Shirumisha's Platform

Shirumisha Kwayu
Surely Goodness and Mercy shall follow me all the days of my life
Forget the former things: Do not dwell on the past. See, I am doing a new thing! Now it springs up: Do you not perceive it? I am making a way in the wilderness and streams in wasteland. Break camps and advance!


by Shirumisha Kwayu on 01/03/18

In 2017, most Tanzanian people felt the effects of contractionary policies, which led to the rise of the popular slogan ‘vyuma vimekaza’.  The majority of people lamented on taxes and scarcity of money in circulation. Nevertheless, as we start 2018, there is an indication that the situation will change, given the two important announcements that were made. This entry will speculate the reasons for what lead to the rise of vyuma vimekaza and why this era is ending in 2018.

One of the explanations given to vyuma vimekaza is due to the crackdown on corruption. This explanation holds the truth when looking at the economic history of the country. Initially, with Ujamaa policy which pioneered self-reliance the government controlled all means of production and the private sector was very minimal. With the fall of Ujamaa policy, the private sector started to nourish, in some parts due to people who wanted to benefit themselves resulting in malpractice between the public and private sector partnership. Regardless of the malpractice, in part, greed incentivised the economy to grow at the expense of growing inequality. The current administration with an eye of reducing the inequality and increasing efficiency on the public sector, took measures to revisit their relationship with the private sector and thus the private sector started to suffer liquidity. For example, the government directed all public parastatal to use the central bank and the banks, which were accustomed to trade with the government money, therefore leading to the banks experiencing liquidation.

Taxation is another reason that can explain vyuma vimekaza. The new administration has increased tax collection, which leaves people with less disposable income. Majority of people have raised their concern on the tax regime, for example with the EFD machines, which small business argue that they cannot afford to buy. In addition, some people have expressed concern on been taxed, even before their business started. In short, there are many challenges with the tax regime. In reality, anywhere around the world from the time of the Roman Empire, no one loves the taxman.

Despite the above reasons, the good news is that the revenue authority TRA has changed some of its policies, which will ease the way people pay tax. It has recently announced that they will only collect taxes once the business has started operation. Such changes are significant as they indicate a change in fiscal policy, which can arguably lead to expansionary policies and hence in 2018 people might start saying vyuma vimeachia.

Furthermore, today the President has announced an injection of 200 billion that will go to pay the private sector, owed to them by the government. This injection will increase liquidity and hence increase the levels of trade and investment within the economy. I personally believe that these two announcements are indication that the government is moving towards expansionary policies and perhaps in due time, more announcements will establish whether the government has decided on this direction 

BYE 2017 WELCOME 2018

by Shirumisha Kwayu on 12/31/17

As we are in the final hours of twenty seventeen, reflecting on my year I feel grateful of the year that God blessed me with. There a lot of things that happen during the year which I won’t remember them all and even if I try to it will be too long for this entry.  The year encompassed a lot of events with all types of feelings, from happiness to dejection, derailments to opportunities. But in all this am very grateful on how God gave a me a good comeback.

One of the things that has occupied me during the year was my PhD. Given that this is my final year it feels like a final round of marathon. Where you are exhausted but you need to go to the finish line. A lot of my plans changed due to writing opportunities that emerged. Although these opportunities emerged they were challenge in themselves. For example, failing to attend a conference in Guimarães, Portugal due to limited time and other factors. Furthermore, some of my writings took more than expected and they had given me a low time that I almost gave up. However, am grateful that my supervisors and family encouraged me to go on and am very glad of the outcome. At least it landed me on my first academic publication on a 3-star journal. Reflecting on the whole process of writing and the emotions; I can’t agree more that the finest oil comes from grinding the nuts.

Another, thing that when I look back at twenty seventeen is my family. My family has always given me a lot of support and strength. In the middle of this year my mother felt sick and I was very low, but God full of mercy and grace healed her. The recovery of my mother is one of the things that I am very grateful of what God did to me in 2017.  This brought back energy and joy not only to me but also to my family.

Lastly on reflecting back in my year, I am very grateful in my spiritual wellbeing and support that I receive from church, life group, friends and family.  Though this year I have taken a lot of effort on my physical and mental wellbeing. Spiritual well-being is something that has kept me going on. Todays sermon was about how God gave Abraham a promise, and in coincidence this week I read in Galatians on the Child of slavery and child of promise (Abraham children). I choose to be a child of promise and I believe twenty eighteen will be a year full of promises that God will bless me with. On my favourite quote from C.S.Lewis that ‘What you see and what you hear depends a great deal on where you are standing. It also depends on what sort of person you are. In 2018 my resolution is on reflecting on what sort of person am I and this will also depend on the stand (decision and perspectives) that I will take to capture the promises of 2018. Happy new year to all of you and may Gods grace be upon you.


Why Government Should Not Close Small Commercial and Community Banks

by Shirumisha Kwayu on 12/15/17

This week President Magufuli has sent seismic waves to the financial industry with his dissatisfaction of the underperforming banks, especially the ones which have not reached the minimum required capital. Today the Prime Minister Majaliwa, through the minister of finance Dr. Mpango, has order the central bank to close all banks that have not reached the minimum capital requirement by the end of this month. This is a shock to small community and commercial banks which are struggling to raise their capital. The Government is arguing that it is not ready to inject capital into struggling banks and that these banks are posing a threat to the economy. Given this argument and the potential impact of closing such banks, this entry is going to argue why closing is not a suitable option for the government to pursue.

Closing the small banks can trigger a financial crisis within the economy. Considering that most banks do not operate in isolation, inter-bank lending is a normal practice, thus an effect in one bank can trigger a ripple effect in other banks consequently, leading to collapse in the banking sector.

In addition, many financial institutions, business, communities and individual have invested in small-scale banks that are threatened with closure. Closing them will further jeopardise the capital that has already been invested in the banking industry. Given that these are small banks and most investor presumably are local investor who are trying to squeeze themselves into the financial sector, a move to close  the banks is to squeeze the local investors out of the central engine of the economy.

Furthermore, these small banks cannot be compared to the well-established and aggressive commercial banks. These small commercial and community banks have less experience, expertise, and capital but they were implemented to serve segments of rural communities, however, the commercial banks ignored them for the bigger slice of cake. Most community and small commercial banks are the ones that were first to reach out in rural areas with cooperation of small financial institutions such as saving and crediting societies (SACCOS) and Village commercial banks (VICOBA). Thus, closing these banks is punishing the small communities, which lend through SACCOS and VICOBA.

A quick closure will almost indefinitely lead to the chaos of a bank run, similar to that experienced by Northern Rock during the 2007 financial crisis; the question is Tanzania ready with such situation? Likewise, the investors may withdraw their capital from banks fearing the instability caused to the banking industry. Thus, the government should be wary in their threats of closure to the banks, as this might lead to instability in larger picture of the financial sector.

Such a move will signal banks to stop their lending and call back their loans having significant implications to lenders who borrowed for investment. The lenders will be triggered to sell their guarantees at a much-discounted price in order to meet loan agreements. This in essence is public theft, taken from the people who decided to invest and/or lend for rural development.

Considering the potential threats posed by the government announcement, my personal suggestion are as follows: 

  • First, the government should not interfere with the central bank. The Central bank’s independence is very important for financial stability. The laissez-faire tendency of the Central bank to these commercial and community banks can be seen as a weakness by the ministry and executive branch, but a hard approach can have dire effects. 
  • Second, the government can top-up the capital in return for the shares, this will help boost the banking industry, which is inevitably the heart of the economy. 
  • Third, the government should capacitate the small banks with training and technical assistance on financial products and technologies, which in turn will allow assistance to our local communities as well as to muscle up and compete with foreign banks. 
Lastly, I will recommend one of my favourite book ‘The Alchemist’ – Three Central Bankers and a World on Fire by Neil Irwin. If that will be a long read and you are restricted in time, you can read my review of the book here.


2017 UK’s General Election Results

by Shirumisha Kwayu on 06/09/17

Many papers today have written how Theresa May’s gamble in calling the 2017 election didn’t payoff, I consider the election was a great painful payoff to Theresa May and the British people. Although the results didn’t go the way May wanted however it’s a great lesson to her and her leadership on what to consider during her endeavour on Brexit.  The results, I believe have united the British people rather than polarizing as some may argue and will enable each one views to be considered. The following are my views on the election results

First, the results have united the people of Britain as they have abolished the demands of second Scottish independence referendum. The poor performance of SNP means that the demands and great effort that May was using to keep Scotland to the union have given May the mandate to continue with the Brexit negation without the worries of SNP.

Second, the fact that the government is formed with DUP means that view of Ireland will be highly considered as now they are represented in the government. If the conservative had a majority of votes they would ignore most of the concerns from other parts of the country and hence it would lead to dissatisfaction in future.

Third, given the Labour surge in the parliament means austerity measure will be revisited, hence the plea of many will be listened. This is because labour appealed to people who are frustrated with the austerity measure. Thus, it means the conservative should wary on austerity measures otherwise they might be taken out of power in the next election. This will also force the conservative government and some of the labour party members to take seriously the concerns that Corbyn raises.

Lastly, the best thing about this election was the participation of youth. This will help the government to take seriously the youth group who are the future of Britain. Also, this will affect British politics as many parties will start to consider issues that face the youth seriously.

Conclusively, one of my favourite politician Hon Ken Clarke claimed that a hung parliament is the worst, I beg to differ as I believe it will help with consensus on matter that are dear to the British people rather than one group of people dragging the other. Likewise, another of my favourite Nick Clegg, who I felt sorry for his fate in the election argue that the election result had polarizing effect. I believe this helps the government not just to focus on the centre but also consider all the dynamics in the room. 

My take on Anna Mwighira’s Appointment

by Shirumisha Kwayu on 06/07/17

I’m pleased with the recent appointment of Anna Mwighira as the regional commissioner (RC) of Kilimanjaro. As a residence of Kilimanjaro, I feel fortunate of her appointment especially with discontentment of some regional commissioners in other regions. Kilimanjaro is fortunate of having wise leaders especially the regional commissioners.  The immediate former RC Meki Sadiki was a very wise man. Since the appointment of Anna has raised concerns especially on the state of opposition, I’ll hereby point my views on why it was rational for her to be appointed and accept the position. I will also look into the way forward for opposition. 

First, Anna is a courageous and wise leader. She is among the few women who have led a political party as well as running for presidency. When she decided to run for presidential position, when some of the preferred members in her party were hesitant to do so. She stood up and ran her campaign in an admirable way. Full of agenda as opposed to personal attacks, which was a major component of other candidates. Unfortunately, the election was dominated with two major parties (CCM vs CHADEMA/UKAWA) and issues that received attention were pity and trifling. Hence, observing mama Anna in a position of leadership especially in a government provides a good lens for citizens to judge her wisdom and see her actions.

Second, Anna’s appointment should remind us that ACT Wazalendo and CCM share the same ideology. They both belong to the left and share the same socialist ideology.  ACT has placed its effort to rejuvenate aspects of the Azimio la Arusha, which was once core belief and the very foundation of CCM. Meanwhile Magufuli’s government is displaying considerable socialist elements such as increasing the powers of state and its intervention in economic matters. Thus, although they argue that ‘development has no party’, parties do have ideologies and ideologies guide strategies and strategies define priorities of attaining development. Probably ACT-Wazalendo fills the ideological vacuum that CCM created following its seemingly unprepared adoption to the liberal ideas without completely abandoning the foundational socialism. 


Third, Kilimanjaro is dominated by opposition, thus appointing an opposition leader to that region might be for strategic reason. Perhaps, the government wants to shield itself from the opposition, and the best way is to let opposition fight opposition. Another reason, which I believe, may be a way of reaching consensus – i.e. opposition might understand other oppositions. Hence appointment of Anna is a bridge of connecting the government with the opposition citizens. Such a move will help a faster materialisation of CCM manifesto in the region.

Prisoners’ Dillema

Despite my reasoning why I feel the appointment of Anna was appropriate, there are valid concerns on the state of opposition in Tanzania. Some have argued that ACT-Wazalendo is an arm of the ruling party, some say it’s a move of the government to dismantle opposition and some believe it’s a move to strengthen democracy. I believe in neither of those. It’s a game theory. We may all be on a prisoner’s dilemma. Whatever the intention and trade-offs that may exist the end results will depend on what the opposition does next.

Way forward for the Opposition

I recommend the opposition parties to do their job, reflect on themselves, the structures of their parties and policies. Then present the public with a credible institution to be elected. If the public doesn’t believe in the party, it’s so hard for them to believe in the candidate however good he/she is.

Lastly, I wish mama Anna Mwighira all the best in her work, she will have all our support.