By Business Insider Reporter
Tanzania’s Minister for Finance, Ambassador Khamis Mussa Omar, has directed the Tanzania Investment Bank (TIB) to significantly strengthen its operational and financial management systems in order to play a more effective role in supporting the government’s implementation of the Dira 2050.
The directive was issued in Dar es Salaam during high-level talks between the Minister and TIB’s leadership, led by the Chairman of the Board of Directors, Mr Sosthenes Kewe. The meeting focused on assessing the bank’s performance, identifying institutional weaknesses, and aligning its strategic direction with Tanzania’s long-term development priorities.
Ambassador Omar emphasised that TIB, as a state-owned development finance institution, must refocus on the core objectives for which it was established: mobilising long-term financing for strategic economic and social development projects, in close collaboration with other financial institutions.
“TIB must re-anchor itself on its founding mandate,” the Minister said. “This includes working closely with other financial institutions and developing comprehensive strategies that enable the effective financing of development projects, including strengthening mechanisms for loan recovery from its clients.”
Financial discipline under scrutiny
A key concern raised by the Minister was the bank’s financial sustainability. He instructed TIB to prioritise financial restructuring over the next 12 months, with clear, measurable actions to improve its balance sheet and operational efficiency.
“Within the next 12 months, you are required to come up with a concrete financial recovery strategy and make this your first priority,” Ambassador Omar said. “The Board must institute quarterly financial reviews, using clear performance benchmarks, to ensure the bank is on track.”
The remarks come at a time when development finance institutions across Africa are under increasing pressure to demonstrate both developmental impact and financial discipline. Rising non-performing loans (NPLs), weak project monitoring, and governance gaps have undermined the effectiveness of several state-owned banks on the continent.
TIB positions itself for Dira 2050
In their briefing, Mr Kewe and TIB’s Managing Director, Mr Deogratius Kwiyukwa, said the bank had begun repositioning itself to play a more decisive role in delivering Dira 2050 targets.
They noted that TIB’s long-term strategy prioritises financing projects that generate employment, expand productive capacity and improve social infrastructure.
Over the next 25 years, the bank plans to focus on agriculture value addition, water infrastructure and reforms within the financial sector.
According to TIB’s projections, more than TSh 5 trillion is expected to be invested in these priority sectors over the Dira 2050 period.
Agriculture remains central, particularly projects aimed at agro-processing and value chains that can absorb large numbers of young people entering the labour market.
Water projects are also seen as critical, not only for improving livelihoods but for supporting industrialisation, urban growth and climate resilience. Meanwhile, reforms in the financial sector are expected to strengthen access to long-term, affordable financing for productive investments.
Tackling structural weaknesses
The meeting also addressed internal governance and risk management challenges that have historically constrained TIB’s performance. Among the issues discussed were the need to reform internal management systems, reduce non-performing loans, strengthen credit appraisal frameworks and improve monitoring of funded projects.
High NPL levels have been a persistent challenge for development banks in Tanzania, often linked to weak due diligence, political interference and inadequate post-disbursement supervision. Strengthening credit assessment and project follow-up was identified as essential to safeguarding public funds and restoring confidence in TIB’s lending operations.
The Minister underscored that governance reforms and professional management were not optional but necessary if TIB is to remain relevant in an increasingly competitive financial sector.
A pivotal role in Tanzania’s development finance landscape
TIB occupies a unique position in Tanzania’s financial system, bridging the gap between commercial banking and public development priorities. As the country pursues its Vision 2050 ambition of transforming into an upper-middle-income, industrialised economy, the role of development finance institutions is expected to expand.
Ambassador Omar’s intervention signals a tougher stance by the Government on accountability and performance within state-owned financial institutions. It also reflects a broader policy shift towards ensuring that public capital is deployed efficiently, transparently and in ways that deliver measurable economic and social returns. If successfully implemented, the reforms outlined during the meeting could reposition TIB as a credible engine of long-term development finance—capable of mobilising capital, crowding in private investment and supporting Tanzania’s economic transformation agenda over the coming decades.
