SINCE the government directed that billions of shillings held in commercial banks by ministries, public corporations and local government authorities be immediately transferred to the Bank of Tanzania (BoT), the banks are now opting for the private sector.
According to a new report released
yesterday by the Tanzania Private Sector Foundation (TPSF), people’s
deposits in the banks had also decreased, indicating they no longer
trust the commercial banks.
Presenting the findings in Dar es Salaam
yesterday, TPSF Financial Advisor, Michael Kitulizo, said the study
findings had revealed that the government move to withdraw its accounts
from commercial banks to Treasury Single Account (TSU) led to a number
of impacts including a shrinking in deposits in commercial banks.
But a senior Lecturer at Mzumbe
University, Prof Prosper Ngowi, says the government’s move to transfer
its deposits to BoT wasn’t reason enough for the drop in deposits, but
that it might have been caused by the government’s move to crack the
whip against ghost workers, students and salaries.
“This should be a waking call to
commercial banks … if their businesses depend heavily on the government,
it’s time they reviewed their business strategies,” the IDM don said.
The study was sanctioned by TPSF with
the aim of conducting an independent assessment of the timing,
efficiency and effectiveness of the government’s measure to withdraw
deposits from commercial banks.
A detailed evaluation matrix linking all
the evaluation questions with the responses from the interviewed
representatives was accommodated to achieve the objectives of the
assessment.
“The study was carried in Dar es Salaam,
Tanzania’s commercial city with almost all commercial banks and big
private sector companies having their headquarters and numerous branches
in the city,’’ Kitulizo said. In his words, “purposive sampling
technique was used to reach the desired respondents.
” The collection of data for the
indicators identified in the evaluation matrix required a variety of
methods and involved different sources and stakeholders. Data was
analysed qualitatively, using both collected data from interviews and
from documentary review.
On January 25, last year, the government
of Tanzania through Treasury Registrar issued a government notice which
aimed at instructing all the public entities to transfer their deposits
held in different commercial banks to BoT by February 1, 2016.
The government explained in the notice
that the move was aimed at enhancing government and public effectiveness
and efficiency in cash management.
Yesterday, TPSF Director of Policy, Teri
Gilliad said there was a need for the government to help the banks that
were affected by the new changes, adding that people have now opted to
keep their money in their houses and other channels.
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