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Tanzania: Agriculture Is Worst Hit Sector as Credit Drops By Nearly 6%

By Alawi Masare

Dar Es Salaam — Agriculture is the most suffering sector as banks’ credit to almost all economic activities has declined in 2016.

Manufacturing, transport and communication and building and construction all experienced negative growth but agriculture has the highest negative growth at -5.7 per cent at the end of December compared with a growth of 11.1 per cent recorded at the end of 2015, according to the Bank of Tanzania’s monthly economic review for January.

Agriculture accounts for about 25 per cent of Tanzania’s Gross Domestic Product (GDP) but the sector has been growing below four per cent in the last few years.

The credit to manufacturing declined from a growth of 22.3 per cent in 2015 to -4 per cent in 2016 while that of transport and communication declined from the growth of 33.1 per cent to -4.1 per cent, the report shows.

The private sector has been crying of tight liquidity that affected credit since the new government started taking austerity measures.

In 2016 the credit to the private sector grew by 7.2 per cent compared with a growth of 24.8 per cent recorded in 2015, the report indicates. Personal loans and trade dominate the credit provided by the banks to the private sector. The two accounts for 40 per cent of credit and the rest is shared among the other economic activities.

Personal loans increased by 9.1 per cent in 2016 compared with a growth of 18.5 per cent during the previous year while credit to trade grew by 8.8 per cent compared with a growth of 16 per cent.

Credit to hotel and restaurants grew by 2.3 per cent in 2016 compared with a growth of 18 per cent in 2015.

Source: The Citizen

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