In his report entitled 'Regional Economic Outlook Sub-Saharan Africa, Recovery and News Risks' released in Dar es Salaam last week, IMF's Senior Resident Representative John Wakeman-Linn said in order for Tanzania's debt levels to increase rapidly, the Government should change its fiscal policy.
Wakeman-Linn said in the past five years Tanzania borrowed a lot to finance its recurrent expenditures while on the other hand its tax revenue collections stagnated.
"I urge the Government to reduce recurrent spending and undertake reforms in tax policy to improve domestic revenue collections," he noted.
He said if the Government reduces its fiscal deficit, it will be able to increase the number of teachers, health care and agricultural officers who are on high demand.
"Overall spending should be reduced where possible cut down some of expenditures," he urged.
Wakeman-Linn also urged the Government to address three major issues which will attract more investors who are currently hesitating to come.
He cited issues that must be addressed quickly in order to attract foreign investors as corruption, high costs of doing business as well as unreliable power supply in Tanzania.
According to the report, the economic growth is expected to reach 6% this year more because of rising of food and fuel prices and delay of seasonal rains in many areas in the country.
He advised the Tanzania Government to take immediate measures that will curb the increase in rising food and fuel, which to a great extent have influenced poverty and impacted on the Gross Domestic Product (GDP).
However, in its latest monetary policy statement the Bank of Tanzania (BoT) has targeted the economy to grow to 7.1% this year.
The Tanzanian government has set up a programme “Agriculture First’ to boost the country’s food security and improve household income.
The country heavily relies on Mining, tourism and shipping for its economic development.
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