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Blueprint for Regulatory Reforms to Improve the Business Environment Improve Reforms to Blueprint for Regulatory

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Blueprint for Regulatory Reforms to Improve the Business Environment Improve Reforms to Blueprint for Regulatory THE UNITED REPUBLIC OF TANZANIA MINISTRY OF INDUSTRY, TRADE AND INVESTMENT DODOMA, JANUARY 2018 DODOMA, JANUARY TRADE AND INVESTMENT OF INDUSTRY, MINISTRY BLUEPRINT FOR REGULATORY REFORMS TO IMPROVE THE BUSINESS ENVIRONMENT IMPROVE REFORMS TO BLUEPRINT FOR REGULATORY BLUEPRINT FOR REGULATORY REFORMS TO IMPROVE THE BUSINESS ENVIRONMENT Ministry of Industry, Trade Prime Ministers's Office and Investment Dodoma, April 2018 THE UNITED REPUBLIC OF TANZANIA Blueprint For Regulatory Reforms To Improve The Business Environment Ministry of Industry, Trade and Investment Dodoma, April 2018 Blueprint For Regulatory Reforms To Improve The Business Environment Keynote Successive government phases in Tanzania have made various attempts to promote investment in the country by creating an enabling business environment through strategic reforms. Such reform initiatives, for example Business Environment Strenthtning for Tanzania (BEST) and Big Results Now (BRN), have admittedly led to some improvements in the realignment of the business regulatory regime and the government’s initiative in the provision and delivery of services. Despite the well-intended efforts to drive reforms with a view to achieving a vibrant economy, a number of policy and regulatory challenges have persisted. The challenges partly emanate from changes in the dynamics of economic, political, social, cultural and the business environments which have had a significant negative impact on the growth of the private sector, weakening the very foundation of the present government’s industrialization drive. As a result, stakeholders have lamented of the apparently conflicting or duplicative policies and laws at the central and local government levels relating to taxes, levies, licensing and other charges. The difference in charges across the Local Government Authority (LGA)spectrum and the multiple regulatory agencies with seemingly similar roles and functions has also raised concern from a cross section of stakeholders. From some stakeholders’ perspective, the prevalence of high costs in enforcing the implementation, both at the central and local levels is a result of the licensing regime laying more emphasis on revenue generation at the expense of provision and delivery of quality service to ensure high yields for both the government and the private sector. It has also been observed that high costs and cumbersome procedures have resulted in informal operation of businesses (occasionally though dubious means) and subsequent loss of revenue to the Government. The 5th Phase Government has re-iterated its dedication to ensuring that regulatory hurdles are removed. While maintaining its regulatory role, the Government has devised strategies aimed at bringing clarity in the regulatory regime in order to ensure that the private sector operates in a friendly and predicable business environment. To that end, the government has embarked upon a holistic approach to reviewing the policy and regulatory framework governing institutions and agencies. It has done so in order to streamline and rationalize the licenses, taxes, charges,fees and levies to ensure inclusive participation of the private sector, focusing on smallholder farmers, small and medium enterprises (SMEs) and large-scale businesses. The government is aware that it must improve and strengthen the business enabling environment (BEE) in line with its objective of moving towards industrialization for economic transformation and human development, as set out in the Second Five Year Development Plan document (FYDP II). The government is also aware that BEE is a prerequisite to ensuring that both local and foreign potential investors are attracted to enter and participate in the different sectors of the economy at the scale required to accelerate and sustain industrial transformation. This Blueprint provides a guide to achieving the industrialization dream of creating, in the shortest period possible, the required business-enabling environment where the government and the private sector work hand in hand in realizing the dream. It seeks to put in place a framework that enables the review of BEE for improved business climate in Tanzania. II Blueprint For Regulatory Reforms To Improve The Business Environment The Blueprint comprehensively analyses the existing regulatory challenges taking into account best practices internationally and proposes robust principles and guidelines for reforms. It articulates clearly general and specific areas for reform and ways of implementing them with necessary adjustments to suit local conditions pertaining to the country. It sets out a benchmark for undertaking a holistic approach to overcoming the challenges and constraints affecting policy, regulations, delivery, and coordination, which retard the growth of the private sector. The Blueprint also proposes a robust M&E framework in order to keep track of the progress in implementation at national and sub-national levels. I therefore calls upon all Ministry Departments and Agencies (MDAs), Regional Secretariats and LGAs as well as business community to effectively implement the reforms presented in this Blueprint. My office commits itself to oversee that, as much as it is possible, all regulations which are a hinderance to to the ease of doing business in our country are amended accordingly. I also request all stakeholders to participate effectively in monitoring and evaluating progress at national and sub-national levels as well as at the level of individual organizations. If we all play our part to implement the reforms Tanzania shall have a regulatory framework which is more pro- business, yet effective in protecting the safety, livelihoods, health and well being of communities. Tanzania will also be in a good position to ensure fair competition, sustainable environment management, national interest and security. Hon. Kassim Majaliwa Majaliwa(MP) The Prime Minister of the United Republic of Tanzania April, 2018. III Blueprint For Regulatory Reforms To Improve The Business Environment The Statement from the Minister Tanzania has resolved to pursue the industrialization course in order to hasten attainment of the aspirations of the Development Vision 2025. We envision a nation with “a competitive industrial base that supports inclusive and sustainable economic growth”. This vision will be achieved by promoting a competitive and sustainable industry base with global supply base for trade that takes geographical advantage, and resource endowment, through policies, strategies and plans for inclusive industrial transformation. The Blueprint is one of Tanzania’s strategic munitions to that end. The Blueprint provides Tanzania with a framework for enabling a holistic review of business-enabling environment (BEE) in order to improve the business climate. If effectively implemented, the Blueprint reform proposals will push Tanzania to the frontier of Ease of Doing Business. The proposed reforms aim to address the remaining hurdles to doing business, including: (i) existence of high compliance costs in monetary terms and time in starting and operating business; (ii) cumbersome pre-approval procedures, which create rent seeking opportunities. (iii) presence of a multiplicity and duplicity of processes; (iv) loopholes in some of the laws and regulations that are applied by regulatory authorities; and (v) high costs of compliance and enforcement to both the government and private sector. Effective implementation of the Blueprint reform proposals requires the regulatory agencies to review and enhance internal and external transparency and communication, including strict adherence to performance management culture. Tanzania’s regulatory authorities should adopt and follow world class Citizen’s Client Charter, Performance Pledge and Customer Strategy, and Monitoring and Evaluation and guarantee feedback to private sector timely. The Blueprint proposes mechanisms for robust monitoring and evaluation, such as Organizational Performance Index (OPI) to compare similar and related regulatory authorities, and production of national Ease of Doing Business Report to rank regions public and private organisations at Production, Supply and Consumption Stages. The reforms on the Government side should be reciprocated by the private sector. It is expected that the private sector will strengthen their capacity for quality representation and dialogue with the Government. As such, the Government is expecting matched capacities among the private sector institutions to engage with the government formally, thus eliminate the vacuum and loopholes which encourage illegal networking and creating avenues for undeserved privileges, corruption, and mistrust. If all parties involved in business adhere to the principles outlined in this Blueprint, Tanzania’s business environment will be characterized by enhanced transparency, supportive rule based decisions, policy predictability, and accountability. With these outcomes, there will be systematic partnership engagement and healthy dialogue between the private sector and the Government, flourishing private sector, and industrial transformation. We all have a role to play! Hon. Charles John Mwijage (MP), Minister for Industry, Trade and Investment. IV Blueprint For Regulatory Reforms To Improve The Business Environment Preface This Blueprint for regulatory reforms in Tanzania has been prepared to address the skepticism by a cross section of private stakeholders who have occasionally argued their efficiencies are curtailed by presence of
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