How Do We Strike a Balance Between Borrowing for Growth and Avoiding Dependency?
Goodluck Msuya
I aspire to be a man who wakes up and loves what he does for a living every day. Travels often, spiritually secure, and financially stable.
Tanzania, like many developing nations, stands at a crossroads. On one hand, borrowing is essential to fund the infrastructure, education, healthcare, and energy projects that drive growth. On the other hand, unchecked borrowing risks creating a cycle of dependency—where repaying debts consumes resources meant for national development.
So, how do we strike that delicate balance?
First, it’s about ensuring every shilling borrowed is tied to a clear, measurable return. Are we borrowing for projects that will generate long-term economic value, such as roads that connect rural farmers to markets or energy solutions that power industries? Or are we funding projects with little impact on productivity?
Second, transparency is non-negotiable. Citizens and stakeholders must know the terms of the loans, how they’re being spent, and the expected benefits. Debt should not be shrouded in secrecy; it must be a shared responsibility that unites rather than divides us.
Third, we must diversify our economy to reduce reliance on external borrowing. Tanzania has immense potential—agriculture, tourism, minerals, and emerging sectors like digital technology. Strengthening these sectors will grow our revenue base, making borrowing a choice, not a necessity.
Finally, we need strong governance. Policies that prioritize debt sustainability, ensure repayment systems are in place, and safeguard against corruption will keep us on track. Borrowing isn’t inherently bad; it’s poor management that turns a tool into a trap.
The question remains: how much borrowing is too much? The answer lies in discipline. Borrow what we need, use it effectively, and ensure the benefits outweigh the costs. It’s not about saying no to debt; it’s about saying yes to growth while staying in control of our destiny.
What do you think?
Are we on the right path, or do we risk falling into the dependency trap?
Founder | Cherry Digital Solutions & Jiko La Mswahili | Airbnb Coach & Hospitality Consultant | Helping Airbnb Hosts & Businesses Elevate Guest Experiences, Maximize Bookings & Build Profitable Brands
2 个月This is pure dependency trap....we are borrowing money to fund projects that didn't return even a single profit except for loss. Ex. Air Tanzania and UDART we run them at high expense at no returning profits....i think they should just allow private investors to run them
Partner at Ashers Associates
2 个月The topic raised by Mr. Goodluck Msuya is indeed extremely important, and indeed he has covered up all salient features of borrowing and the consequent national debt arising. I fully agree for the national development of any country, if there is a need for additional investment which can lead to additional economic productivity, AND if ourselves are in short of funds, borrowing as suggested by Mr. Msuya is necessary. The only point of importance is the country must have well calculated rate of return of the funds, based on which plans are formulated for repayments to the providers and this fact more often than not is not immediately disclosed. This leads to adverse thinking of funds received by way of borrowing causing unwarranted thoughts, particularly when the amount of borrowing has been substantive, the country will be in a position to repay. It goes without saying that no investor or well-wisher would provide loans or grants unless they have first evaluated economic growth of the investee, and in this respect Tanzania has revealed real national development which we are witnessing. I suggest the objective should also be to minimize or totally eliminate poverty.
Accounting & Finance Expert | Partnering with Businesses for Sustainable Growth | Specializing in Financial Health & Compliance
2 个月This is a good question especially when looking at how the debt trend is going. I think striking the right balance is indeed crucial. While borrowing can unlock infrastructure and social development, ensuring debt sustainability is key. Perhaps, a focus on financing projects with a high economic return, transparent utilization of funds, and fostering domestic revenue generation could be the way forward. What strategies do you think are most effective for Tanzania to achieve this balance?