At an official opening of the 20th Conference of Financial Institutions (COFI) organized by the Bank of Tanzania (BoT), the president said that many countries face crises due to the pandemic as most economic activities were paralyzed due to lockdowns to control the spread of the virus.
“As a country, we need to come up with measures to rescue our economy which was adversely hit by the pandemic outbreak,” she affirmed, noting that economic growth dropped to 4.8 per cent from 6.8 per cent over the past five years on average.
The tourism sector was hit hard by coronavirus lockdowns, she stated, urging conference participants to come up with recommendations that would be used by the government to facilitate stronger growth.
“May I appeal to financial institutions to provide long-term loans at reduced interest rates to help revitalize the economy which has been hit hard by COVID-19. The private sector is still struggling due to lack of bank loans,” she asserted.
The government has been engaging with international financial institutions for debt relief as well as soliciting low interest loans to revitalize the economy, the president explained, underlining that in controlling COVID-19, the government was pursuing the vaccination drive, and many people had turned out to receive the jabs in all regions.
Finance and Planning minister Dr Mwigulu Nchemba said that more efforts are required to revitalize the economy, as measures must be taken to regain the 6.8 per cent economic growth rate. Banks and financial institutions can innovative and raise plans enabling the youth to secure loan capital, he stated.
“Financial institutions must come up with alternative suggestions to enable the government establish policies in the coming financial year,” the minister insisted, commending the president’s efforts to rescue the economy, like paying arrears to suppliers and services providers, as well as withholding tax reimbursement arrears.
The minister emphasised the need for Tanzanians to build a culture of saving money through banks, noting that this would stimulate the economy.
Prof Florens Luoga, the governor of the Bank of Tanzania, said in this year’s gathering financial institutions mark the 20th anniversary since the forum was incepted in 1980, using the occasion to bring the gathering to a minute of silence for the memory of the previous governor, Prof. Benno Ndulu.
Financial institutions have been using the forum to exchange ideas on the development of the country’s economy and the financial sector itself.
“Tanzania was not spared from the adverse effects of COVID-19 although it opted not to impose a lockdown,” he said, observing also that economic growth dropped to 4.8 per cent in 2020.
Revenues from the tourism sector dropped by more than half to $714.5m last year, after a 60 per cent decrease in tourism visitations with 620,867 tourist arrivals, he said.
Lending to the private sector decreased to 4.3 per cent in the 2020/2021 financial year, compared to 8.1 per cent of all lending in 2019/2020 tied to increased non-performing loans (NPLs), he added.