Research conducted by Tanzania Insurance Regulatory Authority (TIRA) in 2011 had shown that there is unfulfilled demand of takaful products in Tanzania and that there are potential investors to fill the demand. In light of this, TIRA decided to study matters of licensing and supervision of Takaful companies from several jurisdictions, the result of which a draft regulation was proposed to important stakeholders in 2013.
Stakeholders deliberation were documented and submitted to TIRA for final touches. Sources familiar with the matter, hinted that TIRA might have submitted stakeholders proposed regulation to the Ministry of Finance and Planning in 2014 or early 2015. Up to now, either no progress made or no information on what is the next step or when to expect good or bad news. Unfortunately, some potential investors had already started to mobilize human resources in view that the matter will be decided within reasonable time. Still optimistic though we are where we were albeit some crucial steps taken to have the regulation, no takaful company and no takaful regulation in Tanzania.
In neighbouring Kenya, one takaful company in operation since 2011 and regulation followed in 2016. Can this be an option for Tanzania? No, at least for now.
So what may be done? Well, I might not have straight or proven way around this but I think there are several options worthy to engage with rather than wait and see that has not yielded any result. Option one, demand and supply driven initiatives such as potential customers particularly in the corporate sector and potential investors should seek audience with Ministry of Finance to seek answers and if need to have a constructive discussion and time line on when to expect the regulation to be in place. Second, depending on the outcome of the first option, stakeholders may organize a meeting with Prime Minister to seek some answers and present our displeasure in the way the matter is slowly taken. Third, depending on the outcome of the first or second option, lobby the political class in the ruling party particularly from Zanzibar government to engage their colleagues in the mainland in order to fasten decision making on the matter. This is because Zanzibar Insurance Company which is owned by Zanzibar government and which has invested in staff capacity building and prepared to offer takaful products has much potential to grow with Takaful contributing positively to Zanzibar government revenues.
Of course, these options are not exhaustive and I look forward to hearing from others on best way to make private public partnership work in this case.
The author is Manager (Head), PDSC at Gulf African Bank Ltd.