Tanzania Foreign Investment News (Page 34)

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By LUKE ANAMI

Many programmes of the East African Community (EAC) have stalled in the past few months due to a cash crunch blamed on non-remittance of dues amounting to about $40 million by partner States.

By press time, some of the regional body’s workers were yet to be paid their May 2024 salaries, and a number of organs and institutions had suspended their activities due to lack of budget.

The East African Court of Justice (EACJ), the region’s legal watchdog, announced that it was suspending sessions due to financial constraints.

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TANZANIA — THE private sector credit growth has been growing at a decreasing rate since quarter four last year, but still remained in the Bank of Tanzania (BoT) targets.

The latest monthly economic report of the Bank of Tanzania (BoT) shows that credit growth to the private sector slowed to 16.6 per cent in the year ending April compared to 22.9 per cent posted in the corresponding period last year.

According to the central bank report, private sector credit growth started a downward trend in September last year (21 per cent) to April this year (16.6 per cent).

The Head, Research & Financial Analytics at Alpha Capital said yesterday that the private sector credit growth is still growing, rather at a decreasing rate, averaging 17 per cent in quarter one this year from 23 per cent in quarter three last year, as per the Monetary Policy Report by the BoT.

The slowdown in private sector credit growth has been in line with monetary policy implementation, gauging the growth towards a set target of 16.4 per cent, according to the Monetary Policy Statement published in February 2024.

Private sector credit growth and aggregate money supply growth have remained above target for the last two years, prompting the central bank to adopt the less accommodative policy in 2022.

The policy was finally abandoned in the end of 2023 as growth of money supply approached within the central bank’s target, albeit remained slightly afloat.

Vertex International Securities Research and Analytics Manager Beatus Mlingi said the BoT’s economic reviews from January to April 2024, highlight a concerning trend of declining credit to the private sector.

Several factors contribute to this decline, each with significant implications to the Tanzania’s economy.

One primary reason for the reduction in credit is the tightening of monetary policy by the BoT.

To control inflation, the central bank decided to increase the Central Bank Rate from 5 per cent in the first quarter of this year to 6 per cent in the second quarter.

This increase in interest rates makes borrowing more expensive, thereby reducing the demand for credit among private sector businesses.

As a result, companies find it more challenging to secure the funds needed for expansion and operations.

Another contributing factor is the increased risk aversion among banks, particularly tier 2 and lower-tier banks.

Rising non-performing loans (NPLs) have led these banks to adopt stricter lending criteria.

When banks perceive lending to the private sector as riskier, especially in uncertain economic conditions, they become more cautious, further restricting credit availability.

Additionally, new regulatory measures aimed at improving the banking sector’s stability might inadvertently tighten credit conditions.

The BoT’s risk assessment parameters for banks can constrain their ability to lend, as they must adhere to stricter regulatory requirements to maintain stability.

The implications of this decline in credit availability for Tanzania’s economy are significant.

Reduced credit hampers business expansion and investment, leading to slower economic growth. The private sector, which is a crucial driver of economic activity, relies heavily on credit for capital expenditures and operational funding.

Without adequate credit, businesses may cut back on hiring or even lay off employees to manage costs, leading to higher unemployment rates and reduced household incomes.

Furthermore, financial constraints on businesses can lead to a decline in consumer confidence, resulting in lower consumer spending.

This reduction in spending can further slowdown economic activity, creating a negative feedback loop that exacerbates economic challenges.

Long-term investments in infrastructure, technology and other productive assets may also be postponed or canceled, reducing the economy’s productive capacity and growth potential.

An economist-cum-investment banker, Dr Hildebrand Shayo said yesterday that some commercial lenders have funded mega and long term projects which take long time to start operations.

“Some commercial lenders have been financing mega projects which take a long time to commence production thus causing delays in loan payment,” he noted.

Dr Shayo said that some private sector players implementing government projects have been experiencing payment delays thus destabilising liquidity stance of the lenders.

He said also the considerable part of the non-performing loans that most commercial lenders are experiencing is from the private sector players.

Source: allafrica.com

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DAR ES SALAAM — THE Tanzania Digital Inclusion Project (TADIP) has excelled at the recently concluded World Summit on Information Society (WSIS 2024 PRIZES) held in Geneva, Switzerland.

Implemented by the Internet Society Tanzania Chapter (ISOC-TZ) in Kigamboni District, Dar es Salaam, the project recorded victory in the category of Access to Information and Knowledge.

The award was received by ISOC-TZ president Nazar Kirama, who was accompanied by Minister for Information, Communication and Information Technology, Mr Nape Nnauye.

Mr Nape thanked Tanzanians for their cooperation and vowed that no Tanzanians would be left behind in digital inclusion. Mr Kirama expressed happiness for winning the award, stating that it was a positive gesture towards the digital inclusion journey.

“I am thankful to receive this award alongside the responsible minister. It is my hope that Tanzania will continue to improve in digital inclusion,” Mr Kirama stated.

Explaining about the competition, Mr Kirama mentioned that their project was among 1,049 projects from different countries that entered the competition in the first round.

After screening, 369 projects proceeded to the second and final round, in which the Tanzanian project was among them.

According to Mr Kirama, during the summit’s climax on Tuesday this week, their project was declared the winner in the ‘Access to Information and Knowledge’ category.

The TADIP, initiated in 2020, is a 10-year project aimed at closing the digital divide in Tanzania by connecting the unconnected and underserved citizens in rural and urban centres. The project will connect 32.44 million people and train 6 million youths and women on digital literacy.

It is envisioned that 1,500 WiFi School InfoHubs, 262,260 WiFi Community InfoHubs, and 12,437 WiFi Super InfoHubs will be established throughout Tanzania to connect the unconnected millions.

The WiFi Super InfoHubs will also include a Climate Monitoring Focal Point (CCM-FP), involving students and youths in measuring things like carbon emission levels and air quality. Recently, Minister Nape made significant announcements shedding light on Tanzania’s vision for digital transformation and its role in shaping a sustainable and inclusive future.

He emphasised the transformative power of digital technology and the commitment to leveraging it for the benefit of all citizens.

The Minister stressed the importance of integrating digital solutions into key sectors such as education, healthcare, agriculture and governance to enhance efficiency, transparency and accessibility.

One of the key announcements made by the Minister was the government’s ambitious Vision 2025, aiming to position the country as a digital leader on the global stage.

This comprehensive vision includes strategic initiatives to improve digital infrastructure, promote innovation and entrepreneurship, enhance digital literacy, and ensure the availability of affordable and reliable internet connectivity nationwide.

Mr Nape emphasised the need to bridge the digital divide, recognising that access to digital tools and connectivity is essential for individuals and communities to fully participate in the digital economy.

The project is at aimed higher-connecting citizens to meaningful internet, creating community network innovation hubs, providing digital skills, digital adult education, e-learning skills for teachers and STEM trainings for girls to reduce digital gender gap.

Source: allafrica.com

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Temeke Municipal Counci Mayor, Abdallah Mtinika (in black coat) handing over a gas cylinder to one of the beneficiaries of gas cylinders donated by Tanzania Cigarette Public Limited Company ( TCC Plc) to women entreprenuers from Temeke.

The donation, is part of TCC’s countrywide campaign to distribute over 2000 gas cylinders to women entrepreneurs as a way of encouraging the use of clean cooking energy.

At the centre is TCC’s Corporate Affairs and Communications Director, Patricia Mhondo and other dignitaries.

Source: allafrica.com

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