by Paul Gooday
Economic update
According to the International Monetary Fund, the Tanzanian economy grew at 6.9% in 2012, and is projected to achieve an over 7% growth rate in 2014.
The National Bureau of Statistics announced that in the second quarter of 2013, Tanzania’s economy grew 6.7% (compared to 6.4% in the same period of 2012). The sectors that grew markedly included agriculture, electricity, construction, transport and communication.
Dr Honest Ngowi, business economics lecturer at Mzumbe University, commented that there were more indicators of growth than setbacks currently in Tanzania, that at 6.1% inflation was decreasing and that oil and gas licensing may stimulate further growth. (Tanzania Invest)
Tanzania and China promote partnership
On a recent visit to China, the Tanzanian Prime Minister signed five Memorandums of Understanding in Beijing with his Chinese equivalent. The agreements include partnerships in science and technology, tourism, textile manufacture, cotton production, and the construction of a new Chinese Embassy in Dar es Salaam.
The Prime Minister expressed his gratitude to the Chinese government for the ‘soft’ loans provided to Tanzania, explaining that in comparison to loans from other countries, the terms have been easier. Tanzania would begin to pay China back a US $24.6 million loan that was used to renovate the Tanzania-China Friendship Mills.
Tanzania and China have also signed seven contracts, totalling US $1.7 billion, for investments in electricity, construction, and research. These include a renewable energy research centre and construction of residential housing and business centres throughout Tanzania. (Tanzania Invest)
Bank of Tanzania treasury bond
The Bank of Tanzania has for the first time floated 15-year treasury bonds with a 13.5 % coupon aimed at further development of the country’s financial markets. This will raise funds for long term development projects and also be a point of comparison with market instruments such as mortgage financing and corporate bonds. (The Guardian / IPP)
Protests against Electronic Fiscal Devices
The government continued to pursue its policy of insisting on the use of Electronic Fiscal Devices (EFDs) by traders although businesses had objected to the tax recording machines. Traders in Kariakoo and elsewhere closed their business for several days in protest. The Ministry of Finance and the Tanzania Revenue Authority (TRA) said they were looking into reducing the cost of the device, but reiterated that businesses could not avoid using the EFD system as it was the best way to get accurate tax calculations and keep records.
Traders are against the EFDs, explaining that the device is too costly at TSh 800,000 per piece. The TRA said the actual price ranges between TSh 600,000 and TSh 778,000, depending on the model and type. The Deputy Minister for Finance noted that these are cheaper in comparison to other countries and were made specifically for Tanzania.
The parliamentary economic and trade committee has proposed a joint committee with traders to address the problem. The House team asked that the taxman raise public awareness, and the option of paying for EFDs in instalments was also proposed. The committee requested the government to remove import duty on the devices so as to lower costs. (Citizen)
Rapid rise on Dar es Salaam Stock Exchange
Data from the Dar es Salaam Stock Exchange in late November shows that the value of all 12 local listed companies – as measured by the domestic market capitalization – more than doubled to TSh 5.96 trillion (US $3.7 billion) at the close of trading from TSh 2.94 trillion (US $1.87 billion) at the close of last year.
The Dar es Salaam bourse said market activity was skewed towards foreign investors, with local investors making a minimal contribution focused on the National Microfinance Bank (NMB) and the CRDB Bank (formerly the Cooperative Rural Development Bank).