Survey: Tanzania loan rates too high

What you need to know:

  • In its October 2018 consensus forecast report for Sub Saharan Africa, FocusEconomics, has said Tanzania’s interest rates are currently at 16.30 per cent, higher than the SSA regional rate of 10.63 per cent.

Dar es Salaam. Tanzania has been ranked as the second Sub-Saharan African country with the highest interest rates on loans, the US economic research organisation, FocusEconomics has said.

In its October 2018 consensus forecast report for Sub Saharan Africa, FocusEconomics, has said Tanzania’s interest rates are currently at 16.30 per cent, higher than the SSA regional rate of 10.63 per cent.

The report shows that there was a slight decline in the regional interest rate as it fell to 10.63 per cent in the October 2018 forecast from Sh11.71 per cent recorded during similar period of 2017 and 11.67 per cent in 2016.

However, the Tanzania rate was lower than 18.62 per cent recorded during a similar period last year, making it the fourth with the highest interest rates behind Mozambique (20.50 per cent), DR Congo with (20.00 per cent) and Ghana which had 20 per cent.

The 2018 report shows that Angola has the highest interest rate with 16.50 per cent while Mozambique is third with 14.25 per cent and DR Congo is fourth with 14 per cent.

Other countries with the highest interest rate according to the US organisation are Zambia with 9.76 per cent, Kenya with 8.83 per cent and Uganda with 8.42 per cent.

The countries which experienced the fall of interest rates between October 2017 and October 2018 reports were Mozambique which saw a fall to 14.25 per cent in 2018 from 20.50 per cent in 2017, DR Congo from 20 per cent to 14 per cent and Angola which recorded a decline to 16.50 per cent in October 2018 from 18 per cent recorded in October 2017.

In Kenya rates also fell to 8.83 per cent from 10 per cent in 2017 while the rates for Zambia and Uganda fell to 9.76 per cent and 8.42 per cent in October 2018 respectively from 10.25 per cent and 9.50 per cent respectively.