Govt’s sound economic policy heightens financial sector

MOROGORO: AS a result of the government’s sound economic policy, the financial sector in 2023 emerged as the fastest growing sector in the country.

The sector grew by approximately 16 per cent, the National Bureau of Statistics (NBS) statistics shows.

Inaugurating the People’s Bank of Zanzibar (PBZ) branch in Morogoro Region on Tuesday, Prime Minister Mr Kassim Majaliwa attributed the significant progress of the financial sector to the government’s friendly fiscal policies, which increased investments in financial services.

The financial sector conists of the banking industry, insurance, capital markets and social security.

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Mr Majaliwa noted that the country has experienced an increase in financial inclusion countrywide, including rural areas through various banks and mobile money services.

He said the inauguration of the PBZ branch in Morogoro is line with government’s determination of extending affordable financial services close to citizens, which is critical for economic growth.

“The bank offers an opportunity for Morogoro’s residents to acquire capitals through loans for investments,” Mr Majaliwa said.

PBZ’s Managing Director, Mr Arafat Haji said the bank will heighten trade between mainland Tanzania and Zanzibar, by considering the fact that Morogoro Region is the largest producers of crops.

“Currently, our customers will not travel several kilometres to Dodoma or Dar es Salaam because financial services are right available here in Morogoro,” he said.

The 2023 Finscope Survey Report shows that 76 per cent of Tanzanians use formal financial services as compared to 65 per cent in 2017.

Alpha Capital Head of Research and Financial Analytics, Mr Imani Muhingo, commented that growth of the sector stems from the government’s efforts to improve the business environment and attract domestic and foreign investments.

He said while growth in the banking sector receives notable coverage, little is spoken about the growth experienced in capital markets within the same timeframe.

In that regard, he said that the capital markets subsector also has evolved substantially in the last six years due to rising financial literacy.

Furthermore, he said in the last five years the market saw the value of listed bonds grow by more than five times while issuing unique features of sustainable and Islamic financing, keeping the country ahead of such financing facilities.

He reminded that the market saw the first subnational bond in Tanzania, issued by Tanga UWASA in 2024, raising more than 53bn/- for financing water distribution in the Tanga Region.