Naibu Waziri Mkuu na Waziri wa Nishati, Dk Doto Biteko ameliagiza Shirika la Umeme Tanzania (Tanesco), kuhakikisha Mkoa wa Kigoma unaunganishwa kwenye gridi ya Taifa ifikapo mwisho mwa mwaka 2024.Continue Reading
The Sacco Societies Regulatory Authority (Sasra) recently published its annual supervision report on operations of 357 deposit-taking and large non-withdrawable deposit-taking saccos.
Sasra chief executive Peter Njuguna spoke to the Business Daily on the state of the industry, including steps being taken to address sticky pain points such as loss of deposits, governance lapses, non-remittances and continued lack of insurance for deposits.
A loan to deposit (LTD) ratio exceeding 100 percent in the Sacco industry is inherent in the Kenya Sacco business model where most members save to improve their borrowing ability while also earning a return on the deposits. Hence, it is not a new phenomenon.
This is the reason the authority has proposed policy and legal amendments to effect the deposit guarantee fund and facilitate shared services amongst saccos to enhance savings mobilisation capabilities with safety as a central proposition.
Secondly, while deposits form the bulk of loan collateral, saccos have increasingly expanded collateral choices including registrable properties such as motor vehicles, land and buildings.
Thirdly, in lending, high consideration is placed on repayment ability hence the reason that non-performing loans ratio (NPLs) has remained below 10 percent in spite of the difficult economic situation.
Fourthly, loan contracts are member-centric hence LTD ratio would not be an appropriate indicator for quality of loan security in a financial institution.
Finally, the capital reserves form part of the loanable funds depending on the asset structure and policies of a Sacco and this explains why the external borrowing as a source of funding loans has remained at about three percent on average. Therefore, when deposits and reserves are put together it exceeds the loan at over 112 percent ratio.
Dormant members as a proportion of total members hit a peak of 25 percent during [the first year of Covid-19 in 2020 and it has averaged 20 percent since then, reaching 21 percent in 2023.
This in our view is due to the nature of the economic situation where Sacco members are unable to sustain monthly or regular savings with the Sacco due to diminished household incomes and sustained high cost of living.
This is evident from the sustained high proportion of loans to members for education and consumption financing over the last three years. These are social sectors that in practice should be funded from household earnings and not borrowed funds.
The traditional Sacco business model is that the value proposition is partly based on borrowing as a multiple of non-withdrawable deposits and the return on deposits in the Sacco.
This has the unintended consequences of permanently having an LTD ratio greater than 100 percent as saccos have increased loan amounts to multiple of five to retain members as the liquidity rises.
In itself, this is good from a financial intermediation viewpoint since it addresses the challenge of access to credit to households and micro-small and medium sized enterprises in the economy. But it is a concern from a financial stability viewpoint.
Saccos have invested heavily in payment solutions to make it convenient and efficient in cashing in and out; and thus enhancing deposit mobilising capabilities.
On the policy front, we have made proposals to address the safety concerns through operationalisation of the deposit guarantee fund and a structured management of liquidity in the Sacco industry akin to what happens in other deposit taking institutions world-wide.
SASRA mandate places good governance of saccos at the centre of its work. This is the reason that Sasra, beyond its administrative role, has powers to remove officers from office; and has collaborated with other agencies like Directorate of Criminal Investigations to take up suspected criminal offenses for investigation and prosecution.
This is important in affirming that there are consequences for bad governance in saccos. In addition, Sasra has continued to issue guidelines on good governance practices and has put before Parliament amendments to strengthen the criteria for determining the suitability of officers in Saccos.
Moreover, saccos employ a unique business and ownership model, where members are indeed the owners of the saccos and equally the customers who trade with their entity.
Their role in entrenching good governance should therefore be strengthened through appropriate education initiatives and active participation in the governance processes, which Sasra is facilitating, together with other national cooperative organisations.
DGF is a major pillar in enhancing financial stability of the Sacco industry and the proposed amendments to the Sacco Societies Act to enable its operationalisation are under consideration in the office of the Cabinet secretary.
This is a priority policy agenda of the government, and we expect that it will be concluded in this fiscal year.
The non-remittance challenge has persisted to the detriment of the affected saccos. While Cooperative Societies Act (Section 35) provides a legal mechanism on non-remittances; it is certainly not adequate.
Sasra is encouraging saccos to look at this as a business strategy where members remit directly through the front office services activity (Fosa), or direct debit as opposed to having the employer act as a collecting agent.
This calls for saccos to invest in appropriate capacity in payments processing and member education as non-remittance is becoming an existential threat to some saccos.
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President Samia Suluhu Hassan has firmly defended Tanzania’s sovereignty, emphasising that the country is guided by its constitution, laws and traditions.
The Head of State was responding to concerns by a section of foreign envoys regarding the recent abduction and killing of Ali Kibao, a member of the opposition Chadema party.
In a bold statement, President Samia did not mince words as she reminded members of the international community, including diplomatic envoys in Tanzania, that the nation is fully capable of managing its internal affairs without external interference.
“We are not here to be instructed on what to do in our country. Tanzania has its constitution, laws and traditions that guide us,” President Samia asserted as she addressed the Senior Police Officers’ General Meeting held alongside the 60th anniversary of the force in Kilimanjaro Region.
The President’s remarks follow a series of tragic incidents that have shaken the nation, including the high-profile murder of a political figure and ongoing killings linked to superstition, witchcraft and political or economic interests.
In her address, President Samia assured the nation that the government had initiated thorough investigations into the killings, underscoring that such actions are in line with international norms.
She referenced similar incidents in developed countries, pointing out that the response of any responsible government, including Tanzania’s, is to deploy security agencies to conduct investigations.
“When we hear of a politician in a developed country surviving two assassination attempts, what does their government do? They immediately launch investigations. This is no different here in Tanzania,” the President said, emphasising that her administration will leave no stone unturned in uncovering the truth behind these tragic events.
Stressing the importance of human life, President Samia delivered a powerful reminder to the nation: life is irreplaceable and the protection of Tanzanian lives is a fundamental right enshrined in the Constitution.
“The life of every Tanzanian is protected by Article 14 of our Constitution, which clearly states that every person has the right to life and to be protected by the law,” she emphasised.
She appealed to all public officials, particularly those in leadership roles, to remain fully committed to their constitutional oaths.
“Those who serve in leadership positions must remember their oath to protect the people and uphold the rule of law. Our responsibility is to safeguard the lives and rights of all Tanzanians.”
President Samia also responded to recent diplomatic statements from international envoys expressing concern over the killing of political leaders.
While she acknowledged their expressions of sympathy, she firmly reminded them of Tanzania’s independence and sovereignty.
“Let me remind those expressing their concerns that Tanzania, as a sovereign nation, knows how to manage its own affairs. We have never directed our ambassadors abroad to interfere in their countries’ internal matters when similar incidents occur,” she said.
Referring to the Vienna Convention on Diplomatic Relations of 1961, President Samia urged diplomats to respect established protocols and refrain from overstepping their boundaries.
“Diplomatic relations must be conducted with respect and in accordance with international conventions. We appreciate compassion, but Tanzania will always act according to its own constitution and laws.”
In a call for unity and collective responsibility, President Samia highlighted the government’s unwavering commitment to ensuring peace and security for all Tanzanians.
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As Commander-in-Chief of the Armed Forces, she assured the public that all necessary measures are being taken to prevent further loss of life and bring the perpetrators of violence to justice.
“Our constitution commands us to protect the lives of our citizens and we are bound by that oath. No one feels the pain of these killings more than us and we will not rest until justice is served,” she said.
As the country navigates this period of uncertainty and grief, President Samia called upon Tanzanians to stand together.
She urged leaders across all sectors, including political, religious and civil society, to exercise their influence responsibly and contribute to the promotion of peace.
“It is our collective responsibility to ensure that Tanzania remains a place where every citizen feels safe. To achieve that, we must all be accountable to the positions we hold and the duties we have sworn to uphold,” the President concluded.
Source: allafrica.com
President Samia Suluhu Hassan has issued key directives to the police force aimed at strengthening public safety and addressing the growing crime rates in Tanzania.
To combat the growing threat of financial fraud, particularly online scams, President Samia pointed to the increase in digital transactions as a key driver for new criminal methods.
She revealed that in 2023 alone, over 5bn/- was lost to fraud, with the police recovering only 288m/-.
President Samia urged the police force to develop a comprehensive strategy to tackle cyber fraud as the government shifts towards a cashless economy.
“It is essential for the police to have a strategy to combat online fraud and we must collaborate with the relevant ministries to equip our police force with the tools needed to address this issue,” she said.
President Samia also urged the police to enhance road safety measures, following alarming statistics from the National Bureau of Statistics (NBS) that show a rise in road fatalities between 2022 and 2023.
According to the NBS, road accidents increased slightly from 1,720 in 2022, which claimed 1,545 lives, to 1,733 in 2023, resulting in 1,645 deaths. This brings the total number of fatalities over the past two years to 3,190.
“The rise in road accidents is largely attributed to human error, poor vehicle conditions and inadequate infrastructure. These issues must be addressed urgently,” President Samia said.
She noted that 37.9 per cent of last year’s accidents were caused by drivers’ negligence, 21.2 per cent by speeding and 13 per cent by careless motorcycle riders–all factors within the police’s control to rectify.
The president also said there is a need for the police to shift their focus on criminal investigations and control mechanisms and adapt to technological advancements.
She cited the NBS report on cybercrime, which saw a 36.1 per cent increase from 1,006 cases in 2022 to 1,369 by December 2023. Crimes such as spreading false information, distributing pornography images and online harassment were on the rise.
“With the growing influence of Artificial Intelligence (AI) and digital platforms, the police must be well-prepared to tackle crimes related to misinformation, especially as we approach local and general elections,” President Samia said.
She highlighted the potential rise in politically motivated cybercrime, including defamation, hate speech and false allegations.
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“We are not advocating for the shutdown of social media or silencing citizens’ opinions. However, we cannot turn a blind eye to crimes committed online. Crime is crime, whether it happens online or offline and the same legal measures should be applied,” she added.
As Tanzania gears up for the upcoming local government and general elections, President Samia stressed the importance of maintaining national unity and security throughout the election periods. She urged the police to remain vigilant before, during and after the elections to ensure peace and stability.
In her directives to the Ministry of Home Affairs and the police, the president called for the continued implementation of recommendations to strengthen the criminal justice system, particularly those that do not require legislative changes or significant budget increases.
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She further urged the police to utilise Information and Communication Technology (ICT) to improve efficiency and crime control.
Among the initiatives she highlighted were the “safer city” projects, mandatory vehicle inspections to reduce road accidents and highway patrols. She stressed the importance of building the capacity of officers to implement these projects effectively.
Minister for Home Affairs, Hamad Masauni, expressed satisfaction with the police force’s progress, noting that many of the directives given by President Samia in the previous year’s meeting had been successfully implemented.
Source: allafrica.com
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