GENERAL UPDATE: SYNOPSIS OF H.E. PRESIDENT SAMIA SULUHU HASSAN’S ADDRESS TO THE PARLIAMENT 22ND APRIL 2021. PRIORITY AREAS OF THE TANZANIAN 6TH PHASE GOVERNMENT TOWARDS TANZANIA ECONOMIC GROWTH
- Key focus is on Tanzania economic growth and identification of priority areas.
- Amendment of Policies, Laws, and Regulations governing investment in the country.
- Transformation of the tax collection and administration system.
- Working closely with the private sector.
- Development and reforms in the Mining Sector.
- Improvement and industrialization of agriculture.
- Transport and Communication improvement.
- Democracy, People’s Rights and Administration of Justice.
On Thursday 22nd April 2021 Her Excellency President Samia Suluhu Hassan addressed the parliament of the United Republic of Tanzania for the first time since she was sworn in as President. Her Excellency’s address to the National Assembly shows a reflection of how she will lead the nation, the sixth term government’s priority areas.
It is usual that Tanzanian Presidents use their first address to the parliament to highlight the direction which the executive will take for the next five years. H.E Samia Suluhu Hassan did the same on her first address to the parliament since she assumed the presidency.
The President told the parliament that her government will maintain the good deeds of the previous governments, develop them good and bring in new ones. She pledged to maintain especially the projects which her predecessor advocate for. This will include continuing with all mega projects such as the Standard Gauge Railway. Her Excellency promised to maintain her predecessor’s initiative but in a more “strategic” routine.
Breakthrough Attorneys has prepared this writing highlighting priority areas of Her Excellency’s speech as follows;
- Managing and Maintaining Economic Growth
The President appreciated the pace of economic development that has been reached by the previous government in which she was Vice President. Such steps include the nation’s success in joining the middle-income economies and the increase of the average income of every Tanzanian to USD $ 1,080. She acknowledged the fact that the covid 19 pandemic has slowed down the pace of development. In that regard, her government intends to increase investment in all production sectors which will, in turn, create employment opportunities.
- Focus on the Investment Sector
The government, as the President indicated in her speech, intends to take specific steps to ensure the growth of investment. This will be primarily done by changing the policies and laws which are cumbersome to investors. Harmonization of the policies and laws is aimed at attracting more investors. Some of the changes as the President suggested will be on harmonization of tax policies especially tax administration policies.
Breakthrough Attorneys trust that with such steps the nation will regain the trust of strategic investors which had decreased in the last few years. We also commend the President’s call to having one center for all services such as permits and licences for investors.
- Tax Administration
The tax administration system of Tanzania has been harsh to investors and businessmen both small and large. A harsh system of tax collection has actually been one of the major causes of the decline of investments. Without a fair tax collection system, investors cannot be sure that the environment is safe and secure for their operation.
Her Excellency Samia Suluhu mentioned one of her priorities to create a tax collection system that will and attract investors rather than the one focused on forceful measures which often leads to investors closing their offices. Breakthrough Attorneys commend this move, and further suggest that the laws that govern the tax dispute resolution be harmonized.
- Public Private Partnership
In what we see as a positive move to economic development in the country, the President promised to support and work closely with the private sector. The President indicated that the government is currently working with the Tanzania Private Sector Foundation (TPSF) to create an online system to receive and address the challenges of investors in the country. The challenges in the private sector include the availability of work permits for foreigners. In her own words H.E Samia Suluhu Hassan said;
“There have also been many complaints about the availability of work permits for foreigners…. On this, as complaints have increased, we must reconsider this issue, while protecting the national interest.”
It is very important for the government to reduce the bureaucracy when it comes to work permits for expatriates. There must be flexibility in this area, it so often happens that companies do not operate with the expected efficiency only because the procedure to get work permit for expatriates is blurred. The same actions should also be adopted by licensing authorities and other investment regulatory bodies.
Further, the President expressed concern on the governance of public corporations whereby it is her vision to see them operate in profit. In order to do so the government has planned to evaluate how they operate and make reforms where necessary.
- Development and reforms in the Mining Sector
President Samia Suluhu Hassan intends to maintain development in the mining sector to ensure that it contributes to the economy and provides employment to Tanzanians. The government will continue to administer the mining sector according to the governing laws while ensuring revenue collection is increased. The President told the parliament that the government will closely look at the mining sector and get rid of various challenges facing this sector, which will in turn attract both local and foreign investment. The government will do so as it intends to enter into partnerships with large mining companies, to improve the market, transportation and manufacturing of mineral products.
This is another commendable direction towards improvement in the mining sector, we suggest that the same should be adopted to other industries in the extractive sector including oil and gas. Further, the government should also consider amendments of the laws that act as obstacles to investors in the mining sector, such laws include the local content laws.
- Industrialization of Agriculture
In the next five years the Government intends to direct its full strength to see development of agriculture in the Country. The President appreciated the fact that agriculture provides raw materials to industries. Thus, the government’s plan is to tie and bundle agriculture and industries, this will be done by emphasizing construction of industries especially those which use agricultural raw materials available in the country. The President emphasized on the importance of designating special areas for Industrial Parks and free trade areas especially along the country’s border regions.
Again, this will need both the public and private sector to contribute whereas the government will focus on improving agriculture by ensuring availability of seeds and educating farmers on the modern ways of agriculture. If the environment is attractive, investors will surely invest in construction of industries. The idea of having free trade areas in the country is excellent as this will allow investors to make use of the African Continental Free Trade Area.
- Improving transport and Communication
In terms of transport and communication, the Government intends to invest on improving the infrastructures for both air, land and water transportation. The President expressed that the Government will continue to support and assist the Government’s air transport company (the ATCL) by giving it tax reliefs and ensuring it is governed with people experienced in air transportation business. Further, the government intends to continue improving all transport infrastructures including airports, harbors, roads and railways.
Apart from the said infrastructures, the government will improve Information and Communication Technology (ICT). It is apparent that the President does not want the country to be left behind in the fourth industrial revolution. In specific the government intends to improve infrastructures aiming at increasing the use of ICT and extends its accessibility from the current 45% to 80% in 2025. The Government will prioritize ICT inventions and innovations and improve cyber security. This, if implemented will create opportunities to Tanzanian ICT businesses as well as multinational corporations.
- Improving transport and Communication
The President expressed her concern towards ensuring democracy and people’s rights are protected. In doing so she expressed her concern about meeting with leaders of the opposition to discuss how they will operate their political activities. Further Her Excellency express her concern toward strengthening the justice system in collaboration with the judiciary. She urged the Judiciary to focus on the administration of justice in the country. The Government will also strengthen other actors in the administration of justice in Tanzania including, the Office of the Attorney General, the National Prosecution office, and the PCCB.
Breakthrough Attorneys applaud this step because it will attract both local and foreign investors. Democracy and administration of justice will ensure a safe and secure environment for investors.
The President’s address to the parliament was an address to all citizens, investors, the international community, and other stakeholders. Breakthrough Attorneys believe that Her Excellency’s speech is full of hopes which if implemented will make Tanzania a place safe both politically, economically, and socially. It is quite time for investors and stakeholders in the prioritized areas to seize the opportunity and support the government’s vision while at the same time improving their own business and the community at large. To the public service, all that is needed is to implement the President’s vision. The above areas are not exhaustive of all the areas that the President touched in her speech, other areas include health, water, fishing, tourism, and diplomacy.
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Breakthrough Attorneys, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.