Key elements from a national logistics policy, which has been in the works for months, will likely feature in the FTP. This policy will aim to reduce logistics costs from 13% of GDP to 8% over five years and substantially improve India’s trade competitiveness. The government will likely retain certain key export schemes, such as those relating to special economic zones (SEZs) and export-oriented units, in the next foreign trade policy as well, even though these programmes have been challenged at the World Trade Organization (WTO), sources told FE. However, any new scheme within the FTP will be designed in sync with WTO stipulations, one of the sources said. The new FTP for the next five years is expected to be rolled out from October 1. Coming as it is in the wake of the unprecedented Covid-19 pandemic, the FTP would focus more on ways to ensure India’s greater integration with the global supply chain, trimming elevated logistics costs, incentivising the much-needed research & development (R&D) and bolstering certain marketing support, one of the sources said. government’s Aatmanirbhar initiative as well as ease of doing external trade will have a significant bearing on the next FTP, said the sources. Key elements from a national logistics policy, which has been in the works for months, will likely feature in the FTP. This policy will aim to reduce logistics costs from 13% of GDP to 8% over five years and substantially improve India’s trade competitiveness. To boost innovation, the government could consider extending incentives, including duty-free imports of equipment by an actual user for undertaking R&D. As for marketing support, several countries offer assistance for diversification of markets and better promotion of their products, and India may step us such aid, too. Singapore, for instance, offers a 200% tax deduction on eligible expenses for international market expansion and investment development activities. As for India’s export schemes, the US had successfully challenged these at the dispute settlement panel of the WTO on ground of being inconsistent with global trade rules. Washington had also claimed that “thousands of Indian companies are receiving benefits totalling over $7 billion annually from these programmes”. India had appealed against the WTO dispute body’s ruling in November 2019 and a verdict is still awaited, as the appellate mechanism remains crippled for well over a year, ironically due to the US’ blocking of the appointment of judges to it. New Delhi believes that it has a strong case and the verdict of the appellate body, when it comes, should go in its favour. The programmes that were challenged included the Merchandise Exports from India Scheme (MEIS) and those relating to SEZs, EoUs, electronics hardware technology parks, capital goods and duty-free imports for re-exports. While India has already replaced the MEIS, the biggest scheme accounting for most of the benefits meant for exporters, with a WTO-compliant tax refund programme from January 1, some others still continue. A restructuring of these schemes would warrant an exhaustive exercise, while any abrupt abolition could stoke fresh uncertainties in trade prospects, exporters have said. SEZs are entitled to tax-free import/domestic procurement of goods. Among others, SEZ units get a 100% income-tax exemption on export income for first five years, 50% for the next 5 years thereafter and 50% of the ploughed-back export profit for the next 5 years (of course, a sunset clause has been made effective from July 1, 2020). The EoU scheme typically complements the SEZ one. Export-oriented units, too, get concessions, including duty-free imports or procurement from bonded warehouse. “The new FTP must focus on supporting exporters amidst the volatile environment, impacted not just by the Covid-19-induced stringent economic scenario, but also by rising protectionism. We should also see the government smoothening the transition from MEIS to the WTO compliant export support scheme of RODETP, in facilitating and enhancing India’s competitiveness in global trade,” said Nilaya Varma, CEO & co-founder of Primus Partners, a consultancy firm. After a roller-coaster ride last fiscal due to the pandemic, merchandise exports surged a record 196% year-on-year in April, driven mainly by a favourable base. However, even in absolute term, exports in April stood at $30.6 billion, up almost 18% from the same month in 2019 (before the pandemic struck). The government has now set an ambitious target of $400 billion for FY22, against $291 billion last fiscal. Ajay Sahai, director general and chief executive at exporters’ body FIEO, said external demand looks promising and order flow remains good. However, lockdowns (even for manufacturing units) in certain states like Delhi, Karnataka and West Bengal could weigh on exports in May. Nevertheless, exports will bounce back strongly very soon, Sahai stressed. The validity of the current FTP (2015-20) has been extended by a year and a half through September 2021. The move was aimed at maintaining policy stability and softening the blow to exporters in the aftermath of the pandemic.
Source: Financial Express
Compliance relaxations offered by government under the tax regime inadequate, the survey points out The compliance relaxations offered by the government under the Goods and Services Tax (GST) regime are inadequate, according to a survey of small and medium businesses affected by the lockdown and mobility restrictions in most………
Source: The Hindu
We are also considering extending the interest subvention of 2% on prompt repayment of Shishu loans sanctioned under the Pradhan Mantri Mudra Yojana (PMMY),” said a government ofcial. The scheme ends this month. The government wants lenders to focus on Mudra loans, as it expects that small borrowers will help pick up credit demand once the lockdowns in states are eased. “We are also considering extending the interest subvention of 2% on prompt repayment of Shishu loans sanctioned under the Pradhan……………….
Source: Economic Times
Corporates are offering Covid-19 care packages for the well-being of employees As the second wave of the Covid-19 pandemic rolls on relentlessly, companies are loosening their purse strings for the well-being of their most precious resource — their staff. This includes measures such as handing staff a ‘well-being allowance’, paying and arranging for vaccinating employees and their families and topping up insurance and giving salary advances or loans. They are paying compensation to the family in case of a breadwinner’s death, funding the education of their children, enabling consultations with doctors and offering hospital-managed quarantine facilities. Larger companies have even set up Covid-19 care centres. Some have contributed to government relief funds or helped in the procurement of oxygen plants and concentrators. Clearly, corporates are wearing their hearts on their sleeves. Well-being is key Companies are taking both the physical and mental health of employees seriously. Take the case of Shailee Chatarth, Business Head, Away from Home channel, Pepsico India. Some months ago, her father, based in Bhiwadi, Haryana, tested positive. He recovered, but was prone to depressive bouts. Chatarth says the interventions by Pepsi have been helping her father and the family. “My father is using our employee assistance programme which is a helpline with psychologists.” Further, she, her father, sister and brother-in-law from three different cities are availing of the company’s online meditation services. Tata Technologies has also instituted several programmes including mindfulness sessions for the overall wellbeing of employees. Hotel group Accor has ensured all associates have access to counsellors around the clock. Tech Mahindra has appointed a dedicated Wellness Officer to ensure employees get access to medicines, hospitals, etc. In most other places, HR is stepping into that role. Hindustan Coca Cola Beverages (HCCB) has launched a series of weekly wellness programmes to enable its associates deal with stress. HCCB has also introduced a loan fund to meet exigencies of critical medicines and hospital admissions. VMware, Inc. is doubling the annual ‘well-being allowance’ for its India staffers who are now eligible for ₹59,130. Care centres Many employees live in small houses, which make isolation or quarantine difficult. Mindtree has built well-equipped Covid-19 care centres — staffed by paramedics with a 24x7 ambulance service and oxygen concentrators — in Bengaluru, Chennai and Pune for employees and immediate family members experiencing mild symptoms. Another centre is expected to shortly come up in Hyderabad, says Paneesh Rao, Chief People Officer, Mindtree, Tech Mahindra too is converting some of its campuses into care units. Accenture has partnered with health care providers to offer quarantine rooms in hospitalmanaged-hotels in seven cities. Bajaj Auto has created care facilities of over 250 beds across all plant locations to serve its employees and the community. Financial support for families Loss of the breadwinner is devastating to a family. Mindful of this, some corporates are going the extra mile. Borosil was the first to announce that in the event of an employee’s death due to Covid-19, his or her salary would be paid to dependants for two years. Siemens has said it will give a lump sum of ₹25 lakh and one year’s salary of the employee to the family, and take care of the children’s educational needs. Bajaj Finserv will provide a deceased staffer’s family with an amount ranging from 1.5 times to three times the annual salary; and a fixed amount of ₹1 crore for the family of senior employees. It will pay up to ₹2 lakh a year for a child’s education up to graduation and offer extended medical insurance for the family for 60 months “We resolve to stand by their families in these trying times,” says Sanjiv Bajaj, Chairman & Managing Director. Luminous says a deceased employee’s spouse will be given a job, dependants will receive three months’ salary, health insurance for the family will continue for a year and annual school fees of up to ₹1 lakh for each child will be reimbursed till class 12. Textiles maker Welspun will take care of living expenses, education and health insurance of family members of deceased employees. It will pay half the monthly salary for two years, medical insurance of ₹5 lakh for 10 years, education fees for two children up to graduation and consider spouse/children for suitable job roles. Bajaj Auto too has committed support of up to two years after a staffer’s demise and in dependant childrens’ education till graduation. In addition, there will be a five-year hospitalisation insurance for family members. Vaccination support Companies are organising vaccination camps, directly sourcing vaccines and tying up with hospitals. PepsiCo, for instance, got its Delhi employees and their family members vaccinated through a tie up with Apollo Hospitals last week. More such camps will be held in other cities. Last year’s stories were about the heartlessness of India Inc with reports of job losses from many firms. This year it’s a turnaround. As Kamal Karanth, co-founder of Xpheno, a specialist staffing firm, concludes, “This pandemic has made many leaders, for the first time, experience how employee well-being is directly affecting organisation productivity. Even if empathy wasn’t in the leader’s DNA or employee well-being wasn’t the enterprise priority, the scale of disruption to personal life and business has transformed many.”
Source: The Hindu Business Line
The industry specialised in products like fashion wear, technical garments, sportswear and medical clothing etc. In its early years the Indian garment industry took shape mainly due to the demand of expats in the UK and other countries for traditional Punjabi suits. Recognising the export potential, the Government offered attractive incentives. The result was a thriving business in garment exports with small units mushrooming in different parts of the country close to slums and other semi urban settlements, especially in Delhi, Mumbai, Chennai and Bengaluru. From such humble beginnings, apparel making advanced into large garment industry giving direct employment to millions of people. It also provides employment to support industries like textiles, processing, trims, and many more value addition services. The Transformation The tiny industry grew in space and capacities with investments in modern machines, large assembly lines with conveyor systems, machines with precision sewing capabilities. It uses management and planning software like FastReact, Gerber and Tukatech for designing, pattern drafting, and cutting. The industry specialised in products like fashion wear, technical garments, sportswear and medical clothing etc. Fabrics made of cotton, silk, linen, wool, viscose, banana, bamboo, modal, tencel, polyester, nylon with a variety of finishes are used. Today India is a reliable trading partner of leading retail giants like GAP, ESPRIT, and JC Penney. It exports to Europe, USA, Canada, Japan and South American countries with a market share of 5% and a value of US $ 16.29 billion in 2018-19. Human Capital and Location: The Critical Correlation Despite the exponential growth over the years, the industry continues to rely on human capital as the main resource. Almost the entire industry works on CMT (cut-make-trim). It operates on high productivity to realise profitability and to achieve this goal, the industry invests considerable time and money in training its operators. Thus, the operator behind the machine is a vital resource. It is for this reason that the industry stayed close to locations high in manpower, specifically close to slums and other semi-urban settlements. New units and start-ups operate closer to the workforce. A reason for selection of such localities is cost of transport, low rentals and scale of operations. But over the years it moved to industrial areas requiring employees to travel from distant locations. The Story of Apparel Parks Government of India launched the Scheme for Integrated Textile Parks (SITPs) in 2005 to provide infrastructural facilities to promote industrial clusters that comply with environmental and social concerns of global business. The SITPs are planned to offer seamless value addition from yarn to garment. As per the 2016 report with the Ministry of Textiles, 74 SITPs are sanctioned, but only 30 are functioning. Some parks are fully integrated like Jaipur Integrated Texcraft Park Pvt. Ltd., Lotus Integrated Texpark Limited, Ludhiana Integrated Textile Park Ltd., MAS Fabric Park (India) Pvt. Ltd., Pochampally Handloom Park Ltd. Others like Brandix India Apparel City are developed by single investors, while many are developed by the Government. Certain parks specialise in textiles while some produce both textiles and garments. Most parks have both domestic and export units. Apparel Export Park at Gundlapochampally, Hyderabad and Doddaballapur Apparel Park, Bangalore were established two decades ago to develop the apparel industry and exports. These parks are developed in areas over 170 acres each. But today they wear a deserted look. Barring a few units, many are either closed or rented out for warehousing and other activities as in Hyderabad Park. Similarly, the Bangalore Park has few units in operation. Reasons for Failure The parks are located outside the cities and towns. Their location impacts adversely their sustainability since women are the major workforce and the industry finds it difficult to mobilise them due to the long distances. In addition, poor connectivity is a reason for their failure. Lack of public transport and poor roads are a drawback. Investors shy away as no ancillary units and services are available. Some parks are not connected to national highways or rail heads and sea ports hindering movement of raw materials and finished goods. Export units prefer inland container depots nearby to save time. It is also said that land cost inside the parks is higher than outside. Although certain infrastructure is developed by the park authorities, many MSMEs feel that the pricing of the industrial plots is higher and not justified. Moreover, the small areas of the parks, is another reason for their failure. Internationally such parks are spread over 150 acres and more, in India only 5 sanctioned and approved parks are of this size. Majority of them are less than 75 acres. Apparel and textile parks in Ethiopia, Italy, Kenya, Indonesia, Vietnam and Sri Lanka are larger in comparison. Although the scheme suggests integrated parks, many are, however, dedicated to a single element in the value chain like weaving or garmenting. Thus most of the parks have failed to establish a complete value chain from fibre to garments like weaving, processing, finishing and garmenting. Furthermore, the SITP implementation is plagued by financial problems. Parks are built on a Public-Private-Participation model, with central and state governments funding Special Purpose Vehicle (SPV) to develop infrastructure. Planned common facilities like effluent treatment plants, living quarters, hospitals, restaurants and hotels are either not implemented or maintained. Industrial units built in the parks do not operate as the facilities are incomplete. Often, development outside the parks is the responsibility of state governments and is neglected. Finally, parks are not marketed professionally. Both state and central governments do not consider marketing as an important factor for their promotion. If the parks are to succeed, the agencies must reach out to international buyers and brands like JC Penney, GAP, Esprit, Nike, ZARA, H&M etc., apart from domestic manufacturers. Above all, the industry works on sharp CMTs. Given the challenges highlighted it finds operations in the parks not financially viable. The state and central governments must revisit the scheme and offer incentives to sustain the industry and make them viable. (The author – Ravi Kishore has an experience of over four decades in the Indian Apparel Industry. He worked in various capacities Indian Apparel Industry in export promotion, marketing and management, teaching and skill development.
Source : Financial Express
Entrepreneurs signing guarantee will have to be certain that the business will not flounder The Supreme Court judgment upholding creditors’ right to proceed against……………….
Source: The Hindu
ISLAMABAD - The exports of textile commodities witnessed an increase of 17.35 per cent during the first ten months of the current fiscal year as compared to the corresponding period of last year and surged by 213 per cent on year-on-year basis (YoY). The textile exports were recorded at $12692.840 million in July-April (2020-21) against the exports of $10816.276 million in July-April (2019-20), showing growth of 17.35 per cent, according to latest data of Pakistan Bureau of Statistics (PBS). The textile commodities that contributed in trade growth included knitwear, exports of which increased from $2392.064 million last year to $3126.095 million during the current year, showing growth of 30.69 per cent. Likewise, the exports of yarn (other than cotton yarn) increased by 22.42 per cent, from $22.051 million to $26.995 million whereas, exports of bed wear increased by 24.66 per cent from $1838.449 million to $2291.779 million. The exports of towels increased by 27.18 per cent, from $610.696 million to $776.708 million; exports of tents, canvas and tarpaulin grew by 21.86 per cent, from $78.556 million to $95.725 million; readymade garments by 12.56 per cent, from $2231.697 million to $2512.021 million; made-up articles, excluding towels and bed wear by 22.22 per cent, from $513.405 million to $627.479 million while the exports of art, silk and synthetic textile increased from $272.919 to $301.634 million, showing growth of 10.52 per cent.Meanwhile, the commodities that witnessed negative growth in trade included raw cotton, exports of which decreased by 96.51 per cent, from $17.002 million to $0.593 million; cotton yarn decreased by 4.03 per cent, from $858.580 million to $823.948 million whereas the exports of cotton cloth also decreased by 1.24 per cent, from $1601.650 million to $1581.564 million. The exports of all other textile materials also increased by 39.24 per cent, from $379.362 million to $528.225 million, the PBS data revealed. Meanwhile, on year-on-year basis, the textile exports increased by 213.17 per cent during the month of April 2021 as compared to the same month of last year. The exports during April 2021 were recorded at $1,337.385 million against the exports of $403.833 million during April 2020. On month-on-month basis, the exports from the country however witnessed decrease of 3.21 per cent during April 2021 when compared to the exports of $1355.542 million in March 2021. It is pertinent to mention here that the merchandise exports from the country increased by 13.49 per cent during the first ten months of the current fiscal year.
Source: Nation .com
Can CPTPP, Canada clamp cracks in clothing commerce? Robert Young knows that a trade deal covering 11 countries and spanning three continents may be the missing piece to solve the recovery puzzle of the garments industry. The Comprehensive and Progressive Agreement for a Trans-Pacific Partnership (CPTPP), after all, offers the Philippines a chance to penetrate the markets of Canada, Chile, Mexico and Peru—economies that the country has no existing trade deals with yet. Young, president of the Foreign Buyers Association of the Philippines (FOBAP), said Canada in particular hosts department store chains, including Hudson’s Bay, that purchase billions worth of clothing products from Asian suppliers. At the height of the pandemic last year, Canada imported $8.66 billion of garments, proof of how expansive its demand can be even in challenging periods. It acquired more than half of its apparel imports from Asia’s manufacturing giants China, $3.25 billion; Bangladesh, $1.09 billion; Vietnam, $961.69 million; and Cambodia, $873.34 million However, Young wants the Department of Trade and Industry (DTI) to think twice before signing up the Philippines in the CPTPP. He said the CPTPP may open up opportunities for the industry, but it will eventually lose out to competitors, especially Vietnam. And losing out to regional peers in the face of recession could drive investors away and, in turn, leave workers jobless, Young warned. Garment exports by the Philippines slipped by an average of 12.6 percent in the past five years, to $642.67 million in 2020, from $1.09 billion in 2016, as the country failed to keep pace with the development of its Southeast Asian counterparts. In an interview with the STAR, Young said the absence of a textile industry to support garments production would prevent the Philippines from regaining its status as a leading clothing exporter by next year as set by the DTI in a road map. “The Philippine garments industry has no backup resources. Backup industries are almost zero. The raw materials we use, including the textile and buttons, are all imported. We buy our fabric from South Korea, China, Vietnam,” Young said. As fabric needs to be sourced from abroad, making jeans in the Philippines could cost as much as $10 per pair compared to just $8 in Vietnam. Further, industry sources said it really takes 20 percent more to produce clothing items here than in Vietnam. At a price point then, Vietnam—who is also a founding member of the CPTPP like Canada—will beat the Philippines in any contest for apparel orders, Young said. The FOBAP chief said the DTI would subject the Philippines to direct competition if it insists on acceding the country to the CPTPP, and this may force investors to shut down their plants here and relocate to a neighboring economy. Industry players said they understand the DTI’s intent in exploring the CPTPP markets as export destinations for Philippine garments. Canada slaps an 18 percent tariff on clothing products that come from outside free trade areas. If the Philippines joins the CPTPP, that duty will be eliminated for good. However, local manufacturers have yet to move beyond their expertise of producing fast fashion lines like jeans, shirts and shorts. They lack the capital, raw materials and skills to make what is demanded by Canadian buyers: winter clothes, such as padded ski jackets. In a proof of this incapacity, garment exports to Canada declined by a five year average of 12.2 percent to $14.81 million in 2020, from $24.94 million in 2016, based on data from the Philippine Statistics Authority. “We need to purchase our fabric from abroad to manufacture garments for Canada. It will take a month or two for us to deliver them. Compared to the Vietnamese, they can get the fabric from their local mills, finish the orders this week and deliver them next week,” Young said. For now, Young said the Philippines should work on recovering its $1 billion garment exports by improving shipments to traditional markets United States, Japan and South Korea. Rene Ofreneo, labor and industrial relations professor at the University of the Philippines, asked the government to develop the garments industry by funding efforts to upgrade its products. This way, local players can capture orders for high value apparel similar to what large scale buyers in Canada import. There should be a continuing search for a niche. How can we compete with Vietnam when the manufacturers there are now making high end garments? They can now produce heavy jackets. We don’t have the capacity to do that,” Ofreneo told The STAR. Ofreneo said the country found a niche during the pandemic when garment players repurposed their factories to make personal protective equipment (PPEs) for domestic supply. However, Ofreneo said the government blew its chances of turning the PPE trade into an export industry when it opted to source its PPE needs from abroad. PPE makers invested a total of $35 million or nearly P1.7 billion to transform their facilities and save the jobs of about 7,500 workers, but only received 14 percent or less than P700 million, of the P4.8 billion contracts placed by the government. For Ofreneo, it’s a question worth asking. How can the government support garment makers on the export end when it can’t even support them on the domestic front?12
Source: Philstar
Pakistan-Argentina Joint Commission has decided for improving framework to work on expanding trade and economic cooperation in various sectors. The third session of the Pakistan-Argentina Joint Commission (JC) held in a virtual format in Islamabad and Buenos Aires, said a press release issue by Ministry of Economic Affairs here Sunday. The talks focused on specific areas of cooperation, including bilateral trade and investment, agriculture, textile, pharmaceutical sector, science and information technology, industry, maritime, tourism and forestry. Preliminary meeting of technical experts was also held on May 19, 2021. The Pakistani Delegation was headed by Secretary, Ministry of Economic Affairs Noor Ahmed. The Argentinean side was headed by, Under Secretary, Ministry of Foreign Affairs, and International Trade of Argentina, Ambassador CAROLA RAMON. The experts from all relevant technical departments of Pakistan and Argentina along with ambassadors of both countries participated in the meeting. The Secretary, Ministry of Economic Affairs underscored the need to enhance cooperation between the two countries on the basis of reciprocity, fairness and equity. The Argentinean side also expressed their keenness to expand economic relations with Pakistan. The two sides had candid discussions on the matters of bilateral trade and economic relations and decided to take measures for enhancement of bilateral trade to next higher level. It was also agreed to establish a Joint business Council for B2B interaction between businessmen of both the sides. The both sides also agreed for formation of Joint Working Groups in agriculture, pharmaceutical, information technology and industrial sectors to guide future trade and economic cooperation. The Argentinean side also offered technical assistance for the projects under South-South Cooperation.The sides also decided to sign MoUs in the fields of trade, promotion of investment, agriculture, cooperation in science & information technology, pharmaceutical, maritime and tourism. The two sides decided to have annual follow up meetings to pursue these avenues.
Source: Urdupoint
The 2021 Macroeconomic Outlook report by the Nigerian Economic Summit Group (NESG) has urged the federal government to develop industrial policy and sectoral plans for priority areas as well as address the challenge of insecurity in the country. The report disclosed that the manufacturing sector is one of the six sectors that have the potential to create jobs and reduce poverty. The report also noted that for the sector to create jobs and reduce poverty, private investments would play a major role. It further explained that from recent happenings, actual investments in manufacturing are realised when there is an intersection of market opportunities and government support. It maintained that Nigeria’s reliance on imports, its large market and the coming into effect of the African Continental Free Trade Area (AfCFTA) agreement present a huge opportunity for investment in the manufacturing sector, especially in agro-processing and light manufacturing. Also, the report noted that Nigeria’s manufacturing sector faced several challenges even before the outbreak of the COVID-19 Pandemic. It posited that prior to the pandemic, the sector had suffered mainly from the closure of land borders in September 2019, which reduced informal exports and indirectly affected several manufacturing outfits in Aba, Kano and Lagos. The report stated that perennial problems of power supply, logistics bottlenecks, infrastructure deficits, limited access to credit, foreign exchange scarcity have continuously affected the sector’s performance over time. It added: “The growth of the manufacturing sector has been stagnant (average growth of -0.6% from 2015 to 2019) while capacity utilisation has remained low. “The manufacturing sector is made up of 13 subsectors, including oil refining; cement; food, beverage and tobacco; textile, apparel and footwear; wood and wood products; pulp, paper and paper products; chemical and pharmaceutical products; non-metallic products; plastic and rubber products; electrical and electronics; basic metal, iron and steel; motor vehicles and assembly and other manufacturing.” According to the report: “The sector is dominated by informal players that are mostly micro, small, and medium enterprises. “Manufacturing is Nigeria’s third-largest sector in terms of employment, after agriculture and trade, but the poor quality of infrastructure remains the longest standing problem of the sector in Nigeria and contributes to the high cost of production. “Bad road networks and inadequate electricity supply also make it difficult for businesses to maximise returns and limit operations costs in the sector. “However, Nigeria has numerous favourable conditions for investment, especially in its manufacturing sector. “Some of these conditions include large arable land, strategic location in Africa and large market and opportunities presented by the AfCFTA. “Developing Nigeria’s manufacturing sector is the solution to Nigeria’s foreign exchange problems as the sector has the potential to create jobs and lift millions of Nigerians out of poverty if the government addresses the current challenges. “Already, there are several initiatives and interventions in the manufacturing sector, ranging from import restrictions to the establishment of 43 export processing zones which are currently at different stages of development, according to the Nigerian Export Processing Zones Authority.” 18
Source: This Day Live
The government is engaging stakeholders in the review of 22 laws under the Ministry of Industry and Trade with the view to improving Tanzania’s business environment. The review will also allow a smooth implementation of the blueprint for regulatory reforms to improve the business environment, according to Industry and Trade minister Kitila Mkumbo, who tabled his budget for the 2021/22 financial year yesterday. “We amended two laws through the Finance Act of 2020 and we are preparing another law to protect the local industries and businesses,” said Prof Mkumbo. The proposed Trade Remedies Act of 2021 will also control importation of products, market distortion by subsidized products which get to the local market at lower prices. Prof Mkumbo said the proposed law was already submitted to responsible government organs for further action. Prof Mkumbo’s remarks on review of the laws comes hardly a month since President Samia Suluhu Hassan directed ministers and other government officials to make sure that they improved the ease of doing business in Tanzania. President Hassan said there was an unnecessary bureaucracy in government departments and agencies when it came to regulating businesses and investments. She directed the ministers to review and amend laws that hindered investment in a bid to attract more investors. “We want traders and investors to enjoy our business environment instead of discouraging them,” she said. Prof Mkumbo tabled his Sh105.6 billion budget that had increased by nearly 30 percent from the current budget to finance the priority areas. The ministry is responsible for stimulating the industrial development in the country as well as attracting investment through creating conducive policies. According to the minister, the priority areas include promotion and protection of local processing and value-addition industries in agriculture, livestock, fishing, forestry and mining sectors. The minister said the government will also mobilize development of industries for leather processing, textile and garments. He named other priority areas as protection and supporting of steel manufacturing industries and steel products. Friendly investment environment will be given the needed attention especially to investors setting up battery and vehicles assembling factories, he said. Policies and laws, the minister said, will be harmonized to create a platform in which the business environment would be friendly to people from all walks of life to operate as the government would cooperate with businesses to ensure there was a market for the local products. He also assured the private sector, which is an engine of economic development, of full engagement so that their contributions in national development would be felt. He said as of current, the government has scrapped about 232 different taxes, levies and fees that have been hindering business prosperity and investment. “These measures are aimed at reducing time and costs in securing licenses and other permits to carry business in the country especially for small sized entrepreneurs in the country,” he said. Debating the budget, Solwa lawmaker Ahmed Salim commended Prof Mkumbo, but advised him that endorsement of multiple policies wasn’t the right road to success, instead he should implement the blueprint. “The Tanzania Revenue Authority (TRA) should execute its responsibilities and leave other institutions to remain supportive in creating a conducive investment climate,” he said. Special Seats MP Subira Mgalu (CCM) said TRA and the National Environment Management Council (Nemc) should play their roles in improving the country’s business climate. She observed that the Controller and Auditor General (CAG) 2019/20 report says TRA spent 182 to 365 days to approve or reject investors’ applications for tax incentives contrary to the Tanzania Investment Act of 1997 which instructed that such responses should be given within 14 days. “Also, the law demands that Nemc should process and verify investor applications not later than 95 days instead of the present 133 to 200 days, she said, adding that according to the CAG, only 5,016 certificates were issued by Nemc during the year of review from 13,000 received applications. Geita Rural lawmaker Joseph Musukuma said cooking oil processing firms including the Mopro Factories located in Morogoro depended on availability of sunflower as raw material. However, he said the government has been closing factories that suspended production due to lack of raw materials, suggesting that an emphasis should be given in mobilizing increased production of sunflowers. “There is nowhere they are going to get the raw materials. The sin of robbing other people’s properties shouldn’t fall on your hands, Mr Minister,” he warned. The vocal politician said after opening the earlier seized investors’ bank accounts, the government should give them a grace period of six to one year in order to enable them to re-establish financially.9
Source: The Citizen
