南非国际事务研究所-坦桑尼亚的宏观经济政策发展（英）-2021.10-36页_572kb

Summary of Macroeconomic Policy Responses in Tanzania During the COVID-19 Pandemic

Core Content

The document outlines the evolution of macroeconomic policies in Tanzania, particularly in response to the challenges posed by the COVID-19 pandemic. It highlights the country's pre-pandemic economic performance, the impact of the pandemic on key macroeconomic indicators, and the policy interventions undertaken to mitigate economic decline and support recovery.

Main Points

Pre-COVID Macroeconomic Performance

• Tanzania achieved an average real GDP growth rate of 7% per annum from 2010 to 2019, supported by prudent monetary and fiscal policies, infrastructure investments, and structural reforms.
• The economy was characterised by low inflation (below 5%), stable interest rates, and moderate current account deficits.
• Key sectors contributing to growth included mining, construction, agriculture, and services.

Impact of the Pandemic

• The pandemic disrupted the economic growth trajectory, with real GDP growth expected to decline to 5.5% or more in 2020 and 2021.
• Despite the decline, Tanzania avoided a recession in 2020, partly due to continued macroeconomic stability and limited lockdown measures.
• Agriculture and mining helped cushion the economic impact, supported by ample rainfall, global commodity prices, and effective sector management.

Policy Responses

• The Bank of Tanzania and the government adopted measures to shield the economy, including:
  • Increased funding for the health sector to contain the spread of the virus.
  • Expanded social spending to protect livelihoods.
  • Accommodative monetary policy to maintain liquidity and interest rate stability.
  • A 'build back better' approach to recovery.
• The government also continued planned infrastructure projects, such as the Julius Nyerere Hydropower Station and standard gauge railroad, which accounted for 33.7% of the 2020/21 budget.

Key Information

Inflation

• Inflation remained below 5% in 2020 and early 2021, supported by adequate food supply, low oil prices, and stable power supply.
• The second wave of the pandemic may exert pressure on inflation, but food stock levels and subdued demand are expected to keep it below 5%.

Interest Rates

• Market-determined interest rates were applied since the mid-1980s.
• Lending rates rose sharply in 2020 due to tight credit conditions, but Bank of Tanzania interventions helped bring them down.
• Deposit rates increased from 2.2% in December 2019 to 8.8% by end of 2020, reflecting expectations of continued rate hikes.

Exchange Rates

• The Tanzanian shilling depreciated slightly against the US dollar during the pandemic, by 0.4 percentage points.
• Volatility increased in Q2 2020 due to declining capital inflows, but the central bank's interventions helped stabilise the currency.
• The real effective exchange rate remained relatively stable, and manufactured goods exports increased despite lower global demand.

Money Supply and Credit

• Money supply (M3) and credit to the private sector declined in 2020 due to government borrowing crowding out private sector access.
• The Bank of Tanzania aimed to rebound credit to the private sector by implementing accommodative measures.
• Credit to the government increased significantly in the second half of 2020, contributing to fiscal deficit risks.

Public Finance

• The government used technology to improve revenue mobilisation, such as the Government e-Payment Gateway.
• Tax revenues fell short of targets in 2020, with income tax down by 24.7% and import taxes down by 10.8%.
• Non-tax revenues increased by 18.7%, driven by dividend payments.
• Expenditure was streamlined to align with available resources, with health, education, and infrastructure receiving priority.

Public Debt

• Total public debt reached $29,708.9 million by November 2020, with 80.1% being external debt.
• Debt service costs were 40% of domestic revenue, increasing liquidity risks and diverting resources from development.
• Debt sustainability indicators remained below acceptable thresholds, indicating low risk of distress.

Fiscal Institutional Structure

• The Ministry of Finance and Planning (MoFP) leads the fiscal institutional structure.
• The 2020/21 budget included increased health spending using contingency reserves.
• Budget submissions are reviewed by the Inter-Ministerial Technical Committee before final approval by the Cabinet.
• The Monetary Policy Committee of the Bank of Tanzania sets monetary policy on a bi-monthly basis.

Balance of Payments

• The current account deficit narrowed to $818.6 million in 2020 from $1,661.3 million in 2019.
• Exports of minerals (especially gold) and declining imports contributed to the narrowing deficit.
• Foreign reserves fell by 14.7%, but remained sufficient to cover 5.6 months of projected imports.

Foreign Direct Investment (FDI)

• FDI declined by 17.5% in 2020, primarily due to pandemic disruptions.
• Greenfield investments also dropped by 25%.
• FDI is expected to decline further by 2.4% in 2021, but the impact is anticipated to be low as trading partners open up.

Conclusion

Tanzania's macroeconomic policies have been prudent and adaptive, allowing the country to avoid recession in 2020 and maintain stability in inflation and exchange rates. The government and central bank have taken measures to support recovery, including increased public spending, monetary easing, and continued infrastructure investment. However, challenges remain, such as rising debt service costs, declining FDI, and crowding out of private sector credit, which will need to be addressed to ensure sustainable and inclusive recovery.