RISING national debt to 19 billion US dollars (over 40tri/-) as of last December remains sustainable, the government said here yesterday, charging that the debt effects on the national budget are minimal.
Finance and Planning Minister, Dr Philip
Mpango, assured members of the public of reaccessible loans from
commercial banks that had stopped issuing credits following the
government directive to have all public institutions withdrawing their
fixed accounts from the banks to the Bank of Tanzania (BoT).
Dr Mpango told the National Assembly
here yesterday that the government was optimistic that once the banks
get used to the new government’s directive, they will continue issuing
loans, adding liquidity to the economy.
He said some banks had ceased the loan
issuance pending evaluation of the new directive’s implementation during
the transition period, saying, however, that out of the 66 operational
banks in the country, only CRDB Bank and Tanzania Investment Bank (TIB)
were affected, recording losses during the period spanning
July-December, last year.
Giving details on the national debt, the
minister said Tanzanians have nothing to worry about as the rising debt
stock was manageable, with repayments adhering to maturity.
“The average time to maturity for the
current debt is 12 years, implying low refinance risk to the national
budget,” he assured while presenting the economic status report to
Members of Parliament (MPs). To make it even safer, the government has
been repaying the debts as per their contracts.
For the period between July and
December, last year, the government spent 2.5tri/- to pay the debts of
which 747bn/- and 1.36tri/- settled the external and internal debts,
respectively.
“It’s the intention of the government to
repay all matured loans according to their agreements,” he said, adding
that the government is duty-bound to conduct Debt Sustainability
Analysis every year to establish the state and sustainability of the
debts for the short, medium and long terms.
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