Govt to ease business barriers, expand access to finance

DAR ES SALAAM: THE government is pursuing a unified policy to ease business constraints, improve access to finance and investment land, and strengthen private sector participation in achieving Dira 2050.

The proposed reforms also seek to formalise informal businesses, enabling them to access credit, markets and social protection services.

Speaking during consultations with private sector representatives in Dar es Salaam yesterday, Permanent Secretary in the President’s Office responsible for Investments, Dr Fred Msemwa, said removing existing barriers was essential to unlocking the private sector’s potential.

He said Tanzania’s private sector comprised both formal and informal businesses, but those operating outside the formal system often struggled to access credit, technology, expertise, insurance and other essential services.

“When a significant part of the economy operates informally, businesses remain unrecognised and miss opportunities to access services that could help them grow,” he said.

Dr Msemwa said formalisation will enable businesses to operate within a recognised framework, access financing and markets and provide workers with social protection, including social security benefits.

Policy and Advocacy Manager of the Tanzania National Chamber of Commerce (TNCC), Mr Kelvin Ogodo, said the proposed National Investment Policy would replace the 2022 policy and address persistent challenges facing businesses and investors.

He said the draft policy prioritised improving the business environment and expanding access to capital, which remained a major challenge for domestic investors seeking to establish or expand their businesses.

Mr Ogodo said removing these barriers will strengthen private sector participation in economic development and support Tanzania’s ambition of building a trillion-dollar economy by 2050.

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“We must empower domestic investors while welcoming foreign capital. Investment should create opportunities and deliver tangible benefits for Tanzanians,” he said.

Meanwhile, Tanzania Bankers Association (TBA) Executive Director, Ms Tuse Joune, said the proposed policy would strengthen the financial sector’s role in supporting long-term development.

She said banking was a transformative sector under Dira 2050 because of its role in mobilising capital for agriculture, manufacturing, mining and other productive activities.

Ms Joune welcomed the proposed Private Sector Act, saying it would provide a clear legal framework for businesses and strengthen their contribution to economic growth.

She said banks were ready to support micro, small and medium-sized enterprises (MSMEs), youth-led businesses, women entrepreneurs and manufacturing ventures.

However, she said formalising informal businesses was critical to expanding access to loans, noting that many lacked reliable financial records needed by banks to assess their creditworthiness.

Ms Joune urged businesses to embrace digital payment systems, saying electronic transactions could improve transparency, build reliable financial records and help lenders assess loan applications.

“Every electronic transaction helps build a business’s financial record. That digital footprint can demonstrate cash flow and help lenders make informed financing decisions,” she said.