Debt burden indicators are within sustainable thresholds’

Debt burden indicators are within sustainable thresholds’

THE government has insisted that the conducted Debt Sustainability Analysis (DSA) revealed that the debt burden indicators are within sustainable thresholds that are internationally acceptable during the short, medium and long term.

Public debt stock as of April 2022 was 69.44tri/- equivalent to 14.4 per cent increase as compared to 60.72tri/- in April 2021.

Speaking on Tuesday, when presenting to the 2022/23 national budget estimates in the National Assembly in Dodoma, Minister for Finance and Planning Dr Mwigulu Nchemba said this amount includes domestic debt of 22.37tri/- equivalent to 32.2 per cent of the debt stock and external public debt was 47.07tri/-, equivalent to 67.8 per cent of the debt stock.

He added that the stated amount for external public debt, covering external non-concessional loans amounting to 14.27tri/- equivalent to 30.3 per cent of the debt stock, meaning that a large portion of the external public debt is concessional.

Dr Nchemba said the government conducted DSA in accordance with the government loans, guarantee and grants Act CAP 134.

Furthermore, he said the analysis revealed that the present value of public debt to GDP is 31.0 per cent, which is less than a threshold of 55.0 per cent.

He noted that the present value of external debt to GDP is 18.8 per cent as compared to the established benchmark of 40.0 per cent; and the present value of external debt to export is 142.4 per cent as compared to the cut-off threshold of 180 per cent.

In a related development, Minister Nchemba said in 2021/22, the government resumed the process of the country's credit rating exercise under the guidance and advisory services of Citibank.

He said by May 2022, the government had finalised the procurement process and successfully selected two internationally reputable credit rating agencies.

Discussions with respective agencies are ongoing and preparation of various data to be used in the rating exercise has commenced and is expected to be completed in 2022/23, Dr Mwigulu added.

“I, therefore, take this opportunity to request all stakeholders in public and private sectors as well as financial institutions which will be approached for interviews and information and data collections by experts from these agencies to accord them with maximum cooperation on the broader interests of the country.

He said the completion of this exercise is critical in enhancing our ability to access international capital markets and widen the development of financing options

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