TANZANIA:TANZANIA’S credit growth in agriculture sector year-on-year remained strong at 53.1 per cent in the period ending June, compared to 40.6 per cent in the corresponding period last year.
However, on month to month, the Bank of Tanzania’s (BoT) latest monthly economic review shows that for three consecutive months the credit growth slowed down, signalling a weakening demand for loans within the industry.
For example, last April credit growth to agriculture was strong standing at 60.6 per cent, the highest since December 2019. In May it was standing at 55.7 per cent and in June it was 53.1 per cent.
The BoT attributes the robust credit growth to government measures aimed at improving the sector’s environment and creating favourable conditions for investment.
Presenting the 2024/25 agriculture budget estimates in Parliament, Agriculture Minister Hussein Bashe emphasised that investment in agri-infrastructure is key to attracting private sector investors into the agricultural value chain, thereby creating jobs and increasing farmers’ incomes.
He highlighted the government’s commitment to transforming the agricultural sector through value addition, which in turn stimulates investment in the industry and service sectors.
Minister Bashe outlined several initiatives to bolster agricultural production, including enhancing irrigation infrastructure, expanding market access for agricultural goods and empowering small-scale farmers across the country.
He affirmed that the government is focused not only on attracting new investments but also on encouraging local and quality investments to make the agriculture sector more productive and to enhance its contribution to economic growth.
Agriculture remains a cornerstone of the country’s economy, employing about 70 per cent of the workforce and contributing nearly 26 per cent of the GDP.
In other sectors, manufacturing registered a credit growth of 22.6 per cent in the year under review, up from 14.1 per cent in the previous year.
Mining and quarrying credit grew by 20.8 per cent compared to 6.6 per cent in the corresponding period last year.
Personal loans, largely utilised by micro, small and medium-sized enterprises (MSMEs), grew by 20.8 per cent compared to 20.1 per cent last year and continued to drive private sector credit growth, accounting for 37.2 per cent of total private sector credit.
Credit growth in the transport and communication sector slowed to 16.3 per cent, down from 22.1 per cent last year. In the building and construction sector, credit growth also declined to 14.2 per cent from 21.1 per cent in the corresponding period last year.
