70.71 Group

Tanzania’s performance on creating business-friendly reforms continues to lag behind other East Africa Community member states, a newly released report by the World Bank reveals.

The Doing Business in the East African Community 2010 report which was released in Dar es Salaam yesterday, places Tanzania on position number four out of five countries that make the EAC. Rwanda and Kenya have been ranked on position number one and two, respectively. Uganda ranks number three while Burundi is placed on number five.

Tanzania has performed poorly in areas such as closing and starting business, protecting investors, access to credit, cross border trade, and issuance of construction permits.

“Securing a construction permit, for example, is so complex in Tanzania that it takes 32 steps and 328 days and at a cost approximately 33 times per capita income. The country has been ranked 178th out of the 183 economies in securing a construction permit,” says the report.

Tanzania has maintained the same position in closing business at position 113th in 2009 and 2010, while its performance on protecting investors has slumped from position 88th in 2009 to 93rd in 2010.

Access to credit also remains challenging to Tanzania, dropping from position 84th to 87th while it recorded poorly on employment of workers from position 131st to 133rd.

The World Bank ranking also showed Tanzania slumping on trading across boarder at position 133rd in 2010 from 131 in the previous year, whilst dealing with construction permits has had the country placed at 178th from 175th.

In payment of taxes, the country is ranked 120th from 113th while starting of business is at position 120th, down from 111th in the previous year.

Rwanda ranks dead last in terms of time and cost of liquidating a business.

According to the report, there are however, good practices amongst countries in the EAC that if adopted by all countries would yield very healthy business environment.

Tanzania ranks well in enforcement of contracts while Rwanda is hailed as being the fastest in starting a business. Kenya does well in securing credits.

“A key objective of the EAC is to develop an effective common market. The report provides a good basis for comparing regulatory performance across the region, and how this contributes to deeper regional integration,” said Mr Juma Mwapachu, secretary general of the EAC Secretariat.

The report draws on the data of the annual global Doing Business study and takes a detailed look at business regulations in Burundi, Kenya, Rwanda, Tanzania, and Uganda.

“In times overshadowed by the global financial and economic crisis, business regulation can make an important difference for how easy it is to reorganize troubled firms to help them survive, to rebuild when demand rebounds, and to get new businesses started,” said Sylvia Solf, co-author of the report.

Doing Business in the East African Community 2010 was prepared as part of the EAC Investment Climate Programme supported by the World Bank Group and the United Kingdom’s Department for International Development.

“This report shows that within the borders of the East African Community, there is already excellent experience of innovative investment climate reform that has delivered tangible benefits.  EAC Countries can improve business regulation significantly just by implementing best practice already developed in the region,” said Tim Lamont, Regional Economist, for DFID’s programme in East Africa.

In the World Bank Doing report 2010, Tanzania was ranked 131st, Kenya 95th and Rwanda on 67th while Uganda and Burundi were placed on 112th and 176th position, respectively.

In 2008, Tanzania was ranked 124th, beating Rwanda and Burundi which were positioned 148th and 174th, respectively. Uganda was 105th whereas Kenya was 78th.

Tanzania’s ranking in the 2009 report declined to position 127th, Uganda at 111th while Kenya flopped to 82nd. Rwanda on the other hand picked up to position 139th as Burundi declined further to 177.

Source:
The Citizen TZ