From: Yona Fares Maro
Date: Wed, Sep 16, 2009 at 12:23 PM
Subject: Time to Reshape Our economic climate

Despite recent progress in the macro economic climate and situation in the country, the investment and business climate in the country is still weak. It remains harsh for long term investment in production, especially manufacturing processes. Some of the government’s policies still impact negatively on business in general. These policies or the effects of non policy include infrastructural defects, multiple taxation, insecurity of lives and property, high interest rates (a reflection of the high of cost of money), inadequate quality of human resources, lack of managerial capacity, and poor implementation of government policies.

The ability of the Tanzanian economy to compete with other countries with the same level of aspiration is very crucial. Competitiveness will allow Tanzania to plug into the global economic environment but the implications of a weak infrastructure is an inability to do this. The partnership between the public and private sectors is no doubt key to the emergence of Tanzania as an economically competitive nation. In addition to this is taking education and training very seriously.

Education and training will be a platform for an extensive use and development of technology and continuous innovation. The role the government should play in improving the climate for innovation and technology is huge and this climate will help improve the general climate for business, investment, and economic growth. Other areas of competitiveness include the implications of institutions, policies, and factors that set sustainable medium term levels of economic prosperity.

These are areas of governance, institutions, infrastructure etc. Variables considered within these areas will include property rights, diversion of public funds, organised crime, overall infrastructure and primary school enrolment rates.

Also, one underlying inability to compete is the lack of national economic competitiveness. The states, as critical building blocks for economic transformation, have failed miserably as critical agents of economic growth and development. The allocation to states has become basic handout for successive state governments and civil servants, rather than provide the platform supportive of government expenditure for economic growth. Critical issues that affect business, investment, employment and economic growth such as local taxation, land registration, water supply, road development and maintenance, industrial planning etc are within the control of the states. The way they are handled has implications for the progress we want to make towards 2025.

In relation to foreign direct investment (FDI) and broader climate for foreign businesses and investment, it is important for us to facilitate foreign investors’ access to registration, justice, and other requirements to commence business in Tanzania. We need to benchmark with countries that have the same aspirations as us in the areas of tax laws and creating a favourable environment free of disruption and injustice, as a way of further curbing insecurity.

There is also the need to sustain the fight for change and significant reduction in the level of corruption in the country. We must be seen to adopt a zero tolerance approach to corruption and other economic and financial crimes. The Tanzanian economy must be opened up for competition while providing an effective enabling environment sustained by the strengthening of law enforcement.

Development is underpinned by competition, while corruption, fraud and the absence of due process could undoubtedly reduce the competitive advantage of any country. There is a clear need for a national resistance to corruption, fraud, and mismanagement, while genuine efforts must be made to create a stable socio political environment.

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Yona Fares Maro
I.T. Specialist and Digital Security Consultant