1. The Business Environment Key Issue Discussion GBS Annual Review 23 November 2009

2. Introduction  Macroeconomic stability and strong economic growth.  But sluggish progress of reforms to improve the business environment.  Presentation organised around 4 key messages, drawing on results of recent comparative surveys.  Objective of the session is to agree on concrete actions

3. Message #1  Tanzania is slipping down the Ease of Doing Business rankings and losing ground against its neighbours.

4. M1a: Tanzania’s record against the continent’s top performers

5. M1b: Tanzania’s record against its neighbours in the EAC

6. M1c: Drilling into the data Tanzania: 20102009Change Ease of Doing Business131126-5 Starting a Business120111-9 Dealing with Construction permits178175-3 Employing Workers131133+2 Registering property145 0 Getting credit8784-3 Protecting investors9388-5 Paying Taxes119113-6 Trading Across Borders108105-3 Enforcing Contracts31 0 Closing a business113 0

7. Message #2  The high costs of doing business not only deters new investment but also reduces the competitiveness of Tanzanian firms and Tanzanian exports.

8. M2a: The % of manufacturing firms that export from Tanzania is low.

9. M2b: High Cost of Exports RankDocuments for export (number) Time for export (days) Cost to export (US$ per container) Documents for import (number) Time for import (days) Cost to import (US$ per container) Tanzania103524$1,262731$1,475 Uganda145639$3,090737$3,290 Kenya148929$2,055826$2,190 Rwanda168942$3,2751042$5,070 Burundi170947$2,1471071$3,705 Thailand10414$ 625313$ 795 Mauritius20517$ 725616$ 677 Malaysia29718$ 450714$ 450 China48721$ 460624$ 545 South Africa147830$1,445935$1,721

10. M2c: Other Business Environment constraints (power, finance)

11. M2d: Power outages in Tz relative to neighbouring economies (2006)

12. Message #3  The Government of Tanzania needs to reassure domestic and international investors of its commitment to investment climate reforms, particularly during this Global Economic Downturn

13. M3: Falling investor confidence  Tanzania Investment Centre reports fall in number of registered investment projects.  “Toxic actions” by Government ministries in the headlines  Uncertainty created has increased the level of perceived risk of investing in Tz  Good reputations hard won are easily lost.

14. Message #4  Slow progress in implementation of Investment climate reforms - coupled with vocal complaints from the business community over their treatment at the hands of officials - threaten to undermine the case for GBS

15. Conclusions  Need to secure agreement on concrete steps that the GoT will take over S/M/L-term to improve the Business Environment  Strong leadership is critical  Seriousness of response taken to 2010 DB survey is encouraging.  Look forward to hearing the outcome of the task force deliberations from PS MITM.

16. Asante Sana