A SPEECH PRESENTED TO PESA WORKSHOP

PARTICIPANTS BY PROF. PIUS MBAWALA (M.P) DEPUTY

MINISTER FOR AGRICULTURE AND FOOD SECURITY AT

THE GOLDEN TULIP HOTEL ON 27TH FEBRUARY 2003

 

-         His Excellency US Ambassador Robert V. Royall,

-         The workshop Chairman,

-         The USAID Director Dr. Ray Kirkland,

-         Permanent Secretaries,

-         Regional Administrative Secretaries,

-         District Executive Directors,

-         Private Sector Representatives,

-         Donors,

-         Partners,

-          Invited Guests,

-         Members of the Press,

-         Ladies and gentlemen.

 

First I wish to express my gratitude for the kind invitation extended to me to make a few remarks at this extremely important workshop convened to launch Private Enterprise Support Activities (PESA) for MICRO-SMALL ENTERPRISES (MSE) activities in the country. Let me, at the outset, take this opportunity to thank and applaud the organizers of this event particularly USAID and Development Alternatives Inc. for taking the lead to host this workshop.

 

Mr. Chairman,

 

The workshop represents a special occasion and I believe all people gathered here today from government, private and other organizations will find it not simply useful but absolutely necessary to examine the road taken by partners in fulfilling the objective of contributing to the economic growth of the country. This is opportune in that it is taking place when the Government is committed to addressing issues of micro, small and medium enterprise development, poverty reduction, unemployment and as already spelt out the role of private sector in the national economy. I am optimistic that the outcome of this workshop will contribute to a better understanding on how to grapple with these pertinent issues that affect the lives of the people engaged in small enterprise activities.

 

Most important, we policy makers, recognize the importance of creating a conducive business environment for the Private sector in their noble cause of creating employment, generating income and ultimately contributing towards poverty reduction. Poverty has remained deep and pervasive where an estimated 80% of the rural population live under poverty line with a disposable income of less than US $ 1 per day. This situation has led to lack of income opportunities, inability to meet basic needs, and vulnerability. The poor, the hungry and the diseased cannot be expected to do much above their own pressing struggle to survive.

 

That is why it is important to initiate sustainable development programmes which can guarantee availability of food and employment for the vast majority of our people through promoting activities which would raise incomes and improve affordability. To achieve that, we need social and economic transformation, which is essential in empowering poor communities to manage and own resources for a better livelihood. The thrust is to identify activities to be undertaken for economic sustainability.

 

 To a great extent agricultural produce and other natural resources based products are still processed in markets outside our country thus hindering faster technological transfer acquisition and diffusion. Therefore, there is a need to develop methods that will make technology development endogenous so as to internalize it and stimulate economic growth. We are aware that MSE tend to add value to local resources and use technologies which are easy to acquire. In this regard the generous support of the donor community to economic reform efforts, for instance through PESA, is very much appreciated.

Tanzania is committed to a free market economy whereby the government continues to regulate and facilitate while the private sector takes the lead in creating employment, generating income and growth. The imperative need of the Government is to continue to put in place national policies, strategies and programmes which would create a favorable and an enabling environment for development to occur and which in turn would stimulate a dialogue between the government, private sector and other stakeholders as partners in the development process. The Sustainable Industrial Development Policy or SIDP (1996-2020), for instance, recognizes the role of the private sector including micro and small enterprises and the importance of reviewing policies and legislation which constrain the private sector. While I admit that there are still some constraints, the Government is totally committed to creating business environment that supports the private sector. The complexity of issues involved in development requires collaboration, cooperation and a constant dialogue among all stakeholders. Involvement through such consultations, in constructive dialogue and cooperation are the key to achieving sustainable development and ensuring that constraints are adequately addressed. The synergy among new partners particularly the Private Sector, including the micro and small enterprises is quite explicit in various policies driving the economic growth.

 

Empowering people at the grassroot level through Local Government Reform is seen as the only way to improve governance and accountability. The Government is re-examining responsibilities among various stakeholders, government, civil society, NGOs, private sector, international partners and researchers and the academia in order to increase transparency, mutual trust and democratic decision-making mechanisms for accepted decisions and joint action. The reform process enables the facilitation of Local Government to  perform its function including support to local initiatives which incorporate people’s needs. Within the same spirit, I hope Business Associations in identified regions are facilitated to have their voice heard in the endeavor to articulate the concerns of those they represent. Where they are still weak they are being consolidated and strengthened to take the lead in grassroot activities.

 

The ongoing liberalization and privatization efforts have not led to the envisaged marketing that would have ensured rural producers of competitive prices. Further, MSE are of great potential in terms of creating employment opportunities, expanding domestic production and increasing incomes as well as involving the majority of the people who would otherwise not be effectively involved in the economy. Estimates show that out of about 700,000 new entrants into the labor force every year, it is only 40,000 that are employed by the public sector.  Yet, in accordance with a recent (2000/01) Tanzania Mainland Labour Survey, there are about 2.3 million people who are unemployed, the majority of whom are the unskilled youth.  I hope this workshop today will come up with suggestions particularly to employment in MSE, improve access to markets and credit institutions and establish relationship for better working and productive partnerships.

 

Indeed as we look ahead, there is need to mobilize human resource and harmonize it with   economic activities in order to attract increased sound investments. Mr. Chairman, at a meeting like this, time does not permit for much details but suffice it to say that capacity building has to be enshrined in your programme for quick tangible results. I hope MSE will provide the ground for  transfer of business management and entrepreneurship skills through training and awareness programmes. Training should include information on how to access finances and marketing strategies.

 

In particular I wish to request this workshop to draw up some strategies for assisting small scale farmers to have access to new markets such as in the Middle East, Europe while also taking advantage of profitable AGOA. PESA could facilitate in winning new markets for our small scale farmers for selling organic foods such as bananas, oranges, vegetables, pawpaws, mangoes, coffee, tea, mandarins, aromatic rice, cucumbers, water melons, cocoa etc.

 

Further, I seriously request PESA to assist our small scale farmers to locate overseas food processors who can form partnerships with individual farmers or cooperatives to invest in rural areas. PESA in collaboration with business associations such as TCCIA, CTI and Board of External Trade and in conjunction with the Tanzania Government could advise rural farmers on products for which our country has comparative advantage and encourage extensive promotion of such goods for export.

 

Funds should be available to enable SMEs to make use of them individually or in joint venture partnerships in order to increase production for export.  In addition, promotion of SACCOS should be strongly encouraged so as to be another source of funding for small grassroots credit ventures.

 

I do, however, appreciate your endeavors to create MSE in identified regions in the country. I am sure they will essentially be transformed into viable enterprises with contribution to poverty reduction, absorption of the unemployed and contribute towards economic growth.

 

To conclude, I trust that your deliberations to-day and tomorrow will bring partners much closer and be able to chart out priority areas of concern based on mutual commitment, for improved linkages in information exchange.  I wish you fruitful workshop deliberations and look forward to the results of this meeting.

 

Mr. Chairman, Your Excellency, distinguished guests, workshop participants, ladies and Gentlemen, may I now have the honour and pleasure of declaring this important PESA workshop formally opened and

 

THANK YOU FOR YOUR ATTENTION.