Thursday, May 18, 2017

IMF Advises Tanzania on How to Reach Middle Income Status
by APA News

Tanzania has been advised to put more efforts to strengthen the business climate for local and foreign businesses, in order to foster its industrialization plan for economic transformation and human development, and to achieve middle income status by 2025.This is according to International Monetary Fund (IMF) deputy managing director Tao Zhang, speaking at a public event held at the Bank of Tanzania (BoT) in Dar es Salaam Wednesday.

Zhang said Tanzania like other governments have a key role to play by providing stable policy and regulatory frameworks for development.

“It is ultimately the private sector that is the engine of growth that creates employment and opportunities.”

He stressed that a strong private sector can foster economic diversification, expand trade and deepen Tanzania’s integration into global value chains. And, therefore, government policy is most effective when its objective is to cultivate the private sector.

In view of this, he called on the government to make its decision making process more transparent and predictable across a range of rules and regulations.

Furthermore, Zhang went on, cutting red tape can make a big difference by focusing on simplifying the procedures for opening new business, and called for strengthening the framework for resolving legal disputes because business will only thrive when the judicial system is seen as fair.

“It is important for business to feel it has a say in policy and, therefore, it is useful to broaden consultations with the private sector on planned reforms, including changes to legislation.”

The IMF official said to facilitate private sector-led growth entails bridging the infrastructure gap through scaling up investment in transportation, logistics, as well as energy generation and distribution.

In view of this, he said it was crucial to mobilize tax collection under a fair and predictable tax regime.

Zhang commended President John Magufuli for putting up strong institutions to manage and monitor projects to ensure maximum value for money.

According to him, the government can lead the way in deepening the economic integration of the East African Community.

“This can encourage the dynamism of over 150 million people across the region, and it will open the door to expand trade and investment.”

He said the IMF co-hosted a conference to take stock of the EAC progress to realize its full potential and that the Single Customs Territory has been established and the Common Market is advancing, but underdeveloped infrastructure continues to constrain progress.

More work is needed to remove non-tariff barriers, rules of origin, tax administration and harmonization, automation of trade procedures and labour mobility, he added.

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