TPSF PRESENTATION Godfrey Simbeye Executive Director Tanzania Private

TPSF PRESENTATION Godfrey Simbeye Executive Director Tanzania Private Sector Foundation Presentation to DPG PSD, Dar es Salaam, 13 th November, 2013 TANZANIA PRIVATE 1

Contents 1 Introduction 2 Evolution of TPSF Governance Structure 3 Update on Private Sector Development Policy 4 Priority Area of Focus – Case on Fiscal Reform Process 5 The Roadmap and TPSF Role 6 Conclusion and Way Forward TANZANIA PRIVATE SECTOR FOUNDATION 2

Introduction About TPSF Vision Statement Mission Statement Core Values ØEstablished on 4 th November 1998 ØResult of multi-folded efforts by various stakeholders of the Private Sector ØPromote private sector-led social and economic development in Tanzania An effective apex private sector organization, providing focal point for private sectorled approaches to Tanzania’s economic and social transformation. To function as an apex and focal private sector organization in Tanzania by promoting private sector development as well as effective engagement with Government of Tanzania and other stakeholders in matters of development policy and in the provision of services to members. ØCommitment to best practice ØValue addition ØUnity in Diversity ØImpeccable integrity ØFair competition ØService before self ØCommitment to lifelong learning TANZANIA PRIVATE SECTOR FOUNDATION 3

3 Membership Structure Number Geographical Distribution Major Members 227 Direct Members: 1 Apex Body in Zanzibar (ZNCCIA) 167 Business Associations 45 Corporate 14 MDA’s which support business directly Indirect Members- Well above 4. 5 million 1 Apex Body in Zanzibar 140 Based in Dar es Salaam 86 Based in in the Regions ZNCCIA, TCCIA, CTI, TCT, TCME, ATE, CEORt, ACT, TAHA, TAREA, TATO, TBA, TANEXA, TATOA, TAFFA, TWCC, OGAT etc Wentworth Resources, VODACOM, CRDB, TBL, TIGO, Bank M etc. TANZANIA PRIVATE SECTOR FOUNDATION 4

4 Core. . . advocate for Conducive Business and Investment Climate = competitiveness A co holis co ntrib tic mp ut rev eti ing iew tiv to o en c f a es ou ll ntr ma s y’s jo ec r fa on cto om rs ic Main Objective TANZANIA PRIVATE 5

Evolution of TPSF Governance Structure q. Governance The Annual General Meeting (AGM) is the supreme organ of the Foundation. q. It elects a Board of Directors, and the Board works through five working committee of itself. q. These committees are (a) Executive, (b) Finance, Audit and Administration (c) Policy and Advocacy, (d) Membership Services and Capacity Building, and (e) Programs. q. The day to day management of the Foundation is vested to the Executive Director who heads a team of four departmental managers. TANZANIA PRIVATE SECTOR FOUNDATION 6

Evolution…. q Historical Background q. TPSF has had 4 boards since its establishment todate 1998 to 2002. The Board was composed of 12 members chaired by Mr Arnold Kilewo. During the period TPSF had registered 78 business associations compared with the 33 founding associations in 1998. In 2002 the TPSF constitution was amended to raise the number of board members to 17 to accommodate representation of more sectoral associations and have more inclusiveness of the private sector in the governance structures of TPSF. 2003 to 2008. The second Board came with 17 members under the chairmanship of Mr Elvis Musiba. This board was very inclusive as it was composed of representatives from 13 sub sectors of the private sector. TANZANIA PRIVATE SECTOR FOUNDATION 7

Evolution Cont. 2008 to 2010. The third Board came in with 17 members under the Leadership of Mrs Esther Mkwizu. Through an advice from the World Bank that the Board was too large to be effective, it was reduced to 11 members by a constitutional amendment of 2009. With the new amendments an election was held in March 2010, in which the same chairperson was re-elected, but now with complaints that the major subsectors of the private sector, namely Manufacturing, Tourism and Mining were not represented in the governance structure. The complaints were also sent to the Government for its assistance and intervention. TANZANIA PRIVATE SECTOR FOUNDATION 8

Evolution cont. . These complaints turned into serious confrontation between the TPSF on the one side, and the three left out sub-sectors on the other side, which were later joined by many other subsectors which were also left out in the governance structure. The left out group met on different occasions and proposed to form a new Apex organisation of their own to be known as “Tanzania Private Sector Alliance” if the governance structure problem at TPSF would not be resolved. TANZANIA PRIVATE SECTOR FOUNDATION 9

Evolution cont… q. With the advice and support of the Government, a special Task Force was formed to come out with the best and sustainable way of solving the problem of having inclusiveness and one common voice of the private sector in the TPSF governance structure. q. The task force took one and half years to complete the assignment q. On January 29 th 2013, the Annual General Meeting approved the task force report which recommended the following; q. To have a Board of Directors with minimum 11 members and maximum 15 members. q. Board members to be elected through a Cluster approach in which 10 clusters were approved. These are; Agriculture, manufacturing, Extractive industry and energy, Tourism and Natural resources, Banking and Financial services, Services, Trade and Commerce, Zanzibar PSO Apex body, Regional business Associations, and Women Entrepreneurs q. All the sectoral associations as well as corporate members were requested to select clusters of their choice for purpose of electing their representatives in the Board. TANZANIA PRIVATE SECTOR FOUNDATION 10

Evolution cont… 16 th August 2013 q. The new Board with 12 members elected using the cluster approach came in as the 4 th Board of TPSF q. Under the chairmanship of Dr Reginald Mengi. The Board is fully representative of all the 227 members of Tanzania Private Sector Foundation, and accepted by all members as the inclusive and represents the common voice of the private sector in Tanzania. q. The list of members includes the CEO Round Table group of members who were previously not members of TPSF. TANZANIA PRIVATE SECTOR FOUNDATION 11

Update on Private Sector Development Policy 1. 2. 3. 4. 5. 6. BACKGROUND & RATIONALE CHALLENGES FACING THE PRIVATE SECTOR TANZANIA’S ECONOMIC REFORMS PSDP INITIATIVE PRIVATE SECTOR COMMENTS UPDATE ON PSDP STATUS TANZANIA PRIVATE SECTOR FOUNDATION 12

Update on PSDP… q. BACKGROUND & RATIONALE a. GOT’s determination on Private Sector as an Engine of Growth – macroeconomic framework; b. Ever-changing external environment elastic demand inelastic supply; c. Long, medium and short tem goals and objectives as enshrined in TDV 2025, MKUKUTA 11, FYDP, MDGs, Kilimo Kwanza/SAGCOT/Roadmap; d. Consolidation of initiatives and provide broad guidance. TANZANIA PRIVATE SECTOR FOUNDATION 13

Update on PSDP… q. Tanzania’s Economic Reforms q. The 1990 s onward- reform process underway: q. Macro-economic policy reform; q. Legal, institutional and regulatory framework reform; q impressive GDP growth rate of about 7 percent over the 2001 – 2010. DESPITE THE REFORMS: Poverty remains a major development challenge CALLING FOR private sector to play its major role through increased businesses and investments taking into account limited public resources TANZANIA PRIVATE SECTOR FOUNDATION 14

Update on PSDP… q. PSDP INITIATIVE -developed with the objective of enhancing Private Sector participation in the socio-economic development process -lead to strengthening of private enterprise – individuals, groups, Corporate – not owned or operated by the State and aim for profit making. -Specific Policy Objectives: predictable business related policies; enhance competitiveness; promote diversification of markets, products and services; speed-up formalization of the informal sector; enhance decent employment; encourage private sector saving culture; strengthen private sector associations and; strengthen and encourage business linkages and collaborations. TANZANIA PRIVATE SECTOR FOUNDATION 15

Update on PSDP… q. Some Comments on the First Draft of the PSDP from Private Sector Consultations. -The Private Sector must be inclusive of all economic agents- MSMEs, large firms, individuals, farmers, smallholders, informal sector. - Private Sector development is about building competitiveness from the enterprise development, firm, and national levels. -The Enterprise development level should focus on how to create the most competitive business and investment climate. This includes looking at the following issues amongst others; macro policy stability, sector policies and regulatory framework, hard and soft infrastructure, support systems for environment, incentives, and empowerment issues. -The National level competitiveness focuses on the following amongst others; competitiveness policy, stimulation of sector responses, and benchmarking competitiveness. -The firm level competitiveness focuses on the following amongst others; formalization, SME growth, support programs, domestic market integration, skills and institutional development, and export promotion. TANZANIA PRIVATE SECTOR FOUNDATION 16

Update on PSDP… q. Some Comments on the First Draft of the PSDP from Private Sector Consultations. -Tanzania should learn from best practices on developing a Private Sector Development Policy. These include South Africa, Ghana, and model of the African Development Bank. -Tanzania should focus on policy implementation as this is often the biggest challenge for the country. -The vision of the policy should provide ideological guidance. In responding to this vision, the policy should identify instruments for achievement of objectives reflecting the vision. In this regard the issue of skills development for building competencies for competitiveness, that is based on value chain analysis for priority sectors and products or services in each sector is fundamental -The PSDP should recognize the unique position assigned to the agricultural sector and that farmers of all sizes, from informal smallholders to large commercial enterprises should feature prominently in the policy. -Access to markets and dissemination of information on markets should feature in the policy. -There is need for legislation to guide the growth of Private Sector Organizations as a tool for Private Sector development. Tanzania can learn from the Kenyan model of enacting legislation for PSOs -Public private partnerships in Private Sector development also means that Government can and do handhold enterprises during the formative stage as is evident in the case of the Asian Tigers 17 TANZANIA PRIVATE SECTOR FOUNDATION

Update on PSDP… q. PROCESS STATUS UPDATE i. Specialised group meetings called – members of parliament and GBS DPS. ii. Government approval for first draft given in May 2013 iii. National stakeholder’s workshop held in August 2013 iv. All inputs and comments before and after the august 2013 workshop are being compiled and meetings for updating the policy are underway TANZANIA PRIVATE SECTOR FOUNDATION 18

Priority Areas of Focus – Case of Fiscal Reform Process q. The Practice q. The process begins in October/November of every financial year through July of the coming year. The Ministry of Finance begins by inviting stakeholders to participate in upcoming of the proceeding of the task force for task reform as a necessary process towards budget preparations for the forthcoming year q. The fiscal policy reforms aims at increasing the tax base, strengthening tax administration and tax collection procedures as well as controlling tax evasion. q. Much as it is clearly stated in its mandate that the Government intention is to ensure that tax system provides a conducive environment for doing business and investment in the country, this has not been the case over many past years 19 TANZANIA PRIVATE SECTOR FOUNDATION

Priority Areas of Focus – Case of Fiscal Reform Process q. A more result oriented approach q. TPSF has in this year re-focused its strategy to engage the Government in a more proactive manner which will ultimate address the problem of less consultation with the stakeholders q. Through the established TPSF clusters, a detailed analysis which show various sectors have been affected by the past budget will presented to respective institutions. q. Cluster stakeholders have already started sharing possible sources of the revenue which the Government could potentially optimize to broaden its tax base. This engagement stream will be used to present new revenue opportunities to the government TANZANIA PRIVATE SECTOR FOUNDATION 20

Priority Areas of Focus – Case of Fiscal Reform Process q. Ideally, these engagements would take place before the December tax proposal with a view to reiterate the key points in the process of presenting tax proposals to the Ministry and Parliamentary Committee on Budget. However, alternative sources of revenue from the Government require a more robust and convincing evidences for the Government to accept adoption. It thus requires proven hypotheses. q. Engage the Presidential Delivery Bureau, Planning Commission and the Ministry of Finance on the aspect of resource mobilization and see how their focus will affect the private sector, this will among others include critical analysis of the impact in the longer term. Seek intelligence on emerging government’s budget proposals in the coming budget. TANZANIA PRIVATE SECTOR FOUNDATION 21

Priority Areas of Focus – Case of Fiscal Reform Process q. Capitalize on the TNBC agenda on business environment (including unpredictable policies) and involvement of the Private Sector in the Big Result Now Initiative and clearly unpack all possible spills over effects to the private sector. The logic behind is to lobby for the adoption of RIA in some selected key areas whenever the Government would wish to formulate a policy and its related instruments. q. Government policies need to incent outcomes and be more clearly connected to sustainability of the key drivers of the economy. Moreover, governments have several tools at their disposal, such as taxes, regulations, and markets, to encourage businesses to prosper. However, they are often applied in piecemeal fashion, poorly measured, or used ineffectively. Businesses and management often want to “do the right thing”, and appropriate policy can support this mindset. TANZANIA PRIVATE SECTOR FOUNDATION 22

Priority Areas of Focus – Case of Fiscal Reform Process q. Engage the Government to understand that leading businesses want policies that push all organizations to improved sustainability outcomes. In doing so, firms can put into place long-term measures and innovate new products and practices that move them closer to those goals which is very imperative for the Government self sustenance in terms of revenue. q. Strategize on best PPDs practices for collaborative consultation and policy development involving government, business, and other stakeholders. The PPD should be adjunct, but to work in manner which is more collaboratively and meaningfully. q. Engage all key stakeholders from the very beginning. These include engagements to such key partners as experts and gurus in taxation, Parliamentary Committee on Budget, Parliamentary Committee on Finance, Economy and Industries, influential MPs and President as an institution 23 TANZANIA PRIVATE SECTOR FOUNDATION

The Roadmap and TPSF Role q. The Roadmap is a wonderful innovation for PPD in systematic business environment reforms. Technical joint meetings constitute non partisan forum for action on reforms. q Implementation has been slow and unsystematic; only 22% fully implemented by March 2012, accounting for slippage in DB ranking to 134 (rather than improve to double digit) by 2011. q. Major reason for slow progress: Task Forces not meeting/working. q. In 2012, the Private Sector started organising around the Roadmap by setting up Working Groups of PSOs to seek systematic implementation Two pilot groups: “Trading across Borders” (Mo. HA) and “Starting and Closing Business” (MIT) with sub-committees In 2013, expanded to Dealing with Construction Permits (PMO-RALG) and “Registering Property” (MLHSD) with sub-committees TANZANIA PRIVATE SECTOR FOUNDATION 24

Engagement with Ministry of Home Affairs q. Mo. HA Secretariat collaborating with TPSF secretariat q. Meetings on track, NOW minutes, matters arising, appropriate chair, demanding MDAs reports = improved pace of reforms. q. Partnership emerging - regular meeting of TPSF and Mo. HA Secretariat, joint agenda setting, review of minutes, joint implementation of some (e. g. retreat) q. Task Force jointly addressing roadblocks to its reform work (i) appointing alternate members (ii) awareness raising (iii) better reporting template, and (iv) terms of reference for the working groups Experience invaluable in working with other Task Forces TANZANIA PRIVATE SECTOR FOUNDATION 25

Engagement with Ministry of Industry q. The Task Force held its first meeting in June 2013. Still the Private Sector Working Group on this thematic area has made the following contribution: q. Identified gaps between reported reforms and what is on the ground and commissioned a study /case studies to map actual experience of formally establishing a business from Dar es Salaam and upcountry – results to be used by the Task Force. q. Following participation in the June 2013 meeting, raised issues which should improve subsequent meetings and the work of the Task Force (Private Sector participation, minutes, matters arising, systematically reporting against Roadmap). q. We can also establish a working partnership with the Secretariat as with Mo. HA. TANZANIA PRIVATE SECTOR FOUNDATION 26

Some Challenges in the Roadmap Process q. Meetings not held, and no effective accountability mechanism if not held or no reporting. The result (sometimes): Ø Meetings not chaired by right authority, no previous minutes, some Ø MDA reps unprepared, don’t submit reports or attend meetings. ØSometimes no private sector representation. q. No guiding framework/Terms of Reference for Task Forces. Membership unclear. Sometimes, no reference to the Roadmap q. Lack of structured monitoring /and reporting framework; the Roadmap template too clumsy for MDA, Task Forces and PMO q. Legal reforms (6+) stuck at AG’s Chambers by March 2013. q. Multiple overlapping reforms and platforms demand same overstretched resources from both the Private and Public Sectors TANZANIA PRIVATE SECTOR FOUNDATION 27

Business Action Against Corruption A quick snap shot on BAAC TANZANIA PRIVATE SECTOR FOUNDATION 28

Conclusion and Way Forward We thank you for your support and as a way forward we still have many challenges and thus we request more of your support to realize the potentials endowed in this country! W Discussion/Q & A/Comments/ Recommendations TANZANIA PRIVATE SECTOR FOUNDATION 29

Thank You for Your kind attention TANZANIA PRIVATE 30