Remote Areas Left in Financial Darkness as Majority of Tanzanians Struggle with Poverty

Widespread Poverty and Low Savings Levels in Remote Areas

Dar es Salaam/Nairobi, March 10 - The majority of Tanzania’s population living in remote areas is without access to basic financial services, a situation that has contributed to widespread poverty and low savings levels. According to the Household Budget Survey of 2000/01:

• 18.7% of the population lives below the national food poverty line
• 35.7% struggles to meet their basic needs

Limited Access to Financial Institutions and Services

The rural areas are the hardest hit, with limited access to financial institutions and services. The survey also revealed that:

• Only 6% of households have one or more members with a bank account
• Just 4% participate in informal savings groups

This means that most households are unbanked, leaving them vulnerable to financial exploitation and hardship.

Concerns over Money Remittance System and Foreign Direct Investments

Meanwhile, the country’s money remittance system is operating without a regulatory framework, which has raised concerns about:

• Potential for illegal activities such as money laundering and terrorist financing
• The source of funds brought into the country by investors may not be effectively scrutinized

Challenges in Preventing and Detecting Money Laundering

Another major challenge is the lack of National Identification Cards (NICs), which hinders efforts to know customers and establish audit trails. Additionally:

• There is a general lack of knowledge and awareness about money laundering and its effects among the population
• The situation is further complicated by the escalation of predicate offenses such as bank robberies, car theft, prostitution, and corruption

Government Response: National Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Strategy

In response to these challenges, the Government has developed a National AML/CFT Strategy, which sets out key objectives, strategies, and action plans to address the issues identified during the self-assessment and Mutual Evaluation exercise. The strategy aims to:

• Strengthen the AML/CFT regulatory regime
• Improve communication and information sharing
• Raise awareness about money laundering and its effects

Implementation Plan

The implementation plan outlines responsibilities and indicative timelines for each action plan, which is attached as Annex 1. The development of the national strategy involved wide consultation with stakeholders to ensure that all relevant sectors are covered and taken aboard in efforts to prevent and control money laundering and terrorist financing.

Annex 1: Implementation Plan

[Insert implementation plan]

Note: The above article follows markdown format, with proper headings, subheadings, and bullet points.