How Tanzania can mitigate effects of global upheavals

Dar es Salaam. Bankers yesterday proposed measures to protect the economy from potential global crises and ensure economic stability.

Speaking during a breakfast event organised by the Institute of Directors in Tanzania (IoDT), they highlighted the need for the country to be prepared to mitigate the impact of future upheavals, especially in the event of a global recession.

The meeting was held under the theme Navigating the Global Economic Crosswinds: Implications and Solutions to Corporate Tanzania and the Common Mwananchi.

One of the solutions proposed was the need for diversification in the economy.

This would involve investing in sectors such as manufacturing, tourism, energy and agriculture, which have the potential to both create jobs and generate income for the country.

National Bank of Commerce (NBC) director and head of treasury and financial markets Peter Situmbeko said there were still opportunities to grow despite the global economic woes that have also impacted Tanzania.

“Increasing investment in transport and communication infrastructure, promoting more investment-friendly policies and developing energy generation sources are some of the measures that can be taken,” he said.

They also emphasised the importance of promoting local industries by providing incentives to encourage investment and reduce reliance on imports.

Absa Bank Tanzania director of global markets, corporate and investment banking Esther Maruma said the country could also benefit if productive sectors such as agriculture and energy were prioritised to improve export value.

“Through these sectors, Tanzania can increase its foreign earnings. Sectors such as energy can play a key role in attracting more investors as a result of reliable power supply,” she said.

Another solution that was proposed was the need for increased collaboration between the private and public sectors.

This entails the government creating an enabling environment for businesses to thrive, including reducing bureaucracy, simplifying regulation and providing incentives to encourage investment.

CRDB Bank Plc head of treasury sales and global markets Olais Tira stressed the importance of identifying alternative foreign markets, especially regionally, to mitigate any adverse impact on traditional markets.

“Let’s create means to mitigate the scope of direct impacts. This can be through finding alternative trading partners and markets where we buy our imports or sell our exports,” he said.

Mr Tira added that this was important, bearing in mind that Tanzania had recovered swiftly from the devastating impact of the global Covid-19 pandemic, with the prospect of economic growth being in excess of five percent.

Stanbic Bank Tanzania head of treasury Zainul Chandoo said it was significant for Tanzania to figure out how it fits in the new global economy model where no single country was dominant.

“We need to know where we fit in this new economic scenario. Energy and food security are all important. We need to plan and cement our position in this new model,” he said.

Gracing the event virtually, Finance and Planning deputy permanent secretary Lawrence Mafuru said the government was continuing to implement strategic infrastructure projects and put in place enabling policies to make Tanzania the economic gateway to the region.

“We are surrounded by at least eight landlocked countries, which depend on our ports and this shows how important it is to support the development of our infrastructure, which also serves our neighbours. Also, the importance of airports to tourism cannot be overstated,” he said.

“All these are part of the government’s wider plans to create world-class infrastructure and expedite economic development,” he said.