Business Environment Improvement

Overview

The Business Environment Improvement (BE) Priority Area was introduced under Big Results Now! (BRN) following the Government’s recognition of the need for concerted efforts towards creating an enabling environment for the private sector to thrive in Tanzania. Under BE, six priority areas were determined in consultation with the private sector between February and April 2014. These are; Realigning Regulations and Institutions, Access to Land and Security of Tenure, Taxation, Curbing corruption, Labour Law and Skillsets and finally; Contract Enforcement.

National Key Results Areas (NKRAs) under Business Environment Improvement.

 

Realigning Regulations and Institutions NKRA   Curbing Corruption NKRA
Access to Land and Security of Tenure NKRA   Labor Law and Skill Sets NKRA
Taxation NKRA   Contract Enforcement NKRA

 

Business Environment Framework

 The underlying framework across all NKRAs in the BE Priority Area consists of three main types of intervention:

1.    Streamlining legal and regulatory frameworks: Improving the quality of laws and regulations in order to better facilitate administration and enforcement.

2.    Modernising processes: Enhancing efficiency in workflow processes with the aim of reducing the burden of excessive compliance procedures and costs.

3.    Building institutional and individual capacity: Developing structures and human capital required to implement/enforce regulations and new processes, as well as to sustain business reforms.

Each NKRA has a number of initiatives which seek to address fundamental regulations, procedures and costs related to operating a business in Tanzania. Successful implementation of the initiatives under each BE NKRA are, collectively, expected to have a catalytic effect on improving productivity and competitiveness within the economy (see figure 2).

 The Relevance of Business Environment

In its simplest form, making it easier to do business increases investor confidence in a country. This is reflected through the increase in both foreign and domestic direct investments. More private sector investments translate into greater opportunities for employment which lead to economic growth, and directly impact on improving the livelihoods of Tanzanians, thus contributing to socioeconomic development. When a country has a vibrant and growing economy, underlined by robust systems and accountability mechanisms, the number of taxpayers is expected to increase. This subsequently contributes to a widening of the tax base and thus generates greater revenue for the Government. With additional revenue, the Government will be in a better fiscal position to pay off its debts, and most importantly, effectively fund the country’s development agenda. A conducive Business Environment therefore serves as a catalytic role in enabling other National Key Results Areas to fully function.