Dar es Salaam. Equity Bank executive director Esther Kitoka called for a need to reform the legal system in favour of the financial sector, if banks are to have a significant role in shaping the country’s economy.
The root of her recommendation was on the ground that a large amount of non-performing loans (NPLs) caused by pending cases in court, was tying up the banks’ capital.
“It is high time the judiciary system was reformed so that money can be released and thus enabling banks to lend to others for financing big projects like Standard Gauge Railway (SGR),” she opined.
“Why should we depend on foreign banks to finance big projects while in our country we have money which, if released from NPLs, can contribute to improving the country’s economy?” she queried.
She expressed the need for addressing a fundamental issue of access to finance for traders and investors to take their business to the next higher level.
Quoting figures from the Bank of Tanzania (BoT) monthly economic bulletin, she said over 37 percent of all loans goes to consumer loans.
“Surprisingly, agriculture, which employs over 70 percent of Tanzanians, gets only 6.9 percent of the pie, this is unacceptable,” said Ms Kitoka.
She explained that if those who were involved in the agriculture sector had access to capital, their contribution to Gross Domestic Product (GDP) would have gone up and thus transformed the lives of Tanzanians.
“We really need to discuss what we should do to increase our role in improving access to finance and thus enable businesses to up their capital,” recommended Ms Kitoka.
Meanwhile, Tanzania Revenue Authority (TRA) deputy commissioner for large taxpayers Beatus Nchota called on traders and investors to do proper planning to insure their business against tax risk.
In doing so, he said, they could make one stand a chance to maximize his profit and avoid penalties.
“In any business, risk number one is tax, unfortunately it is not insured,” hinted Mr Nchota.