690. Regarding microfinance, the CSAR notes that the National Microfinance Policy (NMP) was adopted in 2000 and implemented in 2001 to harness microfinance potential for industrial development. From a corporate governance perspective, the 2006 Banking and Financial Institutions Act provides a general framework for the governance of banks and other financial institutions. The Act stipulates some conditions disqualifying a person from being appointed a bank director and the timeline for availing information to stakeholders on year end. 691. The CSAR reveals that competitive markets are usually an important mechanism for encouraging good corporate governance. In Tanzania, economic liberalisation policies introduced in the early 1990s have increased market competition. Government, for its part, continues to establish institutions for the purpose of ensuring the development of a sound market economy. It is committed to a fair competition policy in order to enhance freedom of trade, choice by consumers, and fair access to markets. In this regard, the country enacted the 2003 Fair Competition Act and the Fair Trade Practices Act of 2004. These laws regulate the conduct of companies in the market and promote market competition. They are administered by the Fair Competition Commission based in the Ministry of Trade, Industry and Marketing. 692. With regard to small-scale enterprises and the informal sector, the CSAR notes that the Tanzania Government recently recognized the economic and social value of the informal sector and its critical role in combating poverty. The Tanzanian Government believes that one third of GDP originates from the small and medium enterprise (SME) sector. SMEs operating in the informal sector alone consist of more than 1.7 million businesses, engaging about 3 million people or about 20 per cent of the Tanzanian labor force. Government estimates that there are about 700,000 new entrants into the labor force annually. A large segment of this labor force is absorbed by the informal sector. As a major provider of jobs, the sector does contribute to the transfer of knowledge from one generation to another. 693. The CSAR states that prior to Tanzania’s economic liberalisation, the state dominated the economy. The private sector played an insignificant role because of nationalisation policy. For this reason, the domestic private sector in Tanzania is relatively small and in its infancy, when compared to countries like Kenya where the private sector was encouraged to grow and the state played a facilitative role for several decades. Tanzania, therefore, faces many challenges in promoting private sector development. Ongoing government reforms in the corporate sector are, in many ways, geared at nurturing a burgeoning corporate business and industrial sector. 694. In countries that encouraged private sector growth, one can easily see an appreciable growth in private companies. For example in Kenya, a neighbouring country, four of its companies - Kenya Airways, East Africa Breweries, Kenya Commercial Bank and Nation Media Group - are listed on the Dar es Salaam Stock Exchange. Tanzania has no company cross-listed on a stock exchange in the region. Capitalisation through the stock exchange is very low but growing due to deliberate state-initiated efforts to facilitate growth. 695. The private sector in Zanzibar is also in a state of infancy and is characterised by small enterprises. It is noted that Zanzibar is a relatively small island economy with very few large-scale business undertakings. Many enterprises are firms employing 1-49 workers, an estimated 88 per cent of the corporate sector workforce, compared to Dar es Salaam’s 51 per cent and 59 per cent in other parts of Tanzania’s Mainland. 696. On the investment front, the CSAR notes that Tanzania has created very generous conditions in order to attract foreign capital investments. It further notes that Tanzania encourages foreign investors to plough back their earnings into the manufacturing and other targeted sectors. Big foreign-owned companies such as Ashanti Gold, Barrick Gold Mines, De Beers and starred new hotels are not listed on the Dar es Salaam Stock Exchange (DSE). Originally wholly government-owned banks - the National Micro-finance Bank (with branches all over the country) and the National Bank of Commerce with foreign majority shareholding - were not listed on the DSE. Corporate governance has a long way to go to make a significant impact on national (domestic) economic growth. A major challenge is creating the conditions for the companies referered to above to participate on the DSE. 697. Finally, the CSAR reveals that a generous corporate investment climate was extended to foreign and local private investors. However, this is prone to abuse and investors have stayed in the country for years without paying adequate taxes, amid allegations of manipulating tax and investor-related incentives. 143