Africa-Press – Tanzania. IF my memory serves me right, tabling the proposed Finance Act, 2018, government had 30th September 2018 as the official date for Treasury single account to be effective.
Then, lawmakers raised their grievances urging the government to suspend the plan due to the fact its repercussion would have had an impact on how credit is made available to businesses in Tanzania.
Disagreement for treasury single account then hooked on the supposition that the account will guarantee appropriate control of government cash flow, lessen the number of accounts held in commercial banks by decreasing banking cost paid by the government for services landed by commercial banks and above all reduce gap in the merged fund by comprising cash in a deposit account, which hasn’t been included in circulation.
The setting leading to the design of this one-stop account held at the central bank was overwhelmed with a heated debate with numerous proposals given to ensure such measure shouldn’t disrupt and staff credit expansion in Tanzania.
Thus numerous changes were suggested for the account to produce a win-win result, both for the government and the banks that traditionally are used to channel credit to the business.
While I plan to exercise the authority of decision taken, instead is an attempt to reflect on whether Tanzania is making progress with this single approach account criteria or not.
Alternatively in an attempt to reason on whether treasury single account is good for economic growth or not?
And finally since when it was formed has the credit expansion to businesses improved or not and if not what can BoT responsible to advise the government need to do to kick start flow of capital to support initiatives being created by the president to reactivate investment and economic activities with more energy and drive to help keep pace with middleincome status country attained a few years ago?
I am not a central bank of Tanzania spokesman, but I think it is high time for the bank to examine the asymptomatic link between treasury single account and economic growth.
It is time for the central bank to tell Tanzanians what was the post treasury single account era the extent to which this account implementation has affected revenue generation, employment generation, and if possible improved credit expansion and living standard of Tanzanians business community?
With determination and an upright business mind, such exercise may benefit by drawing data from revenue authority tax statistics and business annual returns.
Though could be too early to jump to a conclusion, I think our come if the analysis isn’t doctored could help to rethink how this treasury single account has either positively or negatively affected our overall economic growth in Tanzania.
To bring brothers and sister into one page, a treasury single account is an economic policy that safeguards and aggregates all revenues and income of the Government into a single source called the Treasury and technically controlled by the Central Bank.
Although this strategy had been effective in many nations in the world, it was, however, introduced and implemented in Tanzania in September 2018.
Treasury single account for untrained brothers and sisters seeks to pool all revenues and expenditures of government into a single account.
Much as the maintenance of a central account will assist the government to manage huge cash transactions, account reconciliation of revenue and reduction of idle funds often abandoned by Ministries, departments and revenue-generating.
Agencies it is high time now to seriously think on whether this approach would help to increase credit to economic activities or limiting financial institution to trade on such deposits to fuel economic activities?
Many administrations, from time to time, articulate certain fiscal strategies and offer supporting settings to stimulate economic growth and development.
These in my view would lead to both an increased in public income and public investment in basic set-up, thus inspiring economic growth with multiplier effects in the economy, capital development indices, increased private returns on resource production, and increased private investments, in that way inspiring household savings.
Theoretically, treasury single account strives to make more resources are available to permit Government to meet up its huge competing demands, give room for accountability and transparency in the management of public funds and help to eradicate corruption and misuse of disloyal investment executives in revenue-generating agencies and above all, to stimulate economic growth.
After four years of execution of this strategy, can Tanzania boost itself on the manner the Tanzanian economy is faring to the introduction and full implementation of the treasury single account?
Does the central bank of Tanzania believe treasury single account is the way to go to regenerate and speed up economic activities in Tanzania?
If not, what should be the best approach to inspire the economic growth of Tanzania under President Samia Suluhu Hassan?
