IMF Staff Completes Visit to Tanzania MyZA

APO News from Africa:

A team from the International Monetary Fund (IMF), led by Mauricio Villafuerte, visited Tanzania from April 3-13, 2017 and held discussions with the authorities on the sixth review under the Policy Support Instrument (PSI) program that was approved on July 16, 2014.

At the end of the visit, Mr. Villafuerte issued the following statement:

“Economic growth, estimated at about 7 percent, remained strong in 2016. More recently though, the economy has hit a soft patch in the context of slow budget implementation, a slowdown in monetary aggregates and credit to the private sector, and the impact of a drought. These factors are expected to ease in the second half of the year and the growth momentum to strengthen.

“Rising food prices have pushed headline 12-month inflation to 6.4 percent in March 2017. However, core inflation remains well anchored at 2.2 percent. Good rains in Tanzania’s southern region and easing of drought conditions in its neighbors should relieve pressures on food prices. The external current account deficit is estimated to have narrowed and the Bank of Tanzania’s stock of external reserves remains at a comfortable level.

“Implementation of the PSI-supported program has been broadly satisfactory. Preliminary data indicate that most targets for end-December 2016 were met except the one on tax revenue that was missed by a small margin. The pace of structural reforms remains slow, but some progress has been made recently towards the implementation of key measures.

“Revenue collections during the 2016/17 fiscal year have picked up over the previous year, although they are likely to fall short of the ambitious target. The level of government spending is likely to fall well short of budgeted levels because of tightly controlled recurrent spending and delays in securing external financing. Thus, there was a small surplus of about a 0.3 percent of GDP during the first half of the fiscal year, and even with financing constraints easing in the 2nd half of the year, the overall fiscal deficit in 2016/17 is projected to be 2.5 percent of GDP, compared to 4.5 percent in the budget.

“Liquidity conditions remain tight, but are expected to ease in coming weeks, including through a decision to lower the statutory minimum reserve requirement. Furthermore, as the pace of economic activity has slowed down, non-performing loans of the banking system have risen. The mission welcomed the steps the Bank of Tanzania was taking to modernize the monetary policy framework.

“The IMF staff team held discussions on how to address these macroeconomic challenges. It welcomed the progress in finalizing non-concessional borrowing agreements, which would help budget implementation. It advised the authorities to resolve the outstanding issues that would allow it to secure a sovereign credit rating. The team commended the authorities’ efforts to reorient toward development spending, but urged them to avoid accumulating new domestic arrears. The team also discussed the broad parameters of the 2017/18 budget, noted that spending levels must be underpinned by realistic revenue and financing assumptions, and urged the authorities to address concerns about the payment of VAT refunds negatively affecting exporting companies.

“The team noted that for Tanzania to meet its medium-term growth objectives would require a vibrant private sector and that ample scope remained to improve the business environment. The team welcomed the initiation of the national dialogue with the business community, and encouraged the authorities to ensure that regular exchange of views become the norm.

“The team met with Minister Philip I. Mpango, Governor Benno Ndulu, Permanent Secretary Doto M. James and other senior officials of the government and the Bank of Tanzania.

“The IMF team thanks the authorities for their hospitality and constructive dialogue during the visit.”

Distributed by APO on behalf of International Monetary Fund (IMF).

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.

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Minister Wharton: UK will stand by people of Ethiopia affected by severe drought:

As the world faces an unprecedented number of humanitarian crises, International Development Minister James Wharton reinforces the UK’s commitment to help those suffering from drought in Ethiopia.

During his first visit to Ethiopia and at a time when a new drought is hitting 13 million people, Minister Wharton visited the Tigray region to see the lifesaving impact of UK aid and how ongoing support is building resilience and helping recovery from last year’s El Nino induced drought.

Earlier this year, the UK increased much needed support to Ethiopia to provide around 800,000 people with lifesaving clean water, food and emergency nutrition to malnourished children.

Minister Wharton also visited Endabaguna refugee reception centre in Northern Ethiopia where he met vulnerable families and children benefiting from UK support. Ethiopia is one of the largest host nations of refugees – with over 800,000 people having crossed the border – with the majority fleeing humanitarian crises in neighbouring South Sudan, Somalia and Eritrea.

International Development Minister James Wharton said:

“Millions of people are living in desperate conditions as extreme drought in Ethiopia and worsening humanitarian crises in neighbouring countries are forcing people from their homes, threatening lives and global security.

“I have seen first-hand how UK aid is providing lifesaving support to vulnerable communities in Ethiopia, as well as refugees, and making a real difference to those who need it most.

“At the same time, we are helping to boost economic development and private sector investment to create jobs and increase stability in the longer term which is firmly in Ethiopia and the UK’s interests.”

In the capital Addis Ababa, Minister Wharton met with workers at a British manufacturing firm Pittards who have benefited from UK aid supported skills training to increase productivity, and met with a local entrepreneur whose leather making business has benefited from UK help.

He emphasised how the UK is strengthening its focus on economic development as a long term solution to povert. This follows on from a visit by the International Development Secretary Priti Patel to Ethiopia earlier this year where she launched DFID’s first Economic Development Strategy at Hawassa industrial park, where UK aid is helping to transform the local economy by creating around 60,000 new jobs.

Over the last five years, UK aid in Ethiopia has:

prevented 4.2 million people from going hungry
put 2.5 million children through primary school
provided 4.9 million people with access to water and sanitation and
enabled 500,000 more women to use modern methods of family planning.

Distributed by APO on behalf of Department for International Development (DFID).

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WFP Condemns Killing of Three Workers in Wau, South Sudan:

The World Food Programme was horrified to learn tthat three workers contracted as porters by WFP’s office in Wau, South Sudan, were killed during violence that wracked the city earlier this week.

The three men – Daniel James, Ecsa Tearp and Ali Elario, all citizens of South Sudan – appear to have been killed on Monday as they tried to make their way to a WFP warehouse, where they worked as porters. Two died of machete wounds and the third was shot.

“We are outraged and heartbroken by the deaths of our colleagues, who worked every day to help provide life-saving food to millions of their fellow countrymen,” said WFP Country Director Joyce Luma. “Our sympathies and condolences are with their families. Their dedication will not be forgotten, and we call on the South Sudanese authorities to hold those responsible for this unspeakable violence accountable for their actions.”

WFP learned of the workers’ deaths on Thursday from the company that employed them, which is contracted by WFP to provide loading and unloading services at the Wau warehouse.

Distributed by APO on behalf of World Food Programme (WFP).

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