Local banks interest rates hinder investments - Irish Ambassador
By Patrick Kisembo
The Irish Ambassador to Tanzania, Anne Barrington, has cited high interest rates charged by Tanzania`s banks as one of the key impediments to investments in the country`s agricultural sector.
Ambassador Barrington made the remarks yesterday when she paid a courtesy call to the IPP Executive Chairman, Reginald Mengi in his office in Dar es Salaam.
She said many investors from Ireland and other parts of the world saw high interest rates charged by the banks as impediments to their need to invest in the sector, which employs majority of Tanzanians.
``Foreign and local investors, wishing to venture in exporting agricultural produce from Tanzania or invest in agro-industries, get stuck when they go to borrow because the banks would charge at least 19 per cent interest and would want the loans to be repaid within five years,`` the envoy said.
She said the move was not conducive and viable for both local and foreign investors eager to invest in the country.
``These are things that the ministers responsible for the sector(s) should sit down and see a way of moderating the interest rates, so that investors could flow in and help to promote agriculture,`` she said.
The ambassador advised Tanzania to take advantage of its abundant natural and human resources to invest and expand the agriculture, adding that the sector had been given a global focus as the main saviour to African countries in the current global financial crisis.
``Tanzania needs to use the existing natural resources and its population for development. We in Ireland had no natural resources and were considered poor, but we emerged up and performed wonders,`` she explained.
Barrington however hailed the government for investing in agriculture, saying it’s focus on the sector was a very welcome move taking into account that more than 80 per cent of the people depended on farming.
For his part, Mengi, who is also the Confederation of Tanzania Industries (CTI) Chairman, raised his concern over the fact that many educated Tanzanian youths viewed agriculture as an activity for unlearned people in the villages.
``There has been a feeling among our people that agriculture is only meant for villagers and the uneducated ones.
This notion is wrong and we need to change the attitude and see the sector as an alternative means of livelihood,`` he said.
Mengi also requested the envoy to allow CTI to send some delegates to Ireland, where they could learn more about agro-processing industries as a way of motivating them to build such ventures in Tanzania for the processing of agricultural produce within the country.
He further requested the envoy to encourage Irish businesspersons to invest in agriculture and other sectors in Tanzania.
Speaking on the people`s perception on agriculture, Barrington said that it was the duty of the government to create opportunities for youths and make them realise that it was worth investing in agriculture.
``There are different models to handle this issue and Tanzania has to come up with its own model on how to encourage young people to go back to the utilisation of land,`` she said.
She challenged Tanzania to take advantage of the prevailing peace to widen the sector and attract foreign investments as well.