This document summarizes Tanzania's macroeconomic performance from 2008-2011. Key points include:
- GDP growth averaged 7.2% annually, driven by mining, financial services, transport, and manufacturing.
- Inflation remained under 10% until late 2008 when it rose to over 13% but fell back to 7% by 2010.
- Money supply and capital formation increased each year. Interest rates and exchange rates fluctuated.
- Foreign reserves grew steadily, reaching over $3.9 billion in 2010, covering over 6 months of imports.
- Challenges implementing Tanzania's national development plan included insufficient funding and the global economic crisis.
After stabilization in 1993 Moldova maintained an unsustainable macroeconomic policy mix. The key problem was a lack of a fiscal adjustment, which resulted in large budget deficits. At the same time, the National Bank of Moldova (NBM) attempted to conduct a tight monetary policy. As a result, the exchange rate was appreciating, domestic absorption increasingly exceeded income and the country has been running large Current Account deficits. Moldova had an access to international financial markets and its indebtedness vs. the rest of the world was growing year by year at an alarming rate. Finally, in late 1998 Moldova suffered a balance of payments crisis, directly triggered by developments in Russia. Moldovan leu was devalued by about 70% and the current account improved.
The paper concentrates on the empirical dimension of the Moldovan financial crisis. It provides a case study of a) detecting and interpreting macroeconomic anomalies and b) identification of early warning signals of policy unsustainability and imminent change of financial market sentiment.
Authored by: Marek Jarocinski
Published in 2000
After stabilization in 1993 Moldova maintained an unsustainable macroeconomic policy mix. The key problem was a lack of a fiscal adjustment, which resulted in large budget deficits. At the same time, the National Bank of Moldova (NBM) attempted to conduct a tight monetary policy. As a result, the exchange rate was appreciating, domestic absorption increasingly exceeded income and the country has been running large Current Account deficits. Moldova had an access to international financial markets and its indebtedness vs. the rest of the world was growing year by year at an alarming rate. Finally, in late 1998 Moldova suffered a balance of payments crisis, directly triggered by developments in Russia. Moldovan leu was devalued by about 70% and the current account improved.
The paper concentrates on the empirical dimension of the Moldovan financial crisis. It provides a case study of a) detecting and interpreting macroeconomic anomalies and b) identification of early warning signals of policy unsustainability and imminent change of financial market sentiment.
Authored by: Marek Jarocinski
Published in 2000
Growth-Debt Nexus: An Examination of Public Debt Levelsand Debt Crisis in Zim...iosrjce
Government debt is an indirect debt of the taxpayers, and can be classified as internal or external.
Debt crisis is the general term for a proliferation of massive public debt relative to tax revenues.Public debt
enables governments to invest in critical areas of the economy where the capacity of tax revenue to undertake
these projects may be limited or in situations where printing additional money will disrupt the stability of the
economy. Government borrows in order defer difficult but necessary reforms such as the imposition of taxes
which might be necessary to generate revenue for development. Countries with high public debt tend to grow
slowly. The study examines the origin of debt crisis in Zimbabwe, debt nature, causes, consequences and
possible ways of reducing the debt. The study uses 1980-2013 data to run an OLS model on economic growth
using STATA Econometric Software, in an effort to explore the effect of external debt. The regression results
shows that public debt has a negative effect on economic growth in Zimbabwe, which has varying theories
prevailing. The study concludes by encouraging the government not to borrow unnecessarily, and to use
borrowed funds for investment projects, rather than on consumption expenditure
The economy is going through a soft patch.
Unemployment increased due to this and seasonal
factors, but started rapidly falling in April.
Macroeconomic balances mostly improved in
the 1Q10. A lot of slack in the economy helped
inflationary tensions ease in this period and the CPI
inflation rate should remain within the central bank
target band for the next four quarters at least. The
four quarter rolling current account deficit rose
slightly in terms of GDP while the central government
deficit came lower than expected.
Slowdown in Chinese Economy and its Impact on the Worldinamdaramaan
This presentation includes the overview of the causes and impact of Chinese slowdown and throws some light on future possibilities which can occur and main concerns to worry about.
Inflation and its Impact on Pakistan Economy Muzafar hussainMuzafar Hussain
State Bank of Pakistan has been entrusted with the responsibility to formulate and conduct monetary and credit policy in a manner consistent with the Government’s targets for growth and inflation and the recommendations of the Monetary and Fiscal Policies Co-ordination Board with respect to macro-economic policy objectives. The basic objective underlying its functions is two-fold i.e. the maintenance of monetary stability, thereby leading towards the stability in the domestic prices, as well as the promotion of economic growth.
Long Run Impact of Exchange Rate on Nigeria’s Industrial Outputiosrjce
While many scholars have carried out a lot of research on the impact of exchange rate volatility and
price shocks on economic growth, this study departs from previous studies and seeks to provide suggestions for
Nigerian policy makers on the attainment of an ideal exchange rate necessary to boost industrialization and
industrial output. The economies of all the countries of the world are linked directly or indirectly through asset
and goods markets. This linkage is made possible through trade and foreign exchange. The price of foreign
currencies in terms of a local currency (i.e. foreign exchange) is therefore important to the understanding of the
growth trajectory of all countries of the world. The consequences of substantial misalignments of exchange rates
can lead to output contraction and extensive economic hardship. These therefore, bring up the issue of an ideal
exchange rate necessary for the achievement of a set of diverse objectives - economic growth, containment of
inflation and maintenance of external competiveness. This study employed the use of the ordinary least square
technique to examine the impact of exchange rate stability on industry output in Nigeria using annual time
series data from 1980 to 2013. The result of the study showed that domestic capital, foreign direct investment,
population growth rate, and real exchange rate were significant determinants of industrial output. The changes
in external balance and inflation were of little or no consequences to industrial output. Based on the findings,
the researcher recommended that conscious efforts should be made by government to fine-tune the various
macroeconomic variables in order to provide an enabling environment that stimulates industrial output and
eventual economic growth.
Monetary Policy Shocks and Agricultural Output Growth in Nigeriaiosrjce
This paper investigated the transmission channel of monetary policy shocks to agricultural output
growth over the period 1970 – 2012. Data were drawn from the Central Bank of Nigeria Statistical Bulletin,
2013. The study estimated a VAR model and showed that producers are able to effectively transfer increases in
cost of production to the final consumer through increased prices; and that though monetary policy shocks,
interest rate and consumer prices have dominant impacts on agricultural output growth in Nigeria, but that
monetary policy shocks transmitted through the interest rate channel are more effective. It was therefore
recommended that monetary policy efforts to revitalize the agricultural sector should focus more on the use of
differential interest rates amongst other policy tools.
Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.
Growth-Debt Nexus: An Examination of Public Debt Levelsand Debt Crisis in Zim...iosrjce
Government debt is an indirect debt of the taxpayers, and can be classified as internal or external.
Debt crisis is the general term for a proliferation of massive public debt relative to tax revenues.Public debt
enables governments to invest in critical areas of the economy where the capacity of tax revenue to undertake
these projects may be limited or in situations where printing additional money will disrupt the stability of the
economy. Government borrows in order defer difficult but necessary reforms such as the imposition of taxes
which might be necessary to generate revenue for development. Countries with high public debt tend to grow
slowly. The study examines the origin of debt crisis in Zimbabwe, debt nature, causes, consequences and
possible ways of reducing the debt. The study uses 1980-2013 data to run an OLS model on economic growth
using STATA Econometric Software, in an effort to explore the effect of external debt. The regression results
shows that public debt has a negative effect on economic growth in Zimbabwe, which has varying theories
prevailing. The study concludes by encouraging the government not to borrow unnecessarily, and to use
borrowed funds for investment projects, rather than on consumption expenditure
The economy is going through a soft patch.
Unemployment increased due to this and seasonal
factors, but started rapidly falling in April.
Macroeconomic balances mostly improved in
the 1Q10. A lot of slack in the economy helped
inflationary tensions ease in this period and the CPI
inflation rate should remain within the central bank
target band for the next four quarters at least. The
four quarter rolling current account deficit rose
slightly in terms of GDP while the central government
deficit came lower than expected.
Slowdown in Chinese Economy and its Impact on the Worldinamdaramaan
This presentation includes the overview of the causes and impact of Chinese slowdown and throws some light on future possibilities which can occur and main concerns to worry about.
Inflation and its Impact on Pakistan Economy Muzafar hussainMuzafar Hussain
State Bank of Pakistan has been entrusted with the responsibility to formulate and conduct monetary and credit policy in a manner consistent with the Government’s targets for growth and inflation and the recommendations of the Monetary and Fiscal Policies Co-ordination Board with respect to macro-economic policy objectives. The basic objective underlying its functions is two-fold i.e. the maintenance of monetary stability, thereby leading towards the stability in the domestic prices, as well as the promotion of economic growth.
Long Run Impact of Exchange Rate on Nigeria’s Industrial Outputiosrjce
While many scholars have carried out a lot of research on the impact of exchange rate volatility and
price shocks on economic growth, this study departs from previous studies and seeks to provide suggestions for
Nigerian policy makers on the attainment of an ideal exchange rate necessary to boost industrialization and
industrial output. The economies of all the countries of the world are linked directly or indirectly through asset
and goods markets. This linkage is made possible through trade and foreign exchange. The price of foreign
currencies in terms of a local currency (i.e. foreign exchange) is therefore important to the understanding of the
growth trajectory of all countries of the world. The consequences of substantial misalignments of exchange rates
can lead to output contraction and extensive economic hardship. These therefore, bring up the issue of an ideal
exchange rate necessary for the achievement of a set of diverse objectives - economic growth, containment of
inflation and maintenance of external competiveness. This study employed the use of the ordinary least square
technique to examine the impact of exchange rate stability on industry output in Nigeria using annual time
series data from 1980 to 2013. The result of the study showed that domestic capital, foreign direct investment,
population growth rate, and real exchange rate were significant determinants of industrial output. The changes
in external balance and inflation were of little or no consequences to industrial output. Based on the findings,
the researcher recommended that conscious efforts should be made by government to fine-tune the various
macroeconomic variables in order to provide an enabling environment that stimulates industrial output and
eventual economic growth.
Monetary Policy Shocks and Agricultural Output Growth in Nigeriaiosrjce
This paper investigated the transmission channel of monetary policy shocks to agricultural output
growth over the period 1970 – 2012. Data were drawn from the Central Bank of Nigeria Statistical Bulletin,
2013. The study estimated a VAR model and showed that producers are able to effectively transfer increases in
cost of production to the final consumer through increased prices; and that though monetary policy shocks,
interest rate and consumer prices have dominant impacts on agricultural output growth in Nigeria, but that
monetary policy shocks transmitted through the interest rate channel are more effective. It was therefore
recommended that monetary policy efforts to revitalize the agricultural sector should focus more on the use of
differential interest rates amongst other policy tools.
Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.
Five years after the onset of the global financial crisis the world economy remains in a state of disarray. Strong expansionary monetary policies in the major developed economies have not succeeded in fostering credit creation and strengthening aggregate demand. Fiscal austerity and wage compression in many developed countries are further darkening the outlook, not only for the short term, but also for the medium term. The burden of adjustment of the global imbalances that contributed to the outbreak of the financial crisis remains with the deficit countries, thus strengthening deflationary forces in the world economy. The dominance of finance over real economic activities persists, and may even have increased further. Yet financial reforms at the national level have been timid at best, advancing very slowly, if at all. In 2008 and 2009, policymakers of several economically powerful countries had called for urgent reforms of the international monetary and financial system. However, since then, the momentum in pushing for reform has all but disappeared from the international agenda. Consequently, the outlook for the world economy and for the global environment for development continues to be highly uncertain. Some developing and transition economies have been able to mitigate the impact of the financial and economic crises in the developed countries by means of expansionary macroeconomic policies. But with the effects of such a response petering out and the external economic environment showing few signs of improvement, these economies are struggling to regain their growth momentum. Prior to the Great Recession, exports from developing and transition economies grew rapidly owing to buoyant consumer demand in the developed countries, mainly the United States.
OVERVIEW Five years after the onset of the global financial crisis the world economy remains in a state of disarray. Strong expansionary monetary policies in the major developed economies have not succeeded in fostering credit creation and strengthening aggregate demand. Fiscal austerity and wage compression in many developed countries are further darkening the outlook, not only for the short term, but also for the medium term. The burden of adjustment of the global imbalances that contributed to the outbreak of the financial crisis remains with the deficit countries, thus strengthening deflationary forces in the world economy. The dominance of finance over real economic activities persists, and may even have increased further. Yet financial reforms at the national level have been timid at best, advancing very slowly, if at all. In 2008 and 2009, policymakers of several economically powerful countries had called for urgent reforms of the international monetary and financial system. However, since then, the momentum in pushing for reform has all but disappeared from the international agenda. Consequently, the outlook for the world economy and for the global environment for development continues to be highly uncertain. Some developing and transition economies have been able to mitigate the impact of the financial and economic crises in the developed countries by means of expansionary macroeconomic policies. But with the effects of such a response petering out and the external economic environment showing few signs of improvement, these economies are struggling to regain their growth momentum. Prior to the Great Recession, exports from developing and transition economies grew rapidly owing to buoyant consumer demand in the developed countries, mainly the United States.
This paper provides an overview of inflation developments in Vietnam in the years following the doi moi reforms, and uses empirical analysis to answer two key questions: (i)
what are the key drivers of inflation in Vietnam, and what role does monetary policy play? and (ii) why has inflation in Vietnam been persistently higher than in most other emerging market economies in the region? It focuses on understanding the monetary policy transmission mechanism in Vietnam, and in understanding the extent to which monetary policy can explain why inflation in Vietnam has been higher than in other Asian emerging markets over the past decade.
impact of monetary policy on economic growth: a case study of south Africa
ini hasil diskusi bersama untuk menyelesaikan studi kasus makroekonomi, khususnya kebijakan moneter
Similar to MACROECONOMIC PERFORMANCE FOR THE PAST THREE YEARS 2008-2011 (20)
MACROECONOMIC PERFORMANCE FOR THE PAST THREE YEARS 2008-2011
1. BY
Prof Handley Mpoki Mafwenga
PhD, MSc, MBA, PGDTM,ADTM
Macro-Fiscal Policy Analyst andTax Expert (PFMO 1)
THE GOVERNMENT OFTHE UNITED REPUBLIC OFTANZANIA
THE MACROECONOMIC PERFORMANCE
FOR THE PAST THREE YEARS(2008-2011)
finance
2. Abstract
This presentation provides an insight in Tanzania with specific
emphasis to the Key macro-economic indicators as reflected
in the Budget; it further, highlights the NSGRP and its
challenges in particular.
Tanzania has maintained strong economic performance over
the past decade, mainly reflecting the outcome of sustained
structural reforms coupled with prudent fiscal and monetary
policies. During the past three-year period up to 2010, the
economy grew at an average of 7,2 per cent, mainly driven
by growth in mining and quarrying, financial intermediation,
transport and communication, and manufacturing and trade
activities.
3. Abstract
Over the period, inflation remained at a single-digit level
until September 2008, when it rose to 11,6 per cent from
9,8 per cent in August and increased to 13,5 per cent in
December 2008 then it slowed down to 7% by year 2010.
Implementation of fiscal and monetary policies remained
prudent and focused on sustaining macroeconomic stability,
particularly real economic growth and price stability.
4. Table 1: KEY MACROECONOMIC INDICATORS
Economic
Indicators
2008/2009 2009/2010 2010/2011 (Data as
at December,
2010)
GDP (Real) 7.4% 6.0% 7.0%
Capital Formation as
percentage of GDP
29.7% 29.0% 32.0%
Growth of Money
Supply (M2)
22.0% 23.4% 21.8%
Growth of Money
Supply (M3)
17.7% 20.8% 25.4%
Interest rates
(Average Lending
rates by Commercial
Banks)
Decreased from
16.05% to14.38%
14.38% Decreased from
14.38% to 13.45%
Interest rates (Time
Deposits)
8.48% Increased to 8.99% Decreased to 7.09%
from 8,99%
5. Table 1: KEY MACROECONOMIC
INDICATORS
Economic
Indicators
2008/2009 2009/2010 2010/2011 (Data
as at December,
2010)
Exchange rate Depreciation ofTZS
was 1,196.3 per
USD equivalent to
10.3%
Value ofTZS
declined by 8.5% to
an average ofTZS
1,329.3TZS per
USD
Value ofTZS was
1,453.5
Foreign Reserves USD 2,872.6 million
sufficient to cover
5.7 months of
imports of goods and
non-factor services
USD 3,551.3 million
equivalent to an
increase of 23.6%
USD 3,948.0 million
equivalent to 6.3
months of imports of
goods and non-factor
services
6. GDP(Real)
Real (constant price ) GDP reveal changes in economic
output after adjusting for inflation. The change in real GDP
plus the change in the deflator approximately equals the
change in nominal GDP.
In 2008/09 adverse impact of the global economic crisis
continued to hit our economy; however, GDP grew by 6.0%
in 2009 as attributed to increased growth in economic
activities of electricity and gas, education, and
communication services including the us of mobile phones
In 2009/10, the GDP grew to 7.0% being attributed by
agriculture and livestock; manufacturing; trade and repair;
transport and communication and financial intermediation.
7. Capital Formation
Increase in capital formation for the past three years was
attributed to increased investments in housing construction,
land developments, roads and bridges construction. Thus, the
GDP growth is direct proportional to capital formation.
There was an increase in capital formation both in public and
private sectors.
8. Growth of Money Supply
Money Supply is significant because it is an indicator of level
of transactions and perhaps inflation or output. The measure
of narrow money is called M1 i.e. currency in circulation
plus sight deposits. The main wider definitions of money is
called M2 and M3. M2 consists of M1plus savings deposits
and time deposits (i.e accounts where cash is available after a
notice period). M3 is M2 plus institutional money funds,
large time deposits, repurchase agreement etc
In the past three years, the growth of extended money supply
(M3) was largely due to increase in the rate of foreign
currency deposits as well as strengthening of USD against
other currencies
9. Interest rates
Interest rate or Yield less the rate of inflation is significant because is the
determinant of investment behavior. The real interest rates are nominal
interest rates deflated by the rate of inflation. Implicitly, at least,
investment decisions are based on real interest rates.
Following Implementation of Second Generation Financial Sector Reform
(SGFSR) and availability of long-term loans for development projects over
five years to December, 2009, the medium term lending rates decreased,
medium term savings deposit rate increased hence, motivating people to
put their savings in banks
The interest rate spread for the past three years continued to remain high
despite increased competitiveness in banking sector. This is largely due to
lack of not only credit reference data bank but also lack of Credit
Reference Bureaux in the country. Also, the absence of National Identity
Cards and high costs involved in doing business due to poor infrastructures
impacted on high interest lending rates
10. Inflation
Two important measures of inflation computed inTanzania
1. The underlying inflation rate; this is the rate of inflation excluding changes in
food prices;
2. year to year headline inflation; this is the percentage change in the National
Consumer Price Index (NCPI)
Increase in inflation in year 2008 to year 2009 was mainly attributed to food
shortage in the country and neighboring countries which led to the increase in
prices of food items, prices of petroleum products in the domestic market
leading to an increase in transportation costs.
However, trend of food inflation which accounts for a large proportion in the
overall CPI started to decline to 9.8% in 2010; also in 2009/10 good rains
season increased food production thereby reducing headline inflation from
12.7% to 9.4% byApril, 2010
NBS updated the NCPI market basket weights from 2001 to 2007 using results
of Household Budget Survey thereby recoding inflation as shown in figure 1
11. Table 2: EAC Comparative Inflation rate
Consumer Prices in 9months period
12. Inflation
Tanzania has recorded low inflation rate as compared to other
partner States;
However, increase in inflation in past three years was mainly
due to sustained pressures on domestic prices that emanated
from a protracted surge in oil and food prices coupled with
economic crisis mostly during the past three years through
recovery has been in place with some fluctuation trend.
However, non-food inflation which is influenced by monetary
policy, slowed down in past three years. This has been due to
the improvement in food supply, as well as sustained prudent
fiscal and monetary policies
13. Exchange Rates
This is the price of one currency in terms of another. They
are determined mainly by the supply and demand, which
reflect trade and other international payments, and much
more important, volatile capital flows which are constantly
shifting around the world in search of the best expected
returns. The prime indicator of market pressures on a
currency is the figure for total currency flows in the balance
of payments account. Other influences are relative interest
rates and yields.
Depreciation of the TZS in 2008/09 was caused by
speculators who hoarding forex following the outset of the
global economic crisis
14. Exchange Rates Cont…..
Depreciation of TZS against USD in 2009/10 was due to the
increase in demand of USD, in the country and also
appreciation of USD against other international currencies.
15. Foreign Reserves
In a strict sense are only the foreign currency deposits and
bonds held by central banks and monetary authorities.
Foreign exchange reserves are important indicators of ability
to repay foreign debt and for currency defense, and are used
to determine credit ratings of country.
high level of reserves at 3.8 billion is unprecedented in the
country’s history and apparently the best among the East
African Community (EAC) member states
This attributed increased reserves accumulation to more
proceeds from exports, particularly in 2010, where gold
alone brought in 1.4 billion US dollars, overtaking the
tourism sector which contributed 1.3 billion US dollars.
16. (NSGRP)MKUKUTA
Since 2005, Tanzania’s GDP annual growth rate averaged 7
percent, which was in line with MKUKUTA target of 6 – 8
percent per annum
In 2009 GDP growth was 6.0 percent, declining partly due
to the global financial crisis. Volume and prices of exports
fell, flows of capital and investment fluctuated, tourism and
demand for tourism products fell as well
17. Figure 1:Shares of Major Sectors in
GDP 2005 and 2009
27.6
20.8
42.5
25
20.8
45
0
5
10
15
20
25
30
35
40
45
50
Agriculture Industry and Construction Services
2005
2009
18. (NSGRP)MKUKUTA Cont….
The share of agriculture in GDP (Figure 2) declined relative
to services and industry and construction. Services constitute
the main sector of the economy, thus its growth will be
critical for sustaining higher economic
Sluggish growth of agriculture was a result of a combination
of many factors. These included poor infrastructures to
support agriculture, inadequate extension services, and poor
technology of production, low value addition, lack of
appropriate financing mechanisms for agriculture, unreliable
markets, unfair and uncompetitive farm gate prices, and
environmental degradation.
20. Major challenges to MKUKUTA
financing:
1. Insufficient resources for MKUKUTA implementation: Resources to fund;
MKUKUTA activities often fell short of the approved allocations.
This necessitated reallocation of resources and in some instances
phasing out some of the activities, despite of their levels of
priority;
2. Global financial and economic crisis: Tanzania was not spared by the
adverse; effects of global financial and economic crises, which
affected negatively the key sectors of economic growth, especially
trade flows, capital inflows, natural resource sectors and
agricultural exports;
3. Omission of important items: the exclusion of wages and salaries and
transfers; to LGAs in MKUKUTA budget led to understating the
magnitude of resources allocated to MKUKUTA clusters. Wages
and salaries to civil servants are the real cost of service delivery to
the public;
21. Major challenges to MKUKUTA
financing Cont…….
5. Delay in costing: the costing of MKUKUTA delayed and hence the
three-year; rolling MTEF was used as a proxy. This did not
give a comprehensive picture of what it took to fully
implement MKUKUTA and thus establish the resource
gap; and
6. Non-state actors’ financing: it was rather difficult to ascertain the
actual; amount spent by these bodies to implement
MKUKUTA.
The Household Budget Survey indicate that, impressive
economic growth achieved in past three years has not yet
sufficiently manifested itself in the reduction of income
poverty. This is attributed to slow growth of the agriculture
sector.
22. Trends andTargets of Income Poverty Reduction,
Urban-Rural, 1991-92 to 2010
28.7
25.8
24.1
12.9
40.8 38.7
37.6
24
0
5
10
15
20
25
30
35
40
45
1991-1992 2000-01 2007 MKUKUTA Target
2010
PercentageofPopulationbelowthebasicneeds
PovertyLine
Figure 3:Trends andTargets of Income Poverty Reduction,
Urban-Rural, 1991-92 to 2010
Urban
Rural
23. Trends andTargets of Income Poverty Reduction,
Urban-Rural, 1991-92 to 2010
There was a decline in income poverty levels over the period
in all areas. The proportion of the population below the basic
needs poverty line declined slightly from 35.7% in 1991/92
to a lesser than 33.6%, and the incidence of food poverty
fell from 18.7% to a lesser than 16.6%. The fall in poverty
over the past three years was larger; basic needs and food
poverty levels both declined by approximately 3 percentage
points, and in Dar es Salaam basic needs poverty declined by
over approximately 11 percentage points.
Poverty rates remain highest in rural areas: 37.6% of rural
households live below the basic needs poverty line, compared
with 24% of households in other urban areas and 16.4% in
Dar es Salaam.
24. Government Budget
Revenue : Government Domestic Revenue increased by
18.1% in 2007/08 to TZS 4,293.074 billion and by 8.2% in
2009/10 toTZS 4,661,540 million.
Grants and Loans: External grants in 2009/10 amounted to
TZS 1,405.3 billion and External Loans amounted to TZS
1,379.6 billion. The period as at March, 2011 Government
received grants and loansTZS 845.7billion.
Expenditure: Government Expenditure in year 2008/09 was
TZS 6,811.8 billion below the target due to revenue
shortfalls during the period.
25. CONCLUSION
During the past three years, the Government of the United
Republic of Tanzania continued to focus on achieving the
objectives of the National Strategy for Growth and Reduction of
Poverty (MKUKUTA).
The government policies were geared towards maintaining fiscal
control through strengthening tax administration and expenditure
efficiency, to cushion the impact of the global economic slowdown
on government operations. Priority was given to improving
domestic revenue mobilization by broadening the tax base,
curbing tax exemptions and enhancing revenue administration.
Monetary policy remained focused on achieving appropriate levels
of liquidity in the economy, consistent with the desirable low and
stable levels of inflation as well as to support the desired growth
momentum.
