THE government is eager to facilitate and see the country's private sector fully capitalize on the 1.3tri/- Covid-19 relief package from the International Monetary Fund (IMF) by implementing projects to be financed with this fund.
The government made clear that the move will help in retaining the funds into the country’s money circulation.
“We want to see these funds bring multiple effects. President Samia Suluhu Hassan would be happy seeing large portion of these funds remain in the country. If not 100 per cent, at least 90 per cent of it should remain in the circulation,” Minister of State in the Prime Minister’s Office (Investment), Mr Geofrey Mwambe, stated.
Mr Mwambe further motivated the private sector to take advantage of the allocated 600bn/- for constructing government infrastructures in government city at Mtumba in Dodoma.
He said there was also another amount of1tri/- from the Central Bank for lending the private sector to execute different projects, thus making a total of 3tri/- from the government awaiting for the private sector to grab opportunities.
Mr Mwambe made the remarks on Thursday in Dar es Salaam when addressing members of the Tanzania Private Sector Foundation (TPSF) on projects that the government is implementing and how they can fully participate.
The gathering also meant to hear from them over what the government could do for them so that they could take advantage of the ongoing projects construction.
"Apart from the 1.3 tri/-from the IMF's quick credit facility, the Bank of Tanzania (BoT) has injected 1tri/- to financial institutions for lending in the private sector in an effort to mitigate macroeconomic impacts of Covid-19 pandemic in the country.
Adding; “Moreover NMB Bank has set aside 100bn/- in loan for lending entrepreneurs in the whole value chain of Agriculture, Livestock Keeping and Fishing sectors”.
As a result, Mr Mwambe asked TPSF members to make better use of the government's potential to strengthen the national economy and alleviate the effects of the global epidemic, Covid-19.
He stated that one of President Samia's goals is to have the private sector participate in development projects, asking TPSF members to seize all possibilities that come their way.
"It is extremely likely that a significant percentage of the 1.3tril/- finance form IMF will remain in the nation if the project is carried out with private sector participation, our president is adamant about opening the country up for national growth," he said.
The minister added that the government is completely committed to ensuring full engagement of the private sector in the construction of ministerial offices at the Mtumba government city in Dodoma.
“So you don’t have to stick on thinking of the 1.3tril/- only, there are other projects that need your participation, and the government is always ready to work together and support growth of the private sector,'' he told TPSF members.
According to him, the private sector can participate in the government project as long as they are in a position to ensure value for money in tenders to be awarded.
“President Samia Suluhu Hassan is fully determined to see positive progress in the private sector, in this case she has instructed and already some measures have started to be taken to stimulate the economy,” said the minister.
He was of the view that, apart from pushing forward the national economy, the effective participation of the private sector assured creation of employment especially for the graduates and those with different skills.
In July this year, the BOT governor Professor Florens Luoga said the decision to inject 1tri/- to financial institutions for lending the private sector was reached in efforts to reduce interest rates on loan to agriculture.
“The Bank of Tanzania shall provide a special loan to banks and other financial institutions at 3 per cent per annum for pre-financing or refinancing of new loans to the private sector,’’ he said.
Adding that a bank wishing to access the special loan facility shall be required to charge interest rate not exceeding 10 per cent per annum on loan extended to the private sector.
According to Prof Luoga, the measure intends to increase liquidity to banks and reduce lending rates and that measure will provide opportunities to banks to extend more credit to the private sector than before.