Tourism business lock out entrepreneurs

I met Dagan on his land 2 years ago, while on my way to the park. We were a group of five journalists. His dream was to open an eco-friendly campsite within, keeping the natural landscape, to tap into the increasing number of tourists visiting the park and the Pare Mountains from the Kisiwani Village gateway.

He was highly optimistic that at long last his family would be able to enter into tourism business and take advantage of the majestic and beautiful scenery that Mother Nature bestowed upon the area where he was born and brought up. "We have the land. All we need is to make it clean, plant suitable grasses for the camp areas and make the place strikingly beautiful. We will put up a fence and build amenities like a good kitchen, toilets and bathrooms. This we can afford. We will be catering for budget travellers who carry their own tents," he had said enthusiastically.

He spoke of lofty goals like collecting Pare artifacts and constructing a  museum later on. Therefore I was excited when I met him recently in Dar es Salaam and was eager to know how the Mdemi Camp Site was doing.Looking forlorn, he said it was a dream that had turned into ashes. "We only had about 3 million Tanzanian shillings (approximately 1,900 US dollars) to start the business.

When I looked at the legal requirements needed to operate the business and what it would cost, we gave up," he said, adding that the tourism licence alone was going to eat up all his capital. And before he could apply for the industry specific licence, he had to fulfill other business formalisation procedures including registering a limited company at the Business Registration and Licensing Authority (BRELA), apply for a taxpayer identification number (TIN), apply for a business licence from the regional trade officer, among other requirements.

"One business consultant asked me to cough up 7 million shillings  and he would help me to get all the paper work needed to get us going," he said, shaking his head.  "There was no way I was going to afford that, he added.He still hopes one day, he will raise enough money to be able to fulfill all the legal requirements. In the meantime, he has to earn a living.  When he gets visitors, he takes them to the mountains and the park and for accommodation requests he directs them to established lodges in the area.  

Some of the visitors do not mind setting up their tents at the compound of his village home after a long tour. That way, he earns extra money. He is of the opinion that it is very expensive and time consuming to fully regularise small and medium business ventures, despite the many opportunities available for entrepreneurship in Tanzania.

He says along the way, the family managed to buy an old but well-conditioned four-wheel drive vehicle, which sometimes they use to take tourists to Mkomazi and the Pare Mountains. "I enquired what it would also take for me to become a registered tour operator and once more, it was a disappointment," he said.

According to the law, for Tanzanian owned companies to get the licence to become tour operator, one has to have a limited liability firm, premises and a fleet of not less than 5 vehicles fully insured. For firms under foreign ownership, one has to own at least ten vehicles."The regulations somehow edges out small enterprises in the tourism business or they are forced to operate informally," he lamented with a sigh.

To get the vital documents from Tanzania Tourism Licensing Board (TTLB), companies must first of all fulfill all other conditions for operating a business, including getting other licences at municipal or village level.

The tourism licence fees are relatively high ranging from 1,000 dollars to 5,000 dollars covering various categories. No wonder Mdemi felt this excludes small and medium enterprises that want to work in the tourism sector. There are many other Mdemis around, small-holder business people who would like to be in tourism business but unfortunately, the regulatory mechanism locks them out.

Hotel Association of Tanzania (HAT) has commissioned a research that is evaluating economic and legal impacts of tourism licensing that will culminate into a policy brief and hopefully the government will give it an ear.

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