The Tanzanian Finance Minister arrived in Paris at the end of July to assure the Paris (donors) Club that tax loopholes had been closed and that the country was committed to the reform process. At stake was $1.2 million that Tanzania urgently needs. The government, whose coffers are empty according to the Daily News, has been forced to increase bank borrowing fourfold in 1994. Mr Kikwete said on his return that several donors might soon release funds but other Treasury sources (quoted in the East African) felt that his mission had not been a success and most donors were still withholding aid.
HOUSING BANK CLOSED
It was announced on August 4 that the Government had terminated operations of the Tanzania Housing Bank for what was described as ‘critical deterioration of the financial condition’ of the bank. Depositors accounts were being transferred to the National Bank of Commerce (NBC) and the cooperative and Rural Development Bank. The Government would spend Shs 9 billion to pay depositors, creditors and employees of the defunct bank.
NEW CAPITAL FOR NBC
Earlier, following a crisis statement from the National Bank of Commerce, the Government announced that it was immediately injecting Shs 11 billion of equity capital, seeking joint venture partnerships with foreign commercial banks for NBC’s international banking services and reducing the bank’s urban branch network. The Bank’s management had stated that it had incurred a loss in 1993/94 and that it had a Substantial portfolio of non-performing loans.