EDITORIAL: Policy stability is key to sustaining banking sector

Tanzanian commercial banks’ windfall 2022 profits are encouraging. An analysis of financial statements conducted by The Citizen shows that 13 top tier lenders registered an all-time record profits of Sh1.116 trillion in 2022.

Three years ago no one would have imagined that in 2022 we would be witnessing such a stellar performance by banks, which is itself an indication of the much expected economic recovery.

It is informative that most of the heads of the 13 commercial banks have attributed their performance to good government policies and improvement in the business environment.

We applaud the government for taking policy initiatives that created the environment for recovery to happen.

More importantly, we commend authorities for listening and working on concerns of stakeholders and the public when it came to the issue of taxes on banking service fees last year.

Credit should also go to the banks for their innovative solutions that have expanded the reach of their services beyond their physical branch network. Tanzania’s dispersed population and poor accessibility of periphery areas has, historically, made it a challenging territory to bankers.

But Tanzanian bankers have been able to capitalize on digital technologies to make internet banking, mobile banking and agency banking a reality. The good financial results need to be maintained. The era of loss making by banks has passed, not with all the opportunities that the natural resources-rich Tanzania and the limitless potential of digital technologies can provide.

We appeal to the government to maintain the conducive business environment and guarantee policy stability to enable not only banks, but other businesses in the country to flourish.

To banks we say, there is no way to give back to the community than to expand their loan portfolios and bring down interest rates to single digit specifically in agriculture.