Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.
Tanzania: Govt Reaffirms to Cut Costs of Doing BusinessFriday, June 13, 2014 > 08:57:59
The government has resolved to remove all trade hassles that have been contributing to high cost of doing business to promote private sector's role in the economy.
Where the private sector is robust, it could provide an important source of finance to compliment government budgetary deficiency particularly in development expenditure.
This can be done by engaging it actively in exploring abundant investment opportunities in the industrial sector.
Moving the 2014/15 budget estimates in Dodoma last week, the Minister for Industry and Trade, Dr Abdallah Kigoda, said only 52 per cent of the budget allocation for his ministry was released, thus creating a gap in implementing development projects.
For the private sector to register outstanding performance, Dr Kigoda noted that the government should put in place enabling environment in order cut down production cost or cost of doing business.
He added, "It is high time to build up morale of the private sector by ensuring that its contributions in the economy is done in smooth and conducive environment, in order to do business at low cost."
The establishment of one stop border post and implementation of single custom territory are the current initiatives in pipeline, having an ultimate goal of creating conducive business environment for the private sector.
The Information and Communication Officer in the Ministry of Industry and Trade, Mr Thomas Mushi, said in an interview that the combined initiatives aim to foster free movement of cross border goods at the most minimum cost.
Since the government is not doing business, he said, the effective engagement of the private sector as an engine of economic growth is not to be underestimated.
Doing business at low cost guarantee not only attractive return to investors but also consumers enjoy goods at low prices. "One of the longstanding outcry of the business community in the country was the high cost of doing business fueled by border delays, multiplications of check points and weighing bridges, unreliable power and high transport costs, all of which made unprofitable business," he said.
But with one stop border post that entails a single or shared physical infrastructure where border agencies of neighbouring countries operate side by side, will remove multiplicity of border clearances and unnecessary delays.
Mr Mushi said at Holili border post on the Tanzania side, the infrastructure to facilitate operations of the new arrangements is ready where over 5 million US dollars donor funded building with state-ofthe art facilities was completed since December, last year.
Another border post, Taveta on the Kenyan side which is nearly 6 million US dollars worth facility was expected to be ready last month.
The ultimate goal of establishing one stop border post is to reduce transit costs incurred in cross-border movement by combining the activities of both countries' border organisations and agencies at either a single common location or at a single location in either direction, without increasing risk to public safety or revenue collection.
However, one stop border post alone can not be a solution to cutting down cost of doing business; rather it is a combination of initiatives. Recently, the government piloted a single custom territory for the central corridor after the northern zone launched in January, this year.
The single custom territory initiatives are under the trilateral arrangement including Tanzania, Burundi and Uganda for the central corridor and Kenya, Rwanda and Uganda for the northern corridor that was piloted from January this year.
Once implemented, it is expected to eradicate trade barriers by adopting a central model of clearance of goods, whereby taxes and assessments will be done only at the first point of entry and, thus, ensure faster clearing of goods as well as reduction in the cost of doing business.
With the system, goods will be declared once at the country of destination before reaching the first entry point, thus cutting down operational costs as well as improving significantly the business climate in the region.
Also with the initiative, roadblocks will be eliminated by the adoption of electronic cargo tracking systems, replacing human intervention through automation of procedures that will also impact in stopping corruption.
For example, there will be a single weighing bridge from Dar es Salaam to Kabanga, Rusumo and Mutukula, an initiative that implies more cargo clearance at the Dar port, more revenues and employment.
Therefore, removing trade barriers is one of the crucial moves that will promote private sector participation in the economy, particularly in complimenting the government budget deficiency by investing in some development projects.