Business Corruption

According to the US Department of State 2011, companies should note that bureaucratic procedures for licenses and permits in Tanzania are burdensome and time-consuming. This environment could potentially trigger corruption, with businesspeople paying bribes to public officials in return for expedited processing.

According to the World Bank & IFC Enterprise Surveys 2006, the surveyed companies reported that bribes are expected in order to obtain basic infrastructure services such as obtaining an electrical connection. However, the number of companies expecting to pay bribes is considered quite low compared to the regional average.

Another site for corrupt practices is the business inspections conducted by government officials. Thus, Global Integrity 2010 reports that, in practice, business inspections by government officials to ensure public health and safety standards are usually carried out in an arbitrary and ad-hoc manner, and bribes are often paid by companies in return for favourable treatment or expedited processing.

Political Corruption

In May 2010, the former Central Bank director of personnel and administration was sentenced to two years in prison for abuse of office in connection with the construction of the Bank of Tanzania building, according to the US Department of State 2010.

Among high-profile corruption cases was the case of Joseph Mungai, an MP and former cabinet minister, who was charged with corruption in August 2010. Mungai was alleged to have given gifts to 15 members of the ruling CCM party. The investigations into this case continue.

Frequency

The World Bank & IFC: Doing Business 2011:
- Starting a company requires the entrepreneur to go through 12 administrative steps, taking 29 days at a cost of nearly 31% of GNI per capita.

- Building a warehouse requires a company to go through 22 administrative steps, taking as long as 328 days at a cost of 2,756% of income per capita.

World Economic Forum: The Global Competitiveness Report 2010-2011:
- Business executives give government administrative requirements (permits, regulations, reporting) in Tanzania a score of 3.3 on a 7-point scale (1 'extremely burdensome' and 7 'not burdensome at all').

The World Bank & IFC: Enterprise Surveys 2006:
- 20% of companies surveyed expect to give gifts in order to get an operating licence.

- 32% of companies surveyed expect to give gifts in order to get a construction permit.

- 9%, 13% and 19% of companies surveyed expect to give gifts in order to obtain a water, phone and electrical connection respectively.

- Senior management spends an average of 4% of its time on dealing with the requirements of government regulation.