IMF COMMENDS TANZANIA'S ECONOMIC PERFORMANCE 2007

By Mgeta Mganga
The International Monetary Fund (IMF) has commended the economic performance of Tanzania, saying it continues to be strong. Speaking to reporters in Dar es Salaam yesterday, an official from the IMF economic department, Roger Nord, said the improvement was fueled by a rebound in the agricultural sector and improved electricity supply. He also attributed the performance to the economic growth which stood at 6 percent in 2006/07. `The economic growth is on track. It is likely to exceed 7 percent in 2007/08,` he said. Nord led a four-man IMF delegation currently in the country to conduct the second review under the policy support instrument. Nord, however, said that the country was still facing two challenges, which include returning inflation to its downward trend. Inflation now stands at 10 per cent. He said the Bank of Tanzania intention to meet its target of reducing inflation was critical toward reducing high interest rates, supporting productive investment, growth and reducing poverty. `In this regard, we welcome the Bank of Tanzania’s efforts to strengthen monetary policy implementation`, he said. He said the second challenge was to ensure that the ambitious targets for revenue and expenditure in the 2007/08 budget were attained. The official said the added revenue rightly reflected the key priorities of the government to further increase social spending, while significantly scaling up infrastructural investment. Revenue performance in the first quarter of 2007/08 had been strong. Nord commended the TRA for strengthening tax administration. He said the mission supported efforts to improve further public financial management with the twin objectives of raising the efficiency of public spending while strengthening accountability. For her part, Minister for Finance Zakhia Meghji said the main factors that had led to increased government revenue were the on-going economic reforms. “We reformed TRA, tighten tax loopholes and widened the tax base,”she said.
SOURCE: Guardian