Tanzania has come
under rare praise from the International Monetary Fund for what the
global lender terms "prudent legal reforms" in its mining sector, land
and microfinance.
These changes have
seen mining's contribution to GDP rise to five per cent, from 4.8 per
cent the
previous year, while gold and US dollar reserve grew above the
country's bench mark--adequate to cover over five months of imports.
Annual inflation
trended below four per cent for nearly 12 months, a stable exchange rate
and an improved tax collection to nearly 96 per cent of the target.
Now, the IMF team,
led by Enrique Gelbard, is urging the country to carry on the targeted
economic reforms but it must clear the business environment of barrier
that would otherwise the economic stability the country experienced in
the recent months.
The IMF team, which
visited Tanzania from February 20 to March 4, noted that cautious
fiscal and monetary policies that the country has made recently have
borne fruits of economic stability.
"The pace of
economic activity appears to have increased in recent months prompted by
higher public investment, a rebound in exports, and an increase in
credit to the private sector. As a result, real GDP growth is estimated
to be close to 6 percent, with activity buoyant in the construction and
mining sectors. Public debt has also been below 40 percent of GDP," said
Mr Gelbard.
Despite the changes
and achievements made, the Gelbard-led IMF team suggested more tax
reforms among other changes, saying they would help sustain economic
stability.
"We highly commend
the authorities for their intention to improve governance in tax
administration and the team emphasises the urgency to adhere to
efficient means of tax collection and control, notably through the use
of risk-based audits," said Mr Gelbard.
According to the
IMF mission, the use of risk-based audits will ensure better compliance
and timely payment of tax refunds and improve companies' cash flows.
With regard to
government spending, the mission urged the authorities to account and
issue reports on implementation of planned measures on a timely basis to
avoid blocking relevant expenditure and decisions which will be
essential to improve businesses' cash flows at that particular time.
Tanzania approved
the Blueprint for regulatory reforms nearly two years ago for which the
government set the official kick-off in July 2019.
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