Tanzanians should not expect immediate results to
the country’s economic structural reforms the fifth phase government is
putting in place, as it will take up to more than 100 days to bear
fruits, economists suggest.
Dr Donath Olomi, CEO Institute of Management and Entrepreneurship
Development IMED), in an interview with this reporter, said, “It is too
early to measure tangible results, although the president has taken some
commendable actions.”
The former senior lecturer of the University of Dar es Salaam
Business School (UDBS) explained that in his 100 days in office,
President Magufuli had managed to create a well-mannered financial
administration in the country.
Moreover, Dr Olomi was of the view that the move could frighten
potential investors, thus slow down their investment pace in the
country.
“Off course, it is a good move for the government to take stiff
action against those involved in mismanaging public funds. For instance,
the Dar port missing containers saga,” he said.
According to him, operations of many freight forwarding agents had
been dismissed as a result, yet such agents employed many Tanzanians.
“When it comes down to microeconomics, these individuals will
suffer. And, again, if investors are eying the education sector, the
proposed directive school fees would stop them for a while.” He added:
“Even the financial institutions that were ready to fund these proposed
projects will also hesitate to disburse the said loans. Off course the
country’s financial system needed as shake up so am sure after six
months, we are going to be in a position of measure Magufuli’s economic
performance.”
Citing the government move to direct its institutions to open an
account with the central bank, the IMED’s CEO says everything has
positive and negative effects. Banks’ attitude to transact with
government is due to the fact that it is a zero risk, interest rate for
instance might range between 13 to 14 percent, but if lending to private
sector, risks are there and in order to condense it banks will have to
increase their interest rate to 18 percent.
“The move will reduce government needs to borrow because money will
be there, moreover, the move will push banks to lending private sector
and this is a credit to the government. But the situation will again
force banks to increase interest rate winch in fact will be a blow to
the private sector. However, it is too early to measure the government’s
economic performance, let us give them time.” He observed.
For Prof Honest Ngowi, Head of Department of Short Courses,
Research and Consultancy, Mzumbe University Dar Es Salaam Campus, says
100 days of Dr Magufuli’s era saw the government increasing effort as
far as revenue collection which is according to him a major landmark.
“Moreover” worn Prof Ngowi “It isn’t easy to measure government
revenue collection by just relaying on November and December months
which saw an increased amount of government collection to 1.5tr/-. The
collection done in the two months was due to the president action to
curb tax evasion,” he said
He added: “So many were force to pay their tax arrears which in
fact happened during November and December. Also the government’s cost
cutting measure, of course it is a recommendable job but we need more
time to firmly comment.
“The president has done some mileage when it comes to revenue
collection, disciplining corrupt leader who were emblazing public funds
but also taking legal action to tax evaders. When you talking about
country’s economy, then these actions are commendable,” said Prof Samuel
Wangwe when asked for comment.
According to Prof Wangwe whose tenure of office as REPOA’s
Executive Director ended last year, told this paper that the fourth
phase government was less concern about cutting unnecessary expenditure.
But Magufuli’s moves will lessened budget deficit which in fact will
create a country’s foundation towards independent economy.
With about 40-year experience in as an economist, Prof Wangwe says:
“I thing we need to see the relocation of funds that will stimulate
production to the individuals. I do understand that this will take time
so we need to be patient. Nevertheless, I don’t thing government
directive to have its institution banking with central bank (BOT) public
interest.”
He added: “Commercial banks are there to handle day-to-day
transaction, BoT is a regulator I think it should remain as a regulator
and strict measures should be taken to make sure that although these
government institutions are transacting with commercial banks but
financial discipline should be observed.”
Prof Wangwe’s concern on relocation of funds is echoed by Dr Bill
Kiwia, a Lecturer at the Institute of Financial management (IFM) saying
the money should be channeled to sectors that will directly help in
poverty alleviation.
“…he has done as far as financial discipline is concern and making
civil servants and businesses to be accountable. The challenge is the
fact that money flow has been decelerated and this might temporarily
reduce employment rates. However, the long-run things will be settled,”
observed Dr Kiwia.
President Magufuli, who took office on November 5, last year,
pledged to speed up growth by diversifying the mostly agrarian economy.
Billions
of shillings have been spent on schools, water projects and electricity
over the past three months - money that wasn�t previously available
