While certain quarters may understandably see those funds as a ‘thanksgiving’ effort by the government to the people for having voted for the ruling party in the last General Election, it is likely that more serious considerations animate supporters of the stalled project.
One such view is that it is an effective and sustainable method of alleviating poverty, particularly in that the money involved was meant to stand as a revolving fund.
A case at times cited is Thailand, where the government created a revolving fund from which village level entrepreneurs were issued with loans. It is said to have been the most effective such fund the world over, with millions moving out of poverty.
In Bangladesh it wasn’t a village level revolving fund but Grameen Bank – a bank for the poor, relying on peer pressure to ensure that loans were returned, and it did wonders.
But it must also be pointed out that the Marshall Plan totalling 50 billion dollars given by the US government to post-war European countries was a revolving fund too.
This is not what happened the first time that a village-level loan scheme was created by the Tanzanian government, the so-called JK billions. That year, 2006, was the most inflationary year in the mid-2000s.
Chances that the 50m/- per village in the form of supposed an entrepreneurs fund or empowerment funds to be managed as in the successful foreign cases are scant. It would make sense to devise a surefire way of managing the cash involved.
Mass empowerment schemes, whether via government-initiated loan schemes as in Thailand or a universally accessible basically women’s bank as in Bangladesh or the Marshall Plan which focused on central banks loaning to private enterprises for minimal interest rates and ensuring timely repayment for others to be loaned, need to live up to expectations. Too bad, many don’t.
At the local level empowerment schemes have to start from successful models, and here perhaps it is the banking sector approach where one puts up collateral that seems to work best. How it can then be tailored to reflect other empowerment efforts is a different matter, and perhaps one for civil society to examine.
It is evident that President John Magufuli is right in his recent remarks in Chato that the changes the government is working to bring about, especially in infrastructure, constitute obvious empowerment.
It is on the basis of availability of good roads, modernised railway services, tarmac roads even up to the interior parts of various districts, health services and availability of prescription drugs that people can use various sources of funds for investment.
Roads bring markets closer, while railways facilitate transportation of bulky goods. The 50m/- per village that had earlier been promised is being farmed into creating collective services which enable microfinance banks, loans and savings groups to perform.
By most accounts, this is a well-intentioned plan the government and the nation need to work on further to ensure it comes to fruition and benefits as many poor Tanzanians as conditions allow.