Dar criticised on business reform

Tanzania has performed poorly in doing business, slipping further down at the ranking of countries with business friendly regimes, according to the World Bank, but industry sources cautioned that such reports should not be taken with a lot of enthusiasm.

World Bank “Doing Business 2014” report released last week ranks Tanzania, the top regional destination for foreign investments, at the bottom of other East African Community member states in doing business.

The report released last week show Tanzania performed poorly, dropping 12 steps in rankings to settle on the 145th position among 189 countries.

The East African second largest economy ranked the last among East African Community (EAC) member states on the ease of doing business indicator.

Rwanda leads other EAC countries occupying the 32nd position among 189 countries. Kenya follows at 129th position, and Uganda and Burundi occupy the 132 and 140 positions respectively.

On the ease of starting a business, Tanzania ranks the third after Rwanda and Burundi. Rwanda led other EAC member states in this category followed by Burundi.

Kenya and Uganda trail at the fourth and fifth positions in the EAC region. Tanzania scored the lowest regional performance in dealing with construction permits.

It is ranked at the 177th position. Kenya had the best regional performance in that category. Tanzania has, however, attained the best regional performance in trading across borders indicator after being ranked at 139th position. It takes the 18 days to export being the shortest time to export in the region.

It takes US$ 1,090 to export a single container being the lowest in the region. The report credits Tanzania on making significant reforms on credit information and resolving insolvency.

It said Tanzania improved its credit information system through new regulations that provide for the licensing of credit reference bureaus and outline the functions of the credit reference data bank.

Tanzania made resolving insolvency easier through new rules clearly specifying the professional requirements and remuneration for insolvency practitioners, promoting reorganization proceedings and streamlining insolvency proceedings.

Commenting, the Minister for Industry and Trade, Dr Abdallah Kigoda, said the government was to address challenges in improving business environment and it was optimistic the country remains top destination for foreign investments.

He said there were improvements in many areas including the fiscal regime which was now more predictable to investors. 

The government had also addressed the problem of excessive bureaucracy in registrations and issuing of necessary permits. “A number of issues have been put in the right perspective but we acknowledge there is a room for improvement,” he said.

There are also opinions that the World Bank report does not capture all the improvements made in the business climate of the country. 

The Chairman of the CEO Roundtable, Ali Mufuruki cautioned that the report should not be taken with a lot of enthusiasm as it does not focus on reflections of local investors on the business climate in the country.

“I don’t pay a lot of attention to these reports. Countries like China and India with the worst performance in these reports are leading in attracting foreign direct investments,” Mr Mufuruki said in an interview. 

They should have asked local entrepreneurs and investors in Tanzania on how the country is doing in improving the business and investment climate.

He, however, noted that the report may have an effect in attracting foreign direct investments. Tanzania tops the East African Community region in attracting foreign investments, according to the World Investment Report 2013.

The report indicates Tanzania registered a significant increase in foreign direct investments in 2012 despite a major global downturn. It shows that Tanzania registered 38.77 per cent increase in FDIs from US$ 1229.4 million in 2011 to US$ 1,706 million as global trend shows alarming decline in investment inflows. 
Source: Daily News, reported by Henry Lyimo from Dar es Salaam,Tanzania
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