Govt says committed to upholding economic stability

By Shubila Barongo

International Monetary Fund (IMF)

The government has reiterated its commitment to maintaining macroeconomic stability to boost strong economic growth and reduction poverty in the country.

International Monetary Fund (IMF)’s Executive Director for Tanzania Momodou Saho confirmed this in a statement released recently.

“My Tanzanian authorities remain committed to maintaining macroeconomic stability,” he said.

According to the statement, plans are underway for authorities to strengthen fiscal policy by progressively reducing the budget deficit.

Consequently, the legal framework and tax administration will be enhanced for revenue boosting, while spending will be streamlined and focused on the main priorities.

Furthermore, it said, the legal and institutional framework for debt management will be reviewed in accordance with the best international practice.
In addition, maintenance of low inflation will remain the principal goal of monetary policy, the statement said.

Saho also noted that authorities are committed to pursuing the implementation of the Policy Support Instrument (PSI) and Standby Credit Facility (SCF) arrangements in the spirit of maintaining macroeconomic stability as well as strengthening fiscal buffers and enhancing the effectiveness of monetary policy.

He acknowledged that the authorities are aware that maintenance of the strong economic growth momentum requires improvement of external competitiveness, and continuing structural reforms, therefore they will focus on investing in infrastructure, developing the human capital, health and the business climate.

The overall economic policy will be in line with the goals of the Five year Development Plan and Mkukuta II of ensuring economic growth and sustainable poverty reduction.

“My authorities recognise the achievements under the PSI and SCF. As the operating PSI expired on June 2013, the authorities will continue to pursue the implementation of the policy reforms under the SCF and will consider a possible request for a new PSI,” read part of the statement.

The PSI is an IMF instrument which helps low-income countries to design effective economic programmes, and, once approved by the IMF’s Executive Board, will signal to donors, multilateral development banks, and markets the Fund’s endorsement of a member’s policies while SCF provides financial assistance to low-income countries (LICs) with short-term balance of payments needs. 

SOURCE: THE GUARDIAN