THE International Monetary Fund (IMF) Resident Representative in Tanzania, Mr Bhaswar Mukhopadhyay, said yesterday that his organisation is satisfied with the speed of Tanzania's economic growth and that the country is among the fast growing economies in Africa.
Mr Mukhopadhway said IMF expects to
witness economic growth in the coming years in collaboration with
private sectors in the country. The IMF boss explained his
organisation’s satisfaction to the Minister of Finance and Planning, Dr
Philip Mpango, when he paid a visit to the ministry. He said Tanzania
has successfully managed to strengthen tax collection systems, control
inflation, wage a war against corruption and implement the government
budget.
On his part, Dr Mpango said the
country’s economic growth depends much on private sectors. He said
strong private companies contribute to the country’s economy through
establishment of investments and paying of taxes.
“It is quite clear that the private
sector plays a big role in the country’s economic growth. A strong
private sector helps the government to get revenues through taxes and
offers employment to Tanzanians through established investments in the
country,” said Dr Mpango.
He said the government recognises and
value the contribution of private sector to the country’s economic
growth. He said the Fifth Phase Government is optimistic to strengthen
the relationship with the private sector so as to realise the revival,
establishment and development of industries.
“We are doing everything in our power to
ensure we build and develop industries in the country. This will be
successful through strong cooperation with the private sector,” he said.
Last week the IMF’s Executive Board completed the fifth review of
Tanzania’s economic performance, noting that Tanzania’s macroeconomic
performance remains strong.
The review also indicates that the
economic growth was robust during the first half of 2016 and is
projected to remain at about 7 per cent this fiscal year. “Inflation
came down below the authorities’ target of 5 per cent and is expected to
remain close to the target, while the external current account deficit
was revised down on account of lower imports of capital goods,” noted
the review report. The review is under the programme supported by a
three-year Policy Support Instrument (PSI).
In completing the review, the board also
granted waivers for the non-observance of the June 2016 assessment
criteria on the overall fiscal deficit and the non-accumulation of
domestic expenditure arrears on the grounds that the slippages were
minor. The PSI for Tanzania was approved by the board on July 16, 2014.
The review, nevertheless, noted that
there were risks that could adversely affect economic growth going
forward. The risks arise from the currently tight stance of
macroeconomic policies, the slow pace of credit growth that may become
protracted, slow implementation of public investment and private sector
uncertainty about the government’s new economic strategies.
However, local economists challenged the
IMF warning saying the body’s analysis did not consider other factors
that boost economic growth in the country.
University of Dar es Salaam (UDSM)
Economic Professor, Haji Semboja, said the problem was not with
microeconomic policies, but instead the government needs to come up with
proper formulation and implementation of policies in key sectors.
He said Tanzania’s economy stands on
various sectors and that there is need to implement available policies,
laws and regulation to enable them contribute to the national economy.
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