an “impetus” package ii) Dialogue should be guided by practicality, i.e. on the basis of a win-win, iii) prioritize spending on education, health and infrastructure ,iv) Adoption of nationalistic and protectionist measures are inevitable including: i) great use of indigenous consultancy , ii) awareness of best practices, and iii) sometimes evaluate and critic donor advise.

The Private Sector was advised to: i) Produce efficiently and effectively ( Reduce costs, Improve productivity, Pass-on the drop in raw material / fuel prices to consumers i.e. reduce prices, ii) Look at new markets and iii) to be proactive.

The Government was advised to i) Facilitate private sector development, ii) Stimulate the economy by increasing development spending and reducing taxes, iii) Ensure self sufficiency in food iv) Increased spending on improving infrastructure ( Power , Ports, Rail, Road), v)Assist banks / development finance institutions vi) Reduce cost of doing business i.e. attract investments by improving the business climate, vii) Develop incentives to help deal with affected sectors, viii) Identify priority sectors that have a competitive advantage.

The private sector argued that increasing internal taxes is not an appropriate option – it would further slow down the economy and push the private sector to the brink...

I am happy to note that some of the proposals recommended to the government were considered and were included in the government economic stimulus package that was announced by the President.

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