Bank of Tanzania

Bank of Tanzania
Benki Kuu ya Tanzania
Headquarters Dar es Salaam
Coordinates 6°48′57″S 39°17′39″E / 6.81583°S 39.29417°E / -6.81583; 39.29417Coordinates: 6°48′57″S 39°17′39″E / 6.81583°S 39.29417°E / -6.81583; 39.29417
Governor Benno Ndulu
Central bank of Tanzania
Currency Tanzanian shilling
TZS (ISO 4217)
Website www.bot-tz.org
Headquarters, Bank of Tanzania in Dar es salaam

The Bank of Tanzania (Swahili: Benki Kuu ya Tanzania) is the central bank of the United Republic of Tanzania. It is responsible for issuing the national currency, the Tanzanian shilling.

The bank was established under the Bank of Tanzania Act 1965. However, in 1995, the government decided that the central bank had too many responsibilities, and was thus hindering its other objectives. As a result, the government introduced the Bank of Tanzania Act 1995, which gave the bank the single objective of monetary policy.

It is governed by a Board of Directors consisting of ten people, four of whom are ex officio members which have three advisory committees that can assist them. The bank is headed by its Governor, assisted by three deputy governors in Administration, Economic and financial policies and Financial stability.

History

The Bank of Tanzania was chartered by the first parliament of Tanzania through the Bank of Tanzania Act of 1965 following the dissolution of the East African Currency Board in 1965.[1][2] The bank commenced operations on June 14, 1966 and was inaugurated by the first president of the country, Julius Nyerere.[3]

Arusha declaration

Immediately after its formation, the Arusha declaration was proclaimed and the traditional roles of the bank was modified to accommodate for the changed in economic system. The lack of competition in the financial markets meant the bank had to reorient its role in the economy. After 1971 The Exchange Control Ordinance and Import Control Ordinance allowed the bank to apply the following plans:[4]

With increased villagisation during the time period and the continued weakness in the balance of payment of the bank, the Bank of Tanzania act was amended in 1978 to give the bank more control. The Act shifted the responsibility of financial planning from the ministry of finance and planning directly to the bank.[5]

Liberalization

Following the liberalization of the economy in 1995 and the rapid rate of inflation and devaluation in the Tanzanian shilling, the Bank of Tanzania act of 1995 was passed which clarified the primary objective of the central bank to establish a monetary environment to ensure Price stability.[6] The act was further clarified in 2006 and is the current governing act for the bank.[7]

Organizational structure

Incumbent Bank of Tanzania Governor Benno Ndulu

Board of Directors

The Bank of Tanzania has a board of directors consisting of 10 people. Four of the members are directly appointed by the President of Tanzania. The ministry of Finance and the Principal secretary to the treasury of the Revolutionary Government of Zanzibar also appoint a member each to the board.

The current board composition consists of the:[8]

List of Governors

Branch Network

Mwanza
Arusha
Mbeya
Mtwara
Zanzibar
Bank of Tanzania Branch Network with Head office in Dar es Salaam

The bank is head quartered in Dar es salaam in the heart of the financial district of the city and also maintains branches in the following cities: Arusha, Mbeya, Mwanza, Mtwara, Zanzibar. The banks latest branch was opened in Mtwara due to the recent boom in economic growth in the southern regions.[10] The bank also has its own training institute located in Mwanza.[11]

Financial Inclusion

The Bank is active in promoting financial inclusion policy and is a leading member of the Alliance for Financial Inclusion. It is also one of the original 17 regulatory institutions to make specific national commitments to financial inclusion under the Maya Declaration[12] during the 2011 Global Policy Forum held in Mexico.

In 2016 the central Bank Chief Professor Benno Ndulu renewed the bank's commitment by launching the National Financial Inclusion Framework (NFIF),2016-2020. The objective is to reduce the number vulnerable households due to low unstable incomes, low confidence and self-exclusion from the current 28.2 per cent.[13]

Criticism

Recently, Bank of Tanzania was involved in an incident which resulted in an audit of its External Arrears Account. About Tshs 133 billion were discovered to have been lost in 2005 through dubious payments. As a result, the President of Tanzania fired the bank's Governor, D. T. S. Ballali, on 9 Jan 2008. Professor Benno Ndullu was appointed to take this position on the same day.[14]

References

  1. ↑ Masson, Paul R.; Pattillo, Catherine (2004-11-30). The Monetary Geography of Africa. Brookings Institution Press. ISBN 0815797532.
  2. ↑ "The Bank of Tanzania Act | AACB". www.aacb.org. Retrieved 2016-09-29.
  3. ↑ "Bank of Tanzania: About the Bank - History of the Bank of Tanzania". www.bot.go.tz. Retrieved 2016-09-29.
  4. ↑ Ndulu, B. J.; Mutalemwa, Charles K. (2002-01-01). Tanzania at the Turn of the Century: Background Papers and Statistics. World Bank Publications. ISBN 9780821350614.
  5. ↑ "Bank of Tanzania - Fortune of Africa Tanzania". fortuneofafrica.com. Retrieved 2016-09-29.
  6. ↑ "The Bank of Tanzania Act | AACB". www.aacb.org. Retrieved 2016-09-29.
  7. ↑ "Central Bank Regulations/Guidelines". www.bankm.com. Retrieved 2016-09-29.
  8. ↑ "Bank of Tanzania: About the Bank - Board of Directors". www.bot.go.tz. Retrieved 2016-09-29.
  9. ↑ "Bank of Tanzania: About the Bank - Former Bank of Tanzania Governors and Deputy Governors". www.bot.go.tz. Retrieved 2016-09-29.
  10. ↑ Lindi, FLORENCE MUGARULA in. "Central bank opens sixth branch in Mtwara". dailynews.co.tz. Retrieved 2016-09-29.
  11. ↑ "Bank Of Tanzania Training Institute , Mwanza, Tanzania | africazip.com". www.africazip.com. Retrieved 2016-09-29.
  12. ↑ http://www.prnewswire.com/news-releases/maya-declaration-urges-financial-inclusion-for-worlds-unbanked-populations-130887928.html
  13. ↑ "Tanzania: Central Bank Launches Financial Inclusion Scheme". AllAfrica.com. 23 February 2016. Retrieved 20 March 2016.
  14. ↑ "Tanzania in bank scandal sacking". BBC. 10 February 2008. Retrieved 20 March 2016.
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