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Tanzania’s economic growth outlook remains bright, the east African nation’s Minister for Finance and Planning, Phillip Mpango, told parliament on Thursday.

Presenting the state of the economy in the House in the capital Dodoma, Mpango attributed the promising economic outlook to an improvement in commercial banks’ credit to the productive sector.

Mpango, said the government, through the Bank of Tanzania (BoT), took several measures during the past months with a view to stimulate liquidity in commercial banks to spur growth of credit to the productive sector.

The measures, he said, have had a positive impact on the operations of commercial banks and the economy at large.

The measures included a reduction in commercial banks’ minimum reserve ratio and a reduction in discount rates, said the minister.

In March 2017, the BoT cut the minimum reserve ratio required of commercial lenders to eight percent from 10 percent in a move aimed at reducing costs of borrowing and stimulating economic growth.

In August 2017, the BoT also revised downwards its discount rate from 12 percent to nine percent before lowering it further to seven percent on August 27, 2018.

Mpango said the move was aimed at lowering commercial banks’ lending rates for the benefit of the final consumer.

Some of the notable outcomes of such measures, according to Mpango, included a growth in credit, extended by commercial banks to the private sector.

The credit growth was recorded at 0.8 percent during the year ending April 2018 but it reached 10.6 percent during the year ending April 2019, he said.

“The increase in the rate of credit growth to the private sector was largely on account of the various initiatives that the government was taking to improve the business environment,” said Mpango.

However, said the minister, personal loans remain the highest recipient of commercial banks’ loans, accounting for 28.8 percent of total loans extended.

Trading activities came second, with an 18.5 percent share of credit extended by commercial banks to the private sector while the manufacturing sector came third, taking up 11.3 percent, said the official. Enditem

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