27 August 2014

Tanzania: Report Highlights Investment,Trade Barriers

"URGENT measures are needed to improve the business environment and the government must act to promote industries and boost production and sales."

This is what the Zanzibar National Chamber of Commerce, Industries and Agriculture (ZNCCIA) told the Ministry of Trade, Industries, and Marketing in a report recently.

The ZNCCIA presented to the minister the report with a number of key issues that must be addressed if business, production and exports were to thrive. ZCCIA concerns follow the result of a recent survey on the development of industries and the challenges facing members of the business community.

The report highlights ten areas of concern and suggests how to overcome the challenges, thanks to BEST-AC which supported the study led by Mr Ahmed Baalawy - board member of the Chamber.

Lack of workable plans, reliable market, difficulties and costs in importing raw material and exporting products, protection of internal market, and lack of investment/ development, were problems identified during the survey by the Chamber.

The latest report reveals that the majority of traders, investors, and entrepreneurs have experienced different challenges, and that the government should know that the development of industries remains vital to people and the economy.

It highlights that industrialization can provide a base for rapid growth of income for the country and individual persons. With the increasing population the government is unable to provide for employment.

Hence it is very important to set up industries to absorb this surplus labour. The chamber emphasizes on the development of industries, saying they are capable of utilizing all the resources in the economy.

They can even make use of scraps and waste materials. Selling cloves, seaweeds, and spices alone cannot help the country earn enough foreign currency because of fluctuating prices. Industrial production is the only option, alongside improvement of agriculture, fertilizers and pesticides.

The chamber says it is only through industrialization that the economy can help solve the problems of poverty and unemployment. The chamber also says that making Zanzibar a better place to do business can only be possible through improving environment and expanding the market to the Mainland.

"With a population of 1.3 million people, only 520,000 (about 40 per cent of the population) can buy locally made goods," the report says. Other problems include unfriendly taxation, unfriendly business/trade regulations, shortage of skilled personnel, lack of subsidies, and residents and citizens not valuing products made in the country.

The report says that many people still prefer buying commodities from abroad, instead of purchasing things made locally, a disadvantage to small growing industries and that the government should have programmes that promote goods made locally.

Authorities, including President Ali Mohammed, First Vice President Seif Sharif Hamad, and the second Vice President Ambassador Seif Ali Iddi have repeatedly said that the government has been making improvements for trade.

"Our economic development strategy prioritises industries and business growth and targets to increase quality products. However, shortage of funds hampers the plans," said the Minister for Trade, Industries, and marketing Mr Nassor Mazrui.

He said the government recognises the role played by members of the business community and the challenges they face particularly in developing industries in Zanzibar. Mr Mazrui said the government cannot solve the problems alone, Public Private Partnership (PPP) is important in delivering trade support to business.

If government will team up with the private sector through a partnership approach, then together we can make it easier for businesses. ZNCCIA's President Mr Abdalla Abbasi, and the Chamber's director Ms Munira Ali said that Zanzibar's business is still very small.

The government as the main stakeholders in trade matters, has to make sure that business environment is good. The chamber says in its report that the private sector is becoming an increasingly important actor in trade matters. It has shown a keen interest in engaging the government on trade policy issues but the problems facing businesses must be solved.


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