EXCLUSIVE: CEOs happy with government’s pro-business policies

The new chairman of the CEO Roundtable of Tanzania (CEOrt), Mr David Tarimo, who assumed the role in June, this year, has called for more consultations before the government comes up with new laws, policies and regulations. Mr Tarimo, who took over from Mr Sanjay Rughani following the latter’s relocation to Uganda as Standard Chartered chief executive, believes by doing, so the business climate could be even more predictable and attract more investors. Mr Tarimo, who is also Country Senior Partner at PwC, a multinational professional services network of firms, granted The Citizen Business Reporter Alex Malanga and exclusive interview. Excerpts:

What is your rate of the current business environment?

The climate has improved significantly in the recent past, thanks to the government’s engagement with the private sector on the issues that investors are grappling with.
 Interaction with the government shows that the private sector and government have common interests.
This is commendable because it creates a room for a win-win for both the private sector and the government.
However, I believe the government can do better to improve the business environment and attract more investors.
 
What is it that the government needs to improve?
More consultations before we have new laws, regulations and policies is of paramount importance in creating an enabling business environment.
It sets a stage for a predictable business environment.
If the government consults more, and in good time, investors will be able to share their perspectives on implications that otherwise might not be seen with less or without consultation.
With more effective consultation, there could be better laws, regulations and policies. This in turn, could encourage and not frustrate investors.  
In other words, predictability will earn investor’s trust and confidence and as a result they could be able to have long-term investment plans because of being sure about their tomorrow.
 
In the past members of the private sector had been crying foul over numerous taxes, charges and fees, what is the current status?
The message from the top on the need for creating a conducive business environment is very clear.
However, we still have a number of challenges in terms of regulations and taxes.
For many sectors the part of the challenge is to ensure that regulators have a holistic view of the impact of all these costs – and yet too often the impression is that the left hand does not know what the right hand is doing.
A recent study in the tourism sector presented at the latest Tanzania National Business Council (TNBC) meeting shows that multiple taxes and regulations affect the sector’s competitiveness. Clearly, much more can be done in rationalisation and simplification of taxes.
 
If the message from the top is very clear, then what is a problem?
No different to the challenge for business leaders, it is one thing to set the strategy but another thing to ensure efficient implementation.
 Change management is key, and whilst we are certainly moving in the right direction, there is a need to move even faster when it comes to addressing challenges that the private sector is facing.
 
How do you rate the way the blueprint for regulatory reforms is implemented?
There is a commitment to address challenges highlighted in the blueprint, this is commendable indeed.
However, the challenge to us is equally on how we ensure that going forward we avoid new issues arising that adversely affect the business environment.
If you pass a new law or regulation without appropriate meaningful prior engagement and consultation, you might be creating a new issue.
 The question is on how we can avoid such a scenario to make sure that we don’t need to have another blueprint in future.

 
What are other challenges that the private sector is facing?
There is a challenge of getting sufficient people with the right skills – particularly where an economy is on a growth trajectory. For example, I recall a time when the banking sector seemed to have an ongoing bidding war for experienced local management talent in the sector reflecting the shortage at the time.
Clearly capacity gaps can have the effect impeding investment in the country.
Infrastructure is another area where the government has certainly been doing a lot, but the private sector would still want more to be done; for example, to ensure more reliable and affordable power.
Again this is an area where the government and the private sector could work together to come up with solutions including identifying areas for public private partnership where the private sector can play a role in filling the gap. A more general challenge for all, relates to the instability consequent on the pandemic and more recently the war in Ukraine, and in particular knock on macro-economic impacts not least in terms of costs (whether inputs, or finance).
 
What does the CEOrt do to bridge the skills gap?
Next month (September) CEOrt Apprenticeship Program will see the graduation of its second cohort, and launch of the third cohort.
The 12-month program harnesses the candidates’ skills through a series of knowledge forums, business simulations, group-based mentorship sessions and personal development coaching.
On completion of the program, participants will have been transformed into highly competent visionaries, enhancing their leadership capabilities and thus making them ready to take on senior leadership positions.
The first cohort of the apprenticeship program that is designed for Tanzanian executives on a career path towards becoming CEOs, has had a number of participants moving on to CEO positions.
They include AccessBank Tanzania Ltd’s Julius Ruwaichi, Black Rock Mining Ltd’s Alimiya Osman, Coca Cola Kwanza Limited’s Unguu Sulay and Songas Ltd’s Anael Samuel.
 
What are the opportunities that the private sector sees in the country?
The abundant natural resources that we are blessed with are well known with plenty of opportunities in terms of, but not limited to, natural gas, mining as well as tourism and hospitality.
As important, it is our geographical location which makes Tanzania the natural connection to, and logistical hub for, so many of our neighbors.
Indeed, apart from the normal business of movement of transit goods, we are in a good place to become a regional hub for supplies originating from Tanzania, whether agricultural products, manufactured items or gas supplies.
Importantly, our membership of the East African Community (EAC), Southern African Development Community (Sadc) and now the African Continental Free Trade Area (AfCFTA) allied to our natural resources create a big opportunity for our private sector to supply neighbouring countries.
It is an opportunity for local investors to expand the scope of what they offer.
 
How well is the private sector prepared to take part in the AfCFTA?
I believe that the private sector’s existing experience from our other regional blocs like EAC and Sadc puts us in a good starting position.
We have been trading effectively in a very strong EAC. This (AfCFTA) is just another step in our journey.
Some have wondered what significant immediate advantage AfCFTA offers given that so much of our immediate African market is captured within the EAC and Sadc.
But this would be to misunderstand the challenges of fragmentation of these trading blocs.
 For example, tax free movement of goods is conditional on satisfaction of rules of origin, which might not be achieved where value chains are spread across more than one trading block but can be achieved when value addition is considered at an Africa level.
AfCFTA also envisages a big push in terms of intra-Africa trade in services.
So, we believe we will not be just observers and a dumping place for finished goods; rather our natural advantages should make us a compelling proposition to leverage the opportunities that AfCFTA will bring.
So, yes we will participate fully in the AfCFTA.
 
What are your priorities as the new CEOrt chairman?
In the recent past we have been doing well on our four pillars (Ethics, Engagement, Policy and Prosperity), but there are aspects that we need to do better.
Firstly, as the CEOrt we want to take our engagement with the government to the next level so that we can support its ambition to make Tanzania the investment destination of choice.
 As CEOs we believe we are uniquely placed to be able to offer a bird’s eye view on cross cutting issues including our take on priorities and opportunities.
Secondly, we will continue to drive the capacity building initiatives through the CEOrt Apprenticeship Program. As part of this we hope to also increase public sector participation in the program.
Thirdly, we will focus on the climate change agenda. With the increasing urgency of the climate change agenda, we recognise the opportunity for business leaders to take the lead in driving responsible climate action.
This will include the designing and implementation of a Climate Action Policy Framework to drive responsible business practices aligned to the government’s commitment to reduce carbon emissions by 30 percent by 2030.
Activities to support this will include: awareness creation (to build understanding of the importance of and pathways to becoming carbon and plastic neutral).
We will also be involved in making the connection with service providers who can provide support in the net zero journey, mainstreaming and implementation of guidelines and ultimately data tracking and reporting.
 
Where do you see the CEOrt in five years from now?
Whilst we are already a trusted partner of the government, as mentioned, we do need to take our partnership to the next level. I believe that my experience in terms of engagement and interaction with the government at policy level will also help.
Again, I would expect to see a significant change in terms of capacity development fostered by the CEOrt Apprenticeship program, with the result that we can then have more people with skills fit for harnessing available opportunities.  
At the corporate level, we hope to support a culture that embeds sustainability as part of the “DNA” of our members.
In terms of membership, we expect to see growth in our organisation that currently represents CEOs from over 180 leading companies in Tanzania cutting across multiple sectors of the economy.
We also want to ensure that the membership continues to reflect an appropriate sectorial balance.