Credit to agriculture highest third month in row

Credit to the agriculture sector has for the third month in a row registered highest growth, thanks to the monetary policy measures rolled out by the Central bank to support credit intermediation to the sector.

According to the Bank of Tanzania (BoT) monthly economic review for September, credit to agriculture sector rose by 42.6 per cent in the year ending August compared to negative 14 per cent registered in the similar period last year.

Credit extended to the mining and quarrying as well as manufacturing sectors increased to 37.7 per cent and 35.8 per cent, respectively compared to negative 3 per cent and negative 0.8 per cent recorded in the similar period last year.

Domestic credit, consisting of credit extended by the banking system to the private sector and central government, grew at an annual rate of 27.3 per cent in August compared with 8.7 per cent in the corresponding period last year.

During the period under review, private sector credit also maintained an upward trend, recording an annual growth of 20.7 per cent from 3.2 per cent in August 2021.

The sustained strong growth in private sector credit is explained by recovery of private sector activities from the effects of Covid-19, improved business environment in the country, and supportive fiscal and monetary policy conditions.

All major economic activities recorded positive growth of credit in August 2022, except for hotels and restaurants.

The profile of outstanding credit to the private sector remained almost unchanged, with personal undertakings holding the largest segment of 42.6 percent, followed by trade, manufacturing and agriculture activities.

Money supply continued to increase, broadly consistent with the target of 10.3 per cent for 2022/23.

Specifically, extended broad money supply recorded an annual growth of 11.5 per cent, higher than 9.9 percent recorded in August last year. The increase was largely due to continued recovery of growth of credit to the private sector.

Broad money supply grew by 12.6 per cent, almost unchanged from the growth registered in the corresponding period last year.

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