United Republic of Tanzania: Selected Issues

International Monetary Fund

No 2025/164, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper explores empirically the extent to which weaknesses in the business environment might have contributed to the slowdown in firm-level productivity in Tanzania. Using the World Bank’s Enterprise Surveys data, this paper sheds light on the relationship between firm-level total factor productivity (TFP) and the business environment in Tanzania. It finds statistically significant evidence that cumbersome tax administration, limited access to finance, and limited access to transport are associated with lower firm TFP in the manufacturing sector. While regression coefficients are not statistically significant, negative associations between TFP and the regulatory burden, as well as power outage, are also evident in non-parametric relationships. On the other hand, there is no clear evidence for the relationship between incidence of corruption and TFP. These results underscore the importance of stepping up structural reforms to improve the efficiency of tax administration, ease the regulatory burden, and improve access to finance and reliable infrastructure. In particular, these reform areas should be given priority in the context of the Vision 2050 and Blueprint for Regulatory Reforms II strategies.

Keywords: business environment indicator; firm TFP; health indicator; World Bank recommendation; staff team of the International Monetary Fund; Total factor productivity; Business environment; Health care; Sub-Saharan Africa; Global (search for similar items in EconPapers)
Pages: 24
Date: 2025-07-03
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