THE routine monitoring of banks performance by the Central Bank is yielding remarkable results, and witnessing their increased contributions and support to the national economic growth.
In this course, the Bank of Tanzania (BoT) has continued to implement prudential measures, which strengthen risk management practices in the banking and financial sector and this in turn, has also made banks to post robust profit and strong balance sheet.
The government initiated the liberalisation of the financial sector in the 1990s, which laid the foundation for a diversified, competitive and vibrant sector.
But the substantial transformation of the banking industry and whole financial sector got fresh impetus during the fifth phase government with close monitoring of the banks by the BoT.
During the reference period, we have witnessed the central bank's close involvement in monitoring the operations of individual banks with ultimate goal of building resilient, sound and strong banking sector.
For example, the BoT makes a close follow-up of the recruitment of their banks staff. This is done to track down bankers' work experience and ethical standards because they contribute to banks growth or decline.
One of the notable results is the increased contributions of banks to economic growth that led to the recent graduation of the country into middle income status, five years ahead of the period.
Last month, President John Magufuli commended the central bank, commercial banks and the financial sector for their contributions, which enabled Tanzania to join the league of middle income economy countries.
The World Bank recently declared Tanzania as a lower middle income economy after attaining the position of per capita income between 1,036 US dollars and 4,045 US dollars.
Moreover, the central bank's close monitoring of banking sector has made banks to register outstanding performance in the quarter ending June this year.
All large banks particularly those owned by the government fully or partly namely NMB, CRDB, TPB, AZANIA and TIB Development posted robust growth, thanks to an enabling environment put in place by the fifth phase government.
This enabling environment put in place through policies, legal and regulatory frameworks have ensured growth of a strong, efficient and effective sector in the country.
The BoT Monetary Policy Statement for June, for example this year, shows that the banking sector has remained sound and stable, with levels of capital and liquidity above regulatory requirements.
Therefore, financial sector reforms particularly those implemented during the fifth phase government will continue to enhance the sector's contribution to the growth of the economy as well as improved living standards.