Govt forms agricultural bank board, to hire CEO soon

BY SHUBILA BARONGO

(BOT) Director of Economic Research, Dr Joseph Massawe

The long awaited Tanzanian Agricultural Development Bank (TADB) is in its final stages of implementation and should be launched anytime soon.

This was revealed at the weekend by Bank of Tanzania’s (BOT) Director of
Economic Research, Dr Joseph Massawe when he addressed journalists on the steps the bank has taken to bridge the export-import gap of current account deficit.

Current account deficit occurs when a country's total imports of goods, services and transfers is greater than the country's total export of goods, services and transfers
“We expect to launch the Agricultural Development Bank anytime soon. The government has already formed a board for the TADB and a CEO position was recently announced and the winner should be announced soon,” he said.

He said the TADB would boost local production levels of cash crops such as coffee and cashewnut as farmers would be able to acquire loans or access credit finance.
Another strategy undertaken by the central bank to balance imports and exports is providing advice to government on setting up export processing zones (EPZ) specifically meant for processing of goods.

He cited examples of such zones as Kamal industries in Kerege, Bagamoyo and Mbegani export zone, where goods can be processed and ferried straight to the port with tax incentives to encourage exportation.

Further, it has advised the government to reduce unnecessary imports saying that depreciation of the shilling is a market based technique which in the long run benefits the farmer.

“Import cut down is an automatic currency stabiliser. When the shilling depreciates the farmer benefits because then the imports become expensive to discourage importers hence stimulating exportation.

He added: It’s time for Tanzanians to endure short term loss for long term gains.”
Concluding, he gave an example of Japan and China which have both applied the said technique by being able to capture US vehicle market because their currency is cheaper than the dollar.

TADB plan was initiated recently by the government under the ‘Kilimo Kwanza’ project as a move to provide appropriate financing to agricultural investment by the private sector which has been a major constraint.

The establishment of the bank would enable large scale production of crops in the country and hence increase foreign earnings.