Tanzania’s Central Bank Wants Bank Leaders to Step Aside After 10 Years 

Tanzania’s central bank will retain a 10-year limit on how long bank chief executives and directors can serve at the same institution, under draft regulations aimed at strengthening corporate governance in the country’s financial sector.

Under the proposed Banking and Financial Institutions (Corporate Governance) Regulations, 2026, a chief executive officer or board member would be barred from serving for more than 10 consecutive years. Anyone who reaches the limit would have to wait three years before returning to the same institution, according to the draft rules.

The regulations are open for public comment until Oct. 28 and would update a corporate-governance framework introduced in 2021 and amended in 2023.

The proposal comes as Tanzania’s banking industry has expanded and undergone consolidation. The Bank of Tanzania supervised 42 licensed banks at the end of June 2025, down from 43 a year earlier, while the number of bank branches increased to 1,032 from 1,026. Of the 42 banks, 35 were commercial banks, three were microfinance banks, two were community banks and two were development finance banks.

The sector accounted for 70.2% of total financial-sector assets in the year to June 2025, according to the central bank’s annual report. The banking system’s gross non-performing loan ratio fell to 3.3% from 4.1%, while the regulator said capital and liquidity indicators remained within prescribed thresholds.

The proposed tenure rule is not new. The Bank of Tanzania first introduced the 10-year ceiling under its 2021 corporate-governance regulations. The rule has since prompted debate among shareholders and industry stakeholders, with some arguing that experienced executives should be allowed more time to implement long-term strategies.

The latest draft retains the limit while proposing wider changes to board structures. The minimum number of board members would rise to seven from five, with a majority required to be non-executive directors. At least two-thirds of the non-executive directors would have to be independent and have expertise in areas including banking, finance, accounting, auditing, law, economics, cybersecurity or information technology.

The proposed rules also reflect the growing role of technology in banking. They would allow as many as 75% of annual board meetings to be held by video conference, compared with a 25% limit under the 2021 framework.

The emphasis on technology comes as Tanzanian banks expand digital services while facing growing cyber risks. The proposed inclusion of cybersecurity and information technology expertise on boards would broaden the skills expected of bank directors.

Tanzania’s banking industry has also changed significantly through consolidation and increased foreign participation. By June 2025, 25 of the country’s 42 licensed banks were foreign-owned and 17 were domestically owned, according to the Bank of Tanzania. Seven banks were listed on the Dar es Salaam Stock Exchange.

During the year, the regulator approved several transactions, including Access Bank Nigeria’s acquisition of African Banking Corporation Tanzania, the acquisition of Access Microfinance Bank Tanzania by Selcom Paytech and Exim Bank Tanzania’s acquisition of Canara Bank Tanzania. It also approved the merger of Kilimanjaro Co-operative Bank and Tandahimba Co-operative Bank to form Co-operative Bank Tanzania.

The banking sector’s financial performance has strengthened alongside that consolidation. In 2024, core capital and total capital ratios rose to 19.3% and 19.9%, respectively, from 17.7% and 18.4% a year earlier, while liquid assets as a share of demand liabilities increased to 29% from 28.7%.

The central bank’s governance reforms therefore come against a backdrop of a banking system that is both larger and more technologically dependent than it was when earlier governance rules were introduced.

Supporters of the tenure limit argue that regular leadership changes can strengthen succession planning and introduce new expertise. Critics have questioned whether a fixed ceiling could force out experienced executives even when their institutions are performing well.

The draft regulations seek to address the issue through succession planning. University of Dar es Salaam finance and banking lecturer Tobias Swai told The Citizen that the 10-year limit could work if banks prepare successors and preserve institutional knowledge during leadership transitions.

The debate also reflects Tanzania’s longer banking history. The country’s banking system has evolved from a heavily state-controlled model toward a more competitive sector with private and foreign-owned lenders. That transition has brought new institutions, greater competition and consolidation, while also increasing the importance of regulatory oversight.

The Bank of Tanzania’s current framework places corporate governance alongside capital adequacy, risk management and financial stability as core elements of banking supervision.

The central bank said in its 2024/25 annual report that Tanzania’s financial sector remained stable and resilient, with financial soundness indicators within prescribed thresholds. It also continued updating regulations covering areas including non-interest banking, climate-related financial risks, sustainability reporting and the interbank foreign exchange market.

The proposed governance regulations extend that approach to the people running banks.

For chief executives and directors approaching the 10-year threshold, the change could require succession plans well before the end of their tenure. For banks, it could also mean a greater emphasis on developing senior managers capable of taking over leadership roles without disrupting operations.

The draft rules remain subject to the public consultation process, meaning the final regulations could differ from the proposals currently under review.

Lakin Ogunbanwo (Nigeria)

Most Famous Photo: His portrait series exploring Nigerian masculinity and identity, often featuring subjects in traditional hats or veiled faces.

Short Bio: A Nigerian photographer born in 1987, Lakin Ogunbanwo is known for his bold and striking portraits, particularly those exploring Nigerian sartorial culture and masculinity. His work often uses strong colors, dramatic lighting, and a focus on gesture and form to create evocative and visually captivating images.

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