Tanzania’s economic growth slowed to 5.7 percent in the first quarter of 2017 following poor performance in agriculture and other sectors that dominate the economy, the National Bureau of Statistics (NBS) said on Tuesday.
The NBS said in a statement that in the first quarter of 2016, the revised gross domestic product (GDP) grew by 6.8 percent.
Agriculture which accounts for over 25 per cent to the GDP grew by 2.6 percent compared with 2.7 percent recorded in the previous first quarter, said the statement.
It added that the construction sector recorded a growth rate of 8.4 percent in first quarter of 2017 compared to 8.9 per cent recorded in the corresponding quarter of 2016.
The statement said transportation and storage registered a growth rate of 4.1 percent in the first quarter of 2017 compared to 7.9 percent in the first quarter of 2016.
Tanzania is facing tight liquidity prompted by the government’s austerity measures which affected businesses and disrupted the credit flow to the private sector.
The Tanzanian government under the administration of President John Magufuli was also ambitious in collecting taxes despite the fact that consumption or demand was low.
Financial institutions, especially commercial banks, have also become more stringent in loan issuing with little money circulating to the private sector.
As a result, almost all major economic activities recorded a considerable decline in growth of credit, with manufacturing, agriculture, transport and communication, construction and hotels and restaurants experiencing negative growth.
Some top commercial banks also recently announced their financial statements for the first six months indicating reduced profits.
Tanzania is targeting at least 7 percent growth of the GDP in 2017. Enditem