Ndulu: 3 things I did best

        Dar es Salaam. When Prof Benno Ndulu was appointed the central bank governor 10 years ago, it was not a coveted corner office delivered at the best of moments. A major scandal had just hit the Bank of Tanzania (BoT) – and the man to mend the battered image had no illusions about what needed to be done.

The former BoT chief assumed one of the country’s most revered offices after the sacking of his former boss, Governor Daudi Ballali in 2008, following widespread graft allegations at the institution.

An independent international audit by accountancy firm Ernst & Young had exposed fraudulent transactions amounting to more than $120 million, which was improperly paid by the bank to dozens of local companies, many of them reportedly fictitious.

But in the past decade, Prof Ndulu defied the political odds to rebuild public trust and confidence in the central bank. And looking back on it now, there are three achievements he says he is proud of – macroeconomic stability, financial inclusion and financial stability of the central bank.

“These are the three important things that I’m proud of as I step out of the central bank,” he said at a farewell function organised for him by the Tanzania Bankers Association (TBA) in collaboration with the Tanzania Institute of Bankers Friday.

“The inflation rate, GDP growth, the foreign reserves and the financial inclusion are all at reasonable levels and I’m certain that these will be maintained or improved,” he added.

Financial Inclusion

Prof Ndulu is credited with supporting the expansion of financial inclusion by licensing more commercial banks, tapping into the growth of mobile financial services and helping introduce agent banking.

Under his stewardship, the central bank also licensed the country’s first two credit reference bureaux in a bid to encourage information sharing among banks to spur lending and lower commercial interest rates.

The two opened doors at a time banks in the country struggled with high ratios of non-performing loans due to a lack of sufficient information about borrowers. The aim of the credit reference bureau was to reduce risks of lending and boost credit to the private sector.

In its FinScope Survey 2017, the Financial Sector Deepening Trust (FSDT) noted that financial inclusion was at 65 per cent.

Inflation rate

From a peak of 20 per cent in December 2011, Prof Ndulu’s era at the BoT saw Tanzania’s annual inflation rate drop to single digit levels. It was at four per cent last December, while the foreign reserve was estimated at $6 billion.

Macroeconomic stabilisation

He is also credited with implementing prudent policies and overseeing macroeconomic stabilisation that have underpinned Tanzania’s strong economic performance over the past decade. The government is expecting the economy to grow above seven per cent.

The BoT Board of Directors approved Sh300 billion as dividend to the government for 2016/17, after profits. That makes a total of Sh780 billion approved as dividend to the government in the last three financial years.

TBA chairman, Dr Charles Kimei, also outlined seven points he said were among the achievements of Prof Ndulu during his 10 years as governor.

Dr Kimei said the former BoT chief uplifted the image and reputation of the central bank; ensured high compliance in the banking sector; stakeholder engagement; and ensuring the macroeconomic stability.

He also said Prof Ndulu spearheaded financial inclusion initiatives; maintained integrity and soundness of the banking sector; and finally, he’s flexible and approachable by all.

“We, therefore, congratulate Prof Ndulu for an excellent mission accomplished ---- 10 years of steering the financial system in Tanzania with great achievements. We also welcome the new governor Prof Florens Luoga and it’s our hope that he will lead the banking sector successfully,” said Dr Kimei.

Prof Luoga promised to maintain his predecessor’s achievements.