Tanzania firms push for faster govt payments
By Bob Karashani
With an economic stimulus package from the Tanzania government highly unlikely, industry stakeholders are now pushing for fast-tracking of repayments of outstanding claims from the government including VAT refunds and the 15 per cent additional import duty imposed on industrial sugar as one way of helping them survive the economic effects caused by Covid-19.
A recent survey by the Confederation of Tanzanian Industries (CTI) shows that many businesses also want consultations with the government before further restrictions to contain the spread of coronavirus are imposed.
The CTI survey sought to identify current Covid-19-related challenges facing businesses and provide policy recommendations for the government. The survey found that over 90 per cent of industries have been affected by the effects of the pandemic through declining sales and market share, production glitches due to logistical problems in acquiring raw material on time, fast-depleting stocks, and inevitable increases in operational costs as revenues plummet.
According to CTI trade policy specialist Frank Dafa, most of the country’s raw materials are imported from countries under lockdown, delaying delivery times by as much as two weeks.
Mr Dafa told a recent private sector webinar discussion in Dar es Salaam that producers of food and beverages, tobacco, chemicals and related products, plastic and rubber goods have been especially affected.
“Many CTI member industries we interviewed said they have now been forced to turn to locally-sourced materials to avert further delays,” he said. He added that some firms have also diversified their businesses in an effort to stay relevant.
“Manufacturers are now producing face masks, soap and sanitizers in bulk while IT companies are generally focusing more on tenders to support work-from-home initiatives and other online services, which are key to minimizing direct social interactions. We are still gauging the value benefits of all these new services,” Mr Dafa said.
Other key CTI proposals to the government based on the survey include fast-tracked payment for services and goods from private suppliers to the government, and a short-term waiver on interest charges on business-related bank overdrafts to enable banks to offer new short-term loans to ailing businesses.
CTI also called for a government-led campaign to promote consumption of locally-made products over imported second-hand and substandard goods.
“This can be done by imposing restrictions on imported second-hand clothes and apparel, subsidising agro-processing industries including SMEs, and enacting policies to promote investment in the manufacture of medical equipment,” Mr Dafa said.
This article originally appeared in The East African. [Photo: The East African]