Impact of COVID-19 on Business & Economy – Tanzania
Tanzania Private Sector Foundation (TPSF) is the voice of the private sector and the umbrella body for private sector associations and corporates bodies in all sectors of the economy in Tanzania. The overreaching goal of TPSF is to promote private sector-led social and economic development in Tanzania through advocating for private sector-friendly policies, legislations, and regulatory and legal frameworks. Visit: https://tpsftz.org/
How did COVID-19 affect business / economy (sectors, sales & profit, employment)?
The pandemic has a negative effect in the economy globally and indeed in the East African Community, including Tanzania. It led to companies laying off employees, some companies shutting down (i.e. tourism, hospitality and transport & logistics sectors), increased burden on the health and social security sectors and the social burden of families having to take care of and/or support sick and unemployed family members. The World Bank estimates a real GDP growth rate of 4.3 percent and a GDP per capita growth rate of 1.3 percent in 2021, following a 1.0 percent per capita GDP contraction in 2020.’ The World Bank 2022.
What are the challenges and/or opportunities Covid-19 has brought forth?
The challenges include
- Decline of business due to closure of borders including the tourism sector that requires movement of people
- Slowdown of movement of goods and people due to lockdown of counties as result of the pandemic
- Delay of export of produce such as horticulture produce due to lockdown in destination countries and the nature of the produce
While the Opportunities
- Virtual workspace has become a key intervention to allow employers and workers to work remotely and save cost such as office space, rent and utilities
- For manufacturing sector there is an opportunity to produce products that have longer shelf life and thus can be supplied throughout a number of years
- The pharmaceutical and medical industry has a wider room of ensuring services are digitized and medicines are readily available to support population
What incentives have the Government given to support the recovery and resilience of business / economy?
In 2021, the Government of Tanzania through BoT introduced a few monetary policy measures to support recovery and increase the supply of credit to the private sector. There has been renewed efforts by the Government to boost the tourism sector by increasing the number of visitors to Tanzania through the “Royal Tour” documentary and other marketing campaigns. Companies are also using digital tools as a resilience and recovery strategy.
How has Covid-19 forced businesses to repurpose /re-adjust your operations?
Usage of digital workspace such as virtual meetings and allowing flexibility on remote working/virtual offices
What genders specific interventions were done to support women amid COVID-19?
UN Women provided grants that helped support economic innovations by young women with the aim of keeping their businesses afloat. TradeMark East Africa under Safe Trade Facility provided training aimed at empowering private sectors, women and SMEs to continue to trade amid Covid-19 and build resilience.
What is the state of business / economy in the EAC?
Democratic Republic of Congo formally joining the EAC will be followed by the immediate removal of non-tariff barriers on the movement of capital, goods, services and people, which will in time lead to an increase in intra-EAC trade. As of 1st July, 2022 EAC is implementing 35% as the 4th Band of the EAC Common External Tariff (CET). The Gatuna-Katuna strategic border post has been re-opened, this will accelerate economic and social development of the Partner States by reviving the free movement of goods, persons, capital and labour.
How do you think the EAC region can prepare for such emergencies in the future?
By prioritizing regional value/supply chain to support local production in order to minimize the dependence on imported goods and services. EAC region should hold more regional training workshops that include simulation exercise (SIMEX) at ports of entry in order to strengthen preparedness and bolster response to future public health emergencies in the Partner States.
What do you recommend the Government of the EAC Partner States do to support recovery, resilience and growth of business/ economy?
The Governments of EAC Partner States should ensure smooth border operations to facilitate the movement of goods and people amid COVID-19 and also prioritize perishable produces at the border crossings.
What incentives do you recommend the Government of the EAC Partner institute to support business / economy?
The Governments of EAC Partner States should implement Fiscal Policy interventions to allow re-growth of business – especially in the tourism, manufacturing, agriculture and transport sectors. Monetary policy interventions to supply more capital to private sector to re-ignite business activities. Expand the scope of social safety nets to address the challenges of unemployment, seasonal employment, retrenchment etc, and also provide Incentives to impacted sectors such as tourism, hotels, aviation and manufacturing.