Zanzibar PS: Why we urgently need to go digital

Unguja. The Permanent Secretary in Zanzibar’s Finance and Planning ministry, Mr Juma Malik Akil, said yesterday reliance on loans from donors was delaying the implementation of development projects.

He said the time has now come to change and start using modern financial institutions with stable and fast-moving systems.

“We are losing opportunities, we have stuck to borrowing. They are good loans with low interests but are delaying us in our development activities, at that time the costs you use to get a loan are higher than what you deserve to get,” said Mr Malik

Mr Malik made the comment during a meeting of financial stakeholders on how to get funds digitally and discuss alternative methods using other financial institutions for running other government projects and activities.

 “We need to change and go digital, we need to get out of the old systems of using traditional methods of seeking affordable loans from banking institutions and donors because they take long to get,” he said.

With that logic, Mr Malik said the systems of the modern financial institutions are fast moving because a loan can be obtained within one or two months.

He said the development budget is one quarter and two quarters are for normal spending and that no economy can grow in that way.

For his part, the Director of the Zanzibar Research Centre for Socio-Economic and Policy Analysis (ZRCP), Mr Juma Hassa Reli, said the digital economy has helped many countries grow, including Singapore, China, the United States and even Kenya.

He elaborated that the digital economies of those countries have currently reached $4.9 million (Sh11.5 billion) in total.

Mr Reli explained that those countries have progressed further in investing in Fintech institutions.

He noted that such institutions could get funds out of the normal banking system, which is bureaucratic with high interest rates.

 “So, we do not need to wait for loans from the banks as we can establish such institutions,” Mr Reli said.