Fund for private sector survival coming next year

The government in collaboration with the World Bank is finalizing a scheme known as `Private Sector Competitiveness Project` whose aim is to help domestic enterprises stay alive in the midst of global competition.

The project will take-off next year with three components seen by promoters as being crucial for ensuring that domestic private sector does steadily become competitive.

The Tanzania Private Sector Foundation (TPSF) Executive Director Louis P. Accaro said yesterday that successful implementation of the project will greatly help Tanzania’s private sector become more viable and aggressive.

`One of the projects` components is the enterprise development, whose aim is to empower enterprises to become competitive at local and regional levels by providing grants that will foot 50 per cent of the costs needed to establish new ventures` he said.

Potential beneficiaries of this component, as when it becomes operational, will be required to submit project proposals to designated consultants for evaluation, and once approved, the beneficiary would be refunded half of the project’s total costs.

One of the objectives of the project, he said, was to reduce access to finance hardships that local entrepreneurs go through during the process of setting up businesses.

The second component seeks to reform Tanzanian’s business and investment environment, by further streamlining legal and regulatory frameworks with a view to making the country more business friendly.

Accaro said that the third component will focus on enhancing the capacity of local microfinance finance institutions (MFIs).

`Under this component, the project will financially empower local MFIs to enhance their capacity for providing loans to savings and credit cooperatives societies (Saccos).

TPSF has dismissed possibility that project’s funds might eventually be landing onto the hands of non-targeted entrepreneurs, arguing that TPSF has hired competent and experienced consultants, who have successfully accomplished similar assignments elsewhere.

However, he sounded pessimism about the intentions by the Tanzania Electrical Company Limited (TENESCO) to hike power tariff by 40 per cent effective.

The move, he said, will not only destabilize the already achieved socio-economic fundamentals, but also entire economy.

`Experience attests that no single country has ever attempted to pull out completely from assisting utility sectors, so the government should look into ways for easing the crisis before withdrawing`, he said.

The anticipated power tariff hikes will hit on production costs, jobs as well as making domestic goods and service uncompetitive in global markets, economists have warned.
SOURCE: GUARDIAN