IMF says poor may soon fair better

Tanzania's government received from the International Monetary Fund in September a favourable report card on its poverty reduction strategy, even though the country remains near the bottom of the UN Development Programmer’s Human Development Index.

"Even with drought Tanzania has had a 5-percent growth in GDP. That's simply remarkable," Volker Treichel, the IMF senior economist for Tanzania, said on Thursday from Washington D.C.

According to the IMF's Executive Board, "Tanzania has continued to maintain macroeconomic stability and to make substantial progress in structural reform."

The country is now popular with the donor community, Treichel said. International aid money is on the increase. In August the IMF released a US $4-million loan.

But some economic indicators do not look so good. Exports have hardly increased in the last year while imports have increased a lot.

Treichel said the increase in imports reflected an increase in the country's dependence on basic foodstuffs. But he also said it was a sign that less imported petroleum was entering the country illegally and that the government was getting more revenue from petroleum tax.

The increase in imports is also a sign that investors are importing more fixed assets, he said.

Treichel said Tanzanians were just as poor now as they were 10 years ago. But he added that in the first years of the 1990s, Tanzanians were much poorer than they are now; while in the late 1990s their incomes started rising again.

"If Tanzania's economy continues to grow at 5 or 6 percent, incomes could go higher than they were ten years ago." he said. "I think the country could even meet the 2015 UN millennium development goal for per capita income."

He said an extensive survey of household incomes in 2002 showed that per capita income was increasing in urban and rural areas.

According to the IMF's assessment, there are still "structural impediments to higher growth, including low agricultural productivity, poor governance and limited access to financial services". The board also said, "High aid dependency makes its success in macroeconomic stabilisation vulnerable".