Gambling, mobile cash games aren’t just frauds

If a law enforcer comes up with the view that the notices are usually acted upon and thousands of people send cash to be part of the dishing out of a 5m/- or 10m/- jackpot or above, then the impression is cemented that there are plenty of frauds around. It is a projection of what fraud is and what its extent is.

Home Affairs minister George Simbachawene asserted towards the end of last week that frauds now range from 500m/- to 1bn/- per day in what he saw as a threat to the national economy.

That summation was a little surprising as money games thrive where people are making cash, and in making large amounts of cash available to a few people at a time, become a disguised form of accumulation. Large amounts are invested in profitable ventures, not just consumed.

The trouble is administrators sometimes believe that money that goes to the Treasury or local authorities by way of levies and taxes is what enables the country to develop.

This is for the simple reason that most followers of traditional distributive ideas commonly view development as merely social services and infrastructure.

These people are often mum about sources of investible surpluses that enable the majority of the people to have gainful employment. At most they think of productive activities like factories, while services are the chief employer.

Money games are positive to the national economy when the regulatory environment is predictable. Surely, it isn’t expected that a municipal official accompanied by police will just walk into a casino and shut down whatever is in progress there.

Nor is it expected that if somebody deposits 10m/- in cash that account will be closed for the police to investigate where that person got the money. That kind of law enforcement is negative, as it scares people and blocks the free flow of money.

When law enforcement is negative or unpredictable, money games can make vast amounts of cash ‘flee’ the economy and be deposited where the circulation of money for value addition is healthier.

Tanzania has in the past welcomed investors and encouraged freedom on the one hand, while tending to be vicious on ‘unwarranted’ making of cash. Accordingly, it is classified at a low level of doing business environment where law enforcers just wait to pounce.

Thus, minister Simbachawene is in a way right in that the pace with which money games are conducted is high, though the idea that this is attempted swindling of unsuspecting people is too sympathetic.

There were messages of that kind earlier, and some people say they still see them, but their scale is negligible as one doesn’t send money simply because a message entered where the money should be sent.

To organise a competitive economy, one must assume that people are rational, not to be saved by the police each time a money game is announced. This is a fact ell worth noting.