The Chanzo Morning Briefing – November 26, 2021.

In our briefing today: Samia concerned not enough liquidity is getting into private sector from banks; PCCB: Over 1000 cases investigated and completed; Tanzania in preparation for its digital currency; AFDB Group issues Sh268 billion loan for road construction.
The Chanzo Reporter26 November 20215 min

Dar es Salaam. Good morning! The Chanzo is here with a rundown of major news stories reported in Tanzania on Thursday, November 25, 2021.

Samia concerned not enough liquidity is getting into private sector from banks

President Samia Suluhu has expressed dissatisfaction with the amount of financing that is getting into the private sector from Tanzania’s financial institutions. 

Speaking during the 20th Conference of Financial Institutions (COFI), President Samia highlighted how financial institutions have been competing on government securities while lending to the private sector remains low.

“I have been curious about the performance of the government security market, the summary of the auction results reveals substantial increase and oversubscription in risk free government securities, and I’m informed [that] the major players are financial institutions, ” the Head of State noted.

President Samia highlighted how the annual growth of credit to the private sector continues to be low at 4.3 percent and urges financial institutions to increase lending to the private sector.

“There is nothing wrong with financial institutions participating in financing of the government budget but the oversubscription is a signal that financial institutions do have significant liquidity,” she pointed out. “This liquidity can also be directed to lend to the private sector.”

As of September 2021, government domestic debt stood at Sh17 trillion, whereas Sh6.1 trillion comes from commercial banks, making about 36.2 percent. Lending to the private sector picked up slightly in September to 4.6 percent from 3.2 percent with a value of about Sh5 trillion.

Bank of Tanzania (BoT) has rolled out various measures to stimulate lending to the private sector including setting up a special loan amounting to Sh1 trillion to lend banks at 3 percent annual interest, reduction of risk weight on loans and reduction of statutory minimum reserve requirement

PCCB: Over 1000 cases investigated and completed

Tanzania’s anti corruption watchdog, Prevention and Combating of Corruption Bureau (PCCB) reported on Thursday to have investigated a total of 1053 cases over a one year period between July 2020 and June 2021. 

PCCB’s boss Salum Radhid Hamdun revealed this yesterday during the annual reflection session held in the capital Dodoma.

“A total of 1053 cases were investigated and completed, whereas 339 were submitted to the DPP for authorization to take the accused to Court,” Mr Hamdun said, adding that over 542 cases were registered in court of which the government won about 345 cases.

PCCB also reported to have saved about Sh29.3 billion during various operations of which Sh11.2 billion was confiscated in form of cash and properties while the rest about Sh18 billion PCCB was able to stop squandering of those resources. 

Tanzania in preparation for Its digital currency 

The Bank of Tanzania (BoT) announced on Thursday that it has started working on its own Central Bank Issued Digital Currency, one month since Nigeria introduced its  first Central Bank backed digital currency in Africa, eNaira.

Speaking during the Financial Institutions Conference, BoT Governor Prof. Florens Luoga highlighted the impact of digital technology to the financial sector, saying digital technology development in the financial sector has led to the rise of Central Bank Digital Currency (CBDC) and cryptocurrency. 

“Several Banks are at different stages of launching their own CBDC, for example, the Central Bank of Nigeria has recently launched eNaira making it the first Bank in Africa to launch CBDC,” said Prof Luoga, expressing the intention of having Tanzania’s CBDC in the near future. 

To that end, Prof Luoga shared the roadmap toward Tanzania’s CBDC, saying: “In making sure our country is not left behind, Tanzania Central Bank has started preparations towards having its own CBDC. The preparations include capacity building of experts, raising awareness to stakeholders and research.”

Globally, Nigeria and Bahamas are the only countries that has so far made their CBDC fully open to the public. There are more than 15 countries that have piloted digital currency in their zones including China, South Korea and the Eastern Caribbean Currency Union (Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines).

Tanzania’s interest in digital currency was sparked by President Samia Suluhu Hassan on June 13, 2021, when she tasked the Central Bank to study digital currencies and cryptocurrency so as to make sure Tanzania is not left behind in the ongoing revolution in the financial sector.

CBDC has emerged as the government solution to the growing interest in cryptocurrencies which are essentially not controlled by government or specific individuals. 

On the question of cryptocurrency, as other Central Banks, Prof Luoga expressed hesitation.

“Regarding cryptocurrencies the Central Bank has warned the public on risks involved in engaging in those currencies,” using the example of how El Salvador is being challenged by the World Bank, IMF and the like after adopting Bitcoin as its legal tender.

AFDB Group issues Sh268 billion loan for road construction 

The African Development Bank Group has issued a sh. 268.18 billion loan for the construction of Mnivata-Newala-Masasi road. 

The signing ceremony was held in Dar es Salaam yesterday between Permanent Secretary Ministry of Finance and Planning, Emmanuel Tutuba and the AFDB’S Deputy Director General, East Africa Region, Abdul Kamara.

The Mnivita-Masasi road is part of the 210km network that runs from Mtwara to Masasi, the first section of the road Mtwara to Mnivata about 50km was built by government internal resources.

This is it for today and we hope you enjoyed our briefing. Please consider subscribing to our newsletter (see below) or following us on Twitter (here) as that is the best way to make sure you do not miss any of these briefings.  And in case you have any questions or comments, please consider dropping a word to our editors at editor@thechanzo.com

 

The Chanzo Reporter

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