LOCAL INVESTMENT CLIMATE (LIC) PROJECT
PUBLIC PRIVATE DIALOGUE - KIGOMA
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A PARTNERSHIP FOR AN IMPROVED BUSINESS CLIMATE
1. INTRODUCTION
The Local Investment Climate (LIC) Project recognizes that the envisioned private sector-led growth as enshrined in the Tanzania Development Vision 2025 is achievable only when there is a business climate that is conducive to private sector investment and enterprises, anchored on sound private sector development policies, laws and regulations as well as friendly and capable institutions, facilitative infrastructure and supportive services. LIC is aware that these cannot be brought about by only one sector but by both the public and private sector working together in harmony each playing a role that is complimentary to and supportive of the other; a partnership that is grounded in mutual trust and respect through a nurtured and sustained dialogue process that is tailored to meeting the needs of both partners. It is in this context that LIC has adopted PPD as a primary tool for bringing the public and the private sector together to work towards improving the business climate and to achieving the project objective.
The objective of the project is improved conditions for sustained business growth and investment in selected local government authorities (LGAs). This objective is to be achieved by the removal of the critical constraints to investment and business growth at the sub-national level.
LIC understands that efforts to improve the business climate are most effective when ther is dialogue between the public and the private sectors especially when the dialogue is done by the beneficiaries of intended reforms as they engage in diagnosisng, prioritizing and shaping the solutions as well as their involvement in the implementation and in monitoring progress.
From the outset LIC adopted a PPD framework that could bring the local business community and the Local Government Authorities (LGAs) together in a regular and structured dialogue process that encourages a practical response to challenges of investment and business growth at local level. PPD under LIC project recognizes and respects equality of voice between the public and the private sector and is designed to build solidarity between the two sectors through commitment to action and mutual accountability.
Global experience shows that Public Private Dialogue (PPD) has inherent virtues that can bring about an improvement in the investment climate. This is because it is a forum where stakeholders can come together to forge alliances to deal with developmental obstacles not only in the private sector but also in the public sector and at societal level at large. It is important therefore that PPD is effective in delivering the desired results for stakeholders and shows proof that real solutions can come from dialogue otherwise PPD remains a powerless tool that soon becomes neglected y otherwise willing parties. PPD is therefore a development forum where issues are discussed information and knowledge is shared to make life better for all. For the private sector PPD can unlock and unblock investments and business opportunities and can serve as a privileged space where parties can: i) come to an agreement on what they consider to be the critical constraints to investment; ii) reach consensus on the priorities that need to be addressed; and iii) agree the specific actions and roles and responsibilities that must be taken by each party to arrive at the desired goal including ways to ensure mutual accountability.
2.0 PPD IMPLEMENTATION PROGRESSIN KIGOMA
2.1 Undertaking PPD Meetings In Kigoma Region
LIC started the PPD process in Kigoma region after undertaking several awareness creation meetings which brought both the public and the private sector together to hear about the project, its objectives, intended activities, intended beneficiaries and expected outcomes in the selected LGAs. These awareness meetings started in the Municipality of Kigoma-Ujiji on the 18th of March 2014 when LIC had a stakeholder meeting to introduce the project upon its commencement. A similar meeting was held in Kasulu on the 19th of March 2014. A follow-up meeting was held in Kigoma-Ujiji Municipality on the 20th of March 2014 due to stakeholder demand.
Additional LIC awareness meetings were held on the 20th of June 2014 for Kigoma-Ujiji Municipality and on 26th of June 2014 for Kasulu district Council. Other meetings included the feedback meetings held for the GM Mapping study on 5th August 2014 in Kasulu district and on the 6th of August 2014 in Kigoma-Ujiji Municipal Council. These meetings provided the background information stakeholders needed for the implementation of the project and specifically for the PPD meetings that were to follow.
The initial PPD meetings that were held were based on a structure that was proposed in the Final Report of the general mapping study in 2014. It followed the same structure and format as the one used by the Tanzania National Business Council (TNBC) and were referred to as LIC PPD framework for improving the business environment in Kigoma. LIC undertook four of these types of PPDs: One was done on the 2nd of December 2014 in Kigoma-Ujiji Municipal Council; the second on 24th February 2015 for Kasulu District Council and another on the 27th of August 2015 in Kigoma-Ujiji Municipal Council followed by the last of its type on the 7th of August 2015. The specific content, the outcomes and the effects of these PPD meetings are further elaborated in follow up sections of this write up by each district.
· Adoption of TNBC- Style PPD for through Regional and District Councils
In April 2015, the Regional Commissioner in Kigoma, recognizing the importance of PPD in overall development of the region and in investment promotion more specifically, approached LIC office in Kigoma for support to undertake PPD not only in the two initial LIC selected LGAs but for the whole region and in all the districts. The request specified the need to undertake the PPD in the style used by TNBC for the sake of sustainability and for harmony with other regions in the country. This was the beginning of the TNBC supported framework that LIC is using now in Kigoma region through the RBCs and the DBCs for all districts councils and with the fullfacilitative support of the TNBC.
· Undertaking of Regional Business Councils in Kigoma
Two Regional Business Councils were held in Kigoma in 2015; the first on the 5th of June 2015 and the second on the 11th of December 2015. The two RBCs resulted in many resolutions agreed for implementation by both the public and the private sector. An Action Plan for the implementation of the resolutions has been prepared by the Secretariat of the Regional Business Council ready for upgrading and approval by stakeholders.
· Inauguration of District Business Councils
Five District Business Councils were inaugurated in 2015. The first was in Kakonko district on the 14th of July 2015; the second in Kibondo district on the 16th of July 2015; the third in Kasulu district on the 16th of November 2015; the fourth was in Kigoma-Ujiji Municipal Council on the 17th of November and the fifth on the 19th of November in Uvinza district Council. The inauguration event had similr agenda for the 5 districts. The public sector presented what they already know as existing and potential investments opportunities in the districts and the challenges that were facing investors. The private sector presented critical constraints experienced in business. Other agenda included awareness creation of the objectives of the LIC project and the facilitation of the TNBC in capacity building of the Business Councils as well as the role of the TCCIA in the private sector.
2.2 Studies and Surveys Informing the LIC PPD Process in Kigoma
In addition to primary information on business climate that was gathered from stakeholders during the introductory and awareness raising meetings LIC used information from the Situation Analysis Report of 2013 and the Report of the Due Diligence Capacity Assessment of PSOs and LGAs of 2013 as well as the Report of the GM Mapping Study of 2014 as the basis for agenda setting for the initial PPD meetings. These studies had shown sectoral investment priorities identified by the LGAs, existing capacities and limitations and opportunities to overcome investment obstacles. The findings therein were considered by LIC and partners as the appropriate entry point to identifying and prioritizing critical constraints to investment in Kigoma and to setting agenda that would lead to identification of solutions to challenges faced. It is worth noting that the information is continuously updated through additional studies as well as taping on the views and opinions shared and discussed during PPD meetings.
LIC learned that Kigoma had been undertaking RBCs since 2007 but in a manner that was unsystematic and unpredictable largely because of limited resources both human and financial to support the PPD process. In October 2014 LIC Kigoma commissioned a brief study to investigate the nature of the RBCs that took place in Kigoma between 2007 and 2014 and to find out what was on the agenda and the issues discussed, and agreed as well as actions taken during that period. The report was shared with stakeholders during the PPD meeting of the 2nd of December 2014.
The findings showed there was limited understanding of the PPD process used by the TNBC, the legislation behind it, and the value of PPD to improving the business climate. As a result there was, inevitably, limited commitment financially and operationally to the process by both the public and the private sector. The study also found that there was limited capacity among public and private sector actors to spearhead the process leading often to ad hoc and sporadic meetings with little or no follow up on agreed actions. In most cases the meetings were provoked by some crisis that needed immediate attention. Even then records of what was agreed were poorly kept which made it quite difficult to follow –up of resolutions passed or commitments made by either the public or the private sector.
Sector specific studies have also been done to inform the PPD process and these focused on analysis of specific value chains to identify critical constraints to investment along the value chain for sunflower as well as mapping of value chain clusters for cassava and fisheries to examined critical constraints facing actors along the value chains that may hinder their ability to invest and grow businesses.
2.3 PPD Proceedings in Kigoma
· PPD meeting In Kigoma –Ujiji Municipal Council on 2nd of December 2014
The first PPD meeting was held at Nzimano Conference Hall, Kigoma-Ujiji Municipality and chaired by the District Commissioner and Co chaired by the Regional Chairperson, Tanzania Chamber of Commerce and Agriculture (TCCIA). Among the participants were the Kigoma, Municipal Director and the Deputy Mayor. There were 24 participants from the public sector, 21 from the private sector and 4 LIC members of staff bring the total to 49 participants. The Agenda included: i) Further elaboration of the LIC project and the PPD approach; ii) Experiences and lessons learned by Kigoma on PPD under the RBC from 2007 to 2004 based on an assessment commissioned by LIC; iii) Challenges facing PPD activities in Kigoma and how to overcome them; iv) Burning issues from the public and private sector that should be raised under PPD forum; v) Accountability and follow-up on actions taken on resolutions passed through PPD forum; vi) What should be done to get full participation of private sector in PPD forum.
The main burning issues raised were:
i) Limited understanding of PPD and its valu to either the public or the private sector leading to limited commitment of memmbers;
ii) Lack of TCCIA capacity to mobilize or educate members in the business community about the importance of the PPDs;
iii) Unwillingness and at times inability of both the public and the private sectors to make financial contributions to organize the PPD meetings;
Resolutions passed included: i) PPD should be the main forum for bringing public and private sector to collaborate on improving the business climate; ii) Burning issues including compliance on tax payment by the private sector, value addition to crops, easing cross border trade, addressing the unsafe conditions in Lake Tanganyika, One Stop Business Center and establishment of data base for Kigoma –Ujiji Municipal Council; access to finance by MSMEs, fast tracking issuance of land Title Deeds, tax exemptions for local investors, removal non-tariff barriers to trade should be addressed by preparing an action plan to be shared in follow-up meetings for approval. The next meeting was set for 27th February 2015.
· PPD meeting in Kasulu District Council PPD on 24th February 2015
The meeting in Kasulu District Council on 24th February, 2015 was held at the Kasulu Youth and Cultural Center It was opened and Chaired by the acting District Executive Director on behalf of the Kasulu District Commissioner. The meeting was attended by 57 representatives from public and private sectors. The main agenda were: i) to familiarize participants with Public Private Dialogue; ii) prioritization of burning issues from private and public sector; iii) and agree on critical issues that are the barriers to investment and business growth.
Resolutions included i) Kasulu District Council should seek support from LIC to fast track the establishment of One Business Stop Centre at Kasulu District and Business database; ii) identification of ways the District Council could reduce the number of taxes charged on business operations; iii) ensuring that responsible authorities act quickly to remove cross border non-tariff barriers; iv) Fast tracking issuance of land title deeds; v) District officials with the support of LIC to promote value added agricultural products and market linkage within the value chains.
· PPD meeting in Kigoma-Ujiji Municipal Council on 27th of August 2015
The PPD was held at Nzimano Conference Hall in Kgoma-Ujiji. The opening remarks were given by TRA official on behalf of the District Commissioner who was invited to be the guest of honor but had to attend to other urgent matters. Altogether there were 52 participants to the meeting. The agenda included: i) an elaboration of the PPD mechanism and its benefits to improving the business environment; ii) Presentation of critical constraints to business growth and investment in Kigoma from the public and the private sector; iii) the role of the LIC project in promoting PPD in Kigoma; Roles to be played by the public and the private sector to improve the business climate. Issues discussed included: i) support to establish the One Stop Business Center; ii) District Business data base establishment and management; iii) Fast tracking issuance of Land Title Deeds; iv) Easing cross border trade: v) Compliance on tax payment by the private sector; vi) Addressing unsafe condition in lake Tanganyika; vii) facilitating access to finance by MSMEs; viii) the need for tax exemptions of local investors; ix) Removal of Non-tariff barriers to trade; x) export regulations and support services and the TRA requirements: xi) and specific modalities for accessing SIFF funds under the LIC project.