By Godwin Semunyu

I recently stumbled on an interesting report by the British Broadcasting Corporation (BBC) revealing that human beings’ attention span; the amount of time humans spend concentrating on a task before becoming distracted. Has fallen from 12 seconds in the year 2000 to just 8 seconds today. Less than goldfish that has a 9-second attention span. In other words: The average human attention span is now shorter than a goldfish. Blame it on technology, they say.

At first, we blamed cellular phones for distractions, then the internet boom, later social media, and now, smartphones have become our brains’ nemesis. The latter being the undisputed source of distraction.

The insights took me back to one of Mark Manson’s article– the attention economy, where he illustrated how life has changed, and the economies morphed into new things. For instance, if you’ve ever spent time in a challenging neighborhood or with people who grew up in poverty, you’ll notice how much they talk about food — their favorite foods, what they’re going to eat this weekend, how they like this and don’t like that, and so on. Much of their lives and conversations revolve around food for the simple reason that the scarcity of food makes it appear incredibly important.
But in first-world cultures where food is never an issue, discussions of food among most people are superficial and usually over within a few seconds.

For most of human history, the significant economic scarcity in the world was land. There was a limited amount of productive land; therefore, there was a limited amount of food. And because there was a limited amount of food, most day-to-day economic concerns, and political squabbles involved land. Most people spent their lives contemplating what land they were going to work, what they were going to grow, what kind of harvest to expect, and so on. Food was always on the top of people’s minds.

Eventually, when the industrial revolution hit, the primary scarcity was no longer land, as machines could now help cultivate more than enough food for everybody. Now the considerable scarcity was labor. You needed trained people to run all of these machines that did all of the cool new stuff so you could make money and get rich. Thus, for a couple of hundred years, the organizing principle in society was based on labor — who you worked for, how much you made, and so on.

Then, in the 20th century, more was produced than anyone would ever need or could ever purchase. The new scarcity in society was no more prolonged labor or land; the scarcity was now knowledge. People had so many choices of what to buy with their hard-earned money, but they didn’t know what to purchase. I once visited a lavished Nike store in the US, and I got overwhelmed by choices. I left.

The abundance of choices then gave way to brands. Thus, people spent most of their day-to-day existence trying to figure out what the best toothpaste was, what a toaster oven could do, and so on. The advertising and marketing fields then came to dominance to disseminate information people needed to make “informed purchases.”

Now, the internet and smartphones have disrupted everything. The primary scarcity in society is no longer comprehensive information. In fact, there is now more information than any of us could know what to do with. Everything can now be figured out in mere seconds. My twelve-year-old son would often scold me, “You can google that, dad, google is your friend,” whenever I ask for information or directions.

The scarcity in our world is no longer comprehensive knowledge, neither labor nor land. The new scarcity in the modern internet age is called; attention. People would do anything to get followers, the likes, impressions, and comments. The new bottleneck on our economy is attention. We tend to seek attention at all costs while paying little attention to things that matter. We are indeed in an attention-based economy with an increasing lower attention span.

The author is Head of Marketing and Communication at Equity Bank(T). The article is his personal views and does not represent his employer. He can be reached through: godwin.semunyu@equitybank.co.tz.

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Need to inculcate savings culture

I just finished reading a memoir by former President Ally Hassan Mwinyi, “Mzee Ruksa, Safari ya Maisha Yangu.” Probably the best narrated Swahili biography of all time. In the book, Mzee Mwinyi discloses how he learned the saving culture from an early age through his late grandfather, Nzasa.

He says, during harvest season, when everyone was busy partying and plummeting the harvests, Nzasa would carefully stock the family harvest, ready to sell at higher prices during drought or in exchange for labor. That mentality, he says, has guided him through his entire life (he just turned 96yr), so much so that he has never borrowed money from anyone, thanks to self-discipline in savings and avoiding unnecessary expenditures.

In Tanzania, we are slowly becoming a nation of spenders rather than savers. The savings to income ratio is lower as the social norm is spending to achieve a particular lifestyle or status, regardless of income. The price tags and brands are essentials, irrespective of income.

Most people will place their lack of savings on not earning enough or because prices continue to rise. Frankly, the real reasons why people don’t save are seldom economic – they’re more psychological. That’s because, to most people, savings is considered as what’s leftover after paying for all essentials, rather than one of the essentials after earning. For most people, their savings get squeezed to allow consumption, while realistically, consumption is compressed to enable savings.

People tend to cling to the illusion that things will somehow improve – that, regardless of their efforts, things will get better, they’ll get lucky, their talents will suddenly be recognized, or “Dili” or Mchongo will come out of the blues, and all their financial worries will disappear. False optimism or what is known as Peter Pan syndrome‘.

Psychologically, spending is funnier than saving. It can be hard to save, especially during tough economic times. But saving is no longer an option. The coronavirus pandemic outbreak has given us all the chance to rethink our spending habits, and if you’re lucky enough to have a job still, it can be a brilliant time to make some positive changes to your financial habits. For instance, in Dar es Salaam, local hospitals charges as high as TZS 1mn for one-night admission for COVID-19 patients, which medical insurers do not cover. We are soon going to see families making life or death choices. Save.

Where do we go from here?

An orthodox piece of advice is to automatically save at least 15-20% of your income every month for future expenses, including emergencies and future life plans. Banks can help you set a particular standing order that will automatically transfer funds to this special account after each instructed income. You can also instruct limited withdrawals.

Another renowned method is starting what is known as an emergency fund, where one can start saving for the future. It might feel like emergency savings money is “just sitting there,” but that’s the point. Your emergency cash reserves should be easily accessible if your income is adversely affected or a significant unexpected expense arises. If you become ill, the last thing you want to worry about is how you’ll pay your bills.

Yet still, since savings is a habit, it is imperative to inculcate it early. Savings should start at home and schools at an early age. One can be taught to start small with achievable targets, short-term goals, and identifying fundamental lifestyle changes. Once savings habits are established, they tend to be maintained, and among ‘rainy-day savers,’ the savings developed during childhood continue into adulthood and become self-reinforcing.

The author is Head of Marketing and Communication at Equity Bank(T). The article is his personal views and does not represent his employer. He can be reached through: godwin.semunyu@equitybank.co.tz.

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By Godwin Semunyu

There’s a lot of talk about digital transformation in the Tanzania banking space, but not a lot of results. A few banks are finding success, but many don’t have a real plan or still enjoy the business as usual.

Meanwhile, customers are busy finding new ways of life in the digital spaces. The Internet penetration rate in Tanzania has more than doubled between 2013 and 2021. Recent government reports have shown that by January 2021, there were close to 51 million mobile connections in the country, equivalent to 82.7% of the total population. Out of that, 15 million (26%) are active internet users.

The world of the internet, cell phones, and gadgets has made the unthinkable, thinkable. What started as social platforms like Facebook and WhatsApp, now links customers to their funds and markets, conveniently. Digital services are getting better and safer. The online business (Instagram business mostly) where one shops online, pay via mobile and have their purchase delivered at doorsteps have to a great extent reduced the need for cash, which is the main driver of traditional banking. Less cash, fewer bank branches.

The digital platforms have crossed and broken barriers even in areas like paying government taxes, duties, land rent, and port charges that were usually considered bureaucratic. International trade has also not been spared. You want a new gadget, you order straight from Apple, and it will be delivered to your doorstep having paid everything including taxes, duties, and airport charges online. All these with no cash involved.

Gone are the days of everyone needing to go to the bank to transact or open a bank account. The days of in-branch loan processing, are increasingly numbered. The dominance of mobile money, alternative banking channels, and the unfortunate emergence of the pandemic hasn’t helped the course either.

When most of today’s customers evaluate financial institutions, they only compare experiences. Real-time transactions and the convenience of services rank higher than the presence of a superior network of branches.

Tanzania Banking population stands at 29 percent, which is around 16 million people while financial inclusion numbers read at 85 percent, around 51 million people. The customers prefer to spend more time on their phones and gadgets than on banking halls. There can only be one winner here. Digital interactions.

The biggest and worrying data of them all is that the median age in Tanzania is 18 years. Meaning the new generation of customers is predominantly tech-savvy. The largest generation in the workforce to date prefers to bank online. Banks ought to adjust to their needs.

Also, Tanzania has a predominantly rural population geographically disperse. The investment costs required to reach them all make it an uphill task for most banks. Digitally, this segment can easily be included. It doesn’t necessarily have to be via internet-based applications, but rather the Unstructured Supplementary Service Data (USSD) mode.

Writings should be on the white wall to all the Tanzania Banks chiefs, in the United Kingdom, for instance, more than 4,000 bank branches have been closed in the past six years as lenders increase digital services for customers.

In the United States alone, since 2012 the number of bank branches opened has fallen by an average of 902 per year, with Bank branches rapidly declining. One report has sarcastically predicted that the bank branches may become extinct by the year 2040.

Also, while announcing, first quarter 2021 performance results, Equity Bank Group CEO Dr. James Mwangi announced that currently, the Bank, as a group, serves 98% of customers via digital platforms, thanks to innovations and investment in technology.

The emergence of Bank’s agents popular known as Wakala since the year 2013 has seen more and more customers abandoning the branches network once needing services. In 2019 the total deposits through Wakala reached a record high of TZS 19 billion an 84% increase from a year prior. Alternative Banking channels have since become the pinnacle functions of the banking business.

In the past few years, Banks had embarked on a mission to push customers outside the branches by introducing higher fees on bank hall transactions. With the new development in the market, one wonders if the strategy will be overturned to save the landmark branches. It should also be noted that there is a growing group of potentials who have never had a bank account and are used to only accessing funds through mobile phones and Wakala. They present a mountain task to be “converted”.

-ENDS-

The writer is Head of Marketing and Communication at Equity Bank(T). He can be reached through: godwin.semunyu@equitybank.co.tz

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By Godwin Semunyu

Soccer goes down to the roots of Tanzania’s history. Through the soccer fields in Jangwani and Kariakoo, the late Mwalimu Nyerere and the TANU comrades converged with the locals during the freedom fighting days.

In Tanzania, whether you are a sports fan or not, you are somehow expected to support either Yanga or Simba. A friend once joked that we are first Tanzanians, then we mention our tribes, followed by our support for either of the two teams. I see no lie. Each club is estimated to enjoy a fan base of between 15-20 million followers, one of Africa’s biggest fan base.

However, with all their mighty brand prowess and lucrative fan bases, Simba and Yanga are still living in a world of financial dependency and relying heavily on funds from sponsors and donors in exchange for advertising values.

Leveraging on their brands’ equity, they are undoubtedly the “adverting heavens” to most local businessmen. Perhaps that is their blessings in disguise. As a result, the clubs have developed a tendency of over-reliance on sponsors and individual benefactors, with minimal revenue alternatives, a recipe for the rise of a solo voice, with financial muscles, to take the helm. It is not an entirely bad situation as it has worked perfectly elsewhere.

However, the downside to this situation is that it lacks a going concern and sustainability. When the dominant voice stumbles, so does the entire institution. Yanga fans learned the hard way when their previous benefactor stepped down abruptly. Within three months, they went from being the wealthiest club in East Africa to a club pleading for fans’ contributions to pay salaries.

A few months back, Simba’s main sponsor pressed the panic buttons when he tweeted a decision to quit the club, following a stint of bad results. Though the decision was reverted afterward, the fans already feared the worse.

Lack of sustainable revenue streams that act as shock absorbers leaves the clubs vulnerable in any mishaps. History has taught that over and over again.

The Government has instructed the two clubs to embark on the ownership model where shares are distributed into 51% to 49%. The ordinary fans own 59%, and a mega investor(s) holding the remaining 49%.

This opens up doors for the clubs to start trading shares at the Dar es Salaam Stock Exchange and generate instant capital to fund operations and growth. Apart from investing in squad and training facilities, it could also be ventured into income-generating tributaries like bonds or short-term fixed plans to guarantee working capital.

The move will also amplify the fan bases as many will jump at the opportunity to own a part of their beloved clubs. Furthermore, as a publicly listed company with mandatory transparency practices, the clubs will win many supporters’ trust to turn them into active members, hence garner annual membership fees.

Merchandise, TV rights, and Kit sponsorship are football clubs’ major cash-cows. With unbalanced books and a desperate need for funds, the clubs naturally lose ground negotiating tables with advertisers. Nevertheless, by becoming financially stable, the clubs will have the upper hand and detect terms.

For instance, the clubs could opt the modern way of kit sponsorship, where multiple advertisers are accommodated. Recently, the English club, Arsenal, signed with Rwanda a three years kit sponsorship deal worth USD39 million to have a “Visit Rwanda” Ad on the sleeves.

Mind you, Arsenal already had five years kit deal with Emirates Airline worth £200m (USD 280mmillion) for the front part of the jersey and around £300 million five years deal with Adidas for the company’s logo on the top left corner, of the same jersey.

It should be clearly stated that floating shares is one thing, but inspiring investors’ confidence is an entirely different ball game. To achieve that, the clubs will have to be appropriately structured and professionally managed.

The clubs also need to invest smartly in the playing squads to get favorable results; game results are an essential driver of the share prices.
In England, for instance, where most Premier League clubs are listed, studies have revealed that share prices reacts asymmetrically to game results. The negative effect being greater and quicker for losers than the positive impact for winners. This is because losing is a stronger predictor of future losing (and hence lower financial performance) and vice versa.

The optimal point is, if the two clubs, which commands the support of close to 30 million Tanzanians, are to make a significant leap forward, financial independence is of the essence. But since mobilizing capital the old way has proved to be a daunting task, floating shares is the only light at the end of the tunnel.

Send your comments to gsemunyu@epicpr.co.tz.

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By Godwin Semunyu
The Zanzibar 8th phase Government under President Dr.Hussein Mwinyi is setting the pace towards attaining a robust 2050 vision, emphasizing in building an economy that capitalizes on marine-based products. “The blue economy,” as it technically termed.

Zanzibar, a combination of Unguja and Pemba islands, has a total surface area of 2,550 sq.Km with a population of close to 1.6 million people.

According to President Mwinyi, Zanzibar’s population has grown in five folds within 50 years, from only 300,000 in 1964. The number is expected to increase to over three million by the year 2040.
the drastic population growth will effectively increase density and consequently increase pressure on land for settlement and production.

Understanding the blue economy vision The ocean covers 72% of the earth’s surface while constituting more than 95% of the biosphere. Human beings’ livelihood is equally blue as it is green. However, less production is done on oceans than on land. Therefore, the blue economy is the sustainable use of ocean resources for economic growth, improved livelihoods, job creation, and better ecosystem health, from fishing to renewable energies, maritime transport, tourism, and waste management.

In Zanzibar, for instance, most of the fishing activities are taking place within fishing grounds in territorial waters, yielding around 1,806 metric tons annually. Comparatively lower to neighboring Mombasa and Lamu that produces about 24,096 metric tonnes annually.

Currently, Zanzibar’s GDP stands at Sh3.1 trillion, with tourism contributing 30 percent, agriculture 20 percent, Industry 18 percent, and other sectors carry 12 percent.

The figures could increase significantly if strategic and deliberate efforts are employed to leverage ocean-based resources like offshore hydrocarbon, energy, tourism, maritime transport, shipping, and deep-sea fishing. Certainly,

Plans should increase the yields through stern investment in deep-sea fishing to cater to local and international demands. There is a ready-made market in the landlocked countries of Rwanda, Burundi, Congo, Malawi, and Zambia.
Reports have indicated that the Eastern Africa region will increase fish consumption from 4.80 kg in 2013 to 5.49 kilograms by 2022. Rising population growth and income levels imply that the region will need 2.49 million tonnes of fish to fill the demand-supply gaps.

Kudos to the Zanzibar government for establishing the Fishing Corporation (ZAFICO) along with the construction of 26bn/- Malindi fish market that, apart from providing reliable stocking facilities with cold rooms, will also create close to 6,000 jobs.

Coastal Tourism is another important pillar of Zanzibar’s blue economy vision. Tourism contributes over 30 percent of Zanzibar GDP, contributing immensely in providing employment and 80% of foreign exchange.
The sector that enjoys an annual visit of around 500,000 tourists boasts a wide variety of options ranging from the historical and cultural sites of Old Stone Town to beach and leisure activities. Zanzibar has more than 500 hotels and guest houses, with a total of 7,500 rooms and a total of 114 tour operators. One of the best in the region.

Zanzibar needs more marketing efforts to promote the Mantra Resort in Pemba, the only underwater hotel in Africa. The Mantra resort rooms are 4 meters under the surface of the Indian Ocean, providing a unique underwater experience to the tourist. If well promoted, The $750 Per night per person rooms will surely be making its way on to the top bucket list of millions of tourists from all corners of the world.

However, the Zanzibar tourists’ sector should not become complacent or rest on their laurels but rather be on their guard by creating more tourists’ values. Zanzibar should always keep in mind the constant competition from Seychelles, Mauritius, and the Maldives.

Another critical area of the Zanzibar Blue economy vision is Seaweed farming. So far, the sector has created more than 25,000 jobs as Zanzibar is the third-largest exporter of seaweed in the world, after the Philippines and Indonesia. The room for expansion in this area is immense.

Furthermore, there is light at the end of the tunnel for deep-sea gas exploration in Zanzibar. Recent development including the initial signing of the Production Sharing Agreement (PSA) between the Zanzibar Government and the UAE based RAK GAS company, has paved the way for further exploration of oil and gas reserves archipelago. This area is of significant importance.

The future is blue

With resources like land for farming becoming scarcer, Zanzibar, like many other islands, ought to fully optimize all the resources presented by the Indian ocean. The blue economy is, therefore, a way forward.

President Mwinyi’s decision to form a special Ministry for Blue economy and fisheries is a bold statement of intent that for Zanzibar, the future is blue.

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