WE'LL PAY EVERYONE SOON, PLEDGES PRESIDENT MAGUFULI

President John Magufuli (centre), holds hands of outgoing Bank of Tanzania (BOT) Governor, Prof Benno Ndulu (right) and incoming Governor-elect, Prof Florens Luoga, after a brief event at State House where Prof Ndulu had gone to bid farewell to the Head of State in Dar es Salaam, yesterday.

President John Magufuli has pledged to settle, by next month, all internal debts amounting to 200bn/- that the government owes its teachers, contractors, service providers and other suppliers.

“It should be clear, however, that the debts are internal arrears which have been duly verified … I direct that proper preparations be made to release those funds … and it’s my hope that the money will stimulate the economy,” he declared.

Dr Magufuli made the remarks in Dar es Salaam yesterday when he bade farewell to Prof Benno Ndulu, the outgoing Governor of the Bank of Tanzania (BoT), whom he praised for proper supervision of the economy -- which has grown from an average of five to seven per cent per annum.

During the occasion held at State House, Dr Magufuli also met and held talks with the incoming Governor-elect, Prof Florens Luoga, whom he appointed to the position last October.

On Dr Ndulu, President Magufuli remarked: “You have done great during your ten years in office … in overseeing commercial banks and bureux de change. “Foreign reserves … increased from $1.8 billion to $6 billion dollars …. which can sustain the country’s imports for the next six months,” Dr Magufuli said.

Dr Magufuli was equally impressed that under his custody, Dr Ndulu had been able to secure funds to implement mega-development projects such as purchase of new aircraft and construction of Standard Gauge Railway and electricity infrastructure.

Prof Ndulu, a former World Bank senior economist, was appointed to the position in 2008 by now retired President Jakaya Kikwete, replacing the then embattled, the late Dr Daudi Ballali. The President revealed as well that a number of international institutions including the World Bank are still longing for services of the Prof Ndulu.

“I am glad with this information please go and represent us in those organisations,” he stated. The outgoing BoT boss thanked President Magufuli for the trust he had in him since he assumed presidency in 2010, stating that he was proud to retire when the economy is on the right footing.

“I should congratulate you Mr President for your guidelines which have helped to improve the economy including controlling the inflation rate to 4.4 per cent,” Dr Ndulu explained. Speaking later, Prof Luoga appreciated his own appointment by President Magufuli and assured him that he will see into it that the central bank continues to be a strong institution in supervising the economy.

“Under my custodianship at BoT I will work to strengthen the local currency and ensure that development projects are implemented successfully,” he pledged. Prof Luoga assured the President that the bank will continue working with other international organisations such as World Bank and International Monetary Fund (IMF) to prepare professional reports on the performance of the economy.

Just recently, the BoT board of directors endorsed a total of 300bn/- as the latest dividend to the government, a decision confirmed via a statement signed by outgoing Governor, Prof Ndulu. The amount scales to a total of 780bn/- so far, that the central dished out to the government between 2014/15 and 2016/17.

The bank disbursed 180bn/- and 300bn/- dividend in 2014/15 and 2015/16, respectively. The law provides powers to the BoT to share with the government the dividend after announcing the profit. The statement clarifies that the fundamental responsibilities of the bank were not to generate profit, but that when profit is realised, it gives a huge part of it as dividend to the government.

The 2006 legislation under which the bank operates stipulates that the main objective of the bank is to prepare and implement financial policy aiming at controlling inflation and building a strong financial system which would facilitate sustainable national economic growth.

Other principal functions of the Bank are to exercise the functions of a central bank and without prejudice to the generality of the foregoing, to formulate, implement and be responsible for monetary policy, to issue currency, to regulate and supervise banks and financial institutions as well as to manage gold.

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