Dr Mpango allays fears of economic slowdown

The Finance and Planning minister, Dr Philip Mpango has accused some members of the parliament, who have been complaining that the national debt has been growing at a fast pace, of failing to interpret data.

Dr Mpango made the claims, when winding up a debate on the 2018/19 economic framework in the Parliament on Monday (November 13).

The minister reiterated that the national debt, which is equivalent to 31.2 per cent of the country’s Growth Domestic Product (GDP), is still sustainable.

According to him Tanzania ability to borrow stands at 56 per cent of its GDP.

For that, Dr Mpango insisted that the government will continue to borrow in order to fund implementation of various development projects.

“We will continue to borrow because we haven’t yet reached the maximum limit, so I urge MPs to be fair, when criticizing us,” said Dr Mpango.

The minister said the national debt increased from $22.3 billion in 2016 to $26 billion in June, 2017, which is equivalent to 17 per cent.

Dr Mpango said Tanzania is faring well when it comes to national debt sustainability compared to other East Africa Community member states.

According to him Uganda national debt stands at 35.4 per cent of its GDP, Rwanda (26.6 per cent), Burundi (43.4 per cent) and Kenya (50.4 per cent).

He also downplayed some MPs concerns that the country economy was declining. Some MPs, who include Nzega legislator Mr Hussein Bashe and his Kigoma East counterpart, Mr Peter Serukamba argued that the fact that personal and commercial loans issued by commercial banks have decreased, it is a sign that the country’s economy is slowing down.

Dr Mpango, who admitted that personal and commercial loans provision have decreased by almost 50 per cent compared to the same period last year, said the decrease was  not an indicator of an ailing economy.

 “This has happened in many countries across the world and one of the reasons is that the private sector has lost ‘appetite’ to lend,” said Dr Mpango.

According to Dr Mpango the government is taking various measures including increasing liquidity at the Bank of Tanzania (BoT).

He further added that the BoT has also lowered interest rates from 16 per cent to 9 per cent.

“We have also lowered deposit rates for commercial banks from 10 to 8 per cent of their capital,” said Dr Mpango.