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IMF: Tanzania should proceed with sound economic management, reforms designed to unlock its potential

Private sector growth is best for economy

IMF: Tanzania should proceed with sound economic management, reforms designed to unlock its potential

Private sector growth is best for economy

18 May 2017 Thursday 09:59
IMF: Tanzania should proceed with sound economic management, reforms designed to unlock its potential

ECONOMIC growth should be made more inclusive and the private sector should be allowed to take centre-stage for Tanzania to realise its 2025 middle-income targets, a top International Monetary Fund (IMF) who visited the country has adviced.

According to IMF deputy managing director Tao Zhang, investments in energy should also be increased and the country’s judicial system strengthened for fairer resolution of disputes.

In an address titled ‘Building on Success: Achieving Tanzania's Goal of Middle-Income Status’ delivered at a conference in Dar es Salaam yesterday, Tao called for the government’s decision-making processes to be made more transparent and predictable.Red tape needs to be cut, and the business community needs to have a say in policy making, he said.

The visiting IMF deputy boss added that Tanzania should proceed with sound economic management and reforms designed to unlock its potential.

“It is essential to increase investment in an effective way to address key bottlenecks in the economy and create more jobs, and to take concrete steps to strengthen the role of the private sector in the economy to help drive future growth,” he stated.

A vibrant private sector is crucial for Tanzania to meet its medium-term growth objectives by fostering economic diversification, expanding trade and deepening integration into global value chains, he emphasised.

Tao’s two-day visit to the country also included talks with President John Magufuli at State House.

His remarks come at a time of growing worry that the private sector is not being involved enough in key economic policy decisions being made by the government.

A recent economic update by the Bank of Tanzania (BoT) indicates that a steep drop in money supply and a spike in non-performing bank loans have seriously hampered private sector growth.

According to Tao, there is a need to strike the right balance between the public and private sectors.

Moves like expanding the tax base to help fund government development projects can only been seen as positive, he said.On economic integration across East Africa, he said with a population of over 150 million people, the region should encourage more dynamism to expand trade and investment.

“Despite the progress that the country and the East African Community have made, more needs to be done on non-tariff barriers, rules of origin, tax administration and harmonisation, automation and trade procedures, and labour mobility,” he said, adding:“If these can be addressed, the EAC can emerge as a true source of economic growth.”

He said the upside for Tanzania is virtually unlimited: Real development, sustainable economic growth, and measurable improvements in the lives of all its people.

The Guardian

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