Zanzibar blue economy through Islamic Finance.

Blue economy is about sustainable use of sea, ports, coasts, other water bodies as well as related water resources including underwater for social economic development while preserving the environment. Zanzibar development vision 2050 regards the blue economy as priority area for the next 30 years, serving as an effective and sustainable means of improving livelihoods and transforming the Zanzibar economy. Zanzibar had prepared Blue Economy policy in 2020, of which the then Minister of Finance and Planning of Zanzibar Hon. Amb. Mohd R. Abdiwawa said " By 2030, given the implementation of Zanzibar Blue Economy policy, we expect Zanzibar to be the leading hub for the blue economy in the Western Indian Ocean region." According to Zanzibar policy, priority areas are; Fisheries and Aquaculture, Maritime trade and infrastructure, Energy, Tourism, Marine and Maritime governance. In each of these areas, there is a lot of funds that are needed in order to address the challenges in each area in order to contribute massively to the economy. One of key sources of funding that Zanzibar government need to resort to is using Islamic financial instruments. Islamic financial industry in Tanzania is at nascent stage of development. Despite of that, it has shown positive impact in enabling financial inclusion, MSME growth and contribution to the government revenue. However, URT and ZRG have yet to tap into financial resources that are available in Islamic banks and windows as well as from the Muslim local and international institutions and investors due to public official lack of awareness, status quo mentality as well as failure to think of the future. No doubt, Islamic finance is the future for people of Zanzibar social economic development agenda after having spent years under conventional financial system that has not delivered prosperity to Zanzibar people. No wonder, current CCM manifesto for Zanzibar promise use of Islamic financial mechanisms. Let us give few examples to illustrate how Islamic financial instruments can play huge role; First example, our fishermen lack capital to buy large boats and vessels as well as lack of modern cooling facilities to store fish. Being majority of Zanzibar fisherman are Muslims, they abhor interest based loans. Islamic microfinance and Islamic banks / windows, through profit and loss sharing arrangements, trade based or leasing arrangements can be of great value to required finance to meet fishermen needs. Another example is on lack of capacity and facilities of Malindi seaport to handle volume of arriving vessels which leads to a lot of time wastage and revenue leakages among others. The government can issue retail government Sukuk, that will enable common people to invest as little as Tzs 50,000/- to raise billions that are required either to build modern seaport, acquire new equipment's among others. Retail Sukuk shall enable Zanzibar people to finance directly their government on reasonable commercial terms rather than existing arrangement of government borrowing on interest basis from commercial banks at high commercial interest rates. The former arrangement brings income directly to people whereas the later is largely for the bankers and shareholders. Last example is on massive potential for renewable energy particularly through solar and wind among others that can be financed through multiple Islamic financial instruments such as Sukuk, syndicated financing through local and international players that will enable Zanzibar to be self-reliant on energy sources particularly renewable energy. Besides, Solar equipment's financed through Islamic financing arrangements can enable remote villagers and urban dwellers to get reliable source of energy, light and improve their livelihoods. Therefore, Islamic financial instruments has huge potential to finance Zanzibar blue economy agenda. To achieve this, government officials and other stakeholders must be open to learn and re-learn Islamic financial mechanisms, promote financial sector policies, laws and regulations that promote Islamic finance, attract and retain talent with Islamic finance qualifications, consult and involve Islamic financial practitioners locally and abroad to address several economic challenges facing the Isles. Insha Allah, with the clean intention, calculated actions under the visionary leadership of H.E. Dr. Hussein Mwinyi, the blue economy vision shall be realized. Do your part!