Tanzania Private Sector Foundation Interview

TANZANIAINVEST has interviewed Mr. Louis Accaro, Programme Executive Director of the Tanzania Private Sector Foundation (TPSF), to assess the importance, challenges, and development of Tanzania’s private sector, as well as TPSF’s role in attracting private investments.

TI: What is the Tanzania Private Sector Foundation about?

Louis Accaro – Tanzania Private Sector Foundation: The Tanzanian Private Sector Foundation is a private sector-led organization composed of a number of private sector associations.

The members of the Tanzanian Private Sector Foundation include the Tanzanian Chamber of Commerce and Agriculture, the Confederation of Tanzanian Industries, the Banking Association, the Fishing Association, the Tanzanian Chamber of Mines, the Merchants Chamber, and all the regional chambers of commerce.

We have 99 associations, so far.

The Tanzanian Private Sector Foundation was formed as the only coordinating body of the private sector to resolve conflicts and to have one voice to dialogue with both the government and the international private sector.

As a consequence, the Tanzanian Private Sector Foundation is recognized by the government as a focal point for private sector associations and issues in the country.

TI: What is the difference between the Tanzanian Private Sector Foundation and the Tanzanian National Business Council (TNBC)?

LA: The Tanzanian National Business Council was created by the Tanzanian Private Sector Foundation.

It was created as a forum, a consultative mechanism whereby the private sector and the government meet as a council to discuss issues of improving the business and investment environment of the private sector in Tanzania.

The Tanzanian National Business Council was formed in 2001 with the president of the country as the chairman.

It was established with the aim of creating a platform to discuss issues relating to private investors, and raise policies that would be implemented by the government.

It meets twice a year.

TI: Tanzania was a former socialist country that realized the need for a free market economy and the development of a vibrant private sector. How would you describe the enabling environment for private companies in Tanzania and what are the main challenges they are faced with?

LA: An enabling environment is one that has all regulations minimized, to enable the private sector to move in freely without being pressured by laws or regulations, and to ensure that the investors are comfortable with what they’re doing.{xtypo_quote_right}An enabling environment is one that has all regulations minimized, to enable the private sector to move in freely without being pressured by laws or regulations, and to ensure that the investors are comfortable with what they’re doing.{/xtypo_quote_right}

Initially, we had about 60 pieces of legislation, which had to be reformed for Tanzania to have an enabling environment for business.

Now, we have a program called Business Environment Strengthening of Tanzania (BEST).

Out of the 60 laws, few have, indeed, been reformed.

For example, the licensing laws have been amended completely and improved with a new semi-autonomous agency under the Ministry of Industry and Trade, that is the Business Registrations and Licensing Agency (BRELA).

With such improved laws, there are only sector licenses; investors in mining need to have mining license; and investors in fishing need to have fishing license, but there are no more trade licenses.

We’ve also changed the labour laws and the land laws.

In the past, land in Tanzania could not be bought because it was the property of the state.

Tanzania has liberalized property laws and now allows investors to lease land for 99 years.

But now, investors can have title to the land; the land is leased to them for a certain number of years, usually for 99 years, and can be sold freely.

Prior to that, no one could sell land.

We also have condominium laws, which allow investors to buy and sell apartments.

Previously, the banks couldn’t give loans because of the lack of collateral, because the land was not in the hands of the people.

However, the laws have been changed so that the mortgage law can work properly as it works in other parts of the world.

Another thing we’ve been working on is an identity card system.

We’re working towards registering everybody in Tanzania in the ID card system, and all the records of a person will be available by typing the ID number in a centralised database.

TI: It seems that a lot has been achieved in improving the business framework in Tanzania. What are the major challenges that have yet to be tackled?

LA: One is commercial justice.

We’ve made some changes in that area but we feel we haven’t gone deep enough because a commercial case can take a year before it is finalized.

We have been pressing the government to make the process fast enough.

Also, all the reforms we’ve seen are at the national level, but we still have some problems at the local government level where there has been very little private sector dialogue.

That is why we established the Tanzanian National Business Council, so that the effects of the national-level dialogue will drop down to the regions with regional business councils.{xtypo_quote_right}That is why we established the Tanzanian National Business Council, so that the effects of the national-level dialogue will drop down to the regions with regional business councils.{/xtypo_quote_right}

This is paramount if we are to attract investors to rural Tanzania.

TI: What would be your message to welcome investors to Tanzania?

LA: Tanzania is a very good place for investment.

It has the environment that allows any investor to come in.

The government allows 100% repatriation of dividends.

The financial system and the economy have been liberalized.

Even our work permits have been liberalized, allowing investors to easily bring up to five expatriates to work in Tanzania.

We have a great tourism sector with the biggest lakes and the biggest game reserves in the world, as well as internationally-renowned destinations such as Serengeti and Ngorogoro.

Tanzania’s renowned tourist destinations are added attractions to private investors.

Our land is also very fertile for agricultural activities.

We rank second in Africa for water resources, which means we have everything for irrigation.

We are now calling on investors to come in all sectors such as fishing, agriculture, mining, tourism.