The International Monetary Fund (IMF) yesterday endorsed
President John Magufuli’s efforts to tackle corruption, but said more
needs to be done to reform the country’s economy and improve the
financial sustainability of the state-run Tanzania Electric Supply
Company Ltd (TANESCO).
Magufuli (pictured) has been spearheading a concentrated campaign
to root out high-level corruption and inefficiency in government since
assuming office in November last year, with several top public officials
already unceremoniously removed from their positions as part of the
crusade.
The IMF mission chief in Tanzania, Hervé Joly, said in a statement
the international lender of last resort welcomed this ongoing purge,
describing it as a “strong drive against corruption.”
“…It (will) help address the perception that governance (in
Tanzania) had deteriorated in recent years, as suggested by a number of
surveys,” Joly said.
Businesses have long cited corruption and government inefficiency
as major obstacles to investing in Tanzania, which ranked 117 out of 168
countries in Transparency International’s 2015 index of least corrupt
countries whereby no. 1 is deemed the least corrupt.
But according to the IMF, the Magufuli administration also needs to
carry out other “vigorous reforms” to foster further structural
transformation of the economy and sustain high productivity gains and
investment.
“Improving the business environment is also a priority. This
includes, among others, better energy and transportation infrastructure
and improving access to land and finance,” Joly’s statement said.
“Further improving the financial sustainability of the public
electricity utility, TANESCO, and settling outstanding arrears on gas
and electricity supplies are critical to facilitating continued private
sector investment in energy,” it added.
Senior public officials who have been dismissed as part of
Magufuli’s anti-graft drive include the chief executive officers of the
Prevention and Combating of Corruption Bureau (PCCB), Tanzania Revenue
Authority (TRA), and Tanzania Ports Authority (TPA).
They are just samples of a wider crackdown that has seen many other
big heads roll across the entire government and public sector spectrum.
According to the IMF, Tanzania’s economy remains buoyant and
inflation will likely remain in check, helped by lower global oil
prices.
“Preliminary estimates suggest that GDP (gross domestic product)
grew by 7 per cent in 2015, with activity particularly buoyant in the
construction, communication, finance and transportation sectors,” the
statement said.
Economic growth is expected to remain close to 7 per cent in 2016,
it added, with inflation remaining in single digits at a 5.6 per cent
average throughout 2015 despite a “significant” exchange rate
depreciation in the first half of the year.
According to the IMF statement, inflation is expected to decrease
further in the coming months, remaining close to the medium-term target
of 5 per cent.
Meanwhile, Tanzania’s annual headline inflation rate eased in
February to 5.6 per cent from 6.5 percent in January due to slower rises
in food prices.
