Regulatory Authorities' Attitude to Compete for Money from Manufacturers harm Industrialisation

Members of the Government Business Environment Reform Committee in discussion with CTI members on measures to be taken to improve business environment in Tanzania.

The attitude of the government’s Regulatory Authorities to compete for extracting money from the business community and industrialists prevents the industrial sector to expand and grow.

The above statement summarises the view of the manufacturers to the Government’s Business Environment Reform Committee which visited the Confederation of Tanzania Industries (CTI) to seek manufacturers’ views on what should be done to improve business environment in the country.
“We have come to find out the areas where you think the government may not necessarily need to overhaul all existing laws and regulations but change few things to make business environment much more conducive” the leader of the committee said.
The Chairman of CTI’s Fiscal and Economic Affairs Committee Mr. Hussein Sufiani Alli said that it was disheartening as the government kept on forming committees to find issues which have already been worked on and documented.
Regulatory Authorities’ attitude to compete for money from manufacturers harm industrialisation Members of the Government Business Environment Reform Committee in discussion with CTI members on measures to be taken to improve business environment in Tanzania.
“This sounds like reinventing the wheel as we have spent a lot of time during the seven-day business lab retreat where we documented all the laws, regulations, policies and institutional challenges that need to be addressed to make Tanzania’s investment environment competitive” he said.
Issues submitted to the Government Committee by the manufacturers: -
In 1970s, the Ministry of Health’s Government Chemist was the only Regulatory Authority that regulated the Food subsector. However, currently it is the most affected subsector for the regulatory authorities to compete for money, making Tanzania unfavorable for investments. It was concluded that in Tanzania the regulatory authorities perform the roles of controlling and regulating instead of supporting and facilitating businesses.
Uplifting of import value: A case was presented to the committee where a manufacturer imported a car for 4,000 Steering Pound. Despite submitting all documents to substantiate the price, the TRA still uplifted the value forcing the owner to pay 17m/- in tax. The tax paid was far above the buying price of the car saying that this can only happen in Tanzania.
Imposition of 15% Extra Import duty on sugar which the government was supposed to refund. The manufacturers’
money has accumulated to between 13-14 bn/- unrefunded. This has forced manufacturers to pay unexpected interest,
making them uncompetitive and prevented investment expansion.
Business Licenses: In Tanzania, an investor is required to have various business licenses. In the neighbouring countries such as Rwanda the licenses have all been consolidated. The government needs to take what is the best practice from neighbouring countries.
Road Licenses: In Tanzania, a car is required to have about 10 stickers which sometimes Policemen and women want to see them fixed on the wind-screen. It is the manufacturers’ view that those licenses should be harmonized and digitalized.
Outdated laws that prohibit Tanzania investors to Invest in game meat. The manufacturers complained over government’s attitude to continue enforcing the outdated and unfair laws which prohibit them to invest in game meat. Even after the government was provided with proof that our neighbour Kenya was harvesting game meat when animals migrate from Tanzania to Kenya. It was observed that government’s rejection to allow Tanzanians to invest in game meat seems to encourage them to cross to Kenya for game meat and use Tanzania as a market.
Financial Institutions requirements for Collateral: Most of the Tanzania’s Financial Institutions have been requesting for immovable collateral before disbursing loans. The requirement has been discouraging new local investors as many lacked immovable collaterals. The government needs to revise this law and allow for an alternative means of collateral.
Tanzania Food and Drug Authority (TFDA)’s woes: The manufacturers complained about the long time that it usually takes before they acquire registration of their products from TFDA. On an average, it has been taking 9 months and sometimes the samples presented for examination get lost, an act which causes a lot of inconveniences to the manufacturers.
It was the manufacturers’ view that the government should consider deregulating its activities in line with other Eastern Asia countries which have succeeded to industrialise quickly after they embraced deregulation. 
Mr. Sufiani urged the government committee to find the already prepared documents and literatures which have all the manufacturers’ views and suggestions on what the government of Tanzania can do to hastily industrialisation.