Stanbic Bank Tanzania (SBT) and the People’s Bank of Zanzibar (PBZ Bank) have formed a strategic partnership as Co-Mandated Lead Arrangers to facilitate a local syndicated loan to support funding the socio-economic development agenda of the Revolutionary Government of Zanzibar (SMZ). The first tranche of the loan is valued at TZS 185 billion which is financed by SBT and PBZ as Original Lenders.
The two renowned financial institutions formalized their collaborative development financing partnership yesterday in Unguja, in the presence of the Minister of State in the President’s Office, Finance and Planning, Dr. Saada Mkuya who emphasized that the lending will stabilize the Isles’ economy and drive sustainable growth.
“This credit comes at a crucial time, as it will help us accelerate economic growth from the current 7.3 percent to over 7.4 percent. It will provide the necessary funds to invest in economic infrastructure, enhancing key sectors like tourism, which was severely impacted by the COVID-19 pandemic,” Dr. Mkuya stated.
She noted that Zanzibar’s economy had contracted to 1.2 percent in 2022 when the COVID-19 pandemic devastated global markets and disrupted international travel and trade.
However, with the economy now on a steady path to recovery, she highlighted the growing interest from Mainland Tanzania’s commercial banks in the Spice Islands, including Stanbic Bank, which is set to open its first branch in the archipelago this year.
Speaking earlier, the Permanent Secretary of Zanzibar’s Ministry of Finance and Planning, Dr. Juma Malik Akil, further highlighted that the syndicated loan was a key component of the SMZ’s domestic borrowing strategy to facilitate development budget of TZS 1.7 trillion for this fiscal year.
“We still face a significant financing gap for development projects, which necessitates similar support and strategic partnerships, such as today’s witnessed synergy demonstrated between Stanbic Bank and PBZ Bank. This collaboration is crucial for funding socio-economic development initiatives,” Dr. Akil remarked ahead of the signing ceremony.
In their remarks, the leaders of the two banks said the credit facility will not only empower the SMZ but also serve as a catalyst for bettering people’s lives.
The financial collaboration is poised to fuel transformative socio-economic progress, tackle critical infrastructure gaps, enhance public service delivery, and unlock new opportunities for sustainable growth and inclusive development throughout Zanzibar’s diverse communities.
Mr. Manzi Rwegasira, Chief Executive of Stanbic Bank, described the monumental financing development as a key milestone in the bank’s continued commitment to Zanzibar’s prosperity and the broader economic development of Tanzania as a whole.
According to him, Stanbic Bank has over the past few years facilitated more than USD 1 billion (about TZS 2.6 trillion) in financing towards development projects, reinforcing its dedication to supporting the country’s progress.
Emphasizing the initiative’s transformative potential, Mr. Rwegasira stated that this local syndication loan will propel key socio-economic projects that will not only have a direct and lasting impact on the lives of individuals but also accelerate sustainable development across the Isles.
“At Stanbic Bank, we view this financing as more than just capital; we see it is a catalyst that will accelerate Zanzibar’s progress in key sectors such as fisheries, maritime trade, energy, tourism, and infrastructure,” Mr. Rwegasira noted.
He stated that this groundbreaking financing will be instrumental in advancing Zanzibar’s Blue Economy.
Meanwhile, PBZ Bank’s Managing Director, Mr. Arafat Ally Haji, highlighted that the loan would play a pivotal role in supporting the government’s strategic infrastructure projects, including the modernization and expansion of Zanzibar’s port.
He emphasized that the financing is designed to accelerate Zanzibar’s growth trajectory and strengthen its overall development by enhancing the delivery of quality social and economic services.
“These funds will facilitate the completion of ongoing socio-economic projects while also financing new initiatives planned by the authorities – ensuring long-term, sustainable prosperity for the people of Zanzibar,” Mr. Haji stated.
