Thursday, December 31, 2009

TZ private sector lauds US$ 1.5 billion stimulus

Saturday, 12 December 2009
DAR ES SALAAM, TANZANIA - The private sector in Tanzania has applauded the seven trillion (about $1.5 billion) economic stimulus package that was put in place by President Jakaya Kikwete to support exporters of agriculture commodities.
The money was given by the government in order to mitigate the effects of the global financial crisis.

"The central bank (BoT) Governor and his committee are working on the assessment of the impact of the stimulus package, expect that by mid January next year the report will be published," Tanzania's Minister for Finance & Economic Affairs Mustafa Mkullo noted.

The financial year 2009/2010 package ending in June 2010 was given to commercial banks to bail out exporters.Banks were given the package to save them from losses caused by the fall in prices and the demand for agricultural commodities due to the global financial crisis.

The major effects of the crisis included the reduction in the number of tourist arrivals, falls in exports demand in the world markets, a fall in remittances, reduction in government revenue among others.

Information from the Bank of Tanzania indicates that the economy growth declined to between 2.4% and 5% this year from the 7.5% recorded last year.The Executive Director for Tanzania Consumer Advocacy Society (TCAS), Bernard Kihiyo, said the stimulus package has helped to strengthen the banking institutions which are lending to the productive sectors of the economy. The Director General for Small Industries Development Organization (SIDO), Mike Laizer, said that the package has been instrumental in reviving the financial and agriculture sectors.

"The package was a must for Tanzania's financial sector because without the backing up for the financial sector, the businesses in marketing and packaging of agricultural goods would have collapsed," Laizer said.

He called for a review of the taxation regime especially taxes applied to small producers, including the counterproductive six per cent training levy,"

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