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IMF proves JK pulling right economic strings
2007-10-13 08:54:03
By Editor
A four-man International Monetary Fund (IMF) team that conducted the second review of the Policy Support Instrument (PSI) was correctly upbeat about Tanzania`s recent strong economic performance under the tutelage of the incumbent administration.
True to the point, its leader said the health of the economy was `sound`, an indication that existing policies were not only right, but also most likely that implementing political and technical leadership was doing its homework properly.
The fountain that has buttressed sustained economic resurgence since 2005 has been rebound in agricultural productivity, coupled with improved climatic conditions that saw rains again ending the disastrous prolonged drought, feeding rivers with water and getting back to life hydro-electric power stations.
Unfortunately, the aftermath of the long-drawn-out drought was yet bruising the economy, as testified by the inflation trend now threatening to reach the economically dreadful double digit level, a thing unwanted to be seen happening by both the IMF, but especially so by domestic economic stakeholders.
Despite the recent economic doldrums, the IMF team was confident economic growth rate that exceeds 7 per cent level would be achieved during the 2007/8 season.
This growth rate is technically believed to be the appropriate one for attaining a number of MKUKUTA goals.
By good luck, the meeting of President Kikwete and IMF team minds was on the unquestionable need to strengthen public institutions and governance by taking corruption issue very seriously.
In this regard, we have no reason to doubt that Kikwete`s stance on zero tolerance on corruption is a hide game, having recently declared that all graft allegations would be dealt with through the proper framework of the rule of law, meaning no stone would left unturned.
To be sure, it was this impeccable spirit of public accountability that apparently made the IMF mission to welcome the launch of the special audit of the External Payment Arrears (Epa) account of the Bank of Tanzania (BoT).
We so hope that the President and IMF are looking forward to its timely completion, something bent on enticing the confidence and commitment of both bilateral and multilateral donors in releasing their 40 percent budgetary support.
As the President himself passionately belongs to the `clean team`, we so believe that his practical anti-corruption crusade would further improve the country`s global perception index and attract even more foreign investors to the productive and service sectors of the national economy.
Thinking beyond the realms of managing graft as `crisis`, resolving to enhance the capacity and efficiency of the judicial system in handling economic disputes has the potential of enticing even more private investors in droves, as well as strengthening the regulatory framework of non-bank institutions like pension funds.
It is true that pension funds have recently been mushrooming, but their prudential supervision was almost lacking, a weakness that calls for immediate remedial action.
Precisely, this administration has proved a lot in less than three years, including an attempt to achieve its ambitious targets for revenue and expenditure.
Monthly tax collections have more than doubled from 147bn/- in 2005 to 320bn/- last September, which is no mean fiscal accomplishment.
The rest can be achieved as well, and make poverty thing of the past.
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