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Appropriate private sector nurturing to boost economic growth

AS most Tanzanians get ahead with the newly sworn in administration, governed by CCM party majority in the legislative body, to deliver an enabling business environment that will spur more economic growth, private firms need nurturing to grow and reach potential.

Nurturing would enable the private sector to play a greater role in meeting the government targets and objectives. The over-all idea that the private sector is fundamental to growth isn’t a novel one for those who understand its starring role in a given economy.

Private investments by the corporate sector are critical to higher growth rates and economic advancement since additional investment creates a multiplier effect in the economy by generating both direct and indirect employment, enhancing demand and nurturing further development.

Private enterprises are the chief agents in creating employment, providing funds, building competitiveness and driving innovation all in my view are essential instru- ments for growth and therefore private sector’s role in encouraging country’s growth and economic development cannot be overstated.

President John Magufuli’s speech to inaugurate the 12th parliament two weeks ago, among other issues pointed out aspiration to nurturing private sector effectively with favourable environment for its contribution to be realised, measure that saw issues related to investment being placed under President’s office docket.

This grit once more confirms Dr JPM’s assertion of his administration to promote and nurture private sector believing that private enterprises will take the economy forward, signalling those who have been waiting on the fence can now jump to make more investments.

History prompts us that, in 1989, the World Bank’s World Development report was entitled financial systems and development acknowledged the steering role of private sector and its impact.

Ten years later, the commission on the private sector and development report 2004 to the United Nations Secretary General, further unleashed private enterprise: making business work for the poor that were tracked by World Development 2005 report generated specially to point out better investment climate for everyone.

These reports, in addition to Dr JPM’s philosophy of aiming at nurturing private sector more closely, signposts that private sector is bloodline of economic growth and its steering role cannot be underestimated.

The utmost investment economist would come to an agreement that various development initiatives and trend throughout the 1990s and early 2000s stimulated at times positively and at oth- ers less so on issues ranging from strengthening the role of private sector and competitive market access, to infrastructure investment, industrial reconstruction in areas like agricultural production and value addition as trade and industry, areas that private sector could play its role productively if atmosphere permits.

Paying thoughtfulness and analysing Dr JPM’s speech, when setting his direction and what he would like to see his government accomplishing in his second five years Term in office, quickly one could grasp his strength of mind to make use of private sector in Tanzania during his second five years term to help boost the economy.

Many analysts might have contracted with him in a different way, but at any gauge, it was easy to find that message of his understanding of private sector that has arguably come to be seen as central to development effort, and that the full range of activities and actors associated with the private sector as part of his mission development strategy during his second Term of office will support realise his goal.

JPM’s communication in the house and to whole nation, unquestionably, signposted private sector as the engine of growth that a successful businesses drive growth, create jobs and pay the taxes that finance social services and investment accomplished by government.

Despite the fact not always stipulated agreeably, in truth, based on reading across many nations in an attempt to ascertain how significant private sector is, amongst the findings noted are that in any given economy, when nurtured with encouraging business setting, the private sector generates 90 per cent of jobs, funds 60 per cent of all investments and above all makes available more than 80 per cent of government revenues.

In my opinion it is this value that elicited Dr JPM decision not to let it go as his government line up to deliver more to Tanzanians as outlined in its CCM manifesto. I trust and have confidence that Dr JPM understands well how private sector drives economic growth through investment, employment and business creation, innovation and knowledge transfer, and other multiplier effects from their set-up and undertakings.

From his speech, it was spotless that private sector growth when given what it desires will contribute to long-term poverty reduction in Tanzania. Isn’t my plan to start debate on what private sector can and cannot do, but for Tanzania in the next five years to be able to progress with time, there is a requisite to babysit private sector, even though with its complexities, elsewhere, this sector is being sought as true partner for development for a number of reasons including its experts, market-based approaches and technological innovation.

Private sector is a major force in development as it can easily manages project finance projects that complement government efforts. Since the private sector has played a huge role in Tanzania’s development and is largely accountable for the phenomenal growth regis- tered by the country since JPM assumed office in 2015, if firmly supported, private sector can do more for Tanzania economic growth.

I think Dr JPM’s speech marked a historical and placing Tanzania investment centre under his office demonstrate the assurance and desire of this administration to promote and nurture private sector and that have faith in it, that private enterprises will take the industry forward which will take the economy forward.

To conclude, in my thoughts today, I would like to give emphasis to three strategic areas and I declare not so much from the perspective of an official of an establishment, but from the viewpoint of someone who spent 20 years in attempting to understand what would make private sector deliver its full potential.

So views uttered here, if taken on board could see this sector aiding government in many aspects. I would like Dr JPM administration to know that micro, small and mediumsized enterprises are at the soul of every country’s economic ecosystem.

They have to be the centrifugal energy that keeps the private sector changing. Their capability for modernisation and growth is the strategic to building competitiveness the capability to create high-quality products and services that challenges those of other regional countries, and that are able to gain a greater market share in evolving global competition.

Additionally, to acknowledge that a new model is evolving around competitive industrial networks that build a closer business between the public and private sectors focused on competitiveness. To grow our economy there is a need to nurture that new approach, but trusted appointee must also handle it carefully.

Finally, our shifting ap- proach to implement FYDPIII and upholding competitiveness forces legislators, to focus on a wide range of policies not hooked solely on financial capital and industrial resources, but also on human capital, cultural change and business governance infrastructure.

To succeed and have positive results, under Dr JPM’s second Term, there is a need to pursue a complete approach to nurture private sector development focused on competitiveness along a range of issues. Prosperous private sector development is certainly, the foundation of sustainable poverty alleviation.

Only the private sector is attuned to market signals and spurred by the reality of profit and loss and this can breed jobs and incomes that are sustain- able for the long-term.

It is my hope the govern- ment and majority CCM party assembly will dye-in-the-wool to a constructive business discussion that would help overcome would-be obstacles and facilitate in modelling private sector business setting that would support the busi- nesspersons and the rest of the economy actors to thrive for shared goal.

I have been recently retrenched by my employer. ...

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Author: HILDERBRAND SHAYO

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