How Tanzania can steer clear of economic downside risks
Tanzania’s economy is facing downside risk (in 2017) to domestic challenges were government can control. Economy is characterized by lower credit growth to the private sector, weak business environment and high levels of the non-performing loans (NPLs). The World Bank recently lowered the growth forecast to 6.6% against government projection of 7.1% in 2017 due to challenges economy is facing. Statistics indicate that lenders now prefer to invest in risk-free securities ignoring private sector securities.The private sector has cited concerns about overzealousness of private sectors, Delay in VAT refunds and payments to contractors and other suppliers and proliferation of regulatory authorities, licenses, and taxes.Way out of downside risks as proposed by World Bank are clearing verified government payment arrears to private sectors contractors and suppliers, government is supposed to speed up VAT refunds and government can secure external financing to fund ongoing and planned capital expenditures.