Bank of Tanzania – History, Structure, Governors, Network and More
Table of Contents
It was formed by the Bank of Tanzania Act 1965. The government later concluded that the bank had been tasked with too many roles, which curtailed its other purposes. This led to the introduction of the Bank of Tanzania Act 1995, that made money policy the only objective of the bank.
The bank is under a ten-member board of directors, four of these are ex officio members that are assisted by 3 advisory committees. The head of the bank is a governor, who is aided by 3 deputy governors in Financial stability, financial and economic policies and Administration.
The first parliament of Tanzania chartered the establishment of the bank via the Bank of Tanzania Act of 1965 after the East African Currency Board was dissolved in 1965. It started its operations on 14th June 1966 following its launch by Mwalimu Julius Nyerere, the first Tanzanian president.
The formation of the Bank of Tanzania was promptly followed by the proclamation of the Arusha Declaration and the modification of the bank’s traditional roles to accommodate the changing economic system. The Bank of Tanzania was forced to redefine its duty in the economy due to the absence of competition in the financial markets. The Exchange and Control Ordinance and Import Control Ordinance permitted it to implement the following plans after 1971:
- The Annual Credit and Finance plan granted the bank free control of the interest rates in addition to being the major act that enabled it to implement monetary policy.
- The Foreign Exchange Plan giving it control over foreign exchange rate use to safeguard national interests as well as prevent the devaluation of the local currency.
In 1978, The bank was of Tanzania Act amended to grant more control to the bank due to increased villagization during that time and the persistent weakness in the bank’s balance of payment. This act moved the role of financial planning to the bank from the ministry of finance and planning.
As a result of the rapid inflation rate and the devaluation of the Tanzanian currency and after the economy was liberalized in 1995, the Bank of Tanzania Act 1995 was instituted, clarifying the central bank’s primary objective as creating a monetary environment that ensures Price stability. This act was clarified again as the bank’s presently governing act.
Bank of Tanzania Organizational Structure
Board of Directors
The board of directors of the Bank of Tanzania consists of ten people. 4 of its members are appointed directly by the Tanzanian president. Two members of the board are appointed by the chief secretary of the Revolutionary Government of Zanzibar’s treasury and the Ministry of Finance.
The present composition of the board is made up of:
- The Governor, the board’s chairman
- 3 deputy governors, the Governor determines their roles
- Ministry of Planning and Finance representative
- 4 Non-executive members
- Secretary to the board
Bank of Tanzania Governors
The Bank of Tanzania has had eight governors, seven previous governors and the current acting governor. The eight governors are listed below:
- Edwin Mtei- 1966 -1974
- Nyirabu Charles- 1974 – 1999
- Rutihinda Gilman- 1989 -1993
- Rashidi Idris- 1993 -1998
- Ballali Daudi- 1998 to January 8 2018
- Benno Ndulu – January 8, 2008, to January 7 2018
- Luoga Florens – January 8 2018 to currently
The headquarters of the Bank of Tanzania is in Dar es Salaam at the middle of the city’s financial district. The bank also maintains six branches cities listed below:
The Mtwara branch was the last to be opened following the recent growth of the Southern areas economically.
The Bank of Tanzania actively promotes the policy of financial inclusion and is a prominent Alliance for Financial Inclusion member. The Bank of Tanzania is also among the 17 original regulatory institutions that made specific commitments in 2011 during the Global Policy Forum which took place in Mexico to advocate for financial inclusion under the Maya declaration
The chief professor of the central bank Benno Ndulu revived the commitment of the bank in 2016 by inaugurating the National Financial Inclusion Framework (NFIF), 2016 to 2020. The goal is to lower the number of vulnerable households because of unstable incomes, self-exclusion and low confidence from the present 28.2 %.
Continuous development of professionals and Training
The Bank of Tanzania owns its training institute situated in Mwanza.
The External arrears Account of the Bank of Tanzania was audited following the involvement of the bank in a scandal. Approximately 133 billion Tshs were found to have been laundered in 2005 via ambiguous payments. Consequently, the Governor of the bank, D.T. Ballali was fired by the Tanzanian president on 9 January 2008. A new governor, Professor Ndullu Benno was appointed on 9 January 2008.
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