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The United Republic of Tanzania

THE PREVENTION AND COMBATING


OF CORRUPTION BUREAU

NATIONAL GOVERNANCE AND


CORRUPTION SURVEY

2009 REPORT
Volume 4: ENTERPRISES SURVEY

DAR/MCC
Dar Management and
FACEIT in Association with
Computing Centre

and

21st November 2009


        CONTENTS 
CONTENTS....................................................................................................................... ii 
LIST OF TABLES ........................................................................................................... iii 
LIST OF FIGURES .......................................................................................................... v 
PREFACE ......................................................................................................................... vi 
EXECUTIVE SUMMARY ............................................................................................. ix 
CHAPTER 1: INTRODUCTION .................................................................................... 1 
1.1  BACKGROUND TO THE SURVEY.................................................................. 1 
1.2  PURPOSE OF THE SURVEY ............................................................................ 1 
CHAPTER 2: SURVEY METHODOLOGY ................................................................ 3 
2.1  SAMPLE DESIGN .............................................................................................. 3 
2.2  REVIEW AND ADAPTATION OF THE QUESTIONNAIRE .......................... 3 
2.3  RECRUITMENT AND TRAINING OF FIELD TEAMS .................................. 4 
2.4  FIELDWORK ...................................................................................................... 4 
2.5  RESPONSE .......................................................................................................... 5 
2.6  DATA PROCESSING ......................................................................................... 6 
CHAPTER 3: THE FINDINGS....................................................................................... 7 
3.1  PERCEPTIONS AND EXPERIENCE OF GOVERNANCE AND
CORRUPTION – EVIDENCE FROM ENTERPRISES................................................ 7 
3.2  TYPES OF CORRUPT PRACTICES PREVAILING IN TANZANIA .......... 8 
3.3  PERCEPTION ABOUT CORRUPTION IN THE SOCIETY ............................ 9 
3.4  EXPERIENCE OF CORRUPTION ................................................................... 11 
3.5  INITIATION OF CORRUPTION ..................................................................... 13 
3.6  PERCEPTION OF THE PRIVATE SECTOR ON POLICIES, ........................ 15 
LAWS AND REGULATIONS..................................................................................... 15 
3.7  MAIN CAUSES OF CORRUPTION ................................................................ 20 
3.8  SERIOUSNESS OF CORRUPTION IN TANZANIA ...................................... 22 
3.9  PROBLEMS AFFECTING TANZANIA .......................................................... 23 
3.10  ASSESSING THE POLICIES, RULES AND REGULATIONS .................. 25 
3.11  ASSESSING THE JUDICIAL SYSTEM ...................................................... 32 
3.12   CORRUPTION IN THE PRIVATE SECTOR .............................................. 36 
3.13  EFFECTS OF CORRUPTION ....................................................................... 39 
3.14  COSTS OF CORRUPTION ........................................................................... 44 
3.15  PERCEPTION ABOUT FIGHT AGAINST CORRUPTION ....................... 45 
CHAPTER 4: CONCLUSIONS AND RECOMMENDATIONS ............................... 50 
4.1  CONCLUSIONS ................................................................................................ 50 
4.2  RECOMMENDATIONS................................................................................ 51 
REFERENCES................................................................................................................ 52 
Annex : Enterprises Survey Questionnaire .................................................................. 53 

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LIST OF TABLES
Table 1: Regional Coverage of the Enterprises Survey ..................................................... 5 
Table 2: Percentage distribution of respondents associating corruption to various
definitions ........................................................................................................................... 7 
Table 3: Percentage distribution of respondents by their perception about corruption .... 10 
Table 4: Percentage distribution of enterprises reporting acceptability of courses of action
in hypothetical situations in public life ............................................................................. 10 
Table 5: Percentage distribution of enterprises reporting their probable course of action in
private life ......................................................................................................................... 11 
Table 6: Percentage distribution of respondents who encountered corruption by region 12 
Table 7: Percentage distribution of enterprises indicating initiators of corruption by
region ................................................................................................................................ 14 
Table 8: Percentage distribution of enterprises reporting problems for the operation and
growth of business ............................................................................................................ 18 
Table 9: Percentage distribution of respondents rating corruption in public sector as a
problem by region ............................................................................................................. 19 
Table 10: Percentage distribution of respondents reporting causes of corruption ............ 20 
Table 11 Percentage of Respondents identifying Greed/Selfishness a Major Source of
Corruption by Region ....................................................................................................... 21 
Table 12: Percentage distribution respondents reporting quality of institutions in terms of
transparency, honesty, clarity and simplicity in tendering ............................................... 22 
Table 13: Percentage distribution of respondents reporting seriousness of various types of
problems facing Tanzania ................................................................................................. 24 
Table 14: Percentage of respondents who felt corruption in public service is serious by
region ................................................................................................................................ 24 
Table 15: Percentage distribution of respondents reporting state intervention in business
operations .......................................................................................................................... 25 
Table 16: Percentage distribution of public agencies by quality and efficiency .............. 26 
Table 17: Percentage distribution of respondents rating the quality and efficiency of the
Police Force by Region ..................................................................................................... 27 
Table 18: Interaction with public institutions ................................................................... 28 
Table 19: Percentage distribution of enterprises reporting the practice of corruption ..... 29 
Table 20: Percentage distribution of enterprises reporting difficulty of meeting
Government Requirements ............................................................................................... 29 
Table 21: Percentage distribution of enterprises reporting tendering practices ................ 31 
Table 22. Percentage distribution of enterprises reporting the importance of factors to win
government contract.......................................................................................................... 31 
Table 23: Percentage distribution of firms reporting average Percentage of contract value
paid as unofficial payment by region ................................................................................ 32 
Table 24: Percentage distribution of enterprises reporting the frequency of practising
good qualities by the court system .................................................................................... 33 
Table 25: Percentage distribution of enterprises reporting the use of various methods of
dispute resolution .............................................................................................................. 33 
Table 26: Percentage distribution of enterprises reporting the severity of obstacles to
using courts ....................................................................................................................... 34 
Table 27: Average duration of court cases by region ...................................................... 34 
Table 28: Percentage of enterprises reporting business practice in private sector ........... 36 
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Table 29 Percentage distribution of respondents who Felt Corruption in the private sector
in 2009 was better Compared to 2005 by region .............................................................. 38 
Table 30: Percentage distribution of respondents reporting private sector reputation on
corruption .......................................................................................................................... 39 
Table 31: Percentage distribution of the rating of impact of corruption by region .......... 41 
Table 32: Percentage distribution of respondents showing effect of some types of
corruption to business ....................................................................................................... 42 
Table 33: Effectiveness of institutions in combating corruption ...................................... 46 
Table 34: Effectiveness of faith based organisations in fighting corruption by region ... 47 
Table 35: Effectiveness of the Police in Fighting Corruption by Region ........................ 48 
Table 36: Percentage distribution of firms indicating willingness to participate in
initiatives to combat corruption ........................................................................................ 49 

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LIST OF FIGURES 
Figure 1: Percentage distribution of enterprises reporting the seriousness of various types
of corruption........................................................................................................................ 8 
Figure 2: Percentage distribution enterprises indicating types of corruption occurring in
vicinity ................................................................................................................................ 9 
Figure 3: Percentage distribution of firms reporting forms of bribery that are practised. 12 
Figure 4: Percentage distribution of enterprises indicating the initiators of bribery ........ 13 
Figure 5: Percentage distribution of firms reporting the availability of rules and
regulations affecting firms ................................................................................................ 15 
Figure 6: Percentage distribution enterprises reporting predictability of the rules and
regulations affecting firms ................................................................................................ 16 
Figure 7: Percentage distribution enterprises reporting frequency of consultation between
government and firms ....................................................................................................... 17 
Figure 8: Percentage distribution of firms reporting income from public tenders as a
percentage of total income ................................................................................................ 17 
Figure 9: Percentage distribution of respondents reporting the seriousness of corruption22 
Figure 10: Percentage distribution of respondents reporting current state of corruption in
public sector in Tanzania compared to 2005 .................................................................... 23 
Figure 11: Percentage distribution enterprise reporting frequency of government
procurement tenders being awarded in a clear and efficient manner................................ 30 
Figure 12: Percentage distribution of enterprises reporting officials receiving bribes in the
judiciary ............................................................................................................................ 35 
Figure 13: Percentage of enterprises reporting incidence of corruption in the private
sector ................................................................................................................................. 37 
Figure 14: Percentage distribution of firms comparing the state of corruption in private
sector in Tanzania between today and year 2005 ............................................................. 37 
Figure 15: Percentage distribution of enterprises rating the harmfulness of Petty
Corruption ......................................................................................................................... 40 
Figure 16 Percentage distribution of enterprises rating the harmfulness of grand
corruption .......................................................................................................................... 40 
Figure 17: Percentage distribution of firms showing reason for withdrawal from tender
process............................................................................................................................... 43 
Figure 18: Percentage distribution of enterprises showing reasons for changing mind on
planned investment ........................................................................................................... 44 
Figure 19: Percentage distribution of firms showing unofficial payment as percentage of
company revenues ............................................................................................................. 44 
Figure 20: Percentage distribution of firms estimating expected percentage change in
company income if corruption were to be reduced by half .............................................. 45 
Figure 21: Percentage of enterprises willing to pay to company income to fund
programmes that would reduce corruption ....................................................................... 49 

v
PREFACE
The problem of corruption in our country is not new and certainly it did not start with my
Government i.e. the Fourth Phase Government of The United Republic of Tanzania. Past
Governments have dealt with it in various ways, although corruption remains a problem
in our country, as it is in the whole world, albeit in varying degrees. To tackle corruption,
the country should generally be well governed – that is to have good governance in the
country. This study, National Governance and Corruption Survey is very appropriate in
that sense.
To understand the problem of good governance in general and corruption in particular, it
is important to conduct studies, which will generate facts and indicate appropriate way
forward in the fight against the vice. Without appropriate studies, the fight against
corruption cannot be scientific. The National Governance and Corruption Survey is an
effort towards that end.
In my inaugural speech to Parliament in 2005, I said the following and I quote: we will
accelerate the war on corruption in a more scientific way and by addressing its root
courses …. But all this will not account much if the public is not cooperative. I ask the
full cooperation of citizens in the war on corruption. This report is part of implementation
of that speech, to fight corruption in a more scientific way. The public have indeed
cooperated in giving information to the consultants, who covered all the regions of
Tanzania Mainland in this study.
In 1996, a study similar to this was undertaken by the Third Phase Government. A
Presidential Commission of Inquiry Against Corruption was appointed to carry out a
study on the status of corruption in the country as part of a strategy of the government to
enhance integrity and accountability. The commission released its report one year later
and recommended a number of things as a way of tackling the vice. In 1999 the
government formulated a National Framework on Good Governance (NFGG) to facilitate
the coordination of reforms designed to foster Good Governance and improve public
service delivery. The National Anti-Corruption Strategy and Action Plan (NACSAP) was
formulated as a component of the NFGG to increase efforts in corruption prevention. In
2002, the Annual State of Corruption in Tanzania Report was published as part of the
follow-up of the 1996 report. However, this report was less detailed and hence the need
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for more detailed and thorough baseline report on the problem of corruption in the
country. The National Governance and Corruption Survey is broad, detailed and captures
important parameters which gives an insight into the problem of corruption in the country
to date.
The National Governance and Corruption Survey add to our understanding of the vice in
the country and offers opportunities for tackling the same. Three surveys, i.e. household,
public servants and enterprises were carried out and some of the main findings are that:
despite the efforts enumerated above, corruption is widespread and a major impediment
to development efforts; the leading cause of corruption is greed among public servants
and business people; in some sectors of public service, corruption has become a way of
life; the institutions which are central in safeguarding good governance like the police
and the judiciary are ranked highest in perpetrating corruption. The indication one gets is
that: my Government have still a long way to go in eradicating this vice and I want to
assure the public that we are equal to the task.
Some of the recommendations are that: more research be carried out on those institutions
which ranked highest and determine the root causes of corruption; the PCCB be
strengthened to be equal to the increasing tasks and increase public awareness on the vice
and elicit their support.
We will take the results of the survey seriously and implement the recommendations
therein to contain corruption in our country.
I would like to thank the Government of Denmark, for providing financial support, which
made this study possible. I would like also to commend the consultants who did a good
job in research and compilation of the report. Last but not least I would like to recognize
the contribution of the Prevention and Combating of Corruption Bureau, who on behalf
of the Government commissioned and supervised the survey.

Jakaya Mrisho Kikwete


President of the United Republic of Tanzania

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ACKNOWLEDGEMENTS

This report has been prepared by many individuals under the general supervision of Mr.
Enock L. Kamuzora, Chairman of FACEIT, the lead consultant, and Cletus P.B. Mkai
who led the project team. Other members of the project team were: Professor A.S.
Mawenya, D. Ntukamazina, B.S. Sreekumar, Dr. V.E. Muba, S. Ngallaba, R.
Rutabingwa, Dr. M.M.P. Bundara, M.R. Lugongo and S.J. Chavda.

The consultants benefited from contributions made by the Technical Committee


especially set up for this assignment by the Prevention and Combating of Corruption
Bureau (PCCB): Dr. Vincent Kihiyo (Chairman), Abdallah Mlangwa, Oscar Hosea,
Sabina Seja, Doto Nkonga, Stephen Ndaki, Ahmed Makbel, Mary Rusimbi, Dr. Flora
Kessy, Daniel Kobb, Tim Harris, Emily Poskett and Jack Titsworth.

During fieldwork stage, Grace Morgan, a World Bank consultant, gave valuable insights
during her visit.

Christian Karstensen, First Secretary (Governance and Political Issues) at the Royal
Danish Embassy, provided helpful comments throughout.

Dr. Edward Hoseah, the Director General of PCCB, actively participated to discuss the
draft Report during the first of the five zonal workshops staged in Dar es Salaam, thereby
generating a constructive debate moderated by FACEIT’s Vice-Chairman, E.N.
OleKambainei.

PCCB’s three counter-part staff, Sada Mzimba, Benno Shunda and Abdallah Kitwana
worked long hours throughout the assignment.

We acknowledge with thanks the involvement of the 12 field supervisors and 37 field
interviewers who were employed by FACEIT to carry out the actual fieldwork.

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EXECUTIVE SUMMARY
The enterprises survey was carried out to study the business environment with a special
emphasis on the effects of public sector governance and corruption on development of
private sector firms. The survey examined the firms’ roles as users of public services and
subject to regulations, contractual providers of goods and services to government, and
clients for licenses and permits. The preferred survey respondent was the head of the
firm (director, manager, president, etc.). The Central Registry of Establishments from the
National Bureau of Statistics (NBS) was used to pick a systematic random sample of 30
establishments from each of 19 regions and the three Municipalities of Dar es Salaam
region. Out of the expected 690 establishments, 627 were covered representing 90.9
percent. Among the 627 firms covered by the survey, 549 were in urban and 78 in rural
areas. They included 384 sole proprietors, 141 partnerships, 12 private liability
companies, four public listed companies and 149 unclassified establishments. The
findings of the survey give the views of the private sector on the current state of
governance and corruption in the country.

Perceptions and Experience of Governance and Corruption – Evidence from


Enterprises

In understanding the concept of corruption, its seriousness and types of corruption


prevalent in the vicinity, the enterprises indicated “demand for unofficial payment”,
“demand for sex” and “abuse of power” as the first, second and third respectively. While
businessmen expected themselves to show high integrity in public life, they would accept
less integrity in private life. Enterprises did not condone corruption but they were
sceptical about the actions that followed once corruption was reported. The survey
results show that 49.7 percent of the enterprises had faced a situation where they were
required to give a bribe. Of those who were required to give a bribe, 90.9 percent gave it
in the form of money. In 64.9 percent of the cases, the service provider initiated the
corruption process by asking for payment. In 18.2 percent of the cases, the service
recipient gave it out of his/her own accord.

Users’ Views on Public Service Environment

Enterprises felt that government policies, laws, rules and regulations were between fairly
easy (29.9 percent) to very easy (41.2 percent) to obtain and thus allowing them to know
their rights. However, it took companies six months on average to register. The view of
78.8 percent of the enterprises is that there was some consultation between business and
government. On doing business with the public sector, 24 percent of the enterprises
indicated that they did business with the public sector, and 16 percent participated in
government tenders. At the top of the list of problems that faced enterprises in their
operations was “inflation”, “corruption in the public sector” and “access to and cost of
financing” in that order.

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Causes of Corruption

Greed/selfishness was identified by 95.5 percent of the enterprises as the main cause of
corruption. Similarly, lack of control and accountability of public officials was identified
by 86.7 percent enterprises and poor law enforcement and inadequate punishment of the
corrupt was identified by 85.6 percent. It was a general view of the private sector that
corruption was a major problem in the country as classified by 92.3 percent of the
respondents. Enterprises thought the private sector had a better reputation than the public
sector. Among the problems facing the country, the most serious was corruption in
public places (identified by 90.9 percent) followed by inflation (90.6%) and the high cost
of living was the third (89.9 %).

Institutional Performance and Integrity/honesty in the Public Sector

The worst performer in the public sector is the Police followed by Judiciary. TANESCO,
comes third and Ministry of Lands, Housing and Human Settlement is the fourth.
Tanzania Postal Corporation is the best performer followed by Parliament. It was
reported that it takes 58 days to clear goods through the customs instead of the official 15
days. Enterprises reported that it was fairly difficult to very difficult to meet government
requirements to operate businesses. The most difficult requirements to meet are those
relating to taxation, tax holidays and reclaiming duty. As a result companies are forced
to use facilitators to assist in processing documents to meet the requirements. The
process also consumes time of senior management. Both of these add to company costs.
From the experiences of enterprises, 18.2 percent reported public tender processes to be
never fair and 50.2 percent reported the process was rarely fair because it had some
malpractices. Those who participated in tendering processes reported that they had to
pay 10 percent of the tender value to win the tenders. In dispute resolution, the court
system was the third choice in preference by enterprises, preceded by alternative
methods. The court system was judged to be too slow in determining cases where it took
an average of fifteen months to determine a case. For those with cases with the longest
duration, 24 percent reported that there was an indication that there was a need to offer a
bribe. Of those who reported actually giving a bribe, 57.9 percent paid to judges, 21
percent paid to court clerks and 15.8 percent to prosecutors or officials in the prosecutor’s
office.

Performance and Integrity/Honesty in the Private Sector

In assessing the private sector itself, enterprises reported that most of them demanded
receipts but hardly any of them paid taxes honestly. On practising corruption, 97 percent
reported that it was practised in the private sector. Out of the 33 industries listed, ten
were rated to have good reputation by more than two thirds of the respondents led by
“telecommunications” followed by “food and beverages”. The industry with the worst
reputation was “mining and quarrying” followed by the “contractors”. Comparing the
state of corruption between 2005 and now, 52.5 percent enterprises thought it was better.

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Understanding the Impact and Costs of Corruption in the Private Sector

Both grand corruption and petty corruption were rated to be very harmful, grand
corruption was rated as being harmful by about 95 percent of respondents and petty
corruption was so rated by approximately 90 percent of the respondents. Corruption was
seen to be an obstacle to operations and growth of business. It adds costs to business. In
some cases it leads to withdrawal from tendering processes and business investment
plans.

Fighting Corruption

Assessing the current situation, enterprises felt that the most effective institutions in
fighting corruption are “faith based organisations” followed by the “media”, third comes
NGOs, followed by Development Partners and PCCB who are fourth and fifth
respectively. The least effective is the Police followed by the courts. The private sector
is willing to join government led initiatives to combat corruption.

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CHAPTER 1: INTRODUCTION

1.1 BACKGROUND TO THE SURVEY

In 1999 the government of Tanzania formulated the National Framework for Good
Governance (NFGG) to facilitate the coordination of reforms designed to foster good
governance and improve public service delivery. The National Anti–Corruption Strategy
and Action Plan (NACSAP) was also formulated in 1999 as a component of the NFGG as
Government’s key management instruments, to combat corruption.

Following the launch of the second National Anti – Corruption Strategy and Action Plan
(NACSAP II) in 2006, the Government of Tanzania has expressed commitment to
undertake a comprehensive diagnostic survey on corruption. The concept paper for
NACSAP II states that:-

“A comprehensive National Governance and Corruption Survey will be launched


presently, and, in the future it will be conducted every two years. It will be
established as one of NACSAP’s standard instruments for identifying where
corruption occurs and on what scale, conducting analytical work relating survey
results to the delivery of services, communicating with the public, and helping set
priorities for tackling corruption issues and strengthening corruption – prone
ministries, departments, agencies and local government authorities”.

During 2006, Tanzania was ranked 93 out of 163 countries by the Transparency
International with a Corruption Perception Index (CPI) score of 2.9. Thereafter, in 2007,
the country’s position improved somewhat with a score of 3.2. However, as from 2007, a
steady stream of shocking exposures of acts of grand corruption – previously unreported
during 2000 to 2005 which is when they took place – rapidly created a perception that
grand corruption was on the rise. Not surprisingly, the CPI score dropped to 2.9 in 2008
and to 2.6 in 2009. Clearly, a detailed assessment on governance issues and levels of
corruption needed to be adequately collected, afresh, to inform policy and decision
making state organs. Attempts that have previously been made to gather information on
corruption have included the report of the Presidential Commission of Inquiry against
Corruption, commonly known as The Warioba Commission Report, 1996 and the State of
Corruption in Tanzania 2002 Report. However, these surveys while answering specific
questions on corruption do not provide a comprehensive analysis of the state of
corruption in Tanzania and do not establish a baseline that is needed for policy reform.

1.2 PURPOSE OF THE SURVEY 

The purpose of the National Governance and Corruption Survey (NGACS) 2009 include
soliciting information from citizens and fostering public awareness about national
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governance and corruption issues, identifying areas or issues for further research,
providing an empirical and analytical basis to argue for budgetary resources for NACSAP
and related reforms, and providing an empirical benchmark and basis for monitoring and
evaluating the effectiveness of government’s governance and anti – corruption
programmes over time. The enterprises survey was carried out to study the business
environment with a special emphasis on the effects of public sector governance and
corruption on development of private sector firms. The survey examined the firms’ roles
as users of public services and subject to regulations, contractual providers of goods and
services to government, and clients for licenses and permits.

The Enterprises Survey Report is the fourth volume in the series of publications for the
three surveys of the National Governance And Corruption Survey – 2009 REPORT
carried out concurrently from the third week of February 2009. The other publications
are Volume 2 - Households Survey, Volume 3 –Public Officials Survey and Volume 1 -
Analysis of Main Findings, Conclusions and Recommendations, that synthesises the three
separate survey reports.

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CHAPTER 2:  SURVEY METHODOLOGY  
2.1 SAMPLE DESIGN 

The scope of the survey covered the 21 regions of Tanzania Mainland. The design allows
estimates of the results at regional level. The sample design adopted for the enterprises
survey over sampled the Dar es Salaam region, as adopted by the Tanzania National
Bureau of Statistics in most of its surveys. Each of the three municipalities of Dar es
Salaam was taken as a region giving 23 regions. The main reason is the heterogeneity of
the characteristics of the region’s population compared to all others regions which are
predominantly rural. Dar es Salaam is over 90 percent urban. The sample employed
included 30 private establishments per region or municipality in Dar es Salaam. The
overall sample was 690 private establishments. These respective samples were worked on
in Dar es Salaam by the management team.

Central Register of Establishments was used to arrive at the sample. For each region,
private enterprises were listed by district census code numbers in continuous serial
numbers. A systematic sample of thirty establishments was selected with a random start.

Within each domain of study (region or municipality in Dar es Salaam), selection of the
30 private establishments took into consideration the representation of urban and rural
establishments, various legal forms of business organisation, various industrial sectors
and different sizes of establishments.

The preferred survey respondent was the head of the firm (director, manager, president,
etc.). If after two attempts to hold arranged meetings with the firm, the interviewer was
unable to interview the head of the firm, any other member of the senior management of
the firm could be interviewed.

2.2 REVIEW AND ADAPTATION OF THE QUESTIONNAIRE

A questionnaire for the enterprise survey was adapted from the generic World Bank
instrument. The initial process was to compare the generic instruments against
instruments used by a few other African countries and make modifications. To secure
Tanzania specific sharpening of the draft instruments, key stakeholders from inside and
outside Tanzania with the assistance of FACEIT consultants developed a conceptual
framework for adapting an advanced draft for initial approval by the Technical
Committee. The questionnaire covered eight broad areas. They are:

1. Characteristics of the responding firms


2. Current situation about corruption in Tanzania
3. Quality of Public services

3
4. Policies, Laws, regulations and the legal system
5. Bureaucracy and state intervention
6. Corruption in the public sector
7. Corruption in the private sector and
8. Anti-corruption strategies

The survey questionnaire is attached as an Annex. This version of the questionnaire


was translated into Kiswahili and subjected to a pilot test by FACEIT field team in
Dar es Salaam region Temeke municipality. Inputs from the pilot test were used to
fine–tune, initially the English version of the questionnaires, by the project
management team and then subjected them to review by the Technical Committee. A
final set of both the English and Kiswahili versions of the survey instrument as well
as Kiswahili version of field instructions manual was thus developed and adopted to
assess the views of business enterprises on governance and corruption in Tanzania.

2.3 RECRUITMENT AND TRAINING OF FIELD TEAMS

There were twelve field teams each comprising of a supervisor and three enumerators.
The consultants outsourced both these categories from a pool of freelance field cadre.
Supervisors had a degree or its equivalent, with wide experience in field data collection.
Enumerators were secondary school leavers also with survey field experience. A set of
guidelines prepared by the consultants was used to shortlist and finally pick the required
number, plus some reserve to participate in the training.

The training initially started with a five day session for a number equivalent to three
teams to manage the pilot test. This was, among other reasons used to sharpen the
training manual. Training of the whole team followed after a final version of the
questionnaire was approved.

2.4 FIELDWORK

Data collection for the diagnostic corruption surveys of households, public officials and
business enterprises were carried out from 2nd week of February to 3rd week of June 2009.
This was a difficult period because in many parts of the country it was raining making it
difficult to reach rural establishments. Each of the twelve teams was assigned to two
adjacent regions. For Dar es Salaam, there were two teams, one covering Ilala
Municipality and the other team covering Kinondoni and Temeke Municipalities. The
fieldwork was initially planned to take about two and a half months, but due to
unforeseeable reasons the work was extended to cover 90 days. Apart from the ongoing
rains, lack of reliable transport was another problem that slowed movement of the teams.
In some cases, identification of establishments was difficult because of some changes that
had taken place between the time the Central Registry of Establishments was updated by
the National Bureau of Statistics and the time of the survey.

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2.5 RESPONSE

Out of the expected 690 establishments, 627 were covered representing 90.9 percent
response. Among the 627 firms covered by the survey, 549 were in urban and 78 in rural
areas. They included 384 sole proprietors, 141 partnerships, 12 private liability
companies, four public listed companies and 149 unclassified establishments. The
regional distribution of the establishments covered is shown in table 1.

Table 1: Regional Coverage of the Enterprises Survey

Code No. Region Frequency Percent


1. Dodoma 25 4.0
2. Arusha 30 4.8
3. Kilimanjaro 30 4.8
4. Tanga 30 4.8
5. Morogoro 19 3.0
6. Pwani 23 3.7
7. Dar es Salaam 81 12.9
8. Lindi 30 4.8
9. Mtwara 30 4.8
10. Ruvuma 21 3.3
11. Iringa 26 4.1
12. Mbeya 30 4.8
13. Singida 24 3.8
14. Tabora 30 4.8
15. Rukwa 30 4.8
16. Kigoma 26 4.1
17. Shinyanga 26 4.1
18. Kagera 29 4.6
19. Mwanza 30 4.8
20. Mara 27 4.3
21. Manyara 30 4.8
Total 627 100.0

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2.6 DATA PROCESSING

All questionnaires were returned to the FACEIT office in Dar es Salaam for processing.
The data processing operation consisted of recording of received questionnaires, manual
editing, coding, data entry and editing of errors captured by the computer programs. The
data processing team recruited by FACEIT for this survey was responsible for the data
processing operation. Five personal computers (PCs) and one laptop were used for
processing the NGACS survey data. The NGACS data entry and editing were performed
in Micro Office Access software and SPSS 16 (Statistical Package for Social Sciences)
software respectively. Data processing commenced on 7th April, 2009 and was
completed on 3rd July, 2009.

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CHAPTER 3: THE FINDINGS
3.1 PERCEPTIONS AND EXPERIENCE OF GOVERNANCE AND
CORRUPTION – EVIDENCE FROM ENTERPRISES

The definition of the word “corruption” varies between different societies. According to
the Tanzania Prevention and Combating of Corruption Bureau (PCCB), corruption is
defined as:

“Corruption occurs where a person commits or does not do something to another person
or group of people with an intention of acquiring personal benefits after being given or
promised to be given a certain amount of money or other valuable things contrary to laid
down procedures and work conditions. Normally, the recipient has certain authority or
is employed in an establishment. Moreover, corruption may feature where the recipient
or the provider does this for personal interests, interests of another person or a group of
people contrary to established procedures;” (un-official translation from Kiswahili)

When respondents were asked to define the word corruption, their definitions were
assigned to pre-coded definitions that included the description of various types of
corruption. Table 2 shows the percentage of respondents that associated corruption to
various definitions of the word. “Demand for unofficial payment” dominated the scene
by being chosen by 94.4 percent of the respondents. It is followed by demand for sex that
is chosen by 50.9 percent. Abuse of power comes third with 36.8 percent.

Table 2: Percentage distribution of respondents associating corruption to


various definitions

Definition Percentage of respondents


Demand for unofficial payment 94.4
Demand for sex 50.9
Abuse of power 36.8
Demand for favour 27.1
Fraud 19.9
Takrima 19.8
Embezzlement of public funds 17.2
Bakshish 12.0
Other 8.3

The same order is replicated in the ranking of the seriousness of various types of
corruption as it is shown in figure 1. “Demand for unofficial payment” is ranked as the
most serious type of corruption by 79.5 percent of the respondents. “Demand for sex”
comes second with 6.5 percent of the respondents and “abuse of power” is third with 5.3
percent of the respondents.

7
Figure 1: Percentage distribution of enterprises reporting the seriousness of
various types of corruption

The results show some doubts that respondents understand corruption as defined by the
PCCB act. It seems some respondents do not consider some types of corruption, those
with low percentage response rates, to be corruption.

3.2 TYPES OF CORRUPT PRACTICES PREVAILING IN TANZANIA

The results of identifying types of corruption that usually occurred in their location by
enterprises are as shown in figure. 2. The first three are similar to the ranking of
seriousness. They are demand for official payment with 84.7 percent of respondents,
demand for sex with 15.3 percent of respondents and abuse of power with 8.2 percent of
respondents.

8
Figure 2: Percentage distribution enterprises indicating types of corruption
occurring in vicinity

3.3 PERCEPTION ABOUT CORRUPTION IN THE SOCIETY

A range of perceptions were expressed in nine statements. Leaders of enterprises were


required to indicate their degree of disagreement with the statements by choosing scores
in a scale between one and four that represented the degree of disagreement where one
stood for strongly agreeing and four standing for strongly disagreeing as indicated in
brackets in Table 3. Average scores in the last column show that enterprises disagreed
with most of the statements that condone corruption. However they were sceptical about
what happened after corruption had been reported where average scores of 2.3 and 2.1
(below 2.5) for statements number 5 and 7 indicating that 67.1 percent and 71.4 percent
of respondents agree with statements five and seven respectively that reporters of
corruption end up suffering.

9
Table 3: Percentage distribution of respondents by their perception about
corruption

S/N Statement Strongly Agree Disagree Strongly Av.


agree disagree score
(1) (2) (3) (4)
1. Bribery is a practical necessity 9.7 13.3 25.8 51.2 3.2
for getting things done quickly
2. Corruption is beneficial 6.1 11.8 32.6 49.5 3.3
provided you are not caught
3. Corruption gives better services 16.6 27.0 24.9 31.5 2.7
4. Following laid down procedure 23.1 31.2 22.9 22.9 2.5
is too costly and time wasting
5. People who report corruption 24.0 43.1 16.5 16.5 2.3
end up suffering the most
6. There is no point of reporting 14.4 25.1 29.6 30.9 2.8
corruption because nothing will
be done
7. Would not have received 27.8 43.6 16.1 12.5 2.1
protection from possible
retaliation
8. The case cannot be proved 24.2 37.7 23.0 15.2 2.3
9. Do not want to betray anyone 14.3 28.4 35.0 22.4 2.7

Considering integrity, leaders were asked to rank three hypothetical situations listed in
table 4. To show the degree of unacceptability they used scores on a scale with a range
between one meaning totally acceptable, to four meaning totally unacceptable. Table 4
shows that senior enterprise management gave average scores of 3.2 and above, meaning
that the statements were unacceptable with more than 74 percent of respondents not
accepting all the statements. The implication is that they demand high integrity in public
life.

Table 4: Percentage distribution of enterprises reporting acceptability of


courses of action in hypothetical situations in public life

S/ Situation Totally Somehow Somehow Totally Av.


No acceptabl acceptable not not scor
. e acceptable acceptable e
(2) (3)
(1) (4)
A government official uses 15.4 10.5 15.8 58.4 3.5
a government car for
personal business or leisure
A person is promoted 9.1 4.3 12.0 74.5 3.5
thanks to a family or
intimate relationship with a
high ranking official

10
In order to keep the car 8.0 5.6 11.6 74.8 3.2
from being towed and avoid
paying a fine, an offender
offers to pay the traffic
police officer directly. The
officer had not asked for
money, but s/he accepts it.

Testing their perception in private life, leaders were asked for the probability of taking
the actions shown in table 5 below. They were asked to rank the reactions in a scale
between one and four where one means not probable at all, and four means highly
probable. A score of 3.2 for the first two statements and the last mean that the statements
indicated their probable course of action under the circumstances with more than 75
percent of respondents agreeing with them. The third statement, with a score of 1.9,
means that the statement is not their probable course of action. Percentage of respondents
disagreeing with it is 74.5. The implication is that they accepted lesser integrity in private
life compared to their demands of high integrity in public life.

Table 5: Percentage distribution of enterprises reporting their probable


course of action in private life

S/No. Reaction Not Not Probable Highly Average


probable probable probable score
at all
(1) (2) (3) (4)
1. Since this money has no 13.3 9.7 22.4 54.6 3.2
owner, this lucky break
can help you with your
family expenses
2. You will take it home 10.9 9.1 27.9 52.0 3.2
and think overnight
about what to do with it.
3. Right away you look for 50.2 24.3 13.3 12.3 1.9
a guard in order to report
the incidence and give
him the envelope with
the money.
4. Knowing that whoever 9.6 11.7 27.4 51.3 3.2
will be given the
envelope will pocket it,
better you take it

3.4 EXPERIENCE OF CORRUPTION

To find out the experiences of company executives in corruption, they were asked if they
were ever faced with a situation where they were required to give a bribe, they were
equally divided where 49.7 percent said yes and 50.3 said no. Figure 3 shows that of
those who said yes, 91 per cent said they gave it in the form of money, and four per cent
gave it in the form of property. Table 6 shows that Morogoro is the region with the

11
highest percentage of respondents who encountered corruption more frequently (90
percent) and Rukwa is the region with the lowest rate of incidence (30 percent).

Figure 3: Percentage distribution of firms reporting forms of bribery that


are practised.

Table 6: Percentage distribution of respondents who encountered corruption


by region

S/N Region Yes No


(1) (2)
1. Morogoro 89.5 10.5
2. Kilimanjaro 50 50
3. Dar es Salaam 67.9 32.1
4. Arusha 66.7 33.3
5. Singida 66.7 33.3
6. Manyara 63.3 36.7
7. Lindi 56.7 43.3
8. Shinyanga 53.8 46.2
9. Dodoma 52.0 48.0
10. Tabora 50.0 50.0
11. Tanga 46.7 53.3
12. Pwani 43.5 56.5
13. Mtwara 44.8 55.2
14. Kagera 41.4 58.6

12
15. Mbeya 40.0 60.0
16. Mwanza 40.0 60.0
17. Ruvuma 38.1 61.9
18. Mara 33.3 66.7
19. Iringa 30.8 69.2
20. Kigoma 30.8 69.2
21. Rukwa 30.0 70.0
National 49.7 50.3

3.5 INITIATION OF CORRUPTION

Figure 4 shows that the experience of 83 per cent of the enterprises was that bribery was
initiated by service providers while 11.8 per cent indicated that service recipients initiated
bribery. The rest indicated it was a spontaneous activity to both. The results suggest that
before serving their clients, government agents demanded bribes from their clients.

Figure 4: Percentage distribution of enterprises indicating the initiators of


bribery

13
Table 7 shows that in twenty out of twenty one regions more than 70 percent of
respondents reported that government agents initiated the act of corruption. Mara,
Tabora and Arusha are the three top regions where government agents initiated bribery
was reported by 90 percent or more of respondents. Iringa has the lowest rate of 69.2
percent.

Table 7: Percentage distribution of enterprises indicating initiators of


corruption by region

S/N Region A service The person It is known


provider offers a before hand
indicates or payment on how to pay
asks for a his/her own and how
payment accord much to pay
1. Mara 100 0.0 0.0
2. Pwani 82.6 8.7 8.7
3. Manyara 83.3 13.3 3.3
4. Kilimanjaro 96.4 3.6 0.0
5. Rukwa 83.3 13.3 3.3
6. Kagera 72.4 6.9 20.7
7. Arusha 90.0 10.0 0.0
8. Lindi 73.3 23.4 3.3
9. Tabora 96.6 3.4 0.0
10. Kigoma 72.7 22.7 4.5
11. Shinyanga 84.6 11.5 3.8
12. Morogoro 84.2 15.8 0.0
13. Ruvuma 71.4 19.0 9.5
14. Tanga 85.7 0.0 14.3
15. Mwanza 89.7 6.9 3.4
16. Dodoma 80.0 20.0 0.0
17. Dar es Salaam 87.5 6.2 6.2
18. Mbeya 86.2 10.3 3.4
19. Singida 60.9 26.1 13.0
20. Mtwara 75.9 20.7 3.4
21. Iringa 69.2 23.1 7.7
National 83.0 11.8 5.2

14
3.6 PERCEPTION OF THE PRIVATE SECTOR ON POLICIES,
LAWS AND REGULATIONS

Policies, Laws, rules and regulations prevailing in the country provided the environment
under which enterprises operated. Accessibility of documents on policies, laws rules and
regulations ensures transparency and enables enterprises to know their rights and
obligations including the right rates of fees payable where need be. It reduces chances of
corruption that takes advantage of the ignorance of the client. Fig. 5 shows how easy it
was for enterprises to access their documentation. They were generally available, with
41.2 percent indicating that they were very easily available and 29.9 percent showing
they were available making a total of 71.1 percent. Only two percent indicated that they
were very difficult to obtain.

Figure 5: Percentage distribution of firms reporting the availability of rules


and regulations affecting firms

Firms were also asked how predictable the policies, rules and regulations were. In figure
6 they show that they were generally predictable with 40.2 percent indicating that they
were completely predictable and 32.3 percent indicating they were fairly predictable
giving a total of 72.5 percent. Those indicating that they were completely unpredictable
were 6.8 percent. Predictable policies, laws and regulations reduces uncertainty in the
business operating environment making it conducive.

15
Figure 6: Percentage distribution enterprises reporting predictability of the
rules and regulations affecting firms

Enterprises were asked to compare between now and 2005 on the predictability of
economic and financial policies in a scale between one and four where one means
completely predictable and four means completely unpredictable. Both years scored 2.3,
meaning they were equally fairly predictable. In the case of changes in rules, laws and
regulations, the scores were 2.3 for 2005 and 2.2 for now indicating little change, being
fairly predictable.

For the private sector to play a leading role in the economy there needs to be
consultations between the business community and government. Fig. 7 shows that 58.5
percent of enterprises feel that government consults them sometimes and 20.3 percent
said they are consulted always adding up to 78.8 percent.

16
Figure 7: Percentage distribution enterprises reporting frequency of
consultation between government and firms

To find the interaction between enterprises and government, enterprises were asked to
indicate whether they did business with government or not. Enterprises indicated that 24
percent of them did general business with government. On participation in public tender
processes, 16 percent of firms participated. Fig. 8 shows income from public tenders as a
percentage of the firms’ total income. While to 17.6 percent of enterprises public tenders
contributed less than one percent of their incomes, to 12.1 percent of firms, public tenders
contributed more than 25 percent of their incomes. The biggest group with 25.3 percent
of firms is the one where public tenders contributed one to five percent of their incomes.

Figure 8: Percentage distribution of firms reporting income from public


tenders as a percentage of total income

17
The survey sought enterprises’ assessment of the problems they faced. Ranking each of
them in a scale between one and four where one means very minor, and four means very
major, table 8 shows that inflation dominates as the biggest problem reported by 90.2
percent of respondents, followed by access to and costs of financing reported by 83.5
percent of respondents and corruption in public sector reported by 81.4 of respondents.
Of the 18 listed problems, fourteen had a score of more than 2.5 indicating that they were
notable problems. Corruption in the private sector and regulatory authorities such as TBS
and TFDA caused the least problems.

Table 8: Percentage distribution of enterprises reporting problems for the


operation and growth of business

S/No Problem Very Minor Major Very Av. score


minor major

(1) (2) (3) (4)


1. Inflation 3.1 6.7 29.6 60.6 3.5
2. Access and financing 5.6 10.7 32.4 51.1 3.3
costs
3. Corruption in public 6.4 12.1 27.0 54.4 3.3
sector
4. Unstable currency 7.2 15.1 32.7 44.9 3.2
exchange rates
5. High taxes 8.6 15.2 31.5 44.7 3.1
6. Bureaucracy in 6.7 17.1 35.4 40.8 3.1
government
7. Inappropriate 8.5 16.5 37.7 37.3 3.0
infrastructure
8. Availability and price 15.3 23.7 31.2 29.8 2.8
of inputs
9. Other (specify) 15.8 28.9 18.4 36.8 2.8
10. Complex regulations 11.1 30.3 34.0 24.6 2.7
and policy instability
11. Ineffective courts 13.3 30.4 32.2 24.1 2.7
12. Legal procedures to 13.0 36.6 30.0 20.3 2.6
establish a business
13. Insecurity 13.8 36.6 28.4 21.2 2.6
14. Requirements to 23.9 26.3 23.0 26.8 2.5
conduct foreign trade
operations
15. Political 20.0 36.8 24.6 18.6 2.4
instability/uncertainty
16. Labour regulations 16.6 43.5 26.3 13.7 2.4
17. Tanzania Bureau of 27.0 37.1 20.2 15.8 2.2
Standards (TBS)
18. Tanzania Food and 31.9 35.7 18.3 14.1 2.1
Drugs Agency
(TFDA)
19. Corruption in private 13.5 34.3 28.5 23.7 2.0
sector

18
Table 9 examines further the third major problem, corruption in public sector and its
regional dimensions. Tabora and Dodoma lead as regions with high corruption in public
sector with 100 percent respondents identifying it as a major problem. They are followed
by Arusha, Manyara, and Lindi, with 96.7, 93.4, 90.0 percent respectively. Mara region
is at the bottom of the table with 40.0 percent of respondents identifying it as a major
problem. Nationally, 81.4 percent of respondents identified it as a major problem.

Table 9: Percentage distribution of respondents rating corruption in public


sector as a problem by region

S/N Region Very minor Minor Major Very Major Average


(1) (2) (3) (4) score
1. Tabora 0.0 0.0 10.7 89.3 3.8
2. Lindi 3.3 6.7 26.7 63.3 3.8
3. Dar es Salaam 3.8 12.5 38.8 45.0 3.5
4. Iringa 11.5 11.5 46.2 30.8 3.3
5. Pwani 4.3 13.0 21.7 60.9 3.5
6. Singida 8.7 4.3 39.1 47.8 3.4
7. Kigoma 8.0 4.0 28.0 60.0 3.4
8. Arusha 0.0 3.3 36.7 60.0 3.5
9. Kagera 3.4 13.8 13.8 69.0 3.4
10. Ruvuma 9.5 4.8 57.1 28.6 3.2
11. Kilimanjaro 3.3 13.3 33.3 50.0 3.3
12. Mara 24.0 36.0 28.0 12.0 3.0
13. Rukwa 10.0 13.3 26.7 50.0 3.1
14. Dodoma 0.0 0.0 28.0 72.0 3.2
15. Shinyanga 8.0 16.0 36.0 40.0 3.1
16. Mtwara 3.3 23.3 26.7 46.7 2.6
17. Mwanza 3.4 13.8 34.5 48.3 3.2
18. Morogoro 12.5 0.0 43.8 43.8 2.9
19. Manyara 0.0 6.7 26.7 66.7 3.1
20. Tanga 6.7 13.3 33.3 46.7 2.8
21. Mbeya 6.9 6.9 44.8 41.4 3.0
National 6.4 12.1 27.0 54.4 3.3

19
3.7 MAIN CAUSES OF CORRUPTION

Among a given list of twelve possible causes of corruption, ten were identified by
more than sixty percent of respondents as major causes of corruption led by
greed/selfishness that was identified by 95.5 per cent. The cause identified by the
least percentage of respondents is corruption providing better services identified
by 35.3 percent. Table 10 shows the ranking of the causes. The ranking uses a
scale between one and two, where one means “yes” it is a cause and 2 means “no”
it is not, with 1.5 being a neutral point. Since all except one of the causes listed
have scores below 1.5, they are all problems of varying degrees.

Table 10: Percentage distribution of respondents reporting causes of


corruption

S/No Cause Yes No Don’t Av.


know score
1. Greed/selfishness 95.5 4.0 0.5 1.0
2. Lack of control and accountability of public 86.7 11.4 1.9 1.1
officials
3. Moral decay 84.1 13.5 2.4 1.1
4. Poor law enforcement/punishment of the 85.6 12.7 1.8 1.1
corrupt
5. High cost of living 74.3 24.6 1.1 1.2
6. Poor remuneration 75.4 23.8 0.8 1.2
7. Poor leadership 79.3 19.0 1.8 1.2
8. Lack of effective corruption reporting system 78.4 18.4 3.2 1.2
9. Lack of independent and effective judiciary 70.8 25.2 4.0 1.3
10. Poverty 61.2 37.2 1.6 1.4
11. Corruption gives better services 35.3 63.1 1.6 1.6
12. Other (specify) 17.2 3.4 79.3 1.2

20
Examination of greed/selfishness as a cause of corruption by region, table 11 shows that
except for Ruvuma and Iringa regions that have 85.7 and 88.5 percent respectively, the
rest of the regions have 90 percent or more identifying it as a cause of corruption, with
seven regions having a percentage of 100.

Table 11 Percentage of Respondents identifying Greed/Selfishness a Major


Source of Corruption by Region

S/N Region Respondents


(%)
1. Morogoro 100.0
2. Lindi 100.0
3. Tabora 100.0
4. Rukwa 100.0
5. Kigoma 100.0
6. Shinyanga 100.0
7. Mara 100.0
8. Arusha 96.7
9. Mtwara 96.7
10. Manyara 96.7
11. Dar es Salaam 96.3
12. Dodoma 96.0
13. Pwani 95.7
14. Mbeya 93.3
15. Kagera 93.1
16. Singida 91.7
17. Kilimanjaro 90.0
18. Tanga 90.0
19. Mwanza 90.0
20. Iringa 88.5
21. Ruvuma 85.7
National 96

21
3.8 SERIOUSNESS OF CORRUPTION IN TANZANIA

Figure 9 shows that, corruption was considered to be a major problem by 92.3 percent of
the firms while 7.2 percent considered it to be a moderate problem.

Figure 9: Percentage distribution of respondents reporting the seriousness of


corruption

The problem was examined by sector, by considering the tendering process. Table 12
shows that enterprises consider their own sector, private companies, to be the first in
being ranked as having good quality in terms of transparency, honesty, clarity and
simplicity in tendering process.

Table 12: Percentage distribution respondents reporting quality of


institutions in terms of transparency, honesty, clarity and simplicity in
tendering

Sector High quality Low quality


Private companies 58.7 41.3
Public corporations 20.9 79.1
Government Departments 16.9 83.1

22
In comparing the state of corruption between now and 2005, the results are as indicated in
Fig. 10. It is rated as much worse now by 44 percent of the firms and worse by 23.3
percent of the firms giving a total of 77.3 percent. Two percent rate it as much better.

Figure 10: Percentage distribution of respondents reporting current state of


corruption in public sector in Tanzania compared to 2005

3.9 PROBLEMS AFFECTING TANZANIA

Comparing corruption to other types of problems facing Tanzania, the three most
serious problems were corruption in public places reported by 90.9 percent of
respondents, inflation reported by 90.6 percent and high cost of living reported by
89.9 percent. Table 13 shows the ranking where 1 means very serious two means
serious and 3 means a very minor problem. While problems numbers one to
twelve in the list are classified as very serious by more the two thirds of the
respondents, the rest are classified as serious. Lowest in the list in seriousness is
violence. Identification of high cost of living and inflation as very serious
problems is an indicator that family incomes are insufficient to meet costs of
living.

23
Table 13: Percentage distribution of respondents reporting
seriousness of various types of problems facing Tanzania

S/No. Problem Very serious Serious Very minor Av. score


(1) (2) (3)
1. Corruption in public places 90.9 8.3 0.8 1.1
2. Inflation 90.6 8.1 1.3 1.1
3. High cost of living 89.9 8.9 1.1 1.1
4. Unemployment 83.7 13.7 2.6 1.2
5. Cost of health services 77.1 17.6 5.3 1.3
6. Cost of education 75.4 20.2 4.3 1.3
7. Unfair judicial system 74.2 19.3 6.5 1.3
8. Lack of good leadership 71.8 19.4 8.8 1.4
9. Delinquency 70.3 22.0 7.8 1.4
10 Poor quality of roads 69.6 23.6 6.9 1.4
11 Drug trafficking 67.6 23.3 9.1 1.4
12 Access to clean water 66.3 26.3 7.4 1.4
13 Destruction of the environment 64.8 27.2 8.0 1.4
14 Police harassment 62.9 25.2 11.9 1.5
15 Corruption in private sector 56.8 28.5 14.8 1.6
16 Safety concerns/crime 55.7 34.6 9.8 1.5
17 Drug abuse 53.1 32.6 14.3 1.6
18 Food availability 52.6 32.8 14.6 1.6
19 Shortage of housing 50.9 35.3 13.8 1.6
20 Gender stereotype/bias 38.7 31.5 29.8 1.9
21 Political instability 38.0 30.7 31.3 1.9
22 Violence 31.9 35.3 32.7 2.0

Examining the first problem, corruption in public services, by region, table 14 shows that
in 14 of the 21 regions, 90 or more percent of the respondents say corruption in public
services is serious, with four of them having a percentage of 100.

Table 14: Percentage of respondents who felt corruption in public


service is serious by region

S/N Region Percent of respondents


1. Arusha 100
2. Morogoro 100
3. Iringa 100
4. Mara 100
5. Lindi 97
6. Manyara 97
7. Dodoma 96

24
8. Rukwa 93
9. Pwani 91
10. Dar es Salaam 91
11. Kilimanjaro 90
12. Mtwara 90
13. Tabora 90
14. Mwanza 90
15. Shinyanga 88
16. Mbeya 87
17. Kigoma 85
18. Singida 83
19. Kagera 83
20. Ruvuma 76
21. Tanga 70
National 90

3.10 ASSESSING THE POLICIES, RULES AND REGULATIONS

In assessing the role of government in the operations of the business community, the
survey sought to find from the enterprises whether the government was interfering in
their operations and they were asked to rank how frequently government interfered in
various types of interference. Using a scale between one and four where one means
always and 3 means never, pricing had a score of 2.4 indicating sometimes there was
interference reported by 28.2 percent and there was interference always reported by 15.1
giving a total of 43.3 percent. Table 15 shows that mergers and dividends had the lowest
rate of interference with a score of 2.8 which is close to never.

Table 15: Percentage distribution of respondents reporting state intervention


in business operations

S/No. Intervention areas Always Sometimes Never Av. score


(1) (2) (3)
1. Dividends 4.3 11.6 84.2 2.8
2. Mergers 4.2 15.9 79.8 2.8
3. Investment 5.4 18.5 76.1 2.7
4. Sales 7.7 20.7 71.6 2.6
5. Employment 4.4 25.9 69.7 2.7
6. Wages 13.6 27.4 59.1 2.5
7. Prices 15.1 28.2 56.7 2.4

25
The quality and efficiency of services delivered by public agencies were ranked by enterprises
using a scale between one and four where one means very good and four means very poor. Table
16 shows that the Police Force was the poorest with a score of 3.0 followed by Judiciary,
TANESCO and Ministry of Lands, Housing and Human Settlement which have a score of 2.8.
Looking at percentages for those performing poorly, the Police Force (73.4%) is followed by
Judiciary (67.0%), TANESCO (63.0%) and Ministry of Lands, Housing and Human Settlement
(60.0%), in that order. The Police Force is involved in apprehending criminal suspects including
traffic offenders and detaining them before they are taken to court. There is discretion in
providing bail to the suspects. There are times when this discretion is misused to harass
individuals. Corruption is used either to get somebody to be harassed or to enable the suspect to
get bail. The Police is also involved in investigating the criminal cases before they are sent to
court. Corruption is used either to prolong or influence the investigation and mislead the courts.
In the past the Prosecution Department was within the Police Force. Corruption was used to
influence the prosecution process and mislead the courts. While corruption involving the
harassment of individuals is petty the type corruption in court cases depends on type of case being
handled. The more serious is the case the grander is the corruption. Corruption in dealing with
TANESCO is mainly petty where one wants accelerated electricity connection or tempering with
electricity bills. Grand corruption comes in during the procurement process of plants and
supplies. Corruption in the Judiciary (Commercial Courts) and Ministry of Lands, Housing and
Human Settlement (acquisition of land) affects the enterprises more and is of grand corruption
nature. The best institution is Tanzania Postal Corporation that has a score of 2.0. The 14
institutions that fall below the neutral point of 2.5, have varying degrees of good quality. The six
that have scores of above 2.5 have various degrees of poor quality.

Table 16: Percentage distribution of public agencies by quality and efficiency

S/No. Institution Very Good Poor Very Av.


good poor score
(1) (2) (3) (4)
1. The Police 1.0 25.6 46.5 26.9 3.0
2. The judiciary 1.8 31.2 50.0 17.0 2.8
3. TANESCO 1.6 35.4 39.4 23.6 2.8
4. Ministry of Lands, Housing and Human 2.2 37.9 39.9 20.1 2.8
Settlement
5. Public Healthcare 2.1 39.8 45.5 12.6 2.7
6. Tanzania Ports Authority 3.0 47.5 34.5 15.0 2.6
7. Ministry of Labour, Employment and Youth 1.2 52.4 37.3 9.2 2.5
Development
8. Tanzania Revenue Authority (TRA) 4.9 51.9 32.1 11.0 2.5
9. Public Procurement and Regulatory Authority 4.2 54.6 32.4 8.7 2.5
(PPRA)
10 Immigration 3.8 51.7 34.1 10.3 2.5
11 Public Water Authority 3.6 50.0 34.7 11.7 2.5
12 Public education services 2.4 57.7 31.6 8.6 2.5
13 TANROADS 2.8 55.2 32.9 9.1 2.5
14 Central Bank 2.9 57.3 32.0 7.8 2.4
15 The Treasury 2.4 60.8 28.9 7.8 2.4
16 Tanzania Investment Centre (TIC) 4.4 62.9 23.1 9.7 2.4
17 Local Authorities 3.1 60.6 29.6 6.7 2.4
18 Tanzania Bureau of Standards (TBS) 6.0 59.2 26.1 8.7 2.4
19 Other (specify) 0.0 75.0 12.5 12.5 2.4

26
20 Business Registration and Licensing Agency 6.2 63.9 22.6 7.3 2.3
(BRELA)
21 Prevention and Combating Corruption Bureau 8.7 64.2 20.7 6.5 2.3
(PCCB)
22 Tanzania Food and Drug Agency 5.6 63.7 22.5 8.2 2.3
23 Social Security Funds (NSSF/PPF/LGPF/PSPF 6.2 68.4 21.5 3.8 2.2
etc.)
24 Central government 7.5 74.0 15.7 2.8 2.1
25 Parliament 9.2 75.4 13.2 2.1 2.1
26 Tanzania Telecommunications Company Ltd. 12.8 70.0 10.6 6.6 2.1
(TTCL)
27 Tanzania Postal Corporation 14.4 71.7 9.1 4.8 2.0

In assessing the performance of the Police force by region, table 17 shows that in 19 out
of 21 regions, 50 percent or more of the respondents say it is poor, 8 out of 21 have
percentages of 80 or more.

Table 17: Percentage distribution of respondents rating the quality and


efficiency of the Police Force by Region

S/N Region Very good Good Poor Very poor Average.


(1) (2) (3) (4) score
1. Arusha 0.0 0.0 48.3 51.7 3.6
2. Mara 0.0 3.7 77.8 18.5 3.1
3. Singida 0.0 9.5 52.4 38.1 3.3
4. Iringa 0.0 12.0 64.0 24.0 3.1
5. Shinyanga 0.0 16.7 33.3 50.0 3.3
6. Kigoma 0.0 19.2 46.2 34.6 3.2
7. Lindi 0.0 20.0 46.7 33.3 3.1
8. Mtwara 0.0 30.0 26.7 43.3 3.1
9. Dar es Salaam 2.5 18.5 58.0 21.0 3.0
10. Ruvuma 0.0 23.8 61.9 14.3 2.9
11. Rukwa 3.3 23.3 53.3 20.0 2.9
12. Manyara 0.0 26.7 43.3 30.0 3.0
13. Mwanza 3.3 26.7 33.3 36.7 3.0
14. Kagera 3.4 27.6 41.4 27.6 2.9
15. Morogoro 5.3 26.3 47.4 21.1 2.8
16. Dodoma 0.0 36.4 59.1 4.5 2.7
17. Mbeya 0.0 36.0 40.0 24.0 2.9

27
18. Kilimanjaro 0.0 36.7 26.7 36.7 3.0
19. Tabora 0.0 50.0 46.4 3.6 2.5
20. Pwani 0.0 52.2 30.4 17.4 2.7
21. Tanga 0.0 55.2 27.6 17.2 2.6
National 0.0 36.4 59.1 4.5 3.0

In examining the interaction between the business community and public institutions,
enterprises were asked for the number of times they contacted some public institutions in
the previous year not necessarily for the same issue. Table 18 shows that TANESCO is
the institution most contacted with an average of 9 times, followed by TRA and public
water authorities, with an average of 6. The institution to be contacted the least number
of times is the Parliament. The table also shows the average number of times enterprises
were asked for unofficial payments. TANESCO comes at the top again with an average
number of 3 followed by TRA with an average number of 2. At the top of the average
amount of money paid per episode is TRA with an average amount of Tsh. 118,685
(USD 90), followed by TANROADS with an average of Tsh. 57,326 (USD 43).

Table 18: Interaction with public institutions

S/No. Institution Number of Number of Average amount


contacts with unofficial paid Tsh. (1
institution payments USD=Tsh 1,320)
1. Tanzania Revenue Authority 6.1 2.1 118,685
(TRA)
2. TANROADS 1.5 0.1 57,326
3. Central Government 2.6 0.2 57,078
4. TANESCO 9.1 2.7 36,184
5. Local Authorities 3.5 0.7 34,138
6. Public Water Authority 6.0 0.9 31,335
7. The Police 2.5 0.9 20,592
8. The judiciary 1.7 0.2 16,437
9. Public Health Care 5.2 0.8 9,639
10 Public Education Services 2.5 0.2 5,123
11 Immigration 1.9 0.2 4,647
12 TTCL 4.9 0.3 3,087
13 Tanzania Postal Corporation 5.8 0.2 2,023
14 Parliament 0.5 0.2 1,324
15 Central Bank 1.8 0.1 703
16 Tanzania Investment Centre 0.1 0.1 430

It has also been reported that it takes an average of 58 days to clear goods through
customs instead of the official 15 days.

Table 19 shows that frequently, once one gives unofficial payment to one official, it does
not stop another official from asking additional payment. However, frequently, once one
gives unofficial payment, one gets the service required. On the other end once mistreated

28
by a public agent, one rarely gets assistance from the agent’s supervisor without recourse
to unofficial payment.

Table 19: Percentage distribution of enterprises reporting the practice of


corruption

S/No. Statement Very Frequently Rarely Very Av.


frequently rarely Score
1. If a firm pays the required additional 17.6 33.4 36.7 12.3 2.4
payment to a particular official, another
government official will subsequently
require an additional payment for the
same service
2. If a firm pays the required “additional 26.1 41.9 22.9 9.1 2.2
payment”, the service is usually also
delivered
3. If a government agent acts against the 13.2 25.8 45.8 15.2 2.6
rules, I can usually go to another
official or his supervisor and get the
correct treatment without recourse to
unofficial payments

In operating a business, one is required to meet some government requirements.


Enterprises were asked to assess the difficulty of meeting some government
requirements. Enterprises reported that it took them 6 months on average, to register
their companies. Firms were asked to rank the difficulty in meeting government
requirements using a scale between one and four where one means very difficult, and
four means very easy. Table 20 shows that government requirements were gauged
between fairly difficult to very difficult as reported by more than 55 percent in all the
cases. Taxation, tax holidays, reclaiming duty etc. are the most difficult to meet.

Table 20: Percentage distribution of enterprises reporting difficulty of


meeting Government Requirements

S/No. Government requirements Very Fairly Fairly Very Av.


difficult difficult easy easy score
(1) (2) (3) (4)
1. Regulations relating to licensing 18.3 37.7 30.4 13.7 2.4
2. Restrictions on buying and 13.5 42.8 33.9 9.7 2.4
selling assets
3. Other 12.0 48.0 28.0 12.0 2.4
4. Ownership regulations 18.0 41.7 30.0 10.3 2.3
5. Labour market regulations 26.7 42.2 25.0 6.2 2.1
6. Price control 31.2 42.6 20.1 6.1 2.0
7. Filing of tax returns 30.3 45.2 19.3 5.2 2.0
8. Taxation, tax holidays, 32.3 45.7 17.3 4.7 1.9
reclaiming duty, etc.

As a result firms are forced to use facilitators like accountants, tax advisers, and lawyers
etc; to assist them in processing documents to meet government requirements. Enterprises
have reported an annual average of Tsh. 1,412,605 (USD 1070) to be the cost of such

29
facilitators. They have also reported that it takes 12 percent of senior management’s time
to process these requirements with an annual average cost of Tsh. 1,104,702 (USD 837)

Considering how fairly government procurement was processed, figure 11 shows that
50.2 percent of the times it was rarely fair and 18.2 percent never fair adding up to 68.4
percent. This is a matter of concern as it is in government procurement that grand
corruption is practised involving huge sums of money through deals between public
officials and enterprises.

Figure 11: Percentage distribution enterprise reporting frequency of


government procurement tenders being awarded in a clear and efficient
manner

Using a score of one to four where one means very frequently, and four means very
rarely, table 21 shows that “bids rigging” was done frequently reported by 83.3 of
enterprises. “Bidders agreeing with each other on “loser’s fee”, and “collusion by
suppliers to fix the minimum price” was done rarely as reported by 64 percent and 62.2
percent of respondents respectively.

30
Table 21: Percentage distribution of enterprises reporting tendering
practices
S/No. Practice Very Frequently Rarely Very Av.
frequently rarely score
(1) (2) (3) (4)
1. Bids rigging 25.6 57.7 12.2 4.5 2.0
2. Qualified bidder being 22.1 54.6 17.4 5.9 2.1
disqualified at pre-qualification
stage due to bribery
3. Adjusting specifications in the 19.4 49.5 24.0 7.1 2.2
interest of one company
4. Leakage of clients budget at a 18.0 49.5 24.4 8.1 2.2
tender stage to bidders
5. Modifying the contract terms 14.9 52.7 24.6 7.9 2.3
during the implementation
stage
6. Tender process being corrupted 15.4 46.1 25.7 12.8 2.4
by external pressure
7. Bidders agree with each other 6.9 29.2 44.2 19.8 2.8
on “losers” fee
8. Collusion by suppliers to fix 6.1 31.7 40.8 21.4 2.8
the minimum price
9. Unjustified complaints 10.2 42.7 34.5 12.7 2.5

Using a scale between one and three where one means very important, and three means
unimportant, table 22 shows that all fell within the score of 2 meaning that the four
factors listed were somewhat important in winning government tenders as reported by
more than 60 percent in all the criteria. Although qualification/competitiveness is
reported by 81.7 percent or firms but connections and making unofficial payments also
count.

Table 22. Percentage distribution of enterprises reporting the importance of


factors to win government contract

Criteria Very Somewhat Unimportant Av.


important important score
(1) (2) (3)
Qualification/competitiveness 58.0 23.7 18.3 1.6
Connections 40.9 27.7 31.4 1.9
Making unofficial payments 41.7 22.0 36.3 1.9

Respondents indicate that on average they paid 10.4 percent of contract value in
unofficial payments to secure contracts. Table 23 shows the regional variation of the
average. Mara region has the highest average of 25 percent and Kigoma and Rukwa
regions have the lowest rate of 2 percent.

31
Table 23: Percentage distribution of firms reporting average Percentage of
contract value paid as unofficial payment by region

S/N Region Average


Percent
1.
Mara 25
2.
Dar es Salaam 14
3.
Lindi 12
4.
Mbeya 10
5.
Mwanza 10
6.
Mtwara 8
7.
Manyara 8
8.
Arusha 7
9.
Singida 7
10.
Kagera 7
11.
Morogoro 5
12.
Pwani 5
13.
Shinyanga 5
14.
Kilimanjaro 4

15. Dodoma 3
16.
Tanga 3
17.
Ruvuma 3
18.
Iringa 3
19.
Tabora 3
20.
Rukwa 2
21.
Kigoma 2

National 10

3.11 ASSESSING THE JUDICIAL SYSTEM

In assessing the judicial system, the enterprises were asked to rank the frequency with
which courts practised the good qualities of courts. Using a scale between one and four,
where one means very frequently and four means never, Table 24 shows that the worst
ranked was the speed (quickness) of dispensing court cases with a score of 3.1 as reported
by 87.2 percent of respondents that it was rarely or never done. It was reported that on

32
average a case took fifteen months to settle, with the longest taking an average of
nineteen months.

Table 24: Percentage distribution of enterprises reporting the frequency of


practising good qualities by the court system

S/No. Description Very Frequently Rarely Never Av.


frequently (2) (3) (4) score
(1)
1. Fair and impartial 4.0 22.9 61.9 11.3 2.8
2. Affordable 5.8 25.6 54.0 14.6 2.8
3. Able to enforce its 3.7 24.1 56.8 15.5 2.8
decisions
4. Honest and 4.5 17.9 55.7 21.9 2.9
uncorrupted
5. Consistent and reliable 3.1 21.3 61.0 14.5 2.9
6. Quick 1.9 11.1 64.6 22.6 3.1

Among the various methods of dispute resolution, table 25 shows that direct negotiation
with the other party was the most preferred while the courts ranked third. However the
low response in using the listed options, including other methods not listed, suggest that
disputes that need formal resolution are rare.

Table 25: Percentage distribution of enterprises reporting the use of various


methods of dispute resolution

S/No. Option Yes No score


(1) (2)
1. Court 12.6 87.4 1.9
2. Negotiation through Police or AG 8.4 91.6 1.9
3. Lawyer without court process 6.0 94.0 1.9
4. Formal mediator 10.2 89.8 1.9
5. Business association 6.1 93.9 1.9
6. Direct negotiation with other party 26.4 73.6 1.7
7. Threat or use of force 1.7 98.3 2.0
8. Family/friend 16.9 83.1 1.8
9. Other (specify) 10.1 83.1 1.9

Table 26 gives the obstacles that prevented firms from using the court system. The first
in severity is the excessive amount of time taken by proceedings having a score of 3.5
where four is the most severe. It was indicated that 34 percent of the cases with the
longest duration were still pending. The least in severity is the judge’s little professional
capacity lying at the neutral score point of 2.5. The ranking used a scale of one to four
where one means no obstacle, and four means major obstacle.

33
Table 26: Percentage distribution of enterprises reporting the severity of
obstacles to using courts

S/No. Obstacle No Minor Moderate Major Av.


obstacle obstacle obstacle obstacle sc
(1) (2) (3) (4) ore
1. The excessive amount of 6.9 3.6 22.6 66.9 3.5
time taken by proceedings
2. Difficulties in sentence 7.4 5.7 31.1 55.8 3.4
enforcement
3. Complicated and tricky 10.4 8.3 31.8 49.4 3.2
legislation
4. Legal costs involved in 12.3 12.9 31.9 42.9 3.1
accessing justice
5. Extra costs involved in 12.5 10.8 35.6 41.1 3.1
accessing justice
6. Judge’s lack of credibility 11.0 13.4 31.0 44.6 3.1
7. Access to adequate legal 13.8 13.1 29.2 43.9 3.0
counsel
8. Judge’s little professional 25.0 21.0 28.2 25.7 2.5
capacity

Examination of the most severe obstacle, excessive length of duration of court cases by
region, table 27 shows that Mara and Mwanza regions have the longest average duration
per case of 33 months. Mbeya region has the shortest average duration of 2 months per
case.

Table 27: Average duration of court cases by region

S/N Region Duration


(months)
1. Dodoma 19
2. Arusha 11
3. Kilimanjaro 5
4. Tanga 3
5. Morogoro 5
6. Pwani 16
7. Dar es Salaam 27
8. Lindi 11
9. Mtwara 9
10. Ruvuma 8

34
11. Iringa N/A
12. Mbeya 2
13. Singida N/A
14. Tabora N/A
15. Rukwa 7
16. Kigoma 6
17. Shinyanga 6
18. Kagera 28
19. Mwanza 33
20. Mara 8
21. Manyara 33
National 15

For those with cases with the longest duration, 24 percent reported that there was an
indication that there was a need to offer a bribe. Of those who reported actually giving a
bribe, figure 12 shows that 57.9 percent paid to judges, 21 percent paid to court clerks
and 15.8 percent to prosecutors or officials in the prosecutor’s office.

Figure 12: Percentage distribution of enterprises reporting officials


receiving bribes in the judiciary

Firms indicated that, out of the cases determined, in 74 percent of the cases judgement
was executed.

35
When asked to compare their confidence in the legal system for upholding their contract
and property rights in business disputes, confidence increased from a score of 2.7 in 2005
to 2.4 now.

3.12 CORRUPTION IN THE PRIVATE SECTOR

In assessing the honesty and integrity of the private sector, firms were asked how they
kept their official company records. Table 28 indicates that almost all companies always
demanded receipts, and hardly any company paid taxes honestly.

Table 28: Percentage of enterprises reporting business practice in private


sector

S/No. Business Almost all Many A few Hardly any Av.


practice companies companies companies company score
(1) (2) (3) (4)
1. Always demand 95.8 2.3 1.4 0.5 1.1
receipts
2. Always issue 6.5 91.0 2.2 0.2 2.0
receipts
3. Keep one set of 2.6 5.2 91.2 1.0 2.9
accounts
4. Pays taxes 5.2 7.9 10.5 76.4 3.6
honestly

The response to how frequently corruption is practised in the private sector is indicated in
figure 13 where 55.1 percent said it was always practised and 36.6 percent said it was
practised frequently.

36
Figure 13: Percentage of enterprises reporting incidence of corruption in the
private sector

In comparing incidence of corruption within the private sector between now and 2005,
figure 14 shows that 43.5 percent of respondents said it was better and 9 percent said it
was much better giving a total of 52.5. Those who said it was much worse were 24.2
percent.

Figure 14: Percentage distribution of firms comparing the state of corruption


in private sector in Tanzania between today and year 2005

37
Table 29 shows the percentage of respondents who said corruption was better or much
better by region. Tanga leads by having 80 percent and Mara has the least, 15 percent.
Thirteen out of the 21 regions have a percentage of above 50.

Table 29 Percentage distribution of respondents who Felt Corruption in the


private sector in 2009 was better compared to 2005 by region

S/N Percent
1. Tanga 80
2. Dodoma 75
3. Ruvuma 72
4. Mtwara 70
5. Iringa 69
6. Kilimanjaro 68
7. Kigoma 66
8. Kagera 66
9. Rukwa 65
10. Morogoro 63
11. Lindi 60
12. Tabora 59
13. Pwani 54
14. Singida 46
15. Mwanza 43
16. Shinyanga 42
17. Mbeya 41
18. Dar es Salaam 37
19. Arusha 34
20. Manyara 24
21. Mara 15
National 53

Asking the enterprises to rate themselves by industry, table 30 shows the reputation of the
private sector by industry. Out of the 33 industries, ten industries were reported by more
than two thirds of the respondents that they had good reputation, lead by the
telecommunication industry. The high competition in the industry could be a
contributing factor. The industry with the worst rating is mining and quarrying followed

38
by contractors who were rated to be good by 21.5 and 23.0 percent of respondents
respectively.

Table 30: Percentage distribution of respondents reporting private sector


reputation on corruption

S/No. Industry Respondents rating good


reputation %
1. Telecommunications 79.6
2. Food and beverages 77.8
3. Services (hotel) 75.1
4. Manufacturing (consumer goods) 72.4
5. Media and publishing 72.2
6. Socially-oriented institutions 71.9
7. Retailing and merchandising 71.1
8. Food and beverage production 69.4
9. Accounting and consultancy 68.4
10 Agriculture 67.9
11 Manufacturing (general) 66.3
12 Furniture 65.4
13 Education 64.0
14 Real estate 62.8
15 Banking finance and securities 60.3
16 Courier, cargo & handling 60.3
17 Services (general) 56.3
18 Industrial (general) 56.0
19 Brokerage 54.4
20 Transport 53.4
21 Insurance 51.5
22 Oil and gas 51.2
23 Medical (pharmaceutical) 51.0
24 Automobile 50.6
25 Electronic and appliances 46.9
26 Manufacturing (chemical) 45.3
27 Medical services 40.5
28 Foreign companies 39.9
29 Construction 32.1
30 Utilities (power and water) 31.4
31 Logging and lumber 26.2
32 Contractors 23.0
33 Mining and quarrying 21.5
34 None 5.9

3.13 EFFECTS OF CORRUPTION

Commenting on the effects of petty and grand corruption, figures 15 and 16 show that
firms felt both were very harmful with 94.8 of respondents referring to grand corruption
and 89.5 referring to petty corruption.

39
Figure 15: Percentage distribution of enterprises rating the harmfulness of
Petty Corruption

Figure 16 Percentage distribution of enterprises rating the harmfulness of


grand corruption

40
The regional perspective of rating the impact of corruption in table 31 shows that only
Kilimanjaro and Dar es Salaam regions have less than 80 of the respondents saying Petty
corruption is harmful. In all the regions except Dar es salaam and Kilimanjaro there is
little variation between rating of petty and grand corruption.

Table 31: Percentage distribution of the rating of impact of corruption by


region

Code Region Petty Corruption Grand Corruption


Very Somehow Not Av. Very Somehow Not Av.
harmful harmful harmful score harmful harmful harmful Score
(1) (2) (3) (1) (2) (3)
1. Dodoma 92.0 4.0 4.0 1.1 96.0 4.0 0.0 1.0

2. Arusha 96.7 3.3 0.0 1.0 100.0 0.0 0.0 1.0

3. Kilimanjaro 69.0 31.0 0.0 1.3 100.0 0.0 0.0 1.0

4. Tanga 72.4 27.6 0.0 1.3 93.1 6.9 0.0 1.1

5. Morogoro 94.7 5.3 0.0 1.1 94.7 5.3 0.0 1.1

6. Pwani 91.3 8.7 0.0 1.1 91.3 8.7 0.0 1.1

7. Dar es 77.5 22.5 0.0 1.2 95 5 0.0 1.1

Salaam
8. Lindi 86.7 13.3 0.0 1.1 93.3 6.7 0.0 1.1

9. Mtwara 89.7 10.3 0.0 1.1 92.9 7.1 0.0 1.1

10. Ruvuma 95.2 4.8 0.0 1.0 95.2 4.8 0.0 1.0

11. Iringa 96.2 3.8 0.0 1.0 88.5 11.5 0.0 1.1

12. Mbeya 100.0 0.0 0.0 1.0 100.0 0.0 0.0 1.0

13. Singida 91.3 8.7 0.0 1.1 87.0 13.0 0.0 1.1

14. Tabora 90.0 10.0 0.0 1.1 92.6 7.4 0.0 1.1

15. Rukwa 96.7 3.3 0.0 1.0 93.3 6.7 0.0 1.1

16. Kigoma 96.0 4.0 0.0 1.0 96.0 4.0 0.0 1.0

17. Shinyanga 92.3 7.7 0.0 1.1 88.5 11.5 0.0 1.1

18. Kagera 86.2 13.8 0.0 1.1 100.0 0.0 0.0 1.0

19. Mwanza 96.7 3.3 0.0 1.0 100.0 0.0 0.0 1.0

20. Mara 100 0.0 0.0 1.0 92.6 7.4 0.0 1.1

21. Manyara 96.7 3.3 0.0 1.0 96.7 3.3 0.0 1.0

National 89.5 10.0 0.5 1.1 94.8 5.1 0.2 1.1

Some types of corruption have been indicated as obstacles to operations of business.


Table 32 has ranked various types of corruption between no obstacles with a score of one,
and major obstacles with a score of 4. “Bribes paid to public officials to avoid taxes and
regulations” is the type that has the highest score of 3 with 25.2 percent of respondents
saying it is a moderate obstacle and 45.0 percent saying it is a major obstacle giving a
total of 70.2 percent.

41
Table 32: Percentage distribution of respondents showing effect of some
types of corruption to business

S/No. Obstacle No Minor Moderate Major Av.


obstacle obstacle obstacle obstacle score
(1) (2) (3) (4)
1. Bribes paid to public officials to 17.9 12.0 25.2 45.0 3.0
avoid taxes & regulations
2. Central Bank mishandling of 24.6 14.1 23.4 37.9 2.7
funds
3. Patronage – public officials hiring 24.5 16.5 26.8 32.2 2.7
their friends & relatives to
official positions
4. Contributions by private interests 27.8 19.6 24.2 28.4 2.5
to political parties & election
campaigns
5. Sale of court decisions in 33.1 16.7 23.4 26.8 2.4
criminal cases
6. Sale of court decisions in 32.2 18.5 26.4 22.8 2.4
arbitration cases
7. Sale of presidential decrees to 41.6 18.7 20.4 19.3 2.2
private interest
8. Sale of parliamentary votes on 44.9 17.6 20.5 17.0 2.1
laws to private interests

Some companies may opt to terminate participation in the tendering process if corruption
is involved. When asked, 13 percent of enterprises indicated that there was a time when
they had terminated their participation in a tendering process. Figure 17 shows the
reasons for their termination. Unofficial payment takes rank number one as reported by
38.9 percent of enterprises.

42
Figure 17: Percentage distribution of firms showing reason for withdrawal
from tender process

Some investors may change their investment plans if they can find other places where
they are not obliged to pay corrupt officials to be able to invest in their countries. Results
of the survey show that 3 percent of investors changed their mind on investment in the
three years previous to the survey. The reasons for changing their mind is given in figure
34. It is dominated by the business environment led by poor infrastructure services
reported by 26.7 percent of respondents followed by labour market regulations that has
20 percent.

43
Figure 18: Percentage distribution of enterprises showing reasons for
changing mind on planned investment

3.14 COSTS OF CORRUPTION

Unofficial payments consume company revenue and deprive government of tax revenue.
It also increases prices to consumers of the final product. Figure 19 shows unofficial
payment by the private sector to other officials in the private sector as a percentage of
their company incomes. While 63.4 percent indicate zero payment, 5.8 percent of
companies give 10 percent of their income and above in unofficial payments.

Figure 19: Percentage distribution of firms showing unofficial payment as


percentage of company revenues

44
Fig. 20 shows the savings that would accrue to firms if corruption were to be reduced by
half. The majority of firms indicate significant positive change. Only 13.2 percent
indicate zero change and 0.3 indicate negative change.

Figure 20: Percentage distribution of firms estimating expected percentage


change in company income if corruption were to be reduced by half

3.15 PERCEPTION ABOUT FIGHT AGAINST CORRUPTION

In assessing the perception about the current status of the fight against corruption the
survey sought to assess the effectiveness of the various institutions in fighting corruption.
Table 33 shows that the most effective are the Faith-based organisations where 48.9
percent of respondents said they are very effective and 44.9 said they are effective giving
a total of 93.8 percent. The media (92.7), NGOs 86.4), Development Partners (85.4) and
PCCB (84.6) are second, third, fourth and fifth respectively with their percentages in
brackets. The least effective is the Police where 69.2 percent of enterprises say the force
is ineffective.

45
Table 33: Effectiveness of institutions in combating corruption

S/No. Institutions Very Effective Ineffective Very Av.


effective ineffective score
(1) (2) (3) (4)
1. Police 2.3 28.5 39.3 29.9 3.0
2. Courts 4.7 42.6 31.5 21.1 2.7
3. Attorney General 4.8 53.3 28.3 13.6 2.5
4. Others (specify) 11.8 55.9 14.7 17.6 2.4
5. Permanent Commission of 9.5 55.5 27.8 7.2 2.3
Inquiry
6. Ministry of Justice and 8.5 56.7 27.2 7.6 2.3
Constitutional Affairs
7. Ethics Commission 12.7 59.3 23.2 4.7 2.2
8. Public Accounts Committee 16.5 52.1 26.3 5.2 2.2
9. Parliament 19.8 57.3 18.3 4.6 2.1
10 Legal and Human Rights 17.3 62.5 16.5 3.7 2.1
Commission
11 Prevention and Combating 32.6 52.0 11.8 3.6 1.9
Corruption Bureau (PCCB)
12 Development partners 25.6 59.8 12.6 2.0 1.9
13 Non-governmental 25.9 60.5 11.4 2.2 1.9
organisations
14 Media 43.0 49.7 5.4 1.9 1.7
15 Faith-based organisations 48.9 44.9 4.7 1.5 1.6

Examining Institutions with the best rating, the Faith Based Organisations, by region,
Table 34 shows that Shinyanga has the worst rating of 3.8 meaning very ineffective and
Manyara has the best rating of 1.0 meaning very effective. However except for
Shinyanga, all the other regions have a rating below 2.5 meaning they are effective.

46
Table 34: Effectiveness of faith based organisations in fighting corruption by
region

S/N Region Faith Based


Organisations
(Score)
1. Shinyanga 3.8
2. Morogoro 2.0
3. Mbeya 2.0
4. Rukwa 1.9
5. Pwani 1.7
6. Lindi 1.7
7. Iringa 1.7
8. Tanga 1.6
9. Mara 1.6
10. Arusha 1.5
11. Kilimanjaro 1.5
12. Dar es Salaam 1.5
13. Mtwara 1.5
14. Ruvuma 1.5
15. Tabora 1.5
16. Mwanza 1.5
17. Singida 1.3
18. Kigoma 1.3
19. Kagera 1.3
20. Dodoma 1.1
21. Manyara 1.0
National 1.6

When we consider the institution with the worst national rating, the Police Force, by
region table 35 shows that Shinyanga region has the best rating of 1.5 and Kigoma has
the worst rating of 3.6.

47
Table 35: Effectiveness of the Police in Fighting Corruption by Region

S/N Region Police


(Score)
1. Kigoma 3.6
2. Arusha 3.5
3. Mara 3.4
4. Kilimanjaro 3.1
5. Lindi 3.1
6. Mwanza 3.1
7. Manyara 3.1
8. Mtwara 3.0
9. Mbeya 3.0
National 3.0
10. Morogoro 2.9
11. Ruvuma 2.9
12. Iringa 2.9
13. Kagera 2.9
14. Dodoma 2.8
15. Tanga 2.8
16. Rukwa 2.8
17. Dar es Salaam 2.7
18. Singida 2.5
19. Pwani 2.4
20. Tabora 2.4
21. Shinyanga 1.5
National 3.0

Companies were asked to indicate the types of initiatives they would be willing to join to
fight corruption. Where a score of one means definitely interested, and four means not
interested at all, Table 36 shows that they are probably interested in joining the indicated
initiatives reported by more than 69 percent of respondents in all the initiatives suggested.

48
Table 36: Percentage distribution of firms indicating willingness to
participate in initiatives to combat corruption

S/No. Initiative Definitely Probably Not Av.


interested interested interested score
at all
(1) (2) (3)
1. Donating funds 42.7 33.3 24.0 1.8
2. Volunteering staff to join a 34.1 35.9 30.0 2.0
government project
monitoring group on
company time
3. Paying for expenses 34.0 38.9 27.1 1.9
4. Volunteering staff members 32.3 35.2 32.5 2.0
to join a government
agency’s tender committee
on company time

Figure 21 shows the percentage of their incomes companies are willing to pay to fund
programmes to reduce corruption. Ten percent of enterprises are willing to pay 10
percent or more of their incomes to fund corruption reduction programmes.

Figure 21: Percentage of enterprises willing to pay to company income to


fund programmes that would reduce corruption

49
CHAPTER 4: CONCLUSIONS AND RECOMMENDATIONS
 
4.1 CONCLUSIONS

The enterprises survey was carried out to study the business environment with a special
emphasis on the effects of public sector governance and corruption on private sector
development. The survey examined the firms’ roles as users of public services and
subject to regulations, contractual providers of goods and services to government, and
clients for licenses and permits. The findings of the survey show that:

¾ There is a wide general understanding of the definition of corruption as


demand for unofficial payment, demand for sex and abuse of power.
However few consider the other types of corruption as defined by the
PCCB to be corruption.
¾ Corruption, both grand and petty, is prevalent in Tanzania in both the
public and private sectors, they are harmful and they constitute a major
problem in the country.
¾ Costs of corruption include loss of government revenue, loss of
prospective investors, and increase in prices of consumer goods.
¾ The major causes of corruption are: greed and selfishness; moral
indecency and lack of control and accountability in the public sector; high
cost of living and poor remuneration, poor leadership and lack of
effective corruption reporting system or a system that cannot be trusted to
protect the reporters of corruption.
¾ The worst performers in the public sector are the Police Force, Judiciary,
Ministry of Lands, Housing and Human Settlement and TANESCO in
that order. However while Police Force and TANESCO refer to wide
areas of petty corruption affecting individuals, corruption in the Judiciary
and Ministry of Lands, Housing and Human Settlement refer to grand
corruption involving businesses.
¾ Malpractices in government procurement and public tendering system
make them prone to corruption.
¾ The public service is bureaucratic where routine processes such as
registration of businesses and clearing of goods through customs take too
long making it prone to corruption.
¾ The general environment in government is transparent where documents
are easily available and changes in policies are predictable.
¾ There is adequate consultation between government and business and the
private sector is operating with little government interference
¾ The private sector is willing to participate in the fight against corruption.

50
4.2 RECOMMENDATIONS  

The survey has provided benchmark data for future surveys. It has identified some areas
that are prone to corruption. It has also indicated some obstacles to the fight against
corruption. To intensify the war against corruption, follow up actions are needed.
Amongst the actions are:
¾ PCCB needs to intensify the awareness campaign to enable the public to
understand the various types of corruption, the reporting system and safeguards
for corruption reporters.
¾ PCCB should improve the corruption reporting system and win the confidence of
the public that corruption reporters are not exposed and are protected.
¾ In addition to accessibility of policies, laws, and regulations and transparency in
public office, transparency in the processes and procedures should be improved to
reduce bureaucracy in the public service and reduce corruption.
¾ To encourage the public to report corrupt activities, sanctions against corruption
culprits should be conspicuous.
¾ Follow up and specialized surveys are needed to look into problem areas that have
been identified as being prone to corruption such as the Judiciary, Ministry of
Lands, Housing and Human settlement, government procurement and tendering
processes, and the Police Force.

51
REFERENCES

Centre for Democracy and Development: CDD – Ghana (2000); The Ghana Governance
and Corruption Survey – Evidence from Households, Enterprises and Public
Officials, CDD – Ghana Accra.
FACEIT and ESRF (2002); The State of Corruption Report – Annual Report Dar es
Salaam.
Government of Kenya (2007); National Corruption Perception Survey, Kenya Anti –
Corruption Commission Nairobi.
Government of Malawi (2005); Governance and Corruption Baseline Survey, Millennium
Consulting Group Ltd, Lilongwe.
Government of Nigeria (no year); Governance and Corruption Diagnostic Survey –
Analysis of Survey Results, Households, Enterprises and Public Officials, Lagos
Government of Sierra Leone (no year); Governance and Corruption Study, CDMA/GRS i
Freetown.
Government of Zambia (no year); Corruption Survey Report: Zambia National
Governance Baseline Survey – Executive Summary Lusaka.
Kaufmann, D et al (2008); Governance Indicators, World Bank Washington D C.
Political Economy Centre (2000); Corruption in the public Sector in Thailand,
Chulalongkorn University Bangkok.
The United Republic of Tanzania (1999); The National Anti – Corruption Strategy and
Action Plan for Tanzania, President’s Office State House Dar es Salaam.
The United Republic of Tanzania (2006); The National Anti – Corruption Strategy and
Sector Specific Action Plans for all Ministries, Independent Government
departments and Executive Agencies Phase II 2006 – 2010, President’s Office State
House Dar es Salaam
USAID, nola and PCCB (2007); Yajue Makosa ya Rushwa Yaliyoainishwa Katika Sheria
ya Kuzuia na Kupambana na Rushwa Namba 11 ya 2007

52
Annex : Enterprises Survey Questionnaire
UNITED REPUBLIC OF TANZANIA

NATIONAL GOVERNANCE AND CORRUPTION SURVEY

ENTERPRISES SURVEY QUESTIONNAIRE

CONFIDENTIAL

IDENTIFICATION

REGION …………………………………………………………..……….

DISTRICT ……………………………………………………………………..

WARD …………………………………………………….…………

Village/Street ……………………………………………….………

Name of establishment…___________________________________

Establishment number …………………………………………………….

VISIT 1 VISIT 2 VISIT 3

Date of Interview

Interviewer Name

Supervisor Office Editor

Name Date Name Date

DATA PROCESSING

Keyed in Name
Date
by
----/----/2009

53
READ THE FOLLOWING TO THE RESPONDENT

Good morning/afternoon. I am _______________________, an interviewer from the Front


Against Corrupt Elements in Tanzania (FACEIT). FACEIT is conducting a survey on behalf of
the Government of the United Republic of Tanzania. The objective of the survey is to have a
better understanding of constraints that hinder the development of private business in Tanzania.
Ultimately, the survey will be used to advise government on ways to improve and strengthen
private enterprise growth. Your answers should reflect only your perception and experience of
doing business in the country. You have been selected to be interviewed. The information
obtained will be treated strictly anonymous and confidentially. Neither your name nor the name
of your firm will be printed or used in any documents or used for tax purposes.

STARTING TIME: ADOPT A 12 HOUR SYSTEM

PART 1. CHARACTERISTICS OF RESPONDING FIRMS

______________________________________________________________________
101 INDICATE LOCATION OF FIRM (FILL IN BOX)
URBAN 1 RURAL 2
102 INDICATE THE SEX OF THE RESPONDENT (FILL IN BOX)
MALE 1 FEMALE 2
103 What is your job title? (FILL IN BOX)
CHIEF EXECUTIVE/DIRECTOR 1
GENERAL MANAGER 2
OWNER/PROPRIETOR 3
PARTNER 4
OTHER (SPECIFY) 5
104 How old are you? (FILL IN BOX) IN YEARS
105 What is your highest level of education attained? (FILL IN BOX)

POST GRADUATE 1
DEGREE/ADVANCED DIPLOMA 2
TRAINING AFTER SECONDARY 3
SECONDARY 4
TRAINING AFTER PRIMARY 5
PRIMARY 6
NONE 7
OTHER (SPECIFY) ____________________ 8

54
106 How many permanent and casual employees does your firm have? (INDICATE NUMBER
OF EMPLOYEES IN APPROPRIATE SIZE OF THE FIRM)
COMPANY SIZE PERMANENT CASUAL TOTAL
1. SMALL (5 – 50 EMPLOYEES)
2. MEDIUM (51 – 200 EMPLOYEES)
3. LARGE (MORE THAN 200
EMPLOYEES)

107 What type of industry is your firm involved in? (CIRCLE AS APPROPRIATE)
AGRICULTURE:
AGRICULTURAL AND FARMING SERVICES 01
PLANTATIONS AND OTHER PLANTS 02
FISHING 03
FORESTRY 04
MINING AND QUARRYING:
SALT MINING AND QUARRYING 05
ROCK, CLAY AND SAND QUARRYING 06
MINING OF MINERALS, CHEMICAL
PRODUCTS AND FERTILISER 07
OTHER MINING AND QUARRYING 08
MANUFACTURING
FOOD BEVERAGE AND TOBACCO 09
TEXTILE PRODUCTS 10
WOOD AND OTHER HOUSEHOLD ITEMS 11

PAPER, PAPER PRODUCTS, PRINTING


AND PUBLISHING 12
CHEMICALS 13
MACHINERY AND EQUIPMENT 14
NON-METALLIC MINING PRODUCTS 15
BASIC METALS 16
OTHER MANUFACTURING (SPECIFY) 17
TRADE, RESTAURANTS AND ACCOMMODATION
WHOLESALE TRADE 18
RETAIL TRADE 19
RESTAURANTS, CAFES, BARS
AND CATERING SERVICES 20
HOTELS AND GUEST HOUSES 21
TRANSPORTATION AND COMMUNICATION
LAND, WATER AND AIR TRANSPORTATION 22
COMMUNICATION 23

FINANCIAL INSTITUTIONS, REAL ESTATE


AND BUSINESS SERVICES 24
PROFESSIONAL PRACTICE (ACCOUNTANCY, LAW,
ENGINEERING, ETC.) 25
55
ELECTRICITY, GAS, WATER 26
CONSTRUCTION 27
OTHER (SPECIFY) __________________________ 28

108 Which of the following best describes the legal status of your company? (FILL IN BOX)

Sole Proprietor 1
Partnership 2
Private Limited Liability Company 3
Public Listed Company 4
OTHER (SPECIFY) ______________________ 5
109 Which of the following best describes the type of owner that has the largest stake in your
firm either directly or indirectly? (FILL IN BOX)

Individual 01
Family 02
SACCOS 03
Workers 04
Managers 05
Investment Company 06
Foreign Company 07
Bank 08
Others (SPECIFY) 09

110 Which of the following best describes the overall control of your firm/company, where
control means making major decisions concerning the enterprise’s direction?

Would you say it is controlled by: TODAY 3 YEARS AGO


(CIRCLE (CIRCLE ONLY
ONLY ONE ONE CHOICE)
CHOICE)
01. Individual owner (s) 01 01
02. A family member 02 02
03. Domestic company group (conglomerate) 03 03
04. Foreign company or group 04 04
05. An investment fund or mutual fund 05 05
06. An investment company 06 06
07. A bank 07 07
08. Its board of directors/supervisory board 08 08
09. Its managers 09 09
10. Government 10 10

56
11. Its workers 11 11
12. SACCOS 12 12
13. Other (SPECIFY) 13 13

111 How was your firm established? (FILL IN BOX)

STATE-OWNED FIRM 1
PRIVATIZATION OF A STATE-OWNED FIRM 2
PRIVATE SUBSIDIARY OF FORMERLY
JOINT VENTURE, DOMESTIC AND FOREIGN 3
DOMESTIC PRIVATE FIRM 4
FOREIGN FIRM 5
OTHER (SPECIFY) _______________________________ 6

112 When did the company start its first operations in Tanzania?
YEAR
113 Please tell me where the Company’s headquarters is located. (FILL IN BOX)
At this site 1
Elsewhere in the country 2
In another country 3

114 Does any government agency or state body have a financial stake in the ownership of your
firm? (FILL IN BOX)

YES 1
NO 2 ( SKIP TO 116)
DON’T KNOW 3 (SKIP TO 116)

115 What proportion (%) does the government agency or state body have in the financial stake
of ownership of your firm? (FILL IN BOX)
PERCENT

116 Does any foreign company or individual have a financial stake in the ownership of your
firm/company? (FILL IN BOX)

YES 1
NO 2 (SKIP TO 118)
DON’T KNOW 3 (SKIP TO 118)

117 What proportion (%) does the foreign company/individual have as the financial stake of
ownership of your firm? (FILL IN BOX)
PERCENT
57
118 Please indicate, in percentage share, your main sources of finance.

Source SHARE (%)


01. Internal funds/retained earnings
02. Local Commercial Banks
03. Equity, sale of stock
04. Foreign Banks
05. Leasing arrangements
06. Investment funds
07. Other state sources
08. Family/friends
09. Money lenders
10. Others (specify)

119 Is your firm involved in export business? (FILL IN BOX)

YES 1
NO 2 (SKIP TO 121)
DON’T KNOW 3 (SKIP TO 121)

120 What proportion (%) of your sales do such exports represent? (FILL IN BOX)
PER CENT

121 Would you, please, estimate the annual growth (%) of your company’s sales over the past
three years? (FILL IN BOX)
PERCENT (per annum)
RECORD IN NEGATIVE NUMBERS IF THE SALES DECLINED

122 Please, predict the annual growth (%) of your company’s sales over the next three years?
(FILL IN BOX)

PERCENT (over the next three years)

123 Does your firm/company have holdings or operations in other countries (FILL IN BOX)

YES 1
NO 2
DON’T KNOW 3

124 For how long has the current General Manager of your company been in the post? (FILL
IN BOX).
MONTHS

58
125 Please specify in order of ranking your company’s three leading products or services.

1.____________________________________________
2.____________________________________________
3. ____________________________________________

PART 2: CURRENT SITUATION ABOUT CORRUPTION IN TANZANIA

201. The word “Corruption” is sometimes difficult to define. Now I would like to ask you,
what do you understand when one mentions the word “corruption”?

CIRCLE ALL MENTIONED

DEMAND FOR UNOFFICIAL PAYMENT 01


TAKRIMA 02
BAKSHISH 03
DEMAND FOR FAVOUR 04
DEMAND FOR SEX 05
EMBEZZLEMENT OF PUBLIC FUNDS 06
FRAUD 07
ABUSE OF POWER 08
OTHER (SPECIFY) _________________________________ 09
DOES NOT KNOW 99

202. In your opinion, which three forms of corruption do you consider to be most serious in
Tanzania?

TRANSFER CODE NUMBER OF RESPONSE MENTIONED 
____________________________________________________  
 
____________________________________________________   
 
____________________________________________________ 

203. What types of corrupt practices do usually occur in your vicinity?

_______________________________________________

_______________________________________________

_______________________________________________

204. In which sector do such corrupt practices occur?

_______________________________________________

_______________________________________________

_______________________________________________

59
205. In your opinion, how does each of the following corruption affect society in general?
CIRCLE AS APPROPRIATE.

VERY SOMEHOW NOT DON’T KNOW


HARMFUL HARMFUL HARMFUL
Petty corruption (Small) 1 2 3 9
Grand corruption (Big) 1 2 3 9

206. In your opinion, do you think corruption in Tanzania is a very serious problem when it is
compared with other problems? (FILL IN BOX)

MAJOR PROBLEM 1
MODERATE PROBLEM 2
MINOR PROBLEM 3
NOT A PROBLEM AT ALL 4
DON’T KNOW 9

207. From your personal perspective, would you consider the following to be the major causes
of corruption in Tanzania? CIRCLE AS APPROPRIATE.

DON’T
CAUSE YES NO
KNOW
Poverty 1 2 9
Greed/selfishness 1 2 9
High cost of living 1 2 9
Poor remuneration 1 2 9
Lack of control and accountability of public officials 1 2 9
Lack of independent and effective judiciary 1 2 9
Moral decency 1 2 9
Poor leadership 1 2 9
Lack of effective corruption reporting system 1 2 9
Poor law enforcement/punishment of the corrupt 1 2 9
Corruption gives better services 1 2 9
Other (SPECIFY) ___________________________ 1 2 9

208. In your opinion, would you strongly agree, agree, disagree or strongly disagree with the
following statements? CIRCLE AS APPROPRIATE.

STATEMENT STRONGLY AGREE DISAGREE STRONGLY DON’T


AGREE DISAGREE KNOW
Bribery is a practical necessity for
1 2 3 4 9
getting things done quickly
Corruption is beneficial provided you
1 2 3 4 9
are not caught
Corruption gives better services 1 2 3 4 9
Following laid down procedures is
1 2 3 4 9
too costly and time wasting
60
People who report corruption end up
1 2 3 4 9
suffering the most
There is no point of reporting
corruption because nothing will be 1 2 3 4 9
done about it
Would not have received protection
1 2 3 4 9
from possible retaliation
The case can not be proved 1 2 3 4 9
Do not want to betray anyone 1 2 3 4 9

209. From the following statements, in your opinion, who usually initiates a bribe?

1. A service provider indicates or asks for a payment 1


2. The person offers a payment on his/her own accord 2
3. It is known before hand how to pay and how much to pay 3
4. Do not know 9

210. Have you ever encountered a situation where you were obliged to give something in
order that you get what you wanted?

YES 1 NO 2 GO TO 212

211. What did you give in exchange for what you wanted to get?

MONEY 1 PROPERTY 2 SEX 3


OTHER (SPECIFY) __________________________ 4

212. In the following questions, I will describe to you some situations that sometimes happen.
In your opinion, how do you rate each action, would you consider it to be totally
acceptable, somehow acceptable, somehow not acceptable or totally not acceptable?
CIRCLE AS APPROPRIATE.

SITUATION TOTALLY SOMEHOW SOMEHOW TOTALLY


ACCEPTABLE ACCEPTABLE NOT NOT
ACCEPTABLE ACCEPTABLE
01. In order to keep the car from being
towed and avoid paying a fine, an offender
offers to pay the Traffic Police Officer 1 2 3 4
directly. The Officer had not asked for
money, but he/she accepts it.
02. A government official uses a
government car for personal business or 1 2 3 4
leisure
03. A person is promoted thanks to a
family or other intimate relationship with a 1 2 3 4
high ranking official

213. We are going to propose a hypothetical situation. Suppose that one night, a little late in the
evening, you are walking in the parking lot of a shopping street/area/mall, the parking lot is
empty, there is no security at this time and you are by yourself. Suddenly, you notice that
there is an envelope on the ground. You pick it up and realize it contains 5 million shillings.
How probable is it that your reaction would be as follows?

61
NOT
NOT HIGHLY
REACTION PROBABLE PROBABLE
PROBABLE PROBABLE
AT ALL
01. Since this money has no owner, this lucky
1 2 3 4
break can help you with your family expenses.
02. You will take it home and think overnight
1 2 3 4
about what to do with it.
03. Right away you look for a guard in order to
report the incidence and give him the envelope 1 2 3 4
with the money.
04. Knowing that whoever will be given the
envelope will pocket it, better you take it.

214. I will read to you a list of problems. Please tell me how serious you consider each
problem to be. Let us use a scale from 1 to 3 where 1 means very serious problem; 2
means serious problem; and 3 means very minor problem.

PROBLEM VERY SERIOUS VERY


SERIOUS MINOR
01. High cost of living 1 2 3
02. Unemployment 1 2 3
03. Inflation 1 2 3
04. Safety concerns/crime 1 2 3
05. Drug abuse 1 2 3
06. Drug trafficking 1 2 3
07. Lack of good leadership 1 2 3
08. Corruption in public services 1 2 3
09. Corruption in private sector 1 2 3
10. Cost of Education 1 2 3
11. Cost of Health services 1 2 3
12. Access to clean water 1 2 3
13. Food availability 1 2 3
14. Poor quality of roads 1 2 3
15. Police harassment 1 2 3
16 Unfair judicial system 1 2 3
17. Destruction of the environment 1 2 3
18. Political instability 1 2 3
19. Shortage of Housing 1 2 3
20. Gender stereotype type/bias 1 2 3
21. Violence 1 2 3
22 Delinquency 1 2 3
22. Any other problem? (Specify) 1 2 3

215. In your opinion, from the aforementioned problems, what do you think are the three most
serious problems affecting Tanzania? List them in order of importance among those I
have read to you?

1st in importance __________________________________________

2nd in importance __________________________________________

3rd in importance __________________________________________


62
PART 3: QUALITYOF PUBLIC SERVICES

301 Does your firm do business with the Public sector? (FILL IN BOX)

YES 1
NO 2 (SKIP TO 303)
DON’T KNOW 3 (SKIP TO 303)

302 What proportion (%) of sales does it represent? (FILL IN BOX)

PER CENT

303 Please judge how problematic the following factors are for the operation
and growth of business. (CIRCLE AS APPROPPRIATE)

Problem in: Very Minor Major Very


minor major
01. Access and financing costs 1 2 3 4
02. Inappropriate infrastructure 1 2 3 4
03. Availability and price of inputs 1 2 3 4
04. Legal procedures to establish a
1 2 3 4
business
05. Requirements to conduct foreign trade
1 2 3 4
operations
06. High taxes 1 2 3 4
07. Complex regulations and policy
1 2 3 4
instability
08. Political instability/uncertainty 1 2 3 4
09.Inflation 1 2 3 4
10. Unstable exchange rates 1 2 3 4
11. Ineffective courts 1 2 3 4
12. Labour regulations 1 2 3 4
13.Corruption in private sector 1 2 3 4
14. Corruption in Public sector 1 2 3 4
15. Insecurity 1 2 3 4
16. Bureaucracy in Government 1 2 3 4
17 Other (SPECIFY) 1 2 3 4

304 From the problems mentioned above, indicate in order of ranking which
ones are the three most important obstacles to your business.

1. _________________________________________
2. _________________________________________
3. _________________________________________

63
305 Please rate the overall quality and efficiency of services delivered by the
following Public agencies or services: (CIRCLE AS APPROPRIATE FOR
EACH INSTITUTION)

Institution VERY GOOD POOR VERY


GOOD POOR
01.Central government 1 2 3 4
02. Parliament 1 2 3 4
03. Central Bank 1 2 3 4
04. The judiciary 1 2 3 4
05. Ministry of Lands, Housing and Urban
1 2 3 4
Development
06. Ministry of Labour, Employment and
1 2 3 4
Youth development
07. The Treasury 1 2 3 4
08. Tanzania Revenue Authority (TRA) 1 2 3 4
09. Social Security Funds
1 2 3 4
(NSSF/PPF/LGPF/PSPF)
10. Public Procurement and Regulatory
1 2 3 4
Authority (PPRA)
11. Business Registration and Licensing
1 2 3 4
Agency (BRELA)
12. Tanzania Investment Centre (TIC) 1 2 3 4
13. Prevention and Combating Corruption
1 2 3 4
Bureau (PCCB)
14. The Police 1 2 3 4
15. Immigration 1 2 3 4
16. Tanzania Telecommunications
1 2 3 4
Company LTD (TTCL)
17. Tanzania Postal Corporation 1 2 3 4
18. Public Water Authority 1 2 3 4
19. TANESCO 1 2 3 4
20. Public Health Care 1 2 3 4
21. Public Education Services 1 2 3 4
22. Local Authorities 1 2 3 4
23. TANROADS 1 2 3 4
24. Tanzania Ports Authority 1 2 3 4
25. Other (SPECIFY) _________________ 1 2 3 4

64
306 & 307 During the last year, please characterize the interactions you had
with the following agencies in each of the stated contests:

Institution 306. Number of 307. Number of unofficial


contacts with agency payments requested & amount
or official paid
No. of times 1. No. of 2. Amount paid
times (Tsh.)
01. Central Government
02. Parliament
03. Central Bank
04. The judiciary
05. Tanzania Revenue
Authority (TRA)
06. The Police
07. Immigration
08. TTCL
09. Tanzania Postal
Corporation
10. Public Water
Authority
11. TANESCO
12. Public Health Care
13. Public Education
Services
14. Local Authorities
15. TANROADS
16. Tanzania Investment
Centre (TIC)

PART 4: POLICIES, LAWS, REGULATIONS AND THE LEGAL SYSTEM

401 Generally how do you consider the availability of the rules and regulations
affecting your firm? (FILL IN BOX)

VERY EASY TO OBTAIN 1


SOMEWHAT EASY TO OBTAIN 2
NEITHER DIFFICULT NOR EASY TO OBTAIN 3
SOMEWHAT DIFFICULT TO OBTAIN 4
VERY DIFFICULT TO OBTAIN 5

402 Please describe the rules and regulations affecting your firm. (FILL IN
BOX)
65
COMPLETELY PREDICTABLE 1
FAIRLY PREDICTABLE 2
NEITHER UNPREDICTABLE NOR PREDICTABLE 3
FAIRLY UNPREDICTABLE 4
COMPLETELY UNPREDICTABLE 5

403 Please indicate the option that best describes your view about the
statement, “In case important changes in law or policies affecting my
business operations, the government takes into account concerns voiced either
by me or my business associations and trade unions.” (FILL IN BOX)

ALWAYS 1
SOMETIMES 2
NEVER 3

404 About the legal system, how often do you associate the following
descriptions with the court system in resolving business disputes? (CIRCLE
AS APPROPRIATE)

VERY FREQUENTLY RARELY NEVER


FREQUENTLY
01. Fair and impartial 1 2 3 4
02. Honest & uncorrupted 1 2 3 4
03. Quick 1 2 3 4
04. Affordable 1 2 3 4
05. Consistent & reliable 1 2 3 4
06. Able to enforce its
1 2 3 4
decisions

405 During the last three years, did your firm use the methods listed below for
dispute resolution? (CIRCLE AS APPROPRIATE)

OPTIN YES NO
01.Court 1 2
02. Negotiation through Police or AG 1 2
03. Lawyer without court process 1 2
04. Formal mediator 1 2
05. Business association 1 2
06. Direct negotiation with other party 1 2
07. Threats or use of force 1 2
08. Family/friend 1 2
09. Other (SPECIFY) 1 2

FOR ENTERPRISES THAT DID NOT USE THE COURT SKIP TO 413

406 On average, please state, in months, how long the cases took to resolve?

Months

407 How long has the case with the longest duration taken? Months

66
408 Is the case with the longest duration determined or is it still pending?

DETERMINED 1
PENDING 2

409 For the case with the longest duration, did you or anyone in your firm
receive any indication that you were expected to make some unofficial
payment (to the judge, prosecutor, or any other public official involved in the
case) in order to get a favourable decision in the case? (FILL IN BOX)

YES 1
NO 2 (SKIP TO 413)
DON’T KNOW 3 (SKIP TO 413)

410 To whom did you make the unofficial payment? (FILL IN BOX)

JUDGE 1
COURT CLERKS 2
PROSECUTORS 3
OFFICIALS FROM PROSECUTOR’S OFFICE 4
OTHER (SPECIFY) 5

411 How much unofficial payment did you pay for the entire case?

412 If your firm won in court, was your firm able to enforce judgment (e.g.
collect payment)? (FILL IN BOX)

YES 1
NO 2

413 How severe are the following obstacles to using courts? (CIRCLE AS
APPROPRIATE)

Obstacle NO MINOR MODERATE MAJOR


OBSTACLE OBSTACLE OBSTACLE OBSTACLE
01. Legal costs involved in
accessing justice 1 2 3 4
02. Extra costs involved in
accessing justice 1 2 3 4
03. Access to adequate legal
1 2 3 4
counsel
04. Judge’s lack of credibility 1 2 3 4
05. Judge’s little professional
1 2 3 4
capacity
06. The excessive amount of
1 2 3 4
time taken by proceedings
07. Difficulties in sentence
1 2 3 4
enforcement
07. Complicated and tricky
1 2 3 4
legislation
67
414 Compare now with 2005, to what extent do you agree with this statement, “I
am confident that the legal system will uphold my contract and property rights in
business disputes.” CIRCLE AS APPROPRIATE
TEND DID NOT EXIST
FULLY TEND TO FULLY
TO THREE YEARS
AGREE DISAGREE DISAGREE
AGREE AGO
Now 1 2 3 4 5
2005 1 2 3 4 5

415 Compared to 2005,

a. How predictable are changes in the government’s economic and


financial policies that materially affect your business? (CIRCLE
IN THE TABLE AS APPROPRIATE)
b. How predictable are the changes in rules, laws or regulations?
(CIRCLE IN THE TABLE AS APPROPRIATE)

Policy a. Economic and b. Changes in rules,


financial policies laws or regulations
2005 NOW 2005 NOW
Completely
predictable 1 1 1 1
Fairly predictable 2 2 2 2
Fairly
unpredictable 3 3 3 3
Completely
unpredictable 4 4 4 4

PART 5: BUREAUCRACY AND STATE INTERVENTION

501 When did you register your business? YEAR

IF REGISTERED BEFORE 2006, SKIP TO QUESTION 503.

502 How long did the process of registering your business take from beginning to end?

MONTHS

503 In opening your business, which government requirement(s) is the most difficult to meet
in the order of severity::

1. _____________________________________
2. _____________________________________
3. _____________________________________

504 Comment on the difficulty of meeting government requirements in operating your


business today. (CIRCLE AS APPROPRIATE FOR EACH REQUIREMENT)

68
GOVERNMENT VERY FAIRLY FAIRLY VERY
REQUIREMENTS DIFFICULT DIFFICULT EASY EASY
1. Labour market regulations 1 2 3 4
2. Ownership regulations 1 2 3 4
3. Regulations relating to licensing 1 2 3 4
4. Restrictions on buying and
1 2 3 4
selling of assets
5. Price control 1 2 3 4
6. Taxation, tax holidays,
1 2 3 4
reclaiming duty, etc
7. Filing of tax returns 1 2 3 4
8. Other (SPECIFY) 1 2 3 4

505 Do you use any facilitators (accountant, tax advisor, lawyer, agent, etc.) to assist you with
government regulations? (FILL IN BOX)

YES 1
NO 2 (SKIP TO 507)

506 What is the annual cost of using these facilitators? Tshs _______________

507 What percentage of senior management’s time per year is spent in dealing with
government officials about the application and interpretation of laws and regulations?
___________%

508 On average, how much do you estimate that time cost your company in the last year,
2007)? ________________Tsh.

509 At what public institution was the greatest amount spent? _______________

510 During the last three years, did you change your mind about a planned investment in
Tanzania Mainland for reason other than finance? (FILL IN BOX)

YES 1
NO 2 (SKIP TO 513)

511 What was the reason(s)? (CIRCLE ALL MENTIONED)

LABOUR MARKET REGULATION 01


OWNERSHIP REGULATIONS 02
REGULATION RELATING TO LICENSING 03
RESTRICTIONS ON BUYING AND SELLING OF ASSETS 04
PRICE CONTROL 05
TAXATION 06
POOR INFRASTRUCTURE SERVICES 07
POOR UTILITY SERVICES 08
POLITICAL CLIMATE 09
OTHER (SPECIFY)________________________ 10

69
512 If you decided against an investment in Tanzania, could you describe the nature of the
investment?
_____________________________________________________________________
_____________________________________________________________________

513 Does your firm import? (FILL IN BOX)

YES 1
NO 2 (SKIP TO 517)

514 How long does it normally take from the time your goods arrive in their point of entry
(e.g. port, airport) until the time you can claim them from the customs?
_______________days.

515 How long should it take officially? _____________days.

516 How much are unofficial costs that are habitually associated with importation as a
percentage of the official fees? _________% of total import official fee.

517 What percentage of total income did your firm spend on security in the year (2007)?
Tshs____________

518 In the last three years, have security costs increased or decreased?
a. no change ___________%
b. increased by ___________%
c. decreased by __________%

519 In the last three years, have you participated in public tenders or contracts? (FILL IN
BOX)

YES 1
NO 2 (SKIP TO 521)

520 What percent of your income comes from public tenders and/or contracts? (FILL IN
BOX)

LESS THAN 1% 1
1 – 5% 2
6 -10% 3
11 – 25% 4
26 – 50% 5
MORE THAN 50% 6
Do not know 9
521 How often are contracts relating to government procurement awarded in a clear and
efficient manner? (FILL IN BOX)

ALWAYS 1
SOMETIMES 2
RARELY 3
NEVER 4

522 Has your firm ever terminated participation in a tender and/or contract in which you had
initially considered? (FILL IN BOX)

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YES 1
NO 2 (SKIP TO 524)

523 What were the reasons? (CIRCLE AS APPROPRIATE)

a. THE COMPLEXITY OF THE PROCESS DUE TO


THE REQUIRED DOCUMENTATION 1
b. THE COST OF THE PROCESS (SPECIFICATIONS, ETC) 2
c. UNOFFICIAL PAYMENTS (COMMISSIONS & BRIBES) 3
d. LACK OF IMPARTIAL FRAME OF COMPETITION 4
e. POSSIBILITY TO OBTAIN CONTRACTS WITHOUT COMPETING 5
f. DID NOT HAVE DIRECT CONTACTS WITH THE RESPONSIBLE PARTIES 6

524 How do you rate the tender process in each one of the following institutions? (Rate in
terms of transparency, honesty, clarity & simplicity in process) (CIRCLE AS
APPROPRIATE)

HIGH LOW QUALITY


QUALITY
a. Private companies 1 2
b. Public corporations 1 2
C. Government Departments 1 2

525 In the last three years regarding government and state corporations tendering processes,
how frequently have the following practices occurred? (CIRCLE AS APPROPRIATE
FOR EACH PRACTICE)

Practice VERY FREQUENTLY RARELY VERY


FREQUENTLY RARELY
01. Bids rigging 1 2 3 4
02. Qualified bidder being disqualified 1 2 3 4
at pre-qualification stage due to
bribery
03. Adjusting specifications in the 1 2 3 4
interest of one company
04. Leakage of clients budget at a 1 2 3 4
tender stage to bidders
05. Modifying the contract terms 1 2 3 4
during the implementation stage
06. Tender process being corrupted by 1 2 3 4
external pressure
07. Bidders agree with each other on a 1 2 3 4
“losers’ fee
08. Collusion by suppliers to fix the 1 2 3 4
minimum price
09. Unjustified complaints 1 2 3 4

526 When firms in your industry do business with the government, what proportion (%) of
procurement contracts involve any unofficial payment? _______% of procurement.

527 How much of the contract value must they offer in additional or unofficial payments to
secure the contract? ________% of the contract value.
71
528 How important are the following factors for enterprises to win government procurement
contract?

CRITERIA VERY SOMEWHAT UNIMPORTANT


IMPORTANT IMPORTANT
01. Qualification/competitiveness 1 2 3
02. Connections 1 2 3
03. Making unofficial payments 1 2 3

PART 6. CORRUPTION IN THE PUBLIC SECTOR

601 In order of ranking what are the three main causes of corruption in the public sector?

1. ______________________________________________
2. ______________________________________________
3. ______________________________________________

602 How common is corruption in the public sector? (FILL IN BOX)

NON EXISTENT 1
RARE 2
SOMETIMES 3
COMMON 4
EXTREMELY COMMON 5
DO NOT KNOW 6

603. To what extent do you agree with the following statements (CIRCLE AS
APPROPRIATE)?

VERY FREQUENTLY RARELY VERY


FREQUENTLY RARELY
01. If a firm pays the required additional
payment to a particular official, another
government official will subsequently
require and additional payment for the 1 2 3 4
same service
02. If a firm pays the required
“additional payments”, the service is 1 2 3 4
usually also delivered
03. If a government agent acts against
the rules I can usually go to another
official or to his supervisor and get the
correct treatment without recourse to 1 2 3 4
unofficial payments

72
604. Please, compare the levels of corruption in 2005 with today (2008) (CIRCLE AS
APPROPRIATE):

MUCH WORSE WORSE BETTER MUCH BETTER


NOW 1 2 3 4

605. How many companies give bribes to win public sector contracts (CIRCLE AS
APPPROPRIATE)?

ALMOST ALL MOST A FEW NONE OF THE


DON’T KNOW
COMPANIES COMPANIES COMPANIES COMPANIES
2005 1 2 3 4 5
NOW
1 2 3 4 5

606. What occurs in the majority of cases where someone makes unofficial payments to a
public official? (FILL IN BOX)

A GOVERNMENT AGENT ASKS FOR A PAYMENT 1


THE BUSINESSMAN OFFERS PAYMENT OF HIS OWN ACCORD 2
IT IS KNOWN BEFOREHAND HOW TO PAY AND HOW MUCH
TO PAY, SO IT IS NOT DISCUSSED 3
THERE ARE BROKERS WHO FACILITATE THE PROCESS 4

607. To what extent have the following forms of corruption affected your business? (CIRCLE
AS APPROPRIATE FOR EACH OBSTACLE)

OBSTACLE NO MINOR MODERATE MAJOR


OBSTACLE OBSTACLE OBSTACLE OBSTACLE
01. Sale of parliamentary votes on laws to
private interests 1 2 3 4
02. Sale of presidential decrees to private
interest 1 2 3 4
03. Central Bank mishandling of funds 1 2 3 4
04. Sale of court decisions in criminal cases
1 2 3 4
05. Sale of court decisions in arbitration
cases 1 2 3 4
06. Contributions paid by private interests to
political parties & election campaigns 1 2 3 4
07. Patronage – public officials hiring their
friends & relatives to official positions 1 2 3 4
08. Bribes paid to public officials to avoid
taxes & regulations. 1 2 3 4

73
608. Please indicate how frequently the state intervenes in the below stated aspects of your
firm: (CIRCLE AS APPROPRIATE)

ALWAYS SOMETIMES NEVER DON’T KNOW


01. Investment 1 2 3 4
02. Employment 1 2 3 4
03. Sales 1 2 3 4
04. Prices 1 2 3 4
05. Mergers 1 2 3 4
06. Dividends 1 2 3 4
07. Wages 1 2 3 4
609. In which of the following transactions has your company been asked for a bribe by
anyone in government in the past? (CIRCLE AS APPROPRIATE FOR EACH
TRANSACTION)

2004 2005 2006 2007 2008 None


01. Local government permits 1 2 3 4 5 6
02. Payment of taxes 1 2 3 4 5 6
03. Clearance of goods from the ports 1 2 3 4 5 6
04. Health inspection 1 2 3 4 5 6
05. Water supply 1 2 3 4 5 6
06. Power supply 1 2 3 4 5 6
07. Judicial issues 1 2 3 4 5 6
08. Passing of bills in parliament 1 2 3 4 5 6
09. Others (SPECIFY) 1 2 3 4 5 6

610. Please tell me how effective the following are in combating corruption in Tanzania
(CIRCLE AS APPROPRIATE FOR EACH INSTITUTION).

Institutions VERY EFFECTIVE INEFFECTIVE VERY


EFFECTIVE INEFFECTIVE
01. Courts 1 2 3 4
02. Attorney General 1 2 3 4
03. Police 1 2 3 4
04. Media 1 2 3 4
05. Faith-Based organizations 1 2 3 4
06. Non government organizations 1 2 3 4
07. Development Partners 1 2 3 4
08. Prevention and Combating
1 2 3 4
Corruption Bureau (PCCB)
09.Parliament 1 2 3 4
10. Ethics Commission 1 2 3 4
11. Legal and Human Rights
1 2 3 4
Commission

74
12. Permanent Commission of
1 2 3 4
Inquiry
13. Public Accounts Committee 1 2 3 4
14. Ministry of Justice and
1 2 3 4
Constitutional Affairs
15. Others (SPECIFY) 1 2 3 4

PART 7. CORRUPTION IN THE PRIVATE SECTOR

701. To what extent are the following constraints of financing an obstacle to


your firm’s financing needs? (CIRCLE AS APPROPRIATE FOR EACH
OBSTACLE)

Obstacle NO MINOR MODERATE MAJOR


OBSTACLE OBSTACLE OBSTACLE OBSTACLE
01. High interest rates 1 2 3 4
02. Lack of access to long
term loans 1 2 3 4
03. Collateral requirements 1 2 3 4
04. Bank paperwork 1 2 3 4
05. Inadequate credit
information 1 2 3 4
06. Special connections 1 2 3 4
07. Banks lack money to lend
1 2 3 4
08. Lack of access to
specialized export finance 1 2 3 4
09. Lack of access to non-
bank equity 1 2 3 4
10. Lack of access to lease
finance 1 2 3 4
11. Lack of access to foreign
banks 1 2 3 4
12. Corruption of bank
officials 1 2 3 4

702. On average, what percentage of revenues do firms like yours typically pay per annum in
unofficial payments to other officials in the private sector? (FILL IN BOX)

0% 1
LESS THAN 1% 2
1 – 1.99 % 3
2 – 9.99% 4
10 – 12% 5
13 – 25% 6
OVER 25% 7

75
703. Please, compare the levels of corruption in the private sector in 2005 with today.
(CIRCLE AS APPROPRIATE):

MUCH WORSE WORSE BETTER MUCH BETTER

NOW 1 2 3 4

704. Compare 2005 with now, how many companies give bribes to win private sector
contracts? (CIRCLE AS APPROPRIATE)

2005 2008
01. Almost all companies 1 1
02. Most companies 2 2
03. A few companies 3 3
04. Hardly any company 4 4
05 None of the companies 5 5

705. In your line of business, how many companies always demand and issue receipts, keep
one set of accounts, and pay taxes honestly?

ALWAYS ALWAYS KEEP ONE SET PAYS TAXES


DEMAND ISSUE OF ACCOUNTS HONESTLY
RECEIPTS RECEIPTS
Almost all companies 1 1 1 1
Many companies 2 2 2 2
A few companies 3 3 3 3
Hardly any company 4 4 4 4

706. Which private sector industries have: (CIRCLE AS APPROPRIATE)

a. Good reputation for not engaging in corrupt practices


b. Bad reputation for engaging in corrupt practices

Industry GOOD REPUTATION BAD REPUTATION


Banking finance and securities 1 2
Food and beverage production 1 2
Electronic and appliances 1 2
Manufacturing (general) 1 2
Education 1 2
Food and beverage 1 2
Medical services 1 2
Services (general) 1 2
Socially-oriented institutions 1 2
Accounting and consultancy 1 2
Automobile 1 2
Foreign companies 1 2

76
Telecommunications 1 2
Agriculture 1 2
Medical (pharmaceutical) 1 2
Courier, cargo & handling 1 2
Media and publishing 1 2
Oil and gas 1 2
Real estate 1 2
Brokerage 1 2
Transport 1 2
Contractors 1 2
Construction 1 2
Mining and quarrying 1 2
Furniture 1 2
Industrial (general) 1 2
Insurance 1 2
Manufacturing (chemical) 1 2
Manufacturing (consumer goods) 1 2
Retailing and merchandising 1 2
Services (hotel) 1 2
Logging and lumber 1 2
Utilities (power and water) 1 2
Transportation 1 2
None 1 2

PART 8: ANTI-CORRUPTION STRATEGIES

801 If corruption in the public sector in Tanzania were to be reduced by half, what would be
the expected change in your company’s net income? (FILL IN BOX)

POSITIVE UP TO 5% 1
6 – 10% 2
11 – 20% 3
21 – 30% 4
31 – 50% 5
51 +% 6
ZERO CHANGE 7
NEGATIVE CHANGE 8
DON’T KNOW 9

77
802 How much of your company’s net income would you be willing to pay to fund a
Programme that would drastically reduce public sector corruption? (FILL IN BOX)

0% 1
Less than 1% 2
1 – 2.99% 3
3 – 5.99% 4
6 – 9.99% 5
10% and over 6

803 Is your company interested in the following initiatives to help combat corruption?

DEFINITELY PROBABLY NOT


INTERESTED INTERESTED INTERESTED AT
ALL
a. Donating funds 1 2 3
b. Volunteering staff to join a
government project monitoring group
1 2 3
on company time
c. Paying for expenses 1 2 3
d. Volunteering staff members to join a
government agency’s tender committee
1 2 3
on company time

804 Please state five government projects that your company would be interested to monitor:

1. _______________________________
2. _______________________________
3. _______________________________
4. _______________________________
5. _______________________________

805 Please indicate government agencies whose tender committees your company would be
interested in joining:

i. ______________________________________
ii. ______________________________________
iii. ______________________________________
iv. ______________________________________
v. ______________________________________

806 Any comments/views on the fight against corruption in Tanzania?

________________________________________________________________________
________________________________________________________________________

78
________________________________________________________________________
________________________________________________________________________

THANK YOU FOR YOUR COOPERATION.

Finish time (adopt 12 hour system)

INTERVIEWER’S COMMENTS

1. How did you find the interview, was it positive or negative? CIRCLE AS
APPROPRIATE

VERY POSITIVE 1
SOMEHOW POSITIVE 2
NEGATIVE 3

2. How did you find the respondent? Do you think he/she was sincere or what?
CIRCLE AS APPROPRIATE.

VERY SINCERE 1
SOMEHOW SINCERE 2
NOT SINCERE 3

3. Any other comments?


____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________

SUPERVISOR’S COMMENTS

____________________________________________________________________
____________________________________________________________________
____________________________________________________________________

79