A breath of fresh air for business community

A BREATH of fresh air is continuing blowing through the business community since President Samia Suluhu Hassan took power two years ago.

To maintain a breath of fresh air, the president, recently appointed some key heads of authorities and departments from the private sector, to further improve their participation in her government.

President Samia appointed Gilead Teri as Chief Executive Officer for Tanzania Investment Centre (TIC). Mr Teri was a Senior Advisor, European Union and Denmark.

The president is also pondering the establishment of a complete investment ministry and decided to appoint a permanent secretary to assist in the coordination of important issues.

“When we finish the legal process, it will be a complete ministry, complete with its own minister and permanent secretary. Currently, we have appointed a permanent secretary to come and help us plan how that will work out,” she said.

Additionally, she said three important sectors will go under the President’s Office, which are the TIC, the Treasury Registrar and Planning Commission.

On top of that, she appointed Damas Mfugale as Tanzania Tourist Board (TTB) Executive Director. Mr Mfugale was a Chief Advisor, Africa Chapter EBI International Consulting Group, and Canada.

Then, late last month, the president appointed Nehemia Mchechu as Treasury Registrar. Prior to the new post, Mchechu, a banker, was the Director General of the state-run National Housing Corporation (NHC).

Appointments from the private sector did not end there. She appointed Mr Hamad Abdallah the Managing Director of Gimcoafrica, a privately-owned firm that manages several properties owned by Tanzania’s pension funds, to replace Mr Mchechu as Director General of NHC.

Mr Abdallah’s appointment to a state-run organisation was in line with Samia’s stated desire to strengthen public-private partnerships (PPP).

According to some economists, investors, who are pouring billions of money into the economy, need adequate attention and that attention could even make sense if it comes from the President’s Office.

Thus the breath of fresh air to the business community warranting taxman, Tanzania Revenue Authority (TRA), to collect a historical 2.77tri/- last December after restoring good relations with its stakeholders without using a task force.

The amount surpassed the target by 106.5 per cent and was the highest monthly collection recorded since the TRA was formed in 1996.

“No matter how successful, we have been, it is still important to increase tax collections by improving the willingness of taxpayers to pay taxes,” TRA Commissioner Mr Alphayo Kidata said early this year.

From July to December 2022, the first half of 2022/23, the taxman collected a total of 12.46tri/- which was 99 per cent of its 12.48tri/- target.

The impressive first-half performance, according to Mr Kidata, was attributed to the rising willingness among the public to pay taxes; improved relations between the authority and taxpayers; timely resolution of issues, and the current growth of business and economic activities in the country.

The banking sector last year registered annual profit growth of 53 per cent. The banking sector profit has grown almost nine times in the last five years, from 134bn/- in 2018 to 1.16tri/- last year.

Alpha Capital Head of Research and Financial Analytics, Imani Muhingo, said the credit growth to the private sector reached seven years high in quarter three of last year.

Moreover, he said, the World Bank projects the GDP growth of Tanzania to be twice that of the world in the next two years while Moody’s upgraded its rating for the country from ‘stable’ to ‘positive’.

The World Bank’s latest report indicated global economy may experience a sharp decline from 3.0 to 1.7 per cent this year, while the country’s GDP is projected to grow from 5.6 per cent this year to 6.1 per cent next year.

The latest revelation by the World Bank comes amid earlier reports which indicated that the economy of Tanzania is anticipated to bravely surf past the looming global recession waves, thanks to a strong laid down macroeconomic policy.

“Tanzania has well-diversified sources of foreign inflows while the shilling has barely depreciated by an annual average of 0.3per cent over the last four years.

“The country has the lowest inflation in the region and one of the lowest in the world, thanks to favorable climatic conditions for agriculture, and food sufficiency within the country,” Mr Muhingo said.

Two years ago, before President Samia was sworn-in to office, businesses complained about hostility in tax collection methods driving many firms to close business.

Now, Zan Securities CEO Raphael Masumbuko, said several sectors of the economy, including manufacturing, banking, and consumer discretionary, have performed exceptionally well in recent months and are expected to continue driving growth.

“This sustained performance is due to the current policies of open economies and stronger diplomatic ties incentivising cross-border trade and foreign direct investments,” Mr Masumbuko said.

The exports of goods and services increased to 12.258 billion US dollars in the year ending January from 9.983 billion US dollars in the previous year, mostly driven by non-traditional exports, particularly minerals and manufactured goods.

The global economy is showing signs of continued recovery from the commodity price-induced recession, according to the IMF, which has revised its outlook from gloomy to less gloomy, which is expected to boost demand for goods and services from various sectors of the market.

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