Tanzania Daily News (Dar es Salaam)

10 July 2012

Tanzania: Trade Barriers Worry Business Leaders

BUSINESS leaders have described bad roads, corruption, water and water supply as well as multiple taxation as trade barriers.

The report, "Business Leader Perceptions of the Investment Climate in Tanzania - 2011" released in Dar es Salaam over the weekend, highlights the problems and include water among them.

Water is usually viewed as a common resource, but was now among the list of priorities in business. The survey reveals that the factors that make it difficult for businesses to grow and continue to run are Power, Roads, Corruption and Water.

According to the Minister for Finance and Economic Affairs Dr William Mgimwa, the 2012/2013 fiscal budget has priorities to work on such barriers.

He added that the factors also go hand in hand with the coming year's priorities in which the government has allocated 4.5tri/- to to stimulate economic growth.

In the report, business leaders were asked about enabling environment factors that are important to their business, factors that make it difficult to do business, non-tariff barriers that are relevant to their business, non-tariff barriers that cause problems for their business and their perception of whether and, if so, how, the government is addressing each factor.

Power is consistently the biggest problem with roads regularly the second. Corruption, which had fallen in 2010, is back to being a major issue. Water, which was not cited as a particular problem until 2010 is now seemingly worse. Access to finance has dropped a bit, though policy makers should not be complacent as it is still an issue.

On her part, Investment and Empowerment Minister of State, Dr Mary Nagu, welcomed the findings and added that one of the greatest challenges that meet most potential business persons in their quest to establish businesses currently is also the inability to secure loans from banks.

"We have prioritised those highlighted areas, but financial institutions should also broaden their reach in giving out credit to our brave entrepreneurs," she said. The University of Dar es salaam economist Dr Lenny Kasonga praised the findings noting that it was prudent for 2012/2013 to focus on the areas highlighted as impeding business growth.

"We don't exactly have the best roads and if roads and communication structures are in place, they can cut down the cost of operation," he said. He added: "We should engage the private sector and our government to ensure that these barriers are removed to improve the business climate."

This is the fourth annual report of a survey of business leaders in Tanzania. It summarises their views of the enabling environment and of the government's role in making it easier to do business.

It has been prepared to highlight priorities for action to improve the business enabling environment in Tanzania. It was commissioned by BEST-AC whose role is to support private sector organisations (PSOs) to engage in private public dialogue.

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