Tanzania: State Refutes Govt, Private Sector Credibility Gap Claims

THERE is no credibility gap between the government and private sector and sweeping reforms are being executed to make Tanzania more attractive to investors, the government assured yesterday.

Minister of State in the Prime Minister's Office, Investment, Angellah Kairuki told reporters in Dar es Salaam yesterday that there was no basis for continued mutual distrust between the government and the private sector, saying the government is readily implementing the reforms as recommended in the blueprint for regulatory reforms to improve business environment.

"There is no credibility gap whatsoever... the government recognises and values the private sector. That's why whenever anything comes up, we come to the table," she said after opening a business dialogue between the government and US investors.

Earlier, US Embassy Charge d' Affaires Dr Inmi Patterson suggested that there was growing credibility gap between the government and the private sector, arguing that the government doesn't seem to walk the talk of business reforms.

But, the minister said the government envisages having strong private sector, which will contribute towards boosting economic growth and development. She said the government adopted the blueprint for regulatory reforms and has developed an action plan for execution.

Ms Kairuki further said it was in the same spirit of promoting development of the private sector that the government placed some private sector related development responsibilities on the Minister of State in the PMO, Policy, Parliamentary Affairs, Labour, Employment, Youth and the Disabled, Jenister Mhagama and later created the investment portfolio under her watch.

"The spirit is to have strong private sector, that's why within five days after President (John) Magufuli met the business community on June 7, we have seen huge improvements in taxes and 54 nuisance levies scrapped," she said.

Finance and Planning Minister Dr Phillip Mpango, in the 2019/20 national budget proposals, announced a raft of tax measures, including the scrapping of 54 levies that were seen as burden to investors, to improve the business environment.

Apart from implementing the suggested reforms in the blueprint, the minister said the government was determined to improve energy and transport infrastructure, which are vital for trade and investments.

The government is executing mega infrastructure projects, including construction of standard gauge railway to link Dar es Salaam Port with landlocked countries- Rwanda, Burundi and DR Congo and over 2000MW Rufiji hydro-power project.

The government is also substantially improving Dar es Salaam, Tanga and Mtwara ports to enable them to optimally use their potentials to turn Tanzania into a transport hub and the main gateway for East and Central African countries.

Minister Kairuki said the government has developed an action plan to implement business reforms as the blueprint for regulatory reforms suggests. "There are areas where we have started implementing the reforms.

The scrapped 54 levies won't be the end. Next November, we will come up with another proposal for comprehensive execution of the reforms," she said.

Foreign Affairs and East African Cooperation Minister Professor Palamagamba Kabudi said the government is implementing the reforms and has always left the door open for discussions with the private sector.

He said implementation of the reforms is the government agenda for all foreign and domestic investors.

"All changes we make to attract investors are in our agenda... they are our own decisions, done after our own evaluation to support all foreign and domestic investors," he said.

Prof Kabudi said President Magufuli is determined to promote the private sector.

The US Charge d' Affaires, in her opening speech of the dialogue, said the government had lost credibility with the private sector, citing Tanzania's 12-place drop over three years in the World Bank's Ease of Doing Business Ranking and foreign direct investment as proof.

"We understand the government wants to attract and increase investments but to do this successfully and retain investments, it must create business environment based on mutual trust between the government and private sector," she said.

She said the raft of tax measures announced in the government proposed budget for 2019/2020 were not good enough to show the government was open for business.

"Initial assessment of the 2019/2020 budget reveals a handful of new incentives for investors... these incentives are a start, but they stop short of a meaningful signal that Tanzania is open for business," she said.

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