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The Business Environment. Key Issue Discussion GBS Annual Review 23 November 2009. Introduction. Macroeconomic stability and strong economic growth. But sluggish progress of reforms to improve the business environment.
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The Business Environment Key Issue Discussion GBS Annual Review 23 November 2009
Introduction • Macroeconomic stability and strong economic growth. • But sluggish progress of reforms to improve the business environment. • Presentation organised around 4 key messages, drawing on results of recent comparative surveys. • Objective of the session is to agree on concrete actions
Message #1 • Tanzania is slipping down the Ease of Doing Business rankings and losing ground against its neighbours.
M1a: Tanzania’s record against the continent’s top performers
Message #2 • The high costs of doing business not only deters new investment but also reduces the competitiveness of Tanzanian firms and Tanzanian exports.
M2a: The % of manufacturing firms that export from Tanzania is low.
M2c: Other Business Environment constraints (power, finance)
M2d: Power outages in Tz relative to neighbouring economies (2006)
Message #3 • The Government of Tanzania needs to reassure domestic and international investors of its commitment to investment climate reforms, particularly during this Global Economic Downturn
M3: Falling investor confidence • Tanzania Investment Centre reports fall in number of registered investment projects. • “Toxic actions” by Government ministries in the headlines • Uncertainty created has increased the level of perceived risk of investing in Tz • Good reputations hard won are easily lost.
Message #4 • Slow progress in implementation of Investment climate reforms - coupled with vocal complaints from the business community over their treatment at the hands of officials - threaten to undermine the case for GBS
Conclusions • Need to secure agreement on concrete steps that the GoT will take over S/M/L-term to improve the Business Environment • Strong leadership is critical • Seriousness of response taken to 2010 DB survey is encouraging. • Look forward to hearing the outcome of the task force deliberations from PS MITM.