With the advent of economic liberalisation, the government has increasingly relinquished its role as an active player in the economy, becoming more of a referee as the private sector takes centre stage. This is what the divestiture of parastatals and other State-owned business organisations was meant to achieve.

However, the creation of the market economy, which seeks to provide a conducive environment for free enterprise by individuals and private organisations, has not been easy. The challenges include weak institutions, a poor investment climate and dilapidated or nonexistent physical and soft infrastructure. These bottlenecks have prevented the private sector from thriving and providing products and services to all sections of the society as expected.

A section that has largely been left out of the fledgling market economy is the rural areas. Despite the mushrooming commercial banks and other financial institutions since the 1990s, rural populations still hardly access their services.

Even the creation of official and semiofficial microfinance institutions such as savings and credit cooperative societies (Saccos) has not helped much. Many of them still shun the rural areas due to the difficulties in operating in those places. They prefer to deal with clients in the urban areas.

As long as infrastructure remains poor in rural areas, the government must step in to help in the provision of microfinance services. The private sector cannot do everything, especially when the environment is not conducive for them to operate optimally.

This is why we appreciate President Jakaya Kikwetes injection of public funds to boost enterprise. The JK Funds (Mabilioni ya JK) initiative is a good idea. However, in its current form, it wont make much of a difference. It should not only be long-term, but should also be formalised.

The majority of Tanzanians, estimated at over 70 per cent, live in the rural areas. Almost half of these are extremely poor. The country will never take a leap forward in development if this huge section of the population continues to be neglected.