2018年-IMF国际货币组织全球_Republic_of_Tanzania_Seventh_Review_Under_the_Policy_Support_Instrument_55页_3mb

Tanzania: Seventh Review Under the Policy Support Instrument (PSI)

Core Content

The Seventh Review Under the Policy Support Instrument (PSI) for Tanzania, conducted in late 2017 and finalized in early 2018, assessed the country's economic performance and policy progress under the 2014–2018 PSI arrangement. The review concluded that program performance had been broadly satisfactory, with most quantitative targets met, though structural reforms remained unevenly implemented.

Main Points

1. Economic Performance and Outlook

• Macroeconomic Performance: Mixed, with GDP growth reported at 6.75% in the first half of 2017, but high-frequency indicators suggested weakening economic activity.
• Tax Revenue: Below expectations due to lower excise collections and unexpected low VAT refunds.
• Credit Growth: Stagnated, partly due to rising nonperforming loans (NPLs).
• Inflation: Remained moderate, close to the Bank of Tanzania (BoT) target of 5%.
• International Reserves: Increased significantly, reaching 5.2 months of import coverage in 2016/17.
• Outlook: Generally favorable over the medium term, with GDP growth projected at 6–7% for 2017/18 and beyond. However, downside risks include a weak business environment, slow infrastructure spending, and a prolonged slowdown in private sector credit.

2. Program Performance

• Quantitative Targets: Most targets for end-June 2017 were met.
• Structural Benchmarks: Progress was slow, but efforts were increased to advance reforms.
• Waivers: The IMF granted waivers for the non-observance of two assessment criteria (tax revenue and domestic payment arrears), citing minor breaches and corrective actions being taken.

3. Fiscal Policy

• Deficit Target: The government aimed for a budget deficit of close to 4% of GDP in 2017/18.
• Capital Spending: Increased from 6.7% to 8.5% of GDP due to delayed development projects.
• Revenue Shortfall: Updated projections indicated a 1.6% of GDP shortfall, attributed to optimistic revenue yields, implementation delays, and reduced aggregate demand.
• Fiscal Adjustments: The government agreed to confirm expenditure cuts and increase domestic financing to cover the shortfall.
• Budget Credibility: Improved through enhanced commitment control and the development of a strategy to address domestic arrears.
• Tax Reforms: Needed to broaden the tax base and improve administration through risk-based compliance and simplified tax systems.
• Public Investment: Should be more efficient, with better project appraisal and selection. The Public Investment Management (PIM) manual needs enforcement, and the PPP Act should be amended to clarify institutional responsibilities.

4. Monetary and Exchange Rate Policies

• Monetary Policy: Should remain vigilant as public spending is expected to increase, particularly on large infrastructure projects.
• Liquidity Management: Close coordination between the BoT and the Ministry of Finance is essential to manage liquidity and government spending plans.
• Interest Rate Targeting: The transition to an interest rate-based monetary policy framework is ongoing, with the BoT preparing to use short-term interest rates as the operational target by early 2018.
• Nonperforming Loans: High NPLs continue to constrain private sector credit, which declined for the second consecutive month in October 2017.
• Exchange Rate: The BoT has maintained a tight monetary stance and reduced reserve requirements to manage liquidity, but further easing should be avoided due to excess reserves.

5. Financial Sector and Business Environment

• Banking Sector: NPLs increased to 12.5% of total loans, with asset quality deteriorating across most sectors.
• Profitability: Bank profits declined to 2% of assets and 8.7% of equity in September 2017, the lowest since 2007.
• Bank Mergers: Twiga Bancorp is under statutory management by the BoT, and FBME Bank and Mbinga Community Bank are being liquidated.
• Business Climate: Perceptions of the business environment have deteriorated, potentially deterring investment and private sector participation in major infrastructure projects.

Key Information

• PSI Approval: The PSI was approved in July 2014 and extended to January 2018.
• Program Objectives: Maintaining macroeconomic stability and promoting inclusive growth through public finance management reforms, improved transparency, and a shift to an interest rate-based monetary policy.
• Challenges: Persistent domestic payment arrears, weak tax revenue, slow budget execution, and high NPLs.
• Recommendations:
  • Improve budget credibility and implementation.
  • Enhance tax administration and policy to boost domestic revenue.
  • Strengthen public investment management and PPP frameworks.
  • Address NPLs to reduce financial sector vulnerabilities.
  • Ensure close coordination between fiscal and monetary policies.
  • Continue efforts to improve the business environment and infrastructure.

Conclusion

The staff recommends the completion of the seventh review under the PSI, acknowledging the mixed economic performance and the need for continued reforms to ensure sustainable growth and fiscal stability. The review highlights the importance of policy coordination, structural improvements, and addressing key challenges in the financial and public sectors to support Tanzania's long-term development goals.