TANZANIA: CREDIT growth to the agricultural sector has declined slightly but continues to be the most appealing to commercial lenders, the Bank of Tanzania reveals in its latest monthly economic review.
The report indicates a decrease in credit growth to the agricultural sector from 60.6 per cent in the previous period to 55.7 per cent in the year ending May.
Comparatively, credit growth to the manufacturing sector reached 29.4 per cent, while the building and construction sector saw a growth of 20.7 per cent.
Other sectors and their respective credit growth rates include personal (17.9 per cent), mining and quarrying (17.6 per cent), transport and communication (16.2 per cent), hotel and restaurant (1.9 per cent), and trade (negative 2.4 per cent).
Agriculture represents nearly 26.5 per cent of Tanzania’s GDP and employs about three-quarters of the country’s workforce.
During the presentation of the 2024/25 budget, Agriculture Minister, Hussein Bashe reiterated the government’s commitment to enhancing agricultural infrastructure to transform the sector into a modern, commercial, and highly productive area, thereby boosting its contribution to economic development.
Bashe emphasized the pivotal role of the private sector in formalizing and empowering small-scale farmers to produce commercially.
He highlighted investments in agricultural infrastructure as crucial for attracting private sector investors, creating jobs, and increasing farmers’ incomes nationwide.
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“The government aims not only to attract new investments but also to encourage local and quality investments that enhance the productivity of the agriculture sector and its contribution to economic growth,” Bashe affirmed.
This proactive approach by the government is seen as instrumental in creating new opportunities for private sector entities to capitalize on and contribute to the sector’s growth.
According to the Central Bank, private sector credit remains a key driver of money supply in the economy, growing at 16.5 per cent compared to 17.6 per cent in the previous month.
Personal loans, predominantly used by micro, small, and medium-sized enterprises (MSMEs), continue to account for the largest share of total credit extended to the private sector at 37.9 per cent, followed by trade (12.9 per cent) and agriculture (11.8 per cent)
