Tanzania bars foreigners from microfinance outfits

The Bank of Tanzania (BoT) has introduced regulations that prohibit the employment of non-Tanzanians in the country’s microfinance service sector, in a development likely to undermine the spirit of regional integration as the economy battles an unemployment crisis estimated at more than 8.9 percent.

The regulator, through the draft Microfinance (Non-Deposit Taking Microfinance Service Providers) Regulations, 2024, notes that in the event non-Tanzanians are given opportunity to work for these institutions their number should not exceed five at any given time.

“A microfinance service provider shall not employ a non-Tanzanian or renew any contract of such a person, unless it seeks and obtains prior approval of the Bank, “according to the regulations tabled for public participation on the Bank’s website.

According to the regulations, BoT may approve the employment of a non-Tanzanian depending on the availability of qualified Tanzanians for the proposed position, complexity of the functions and roles to be undertaken, approval granted by Tanzania Investment Centre, emergency situation which may warrant an extra person and the time the extra person is expected to stay in the institution and impart knowledge to Tanzanians.

If approved, these regulations are expected to apply to all Tier 2 microfinance service providers operating in Mainland Tanzania, including credit companies, financial organisations, housing microfinance companies, individual money lenders and digital microfinance lenders.

The East African Common Market Protocol provides for the movement of persons, travel documents and the free movement of workers in the region.

The partner states, under the Common Market Protocol, guarantee the free movement of workers, who are citizens of the partner states within their territories.

In addition, they warrant that the workers will not be discriminated against in their territories based on their nationalities in relation to employment remuneration and other conditions of work and employment.

In this regard, the East African citizens are entitled to apply for employment, accept offers of employment move freely within the territories of the Partners States for the purpose of employment.

The objective of the Common Market Protocol is to realise accelerated economic growth and development in the region through the attainment of free movement of goods; free movement of persons, free movement of labour, the right of establishment, the right of residence, the free movement of services and the free movement of capital.

Data by Trading Economics shows that the unemployment rate in Tanzania declined to 8.9 percent in 2022, from 9 percent in 2021. It averaged 10.31 percent from 2001 to 2022, reaching an all-time high of 12.9 percent in 2001 and a record low of 8.9 percent in 2022.

Source: The East African

Leave a Reply

Your email address will not be published. Required fields are marked *