The interviewees talked on the importance of the envisioned Takaful, saying if introduced, it will mainly focus on economic growth in support of the government backed industrialisation agenda. Finance and Economic Expert Mohsin Hussein argued that the plan has come at the right time, taking into account the strategic development plan by the government.
“The expansion of insurance services will consequently expand the country’s financial services in various spheres,” Dr Hussein argued. Takaful investment funds will also facilitate establishment of industries, create more job opportunities and increase government revenues.
Banking and Finance Senior Lecturer at the Institute of Finance Management (IFM) Dr Bill Kiwia concurred that insurance sector will be transformed because Takaful operates under the system of risk sharing by customers through cooperative principleinstead of risk transfer to the third party. Furthermore, the capital market will also be transformed as Takaful fund management functions will focus on investing in shariah compliant assets.
“This will not only bring together diversity in capital market but also increase sources of financing of long term projects in Tanzania,” he explained. Availability of diversified sources of financing is crucial for Tanzania, which is at a transformative stage and growth, with mega projects like Standard Gauge Railway and Stiegler Gorge underway.
The neighbouring Kenya officially introduced Takaful insurance in 2011 and, as a result, increased competition to the market, offered alternative insurance products and promoted innovation to the industry.
Another expert, Omar Sharif, elaborated that the introduction of Takaful will widen the banks’ ability to issue loans as the shariah compliant cover against risk from the loans will be reduced.
Islamic banks are strictly prohibited from using conventional cover because of shariah related issues. The Takaful in the financial industry paves way for alternative risk cover and at the same time opens up investment indirectly for policy holders. “Premiums are always channeled to investments activities in the local economy, increasing the domestic production,” he said.
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“In fact, all the leaders I met in the UAE praised us for maintaining peace, a prerequisite to achievement in development,” Dr Shein said at the press conference held at the airport in Zanzibar shortly after landing from the Arab countries. On January 21, this year the President and his delegation which included First Lady Mwanamwema Shein left the Islands for a week-long visit in countries forming UAE: Dubai, Sharjah, and Ras-al- Khaimah.
He said the reception he was accorded in each state was good, and that leaders in the Arab countries had promised to support Zanzibar move ahead in various sectors, including the search for alternative energy, oil and other natural resources, improvement of social services and infrastructure.
Dr Shein said, “… I personally learned a lot. The countries are economically well-off, but they have managed to advance because of determination and good planning, tools which we (Zanzibar) can copy from them.”
He said without good planning, even if you have money, one can fail to move forward as witnessed in some countries including in Africa where some nations have good economy, but have failed to achieve development goals.
Speaking with Journalists, the isles leader also answered questions which were not directly related to his trip. When asked to comment on ongoing views about changing presidential term limit from the current five to seven, he replied “It is not my agenda; I will respect my constitution term and leave the office to others.”
He was also asked about the temporary ban on registration of international ships after some foreign ship flying Tanzania flag were implicated in illegal business, he said “I know there are discussions going on.
It is the dishonest ships abroad are to blame for misusing our flag. I hope we will have the right to continue registering international ships.”
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