Parliamentary Committee: Regulatory Agencies Whose Functions Overlap up for Trimming

Tuesday, April 19, 2016

Some of the CTI members listening to the Chairman of the  Parliamentary Committee on Industry, Trade and Investment Dr. Dalali Peter Kafumu (not in picture)

THE April 8 2016 meeting between the Parliamentary Committee on Industry, Trade and Investment, the Manufacturers and different Regulatory Agencies ended up with some parliamentarians calling for the government to trim down all Regulatory Agencies whose functions overlap or streamline them to reduce burden to the manufacturers.

The feeling to trim the number of Regulatory Agencies whose functions overlap came after the members of the Parliamentary Committee on Industry, Trade and Investment listened to the Confederation of Tanzania Industries (CTI), Individual manufacturers and heads of the Regulatory Agencies.

The meeting was called by the Chairman of the Committee Dr. Dalali Peter Kafumu (Member of Parliament for Igunga Constituency) whose committee is preparing a report that will help the Fifth Phase Government to realize its industrialization dreams.

The Regulatory Agencies which attended the meeting included; the Tanzania Bureau of Standards (TBS), Tanzania Food and Drugs Authority (TFDA), Weight and Measures Authority (WMA), Business Registration and Licensing Authority (BRELA), National Environmental Management Commission (NEMC), Occupation, Safety and Health Authority (OSHA) and Tanzania Revenue Authority (TRA).

Issues presented by CTI:

The Regulatory Agencies are essential for Tanzanians in general, but they pose challenges which need urgent solutions. The challenges are:

First,there are many Regulatory Agencies some which undertake similar functions for different charges or fee. For a local investor to start food related industry for example, he is requires to acquire authorisation from TFDA, NEMC, TBS and make sure he abides by the Local Government (District Authority Act. Cap 287 or Urban Authorities Act. Cap 288).

He has also to acquire documents from Atomic Energy Agency, Weights and Measures Body, Fire and Rescue as well as BRELA. The multiplicity of these Regulatory Agencies forces an investor to go through tedious process which adds to the cost of doing business to the investor.

Second,most of the Regulatory Agencies execute similar functions such as inspecting industrial areas as well as quality of food but do not share information, a good example being TFDA and TBS. 

Thirdly,some Regulatory Agencies charge their fees using American dollar, basing on the value of the consignment instead of Tanzania Shilling and the actual cost of inspection and or determination of product’s quality. The inspection fee or charges for determining the quality of products are unnecessarily high which add to the cost of doing business.

Fourth,the Regulatory Agencies frequently delay the inspection report or quality inspections which cause delays of industries to start production in the country. In order to register a product’s quality with TBS or TFDA for example, it may take not less than six month and the two Agencies do not accept quality test results from other countries’ Agencies in case there is dispute.

Fifth,some Regulatory Agencies work like Police force, and do not work to assist the manufacturers comply with existing Laws and Regulations. The Agencies wait the manufacturers to error so that they can fine or close their businesses.

Sixth,the Regulatory Agencies lack centrality as some are situated in the regions, some in different corners of Dar es Salaam which force investors to visit each agency separately. This also adds to the cost of production which makes Tanzania products uncompetitive.

           CTI suggestions:

The Agencies whose functions overlapped should share information on test and or inspection results;    charges their fee in Tanzanian Shillings and based on actual value of inspection or tests made to the products. The Agencies need to conduct awareness education to the manufacturers on how to comply with existing laws and regulations instead of using force to make them comply.

The government should also consider streamlining the Acts which created those Agencies and think to start paying for the Agencies’ operation expenses. This will help them remain with very few fee and charges which do not affect the manufacturers’ competitiveness.

                           CTI members’ views:

i.   Tanzania Manufacturers were subjected to numerous fees and levies from many Regulatory Agencies to the extent that companies are paying more than 20m/- monthly for fumigating containers alone.

ii.   The bad side of the matter, the behaviour and attitudes of most workers of these Regulatory Agencies were like Police. They come with intimidations to close industries as if the industries have no value to this country.

iii.    All fees and charges paid by the manufacturers to these Regulatory Agencies add to the cost of production are passed over to the ultimate consumer, an act which made manufacturers to be uncompetitive both locally and regionally.

Vi.   The Tanzania Revenue Authority (TRA) arbitrarily uplift import value and long verification procedures force importers to spend more than 7 days before they clear their goods which attract huge demurrage charges.

                                 Head of Regulatory Agencies’ responses:

i.  Regulatory Agencies worked within provided laws and regulations

ii. Some of TFDA and Tanzania Bureau of Standards (TBS) functions overlapped and they were in discussions to streamline their functions to avoid double charging of manufacturers.

                                   Members of Parliaments’ views:

i.    Dr. Diodorus Buberwa Kamala (MP for Nkenge Constituency): The government must act and trim or merge all Regulatory Agencies which seem to provide similar services.

ii.    The Regulatory Agencies which will prove to be essential for the well being of Tanzanians, their operation costs must be assumed by the government while allowing only to charge very little fees to make the manufacturers competitive.

iii.    The regulatory agencies have turned themselves into TRA as they engaged in collecting money for their survival while disregarding the negative impact their fees and charges cause to the manufacturers.

iv.    Mr. Godless Lema, a Member of Parliament for Arusha Urban: Many of the government authorities have adapted to work by exerting threats to people, a system which, if continues, could cause some manufacturers to relocate their businesses to the neighbouring countries.

v.    Proposed another inclusive meeting with Minister for Finance and Planning, Minister from the President’s Office, Minister for Industry, Trade and Investment, TRA, and Heads of the Regulatory Agencies after which the committee will meet the President and tell him about all manufacturers’ woes.

                      Parliamentary Committee Chairman’s Views:

i.   The Regulatory Agencies should emulate TFDA and TBS efforts while concrete and lasting solution on multiple regulatory Agencies’ effects are being sought to make Tanzania manufacturers competitive.

ii.   Agreed to Mr. Godless Lema’s proposal and ordered Permanent Secretaries and Heads of Regulatory Authorities to be on alert for the other meeting.

iii.  Tentatively scheduled the meeting during the coming Parliamentary Budget sessions and requested the manufacturers to help the committee by attending the meeting in Dodoma. The meeting will draw resolutions and proposals to be presented to the President as a strategy towards industrialisation.