“Doing Business and Measuring Business Regulations in East Africa"

The World Bank and International Finance Corporation annual report on “Doing Business and Measuring Business Regulations in East Africa" has drawn mixed feelings from scholars and from business stakeholders across the country.

While others support the report from these two giant financial institutions, some scholars have told Tanzanians to be more skeptical because the report will not transform and foster social and economic development in the region.

Speaking to the Express in an exclusive interview recently, University of Dar es Salaam Senior Lecturer Dr Bashiru Ally said that most of those world financial institutions are imperialists who focus on capital accumulation and investment in developing countries.

He said that international financial institutions are paving the way for multinational companies from developed countries to come and invest in developing countries in all key sectors of the economy.

“African leaders and entrepreneurs should rethink how to control their growing economies in this era of technology, globalization and investment, to ensure African economies are controlled by African themselves.”

“These IMF, IFC and the World Bank are trying to block free thinking by Africans about their economies without outside interference in daily trade activities,” he said.

Dr Ally noted that international financial institutions’ eyes are on the rich African resources available in sectors such as mining, fishing, fertile land, construction, and commerce.

He said that Africa will be constructed and developed by Africans themselves through natural resources, but they need proper regulatory reforms which will foster social and economic progress.

For his part David Mbulumi from the United Nations Development Program (UNDP) said the IMF and the World Bank reports for Africa do not reflect the reality of most of the developing nations in Africa.

He noted that for instance Millennium Development Goals criteria’s are not applicable to most African countries and funnily enough you cannot compare Africa, with the Caribbean, Europe, America or Asia in various aspects, such as trade, construction and the business environment.

He said that these reports are not applicable to most of the developing nations, due to the fact that criteria used by these giant institutions are not suitable for the African continent.

“I am a little bit skeptical about these reports because they are using the same criteria worldwide while Africa and Europe have different cultures, values, business and environments and it is not logical to dump them in the same basket,” he said.

Mbulumi added that whereas these reports outlined the weaknesses in registering and starting up business, bureaucracy in getting construction permits and the cost of doing business in African countries, sometimes these studies are biased.

He further said these criteria are too general across the world, which fails to do justice to the African continent, and it is not fair to match developed and developing countries in regulatory reforms, law and order, technology, infrastructure and capital for investment.

 “I am strongly advocating these reports on doing business in Africa and East Africa because they are featuring what is really happening on the ground in most of the developing countries,” says Hussein Kamote Director of Policy and Advocacy from Confederation of Tanzania industries.

He said that corruption, bureaucracy and red tape are the major setback of investment, especially foreign direct investment in Tanzania.

“Some of the business people nowadays turn to neighboring countries such as Rwanda, Namibia, Mozambique and Zambia, where bureaucracy is very low and opportunities available,” says Kamote.

Kamote cited an example of the business people who were investing in the textile industry but have decided to shift from Tanzania to Mozambique due to the red tape which is continuing rampant in that key sector.

He said that in Tanzania the process of registering companies or getting business licenses is too cumbersome compared to other East African countries such as Rwanda, which for the last two years has attracted foreign investors into tourism, construction and other key sectors.

Kamote said that these IMF and the World Bank reports on doing business in Africa is a great opportunity for the African people to start restructuring and revamp their overall system.

For his part the corporate lawyer Christopher Singa told the “Guardian” that the IMF and the World Bank are development partners in every key sector such as construction, mining, telecommunication and public services.

He said that according to IFC and the World Bank report on doing business, for 2012/2013 it applauded the East African governments including Tanzania for implementing proper regulatory reforms that improve the environment for local businesses.

Singa added that continuous improvement of the business environment is important for economies seeking to benefit from increased trade and investment through regional integration.

The latest report of those two giant world financial institutions shows that the business environment for entrepreneurs in all five economies of the East African Community:  Burundi, Kenya, Rwanda, Tanzania and Uganda have improved.