Private Sector:

Consistent with ongoing reforms, the Government of the United Republic of Tanzania has redefined the role of the state to that of policy maker, maintenance of law and order, provider of basic social and economic infrastructure and facilitator of economic growth.  The government recognises that it has the role to facilitate the private sector and other economic agents to actively and effectively invest in productive and commercial activities in order to accelerate economic growth and development.  The Government can do this mainly through putting  favourable policies in place, provision of a conducive environment for local and foreign investment, promotion of institutional changes conducive to the development of the private sector, stimulating investor’s confidence through transparent, effective and efficient administrative processes in government institutions and to put in place an appropriate legal and regulatory framework.

In recognition of this important role towards creating an enabling environment for private sector development, the Government has been implementing wide ranging institutional and policy reforms.  It has liberalised its economy; amended and enacted a number of investment related laws and policies, undertaken financial reforms, liberalised its trading regime; put in place an attractive investment package; and undertook a number of initiatives to promote and develop the private sector.  Tanzania now has one of the most liberal investment regimes in Africa.

In supporting the complementary and supplementary role of the private sector in accelerating socio-economic development, the Government has developed modalities for institutionalising the  then ad-hoc consultative process with the private sector in evolving appropriate and effective macro and sectoral policies. (e.g. through participation in the Government Tax Task force and the Public Expenditure Review working groups).  Similarly, the private sector itself has evolved institutional mechanisms of interactions and consultations with the Government through umbrella organisation such as the Tanzania Chamber of Commerce Industry and Agriculture (TCCIA), Confederation of  Tanzania Industries (CTI), the Tanzania Private Sector Foundation (TPSF) and the National Business Council (TNBC) which was launched in April 2001.  TNBC will provide the main forum for public/private sector consultations on strategic issues of economic growth and economic development.

The private sector to all these changes has been cautious, but overall positive.   Public monopoly in the financial sector has been broken as there are now more than than 20 private banks and financial intermediaries accounting for nearly 80% of total assets in the banking system.  The insurance market has been opened to private and foreign participation and a Dar es Salaam Stock Exchange has been opened.  More than 250 out of 400 enterprises that used to run as state owned enterprises have been privatised.  The agriculture and infrastructure sectors are increasingly coming under the private sector through privatisation, concessioning of assets for private operation and new entry. 

Furthermore, most of the public enterprises in industry have been privatised.  The most robust response has been in mining and tourism, currently the destination of the bulk of local and foreign investment.