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Private, public sectors’ alliance is a game changer: Here’s why

Findings from a case study in Tanzania's joint economic recovery plan

MONDAY December 5, 2022

By Adam Ihucha

Tranquility News Correspondent, Tanzania

A reciprocal relationship between the government and the private sector, courtesy of President Samia Suluhu Hassan, has paid dividends in driving economic recovery post COVID-19 pandemic.

In her keynote address at the maiden Private Sector Day, the Chairperson of the flamboyant Tanzania Private Sector Foundation (TPSF), Ms Angelina Ngalula, says the country has seen key sectors of economy recouping rapidly, thanks to the good rapport existing between the public and the private sector.

“Together we have achieved a robust overall economic growth post COVID-19. For instance, we have successfully managed to revive the multi-billion-dollar tourism industry through the public and private sectors’ efforts”, says Ms Ngalula, doubles as also the East African Business Council (EABC) Chairperson.

Tourism, which is a money-spinning industry creating 1.3 million direct jobs and generating $2.6 billion annually in Tanzania, equivalent to 18 per cent as well as 30 percent of the country’s GDP and export receipts, respectively, was hobbled by the brutal wave of Coronavirus.

Owing to its inbound nature, the industry was the hardest-hit, as the outbreak of the Coronavirus led to a sharp fall in tourist arrivals from slightly over 1.5 million in 2019 to 620,867 in 2020.

The Tanzania’s Vice-President, Dr Phillip Mpango, was a Guest of Honour during the handing over of awards at the climax of the Private Sector Day 2022 held in the country’s commercial capital, Dar es Salaam. He was flanked by the Minister for Industry and Trade, Dr Ashantu Kijaji (Left), and his host, the Tanzania Private Sector Foundation (TPSF) Chairperson, Ms Angelina Ngalula (Third Left), among other dignitaries. PHOTOS | COURTESY

The decline in tourist arrivals triggered an even more devastating plunge in revenue collection to $1.7 billion in 2020, down from an all-time record of $2.6 billion in 2019.

With an 81 percent drop in tourism due to the COVID-19 pandemic, many businesses collapsed, resulting into significant losses in revenue and three-quarters of jobs within the industry; be they tour operators, hotels, tour guides, transporters, food suppliers or traders.

This severely affected the livelihoods of many, especially the micro, small and medium enterprises, unprotected workers and informal businesses, mostly comprising women and youth.

At the height of the pandemic, both the government and the private sector had undertaken a number of response measures, including rollout of vaccines, virtual marketing blitz, engaging international marketing companies to promote Tanzania as a top-notch tourism destination in the US, and organising travel agents’ familiarisation trips to the country.

It goes without saying, Dr Samia’s Royal Tour film’s content, its strategic premiere in the US market and timing had a widespread grip and commands significant traffic of tourists and investors.

The Tanzania Private Sector Foundation (TPSF) Chairperson, Ms Angelina Ngalula, delivers her keynote address during the climax of a maiden Private Sector Day 2022 in Dar es Salaam, Tanzania.

Produced by Peter Greenberg, the maiden film featuring President Samia as his key guide, showcasing Tanzania’s rich cultural, wildlife heritage and an array of investment opportunities through her leadership eye, was launched in New York, US, on April 18, 2022.

What made the ‘Royal tour’ series different from most tourism-related programming is that, besides presenting an informal and personal side of a leader, it presents a 360-degree view of Tanzania, the home of number one safari destination in the world, housing four of the most coveted adventure hotspots on earth: the Serengeti, Mount Kilimanjaro, Zanzibar, and Ngorongoro Crater, compounded by the kind hearted people.

Fortunately, all these efforts have yielded tremendous impact in terms of commanding substantial tourists’ traffic, Ms Ngalula says, citing latest official statistics showing the country received 742,133 tourists between January and July 2022, representing nearly 63 percent growth compared to the same period in 2021.

She attributes agricultural sector growth to lowest interest rates from three key commercial banks, namely CRDB, NMB and TIB, saying it is one of the milestones of joint initiatives between the country’s sixth phase regime under President Samia and the private sector.

“We witnessed CRDB, NMB and the TIB banks lower interest rates on agricultural loans from 20 per cent to a historic 9 percent, to enable farmers to access reasonable credits required for spurring agriculture and realising the 10/30 Agenda,” Ms. Ngalula says.

Tanzania President Samia Suluhu Hassan (Left) guides Royal Tour photojournalist Peter Greenberg during the filming of a documentary dubbed Tanzania: The Royal Tour. PHOTO | FILE

Both the 10/30 Agenda and the National Development Strategy call for agriculture to grow by 10 percent, up from the existing five percent, come 2030, should the sector contribute significantly to economic growth and create descent jobs to the critical mass of women and youth through its multiplier effects.

“We’ve seen ratification of the African Continental Free Trade Area (AfCFTA), signing of major bilateral trade deals for local products to access international markets and enactment of business-friendly policies. These initiatives have played a critical role in restoring confidence to investors and the business community,” the TPSF Chief explains.

Indeed, President Samia’s State visit to China has reaped a huge direct and multiplier-effects to the horticulture industry, as she had essentially unlocked nearly $150 million strategic Chinese avocado market, in addition to those of South Africa and India, thus offering a ray of hope to thousands of butter-fruit growers.

On economic diplomacy, the TPSF leader showers praises to the President’s multilateral engagements with foreign governments and institutions for aiding the private sector, women and youth to access capital.

“We in the private sector are delighted over the prevailing peace and stability coupled with the government’s increased infrastructure spending, as it improves connectivity to markets and benefits the economy,” Ms Ngalula says.

The Tanzania Vice President, Dr Phillip Mpango (Centre), stands in honour of the national anthem during the Private Sector Day dinner gala. In his right is the Industry and trade Minister, Dr Ashantu Kijaji, whereas in his left is his host, the Tanzania Private Sector Chairperson, Ms Angelina Ngalula.

The TPSF Chair cites the June 2022 government’s directive to offer tax amnesty to outstanding arrears, saying it is an effective model for stimulating the country’s businesses and the economy.

Equally effective, she says, was an amendment of the Tanzania Shipping Agencies Corporation (TASAC) Act, 2017, saying it has resulted into increased business for local private sector companies.

“TASAC aside, other policy reforms like the National Investment Bill, 2022, encourage, nurture and increase local participation in the economy,” says Ms Ngalula, adding: “Decreased capital requirements for locally owned businesses, various investment incentives as well as promotion of local and foreign investments will spur trade.”

The TPSF also commends President Samia’s directive on the development of the National Local Content Policy to empower local firms to benefit from major government projects and investments.

The private sector sees the light at the end of tunnel through the implementation of the blueprint for regulatory reforms, as the government scrapped-off a total of 232 fees and charges in 2020/2021 financial year as well as 80 Finance Act parts related to business environment were amended in 2021/2022.

The Minister for Industry and Trade, Dr Ashantu Kijaji (Left), and the Chairperson of the Tanzania Private Sector Foundation (TPSF), Ms Angelina Ngalula (Right), greet guests invited to the 1st Private Sector Day 2022 dinner gala.

The initiatives coupled with professionalism in tax collection have triggered impressive tax compliance with official data showing that Tanzania Revenue Authority (TRA) had collected Sh16.69 trillion by March 2021/22, up from Sh13.59 trillion the previous financial year, registering equivalent to 22.8 per cent growth.

“As you are aware, the TPSF 2022 theme is Enhancing Private Sector Growth; as we look towards the new year, we see the need for our role, as the private sector, to be discussed,” says Ms Ngalula, adding: “The private sector intends to build on the success achieved in 2021 and 2022.”

The Tanzania Private Sector Day is a flagship of multi-sector events the TPSF organised in collaboration with key private sector organisations to honour and recognise the contribution of the sector to the country’s economy.

The event brought together over 1,000 delegates this year, including captains of industry, CEOs and government officials.

The organisers from the private sector included local organisations, namely Tanzania Chamber of Commerce, Industry and Agriculture; Confederation of Tanzania Industries; Tanzania Women Chamber of Commerce; Zanzibar National Chamber of Commerce; Tourism Confederation of Tanzania; Agricultural Council of Tanzania; Tanzania Chamber of Mines; and the CEO Roundtable.

Policy reforms like the National Investment Bill, 2022, encourage, nurture and increase local participation in the economy,” Ms Angelina Ngalula, the Chairperson of the Tanzania Private Sector Foundation.

Organisers from international business associations were the Chinese Business Chamber of Tanzania, Amcham-Tz, Tanzania Indian Business Association, European Business Group, DEİK Türkiye Tanzania Business Council, British Business Group in Tanzania, Aga Khan Economic Planning Board for Tanzania, and the Ministry of Investment, Industry and Trade.

The Objectives of the event was to take stock of the private sector’s achievements under the sixth phase government, promote business and investment in Tanzania in a bid to enhance the role of the private sector in realising the Tanzania Development Vision 2025.

With over 375 direct members, 231business associations, 129 corporates, 15 associate members, all representing over four million businesses, TPSF is an apex organisation and private sector focal point acting as the voice of the sector in TanzaniaΩ

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