JPM doubts NMB profitability

SYLIVESTER DOMASA in Dodoma

PRESIDENT John Magufuli yesterday ordered careful recalculation of the National Microfinance Bank’s (NMB) net profit for the government to get fair returns on its investment.

Speaking at the official launch of NMB Kambarage Branch in the capital here, President Magufuli said the government needs the money to boost provision of social services to all Tanzanians.

“I am certain that there is a kind of dirty game played here...I need our officers to undertake fresh calculations to ensure we are not doomed,” said Dr Magufuli, after presenting a brief assessment of dividends issued by the bank.

The government, which controls 32 per cent shares in the commercial bank, received 10.8bn/- , 14.3bn/-, 16.5bn/- and 16.5bn/- in 2012/13, 2013/14, 2014/15, 2015/16 and 2016/17 fiscal years, respectively.

“This does not need rocket science to spot a problem somewhere,” he said during his speech at the launch event, which also attracted former Prime Minister Mizengo Pinda, National Assembly Speaker Job Ndugai, Ministers, Members of Parliament and businesspeople.

Dr Magufuli explained that the money issued as dividends was direly needed for the country’sdevelopment. He said he doesn’t expect the same amount this year because the bank had been performing well in the local and international markets.

Dr Magufuli was equally concerned that the financial sector is in its infancy stage amid existence of 50 financial institutions and seven social security schemes.

Official government figures indicate only 4.7million Tanzanians operate accounts in various financial institutions, especially banks, with only 2.2 million people registered as members to various social security schemes.

“This is why we have resolved to merge this social security schemes from seven to only two partly to improve members’ benefits,” he said, assuring employees of the PSPF fund of their jobs at the time of merging the funds.

NMB Managing Director Ineke Bussemaker told the president that the bank had survived an economic crisis that hit majority financial institutions last year.

She called on the government and policy makers to discuss the interest rate dispute with financial institutions, to help in lowering the rates and subsequently benefit majority Tanzanians, especially smallholder farmers and business people.

PSPF Director General Adam Mayingu said the new structure, which houses NMB Branch and the highest building in Dodoma so far is 100 per cent complete and has consumed 30.56bn/-.

He said the building is fully occupied and is projected to generate at least 4.7bn/- annually, with the cost of construction likely to be recouped in seven years.