13.1 The regulatory environment The Tanzanian government is in the early stages of reviewing the regulatory and operating environment for its SMEs. According to the UDEC report (2002), most existing business policies and regulations were set up with large businesses in mind and are inappropriate for smaller enterprises. It also reported that existing policies are either gender blind or gender insensitive and thus fail to support women entrepreneurs in growth sectors.
Tax policies and regulations are complex, and business registration and licensing processes are complicated, time-consuming and centrally administered. Furthermore, many sector regulations are too stringent to be met by small enterprises (ibid.). With respect to the latter point, ILO (2003) cites the example of women who participated in the UNIDO-supported food-processing project for women. Although about 200 women started their own food processing businesses after the UNIDO training, very few have been able to comply with the Food Control Act, and so are obliged to continue to operate as “informal” enterprises42 “at the mercy of the tax, health and licensing officers” (p. 32).
While women in the informal economy may be able to avoid compliance with many of the regulatory and tax demands, entrepreneurs who wish to formalize (in order to be able to grow) must overcome the challenges presented by laws, regulations and taxes (UDEC, op. cit.). Thus, women are impeded in their growth aspirations.
The Government is just beginning to implement the Best Environment Strengthening for Tanzania Programme (BEST), with help from donor governments. The main objectives of this five-year programme are to realign the regulatory environment around the needs of SMEs. A Better Regulation Unit has been established in the President’s Office of Planning and Privatization. However, additional efforts are required to ensure that gender inequalities – institutional, inadvertent or perceived – in any part of the institutional and regulatory framework are removed.
In general, men in Tanzanian society have more access to and control over economic resources than women. Gender-biased practices exist in many areas of the economy, including the education system, labour market policies and the banking and the legal system. This situation influences the type of sectors women operate in and prejudices them in many of their efforts to expand their enterprises. The issue of land ownership poses another particular difficulty for women entrepreneurs. Customary gender-biased loopholes must be removed from the law to give women equal rights to property, which they can then use as collateral security for bank loans, should they so wish.
13.2 Recommended actions – regulatory environment (i) Address gender biases in the regulatory and legal system.
The MIT-SME Section should liaise with the Better Regulation Unit to ensure gender biases are taken into consideration when reviewing the existing legal and regulatory environment in favour of all MSMEs.
The ILO has been working on a number of policy-related initiatives in Tanzania and has worked with UNDP and UNIDO in preparing the Informal sector roadmap study.
Gender mainstreaming workshops should be offered to the Better Regulation Unit and to members of the BEST implementation team to create more awareness of the possible negative impacts of the current regulatory environment on women-owned MSMEs.
To learn more about this author, visit International Labour Organization's Website.
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