The current view of the Bank of Tanzania’s Twin Towers and the old structure in-between the two towers. The central bank is the statutory financial regulator of the country. Monetary issues fall within Union Matters. PHOTO | FILE Tanzania’s financial sector has passed through many phases in the last six decades, all of these have had their bearing on banking – which, however, has been growing from strength to strength
Dar es Salaam. Tanzania’s banking sector is one of the most vibrant in the region, with its number of commercial banks higher than that of bigger economies in the continent.
Data from the central Bank of Tanzania (BoT) show that Tanzania has 35 commercial banks. This is more than the number of banks in larger economies like Nigeria (22) – but is only slightly lower than that of the larger economies of Kenya (39) and Egypt (40).
The latest BoT banking supervision report shows that the industry had mobilized deposits to the tune of Sh24.76 trillion in 2020, with total assets being Sh34.69 trillion.
Moreover loans, advances and overdrafts stood at Sh18.78 trillion.
The vibrancy of the industry is a clear example of key strengths that the Tanzanian economy possesses: resilience and high capacity for adjusting to change.
In fact, the evolution of the banking industry in the last 60 years gives a more visible picture of how the Tanzanian economy has performed and the mileage ahead the country still has to cover to attain its sustainable economic targets.
As the case has been historically in Africa, Tanzania started out with the majority of the population alienated from the formal economy. The informal economy is traditionally out of the reach of the banking industry, which means that despite the fact that Tanzania had a number of private banks at independence the millions of Tanzanians could not access services in these banks.
They were there to serve mostly officials in the colonial system and the foreign traders, merchants and small but burgeoning middle class that existed then. At independence all of the banks were foreign owned. To date Tanzania is still struggling with this alienation, which is a negative aspect that highlights the imbalances of the global economic forces.
The nationalization of banks and financial institutions following the Arusha Declaration of February 5, 1967 did not result in improved financial inclusiveness due to various factors, despite government efforts to establish non-financial institutions to serve the rural and […]
