Tanzania Needs Clear Rules Amid Economic Transition, Ndulu Says

DAR ES SALAAM (Capital Markets in Africa) Tanzania needs to provide clear rules to businesses as it improves governance and makes better use of its natural resources, the governor of the central bank said.

President John Magufuli’s government has embarked on an industrialization drive that will need the public sector and business to work better together to achieve inclusive growth, Bank of Tanzania Governor Benno Ndulu said Tuesday at a book launch in the commercial capital, Dar es Salaam.

With the private sector playing a key role, “the question of business environment, improvement of governance, but also clarity of rules and greater certainty about what is the new, if you want, rules of the game, is extremely important,” Ndulu said. “Laws tend to ground those rules better than simply edicts.”

Magufuli, who took office in late 2015, has been on a drive to cut corruption and boost natural-resources revenue in sub-Saharan Africa’s sixth-biggest economy. His administration has passed laws enabling it to renegotiate contracts and ordered foreign firms to sell stakes on the local stock exchange for greater transparency. Authorities hit Acacia Mining Plc with a $190 billion tax bill and seized gems from Petra Diamonds Ltd., alleging it hadn’t paid its dues. There’s been concern the moves could affect tax income and deter further investment.

Heeding Law
Minister of Industry, Trade and Investment Charles Mwijage said the government is trying to ensure companies heed the law and that suggestions it will drive away investment are misguided.

“They need to change their mind,” he said in an interview on the sidelines of the same event, describing interest from China, Vietnam and India as showing that Tanzania is attractive to investors.

“We want to fight to have an inclusive economy,” Mwijage said. “People used to eat while others were going to bed without food.”

The government is “coming up with a system whereby we will make sure that everybody is getting part of the cake,” he said, ruling out any suggestions of nationalizing industry.

Source: Bloomberg Business News