DAR ES SALAAM Nov 6 Tanzania's economy is set
to grow 7 percent in 2013 but the government needs to expand
revenue by simplifying tax exemptions and curbing power
subsidies to sustain growth and ease fiscal pressure, the IMF
said on Wednesday.
The International Monetary Fund said inflation was expected
to slip back towards the government's target of 5 percent by
mid-2014, after falling to 6.1 percent in the year to September.
It also noted that the current account deficit "remained
large", at the equivalent to 13.5 percent of gross domestic
product in the year July 2013 to June 2014.
Tanzania, like its east African neighbours, has been growing
strongly. It is banking on gas discoveries in the years ahead,
but for now has a huge job fixing rickety infrastructure,
lifting its people out of poverty and addressing the sensitive
issue of power and other subsidies that drain state coffers.
Paul Mauro, who led an IMF team to Tanzania, said in a
statement at the end of the talks that growth of 7 percent in
the first half of 2013 was expected to extend to the full year.
"To sustain economic growth and to stem fiscal pressures
during the current and next fiscal year, priorities include
mobilising additional revenues by reducing and simplifying tax
exemptions and bringing the power sector to financial
sustainability," he said.
He said the government had reaffirmed its commitment to a
fiscal deficit equivalent to 5 percent of gross domestic product
that was agreed with the IMF, although he said agreed targets
for domestic financing had been exceeded in 2012/2013.
Among the medium-term policy challenges, Mauro included
"enhancing the institutional framework to ensure that possible
future revenues from newly discovered natural gas deposits
benefit all citizens".