?IMF urges Dar to reform to stem economic slowdown

Tanzanian President John Maghufuli

The International Monetary Fund has called on Tanzania to speed up reforms and spend more to prevent a slowdown in one of the world’s fastest growing economies.

President John Magufuli pledged to reform an economy hobbled by red tape and corruption and begin a programme to develop public infrastructure after he was elected in 2015.

But the IMF said in its latest review that progress has been slow, while lack of public spending - coupled with private sector concerns over policy uncertainty - was curtailing growth in East Africa’s third-biggest economy.

“Improvements in the business environment - policy predictability based on a strong dialogue with the private sector, regulatory reforms, timely payment of value-added tax (VAT) and other tax refunds, and eliminating domestic arrears — must be pursued with urgency,” the IMF said late on Tuesday.

Tanzania’s GDP growth slowed to 6.8 per cent in the first half of this year from a 7.7 per cent in the same period a year-ago.

The economy has been growing at around seven per cent annually for the past decade, but the World Bank said in November that growth will likely slow to 6.6 per cent in 2017.

The IMF said while Tanzania’s first half GDP growth in 2017 was 'still strong', a sharp fall in lending to the private sector - prompted by high non-performing loans - pointed to a continued slowdown in growth.