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Tanzania – Integrity, Vital in Private Sector Development
Source: allAfrica.com
Source Date: Wednesday, October 19, 2011
Country: Tanzania
Created: Oct 19, 2011

Corruption has devastating consequences on the environment, built structures and social welfare of the communities in which the project is constructed, corruptly. As a result of deeply entrenched perception in the construction sector for example particularly among clients, contractors and consultants have discovered that everything commands corrupt payments.

It's alleged that under the corrupt environment, ultimately it is the big companies with financial muscles to offer tempting kickbacks that end up winning the contracts. Corruption inhibits the functioning of the market and distorts the allocation and use of resources, hence hampering trade and deterring investment.

Teaming up the efforts by the anti- corruption body, the Tanzania Private Sector Foundation (TPSF) recently led the Tanzania business sector to launch the Business Action Against Corruption (BAAC) Tanzania Chapter in the country. The launch was the culmination of the close collaboration of the TPSF with the Prevention and Combating of Corruption Bureau (PCCB), Human Rights and Development Trust of Southern Africa (HURIDETSA) and the commonwealth Business Council since 2009.

"Establishment of the BAAC-TZ is a challenge to the private sector and its stakeholders to come clean of corrupt practices instead of propagating government weaknesses," said Mr Mathias Chikawe, the Minister of State in the President Office for Good Governance.

The government welcomed the private sector initiatives to establish the BAAC Tanzania Chapter that will consolidate the anti-corruption war in the community as well as creating friendly business environment. Available statistics show that private sector contribute only 14 per cent to the Gross Domestic Product (GDP).

Mr Chikawe said as the private sector becomes exemplary with outstanding performances reflected in the high quality products and services offered, it will act as an important instrument in reducing corrupt incidences emerging in the form of special preferences.

With an active private sector, tax collection targets which the taxman has for sometimes missed would easily be reached.

Also, the nation would witness an increased employment opportunities thus facilitating in the poverty alleviation efforts. Corruption is often a collusive arrangement between some officials in government and individuals in business who have little or no concern for the social, economic, environmental, political or human consequences of their actions.

Such decisions are taken not for the public benefit but merely to serve personal interests. Lack of an integrity environment impedes Foreign Direct Investment (FDI) flows too. Many African countries are pursuing market oriented economic policies, including divestiture of public enterprises, and creating an environment more conducing for business.

This includes improving efficiency in production and service delivery. Yet the business environment overall is not yet fully conducive for FDI inflows. Speaking at the event, the Commonwealth Business Council Board member Mr Reginald Mengi said corrupt practices in the private sector harm and retard competitions.

"Fighting corruption in the private sector will create equal opportunities for business persons to compete," he said. There is a clear need to create and nurture an integrity environment which will prevent corruption and create a better environment for private sector development and investment promotion.

The past reports by the Controller and Audit General (CAG) have unearthed a number of district and town councils across the country involved in the misappropriation of public funds that the central government had allotted to infrastructure development. Rough estimates for example, have it that in Tanzania, over 10 per cent of the monetary value of construction projects is siphoned out through corrupt practices, ultimately landing into custody of unethical parties to the construction contracts.

However, over 90 per cent of construction contracts and about 70 per cent of all consultancies in the industry are allegedly secured corruptly. The Minister of State in the Prime Minister's Office responsible for Investment and Empowerment Ms Mary Nagu said corruption is one of the factors stalling growth of private sector.

The establishment of the BAAC-TZ, private sector will become an active player in uprooting corrupt practices in the business community. Dr Nagu urged stakeholders in the private sector to turn into opportunities the challenges posed by globalization in order to speed up the fight against poverty in the society.

She challenged them to unite and speak with one voice when urging the government to create more friendly business environment. "Speaking with one voice for the private sector is no more a choice but a necessity because it will enhance its contribution into the economic development," she said.

The Tanzania Chamber of Commerce Industry and Agriculture president Mr Aloyce Mwamanga expressed concern over the sluggishness in formalising the informal sector impacting in both losses of government revenues as well as stalling business expansion. Mr Mwamanga appealed for special preferences for the local companies in the tendering process to enhance and involve them in the government procurements.

 

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