In Summary

I am neither an expert in finance nor in economics, but I have keenly been observing global monetary trends. That is why I have something to discuss. As we say every man is a political animal, every man can become an economic animal as well.

As we welcome the new Bank of Tanzania (BoT) governor, Prof Florens Luoga, and as we start the new year, there are burning issues to ruminate.

I am neither an expert in finance nor in economics, but I have keenly been observing global monetary trends. That is why I have something to discuss. As we say every man is a political animal, every man can become an economic animal as well.

As much as each one of us is touched by political activities, the same applies to economic activities. I remember my good old day at the University of Dar es Salaam where Prof Luoga taught me laws as an undergraduate. Now he is at the helm of BoT. Indeed, he faces a gargantuan task. Tanzanians will ask him: “Where is the money?” Truly they have hollering about the financial crunch.

Prof Luoga has come at the time when there is a huge outcry over the dwindling money circulation. Money spending has been restricted to the point of causing concern. In simple terms when you are in such a situation there will be no taxes. When doesn’t collect revenue, the impact is big.

The government contends that the poor money circulation, now termed as “vyuma kukaza”, came after the government blocked all avenues of corruption and waste in the government. In fact chances of improving money circulation are slim. I candidly advise Prof Luoga that the government should not be happy when the economic situation is difficult. That is not healthy to the country’s stability. If the populace find no more legal means to earn their livelihoods, they will resort to the illegal means. That is bad and should be averted.

So, I would advise Prof Luoga to come up with best means for money to come back legally to circulation for Tanzania to prosper. No country has succeeded in a situation like that we are in now.

Once again the issue of dollarisation has risen again. Of course, this means the use of other foreign currencies as well such as the pound, euro and yen.

I don’t believe that the dollarisation is bad for our economy because it all depends on how our economy revolves. Even the government itself a few months ago believed the same.

Of course, the central bank has the duty of ensuring financial stability. But my big question is, is the government really prepared for this as people want to feel safe and protected in dollars, euro and pound sterling?

I call on Prof Luoga to come up with best financial strategies to stimulate the economy. He should advise politicians that a stable currency and a stable economy go together with a stable democracy. It is not enough to claim to have a democracy. What matters is to have a stable one to have stable economic fundamentals.

I have huge faith in Prof Luoga as he is very practical. This country needs new impetus to achieve the middle-economy status and industrialisation. BoT has a big role to play in propelling our country to the acme of socioeconomic prosperity.