Need for strategy to amicably address financial challenges

Dar es Salaam. Stakeholders in the financial sector have called on the government to develop a digital economy strategy that will cushion emerging challenges including the newly introduced mobile money levies that was met with fierce public outcry recently.

This was said on Friday by the Financial Sector Deepening Trust (FSDT) acting chief executive Irene Madeje during the Mwananchi Communications Limited (MCL)’s symposium themed: Growth challenges and future of the financial sector.

She said there was the need for coordinated action across all sectors of the economy including agriculture, mining, trade among others where arising issues like the money levy would not happen because there would be one vision on what the financial sector needs to do to develop the country.

“The Bank of Tanzania (BoT) recently released report revealed that between August 2020 and August 2021 use of hard cash had increased in the country by 13.4 percent in just one year thereby pushing cost of producing and transporting the money,” she said.

On the cashless question, she said there was need to focus on the entire money circulation and look into how to digitalize the whole eco system.

She noted that the Tanzania Bankers Association (TBA) had to develop a system to integrate the banking services with Mobile Network Operators (MNOs) who had been competing for the same customers.

According to her, MNOs hold massive distribution into the majority of numbers of Tanzanians.

“We still have a long way to go because there is a gap… but we have to appreciate what has happened in our history. When Tanzania allowed financial services through MNOs there was a time the two walls were competing for the same customer with MNOs driving themselves and the banking sector on the other side but now there is collaboration between the two,” she said.

For his part, Tanzania Revenue Authority (TRA) deputy commissioner taxpayer department, Beatus Nchota said the national payment system was supervised by TRA. He noted that the mobile money levies were new and started July this year, where reports show that some countries succeeded while others failed.

“This is just the beginning and following public outcry the government reduced the rates by 30 percent to reduce the pinch,” he said.

He noted that there was still a wide window to look into it especially as its effects are high and could affect other sectors.

In another development, Equity Bank, Executive Director Esther Kitoka said financial sector need to focus on collaboration rather than competition.

“When it comes to mobile money they have been showing good collaboration unlike banks who are in competition but there is good progress through TBA among things we have been able to collaborate is that we are building a system for Mobile Instant Settlement.

Explaining she said when a person wants to transfer money from bank to bank it must pass through the TISS system. She noted that through TBA there are more improvements to enable collaboration.