Low interest loans are the key to growth
At the official opening of the 20th Conference of Financial Institutions (COFI) hosted by the Bank of Tanzania (BoT), the President said that many countries are facing crises due to the pandemic as most of the activities economies have been crippled due to blockages to control the spread of the virus.
“As a country, we must come up with measures to save our economy which has been hit hard by the pandemic epidemic,” she said, noting that economic growth fell to 4.8% from 6, 8% over the past five years on average.
The tourism sector has been hit hard by the coronavirus lockdowns, she said, urging conference attendees to come up with recommendations that would be used by the government to facilitate stronger growth.
“May I call on 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 the lack of bank loans, ”she said.
The government has engaged with international financial institutions for debt relief and requested low-interest loans to revitalize the economy, the president said, noting that by controlling COVID-19, the government government was continuing the vaccination campaign, and many people had traveled to receive the jabs in all areas.
Finance and Planning Minister Dr Mwigulu Nchemba said more efforts are needed to revitalize the economy as steps need to be taken to regain the economic growth rate of 6.8%. Banks and financial institutions can innovate and put in place plans for young people to get loan capital, he said.
“Financial institutions must come up with alternative suggestions to allow the government to establish policies in the next fiscal year,” the minister insisted, praising the president’s efforts to save the economy, such as paying arrears to suppliers and suppliers. service providers, as well as the reimbursement of withholding taxes. arrears.
The minister stressed the need for Tanzanians to develop a culture of saving money through banks, noting that this would stimulate the economy.
Professor Florens Luoga, Governor of the Bank of Tanzania, said that at this year’s rally, financial institutions marked the 20th anniversary of the forum’s establishment in 1980, taking the opportunity to bring the rally to one minute of silence in memory of the former governor. , Teacher. Benno Ndulu.
Financial institutions have used the forum to exchange ideas on the development of the country’s economy and the financial sector itself.
“Tanzania has not been spared from the adverse effects of COVID-19 although it has chosen not to impose a lockdown,” he said, also observing that economic growth fell to 4.8 % in 2020.
Tourism sector revenues fell by more than half to $ 714.5 million last year, after a 60% drop in sightseeing tours with 620,867 tourist arrivals, he said.
Loans to the private sector decreased to 4.3% in FY2020 / 2021, compared to 8.1% of all loans in 2019/2020 linked to an increase in nonperforming loans (NPLs), he said. he adds.