TZ economy ‘growing’ despite falling donor funding

Dar es Salaam. The government yesterday acknowledged that some donors had withdrawn from supporting the national budget, but said the economy continued to post a 6.8 per cent growth.

Finance and Planning minister Philip Mpango also said although the country’s gross domestic product grew at 6.8 per cent between July and September 2017, benefits of the expansion had not trickled down to the majority of Tanzanians.

He spoke of the government having made huge strides in development although some shocks were there, including a number of donors withdrawing from financing the national budget and businesses being closed due to various reasons such as indebtedness.

The minister was speaking during the launch of the Economics Society of Tanzania (EST). The outfit will bring economists into one platform to come up with collective decisions to improve the country’s economy.

“Tanzania is among 10 countries in Africa whose economies are growing at impressive rates. We are also doing well in financial inclusion and inflation rates now stand at single-digits. Between July and December 2017 inflation rate was 4.8 per cent.”

“The majority of our development partners are tired of supporting us, and therefore have withdrawn from supporting our budget programmes,” Dr Mpango also said.

He cited a slow growth in agriculture, which employs the majority of the workforce, as a challenge.

“Agriculture is growing slowly: at just 3 per cent. It grew at 3.1 per cent during the second half of last year,” he said.

According to him, unemployment rate of 10.3 per cent also contributes to high poverty levels.

He explained that Tanzania faces a challenge of high fertility rate of 5.2 per cent for each woman and the population is projected to reach 54.2 million this year.

He cited high rates of nonperforming loans (NPLs) as a big challenge to the financial sector.

NPLs grew to 12.5 per cent by September last year, higher the 5 per cent threshold set by the central bank. “High NPLs are as result of agriculture and business activities that did not do well.”

However, he underscored the government’s seriousness to improve the economy including fighting rampant corruption, earning Tanzania a good name for reducing graft to a large extent.

The country is also implementing mega projects such as the standard-gauge railway, Stigler’s Gorge energy programme and improving the aviation industry.

The Bank of Tanzania Governor, Prof Florens Luoga, hailed the economists for reviving EST, which became moribund in the 1990s.