The coronavirus outbreak has impacted many investments, but mainly local manufacturers who depend on raw materials from China and India.
The two Asian economic giants are the main suppliers of raw materials to the country’s manufacturing industries.
Tanzania Private Sector Foundation (TPSF), Executive Director Godfrey Simbeye unveiled to the “Daily News” yesterday in an exclusive interview that industries have started running out of raw materials due to limited importation of the feedstock from the two countries which are among the most affected nations following the COVID-19 outbreak.
“So far, regarding the production sector, those who depend on raw materials from China and India are most affected as they have started running out of raw materials amidst declined importation of the feedstock from those countries,” Mr Simbeye stated. Mr Simbeye warned that those enterprises will no longer be able to operate sustainably because production has dropped, except for industries that source the raw materials from within the country, for instance from agriculture.
“For instance today I have received a letter from one company informing us over its decision to send home its 150 workers until September due to poor production; he said but declined to go into detail over the company.”
Mr Simbeye said the TPSF was, however, carrying out a general assessment of the effects of the coronavirus to all of its clusters ranging from agriculture, financial institutions and industrial production.
He said the Foundation, an umbrella of private sector players, has already directed leaders of all of its clusters to analyse the impact of the virus on their clusters and compile detailed reports.
On the other hand, the TPSF envisaged a gloomy picture over bank loans repayment if the country would opt for a total lockdown.
He argued that the bank sector would definitely be affected if private employers would decide to send their workers home as preventive measures against the spread of the deadly disease.
Mr Simbeye argued that it was a naked fact that if the debtors would not work and earn money they would definitely be unable to settle their loans.
“I can see nonperforming loans (NPLs) growing in the future should there be no arrangement for a stimulus package,” he suggested.
Recently, the Bank of Tanzania (BoT) said it was contemplating to offer special packages for the financial sector in a bid to stabilise the sector and maintain monetary stability following the coronavirus outbreak.
This is part of Central Bank’s contingent plan to cushion the economy from what is expected to be a severe blow from the pandemic.
BoT’s Macro-prudential Analysis and Crisis Management Manager, Dr Deogratias Assey, said the central bank was weighing bailouts to help the finical sector if the virus will create a monetary crisis.
On a separate occasion, Executive Director of Confederation of Tanzania Industries (CTI), Mr Leodegar Tenga, told journalists in Dar es Salaam that it was obvious that industries that were relying on raw materials from abroad were hit hard by the economic effects of the coronavirus.