Kikwete appreciates growth, stability of financial sector after reforms

Dar es Salaam. Former Tanzanian President Jakaya Kikwete has appreciated the growth and stability of the financial sector, recalling the reforms that he said are now paying off.

Mr Kikwete was the finance minister when Tanzania embarked on a series of reforms that started in 1991 as an effort to promote the development of a market-based financial sector.

Speaking at a brief Iftar event organised by the National Bank of Commerce (NBC) for its customers on Thursday evening, Mr Kikwete said the banking services were now accessible to more people in Tanzania and the institutions were generating significant profits.

"Many reforms took place when I was the Minister for Finance. I know well where we are now and where we came from,” said Mr Kikwete.

“Today, when I see banks announcing billions of shillings in profits, it clearly proves that the reforms we implemented at that time have been successful," he said, citing NBC which made a profit of Sh122 billion last year as an example.

The reforms were implemented in two major phases. The first generation financial sector reforms started in 1991 targeting legal reforms to create a competitive environment, modernisation of the National Payment Systems, strengthening of the Bank of Tanzania’s regulatory and supervisory capacity, restructuring and privatisation of state-owned banks and financial institutions.

The second generation financial sector reforms followed in 2003 aiming at strengthening the banking sector, developing financial markets, facilitating the provision of long-term development finance, land reforms, creation of credit registry and strengthening of micro and rural finance.

Mr Kikwete explained how customers faced difficulties in accessing financial services before the government intervened and took various measures, including closing and restructuring the ownership and management structure of some banks.

"All those challenges are now history. All I wanted to share with you is, the financial sector is the lifeblood of the economy. If the sector falters, it will cause the economy to decline,” he added.

NBC Managing Director, Mr Theobald Sabi, said that organising Iftar has been a tradition of the bank for the past 15 years, aiming to join and unite with its customers and show solidarity during the holy month of Ramadan.

"This is also a month that reminds us to do what is good in front of our God. Since NBC is always close to the faith of its customers, we decided to organise this Iftar event to join our fellow Muslims in achieving that," he said.

NBC also provides Islamic Banking services for individuals, entrepreneurs and large businesses.