Thursday, July 2, 2009

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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