Over the past three or so years, the fifth-phase government of Tanzania led by President Dr John Pombe Magufuli has introduced sweeping public policy reforms in a range of economic sectors that influence what private sector companies in Tanzania can and cannot do.
These companies and their executives have an active role to play in shaping private sector-government relationships and public policy in Tanzania, but they face the formidable challenge of being viewed with suspicion and mistrust by the government (see, Zacharia, Alfred. “Private sector seeks to mend fences with government.” The Citizen. 24 August 2018).
To surmount this challenge, private sector companies need to adopt a deliberate, practical and progressive approach to government relations and public policy.
But many don’t have such an approach; in its place, they place employment adverts with regard to openings for government relations managers and analysts that overtly call for candidates with the ‘right contacts’ and the ability to network. Only a handful has sought to approach government relations and public policy in a systematic way for positive impact.
Moreover, a small number has learnt how to listen, engage, and communicate with high-level government leaders or to decode and navigate Tanzania’s unique geopolitical climate. And then there is the inadequate understanding of policy and law making processes in Tanzania.
The business value at stake from government relations and public policy in Tanzania is huge, as potential public policy-related risks arising in the executive, legislative and regulatory spaces can have far-reaching implications (e.g. immigration and employment, taxation, foreign exchange control, cross-border trade, and regulatory approval for grant, extension and renewal of licenses).
However, risks are not always negative or destructive events. At times they can provide opportunities and benefits for companies. Regrettably, for many companies, government relations and public policy activities are not integrated into their Tanzania strategic positioning; or if they are integrated, they are not organized as carefully as are other business functions.
Yet, because of the sweeping public policy reforms introduced in Tanzania, government regulatory authorities have significant influence over the undertakings and arrangements of private sector companies.
A deliberate, practical and progressive approach to government relations and public policy can help private sector companies to build effective relations with the central government and regulatory authorities which enhance better understanding and interpretation of regulatory requirements and the authorities’ satisfaction of compliance with those requirements. This, in turn, helps to avoid business disruption and financial losses resulting from regulatory raids.
If the government regulatory authority is not satisfied, there is a serious risk that the company’s license will not be granted, extended or renewed or the government may issue new regulations that make it more difficult to continue to operate. The recent overhaul of Tanzania’s mining regulatory framework and the impact it has had on some mining companies is a case in point.
Adopting a deliberate, practical and progressive approach to government relations and public policy can also enable companies and their executives to share concerns regarding existing regulations with the hope of influencing the development of future regulations and to obtain early notification of changes in regulations to be issued thereby allowing greater opportunity to satisfy regulatory requirements in sufficient time.
But how do you know if such an approach is bringing a positive impact? Is it when the government regulatory authority, in its public informational activities and consultation, is keen to listen and respond to your company’s concerns about potential laws and regulations? Yes definitely.
However, that’s dependent, in part, on whether the government regulatory authority is satisfied with the company’s previous performance in meeting regulatory compliance requirements. This sounds simple, but it’s really not easy.
The government relations function is so much more than just having the ‘right contacts’ and attending networking events. In light of the sweeping public policy reforms that impact on the private sector, executives and companies need to adopt a deliberate, practical and progressive approach to government relations and public policy into their Tanzania strategic positioning.
This can ultimately help to address the formidable challenge of private sector companies being viewed with suspicion and mistrust by the government.