Financial sector makes notable headway

Financial sector makes notable headway

According to the National Bureau of Statistics (NBS) Gross Domestic Product (GDP) fourth quarter, the outstanding performance is attributed to an increase in levels of deposits and lending by commercial banks. 

“The financial soundness indicators at the end of last year show that the banking sector for example, remains sound, profitable, and liquid in the whole with the ratio of non-performing loans declining to 6.7 from 9.8 per cent recorded in December 2010,” stated the report. 

The Bank of Tanzania (BoT) continued to implement the Second Generation Financial Sector Reforms aiming at sustaining vibrant financial sector in support of economic growth and expanding monetary access.  Similarly, the NBS report shows that the GDP for the first three quarters last year is estimated to have grown by 6.3 per cent, exceeding 6.0 per cent projected for 2011. 

The growth rate was spearheaded by higher growth rates in mining, construction, transport and communication, financial inter-mediation, trade and repairs.  The International Monetary Fund (IMF) said in November last year that GDP growth in 2011 may exceed the fund’s 6 per cent as earlier projected, due to the strong performance of the telecommunications, construction and financial services sectors. 

But in March this year, the forecast showed that the economy will expand by 6.5 to 7 per cent between 2012 and next year.  However, frequent power blackouts slowed down the economic growth rate to 6.5 per cent in the fourth quarter of last year from 6.7 per cent in the preceding period. 

Electricity output fell 1.7 per cent compared with 9.7 per cent growth a year ago, with low water levels suffocating hydroelectric production and maintenance work affecting gas-fueled power generation.  The electricity crisis caused growth in the manufacturing sector to decline to 6.6 per cent from 9.9 a year ago, the NBS report said. 

The report further said that, construction grew at a rate of 8.1 per cent in the fourth quarter last year compared to 1.0 per cent of the corresponding period.  Mining rebounded to grow at 1.2 per cent from negative 9.1 per cent a year ago. This was helped  by an increase in gold production and higher prices of the precious metal at the world market.  

The activities in the transport and communication sectors recorded a decline in the growth rate to 10.8 per cent in the fourth quarter compared to 17.2 per cent in the same period of 2010. The performance is attributed to slight increase in the volume of cargo handled during the period, stated the NBS report. 

Trade and repairs activity posted a growth of 7.1 per cent in the fourth quarter compared to 7.1 per cent in the similar period a year before. The growth rate is attributed to a slight increase in traded goods.

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