Donor-backed initiative to speed up Tanzania reforms

30 Sep 2013Katrina Manson

When one of Tanzania‘s leading businessmen needed to discuss a worrying shift in government policy, he set off for a senior civil servant’s office himself. There, he spent two hours waiting, as he puts it, to “not get a meeting”.

“We are working on it”, the civil servant said. “Kuja kesho (Come tomorrow)”.

Private businesses say this kuja kesho mentality is one of the biggest impediments to attracting investment and expanding operations. Several aim to move into the east African region and beyond, but are consistently wrongfooted by government inefficiency.

“The business community is dynamic, but the government … Oh my goodness”, says the businessman.

Of its four neighbours, only landlocked, war-devastated Burundi scored lower than Tanzania for its business environment in the World Bank rankings this year. Worse, it is slipping.

“In terms of the quality of the country’s investment climate, the country’s ranking has actually declined, slipping 21 places over the past five years”, says a World Bank report on Tanzania published this year.

While it is easier to start a business and register property than it used to be, it is harder to secure construction permits, protect investments, trade across borders and enforce contracts, the report says.

William Mgimwa, the finance minister, says: “We are not here to make decisions that are going to create any negativity with investors. No, no, no. That will be the last [thing] to attempt”.

But in another set of rankings, which assess government effectiveness, Tanzania is also slipping, down 15 places in five years.

Real estate developers say they can wait months for “the right business permit”, a euphemism for a propensity to extract money in exchange for paperwork.

“Corruption is … perceived as the most severe constraint by almost half of business leaders”, says the World Bank report.

Business people say privately they could cope with corruption if paying extra meant it would speed things up. “They take the money and things still don’t happen”, complains one.

Businesspeople say the problem is based, to some extent, on the country’s socialist, centralised legacy. “Decision-making is very slow”, says one. “Everyone wants the safest bet, including the president. Don’t do anything and then we’re still OK”.

None of which suggests Tanzania is speeding to its target to become a middle-income country by 2025.

But, with an election on the way and donors regularly noting that despite pouring in billions of dollars they have made no headway on reducing poverty, president Jakaya Kikwete is spearheading a fresh initiative.

Lu Youqing, the Chinese ambassador, says “One reason Tanzania has difficulties attracting investment is the inefficiency of the government”.

He backs the president’s delivery bureau, a Chinese-style target-orientated office, headed by Omari Issa, who also heads a donor-funded initiative.

“The ‘Big Results Now’ initiative is a recognition by the government that it is not getting results fast enough”, says a senior international donor of a project introduced this year to fast-track reforms in six areas, including energy, agriculture and education. “The productivity of public expenditure is very low”.

The BRN initiative, modelled on efforts in Malaysia after a visit there by Mr Kikwete, aims to marshal change from the top and deliver on targets.

The $25m-a-year monitoring system is paid for by the World Bank, the UK’s aid agency DfID – which has committed more than $70m over four years – and the Swedish aid agency.

On his return, Mr Kikwete gathered the country’s top officials to execute the plan, which has a counterpart in Rwanda.

Tanzania already had several overlapping plans, but Mr Mgimwa says the extra organisation will deliver.

“We have had all these priorities for the past two years in the strategic plan – [the BRN] is not a publication of other priorities”, he says. “It is a mere emphasis on specific priorities that have a quick impact”.

Business people and investors are sceptical whether it can deliver results faster.

One donor insists: “It’s not a waste of money. The point is to have a different level of execution”.

The exasperated businessman says next time he is obliged to visit a ministry, he will do so wearing a T-shirt emblazoned with the phrase “Big Results Now”.