A report which was posted on Wednesday, though denied by the IMF, claims that the Tanzanian government, headed by President John Magufuli, has made some unhealthy policies (“unpredictable and interventionist”) that may impact negatively on the country’s economy.
The leaked report claimed to be seen by Reuters was not made public by the International Monetary Fund (IMF) as the Tanzanian government did not consent to its publication. However, the report revealed some damaging policy decisions approved by President John Magufuli since his emergence into Power in 2015.
Possible Causes Of Tanzania’s Economic Downslide
The IMF posited that the country is experiencing a weak business environment, also its decisions to implement projects that may not have high rates of return to the economy are likely to constrain annual GDP growth of the nation.
The leaked report, also highlighted that some damaging policy decisions approved by President John Magufuli since his emergence into Power in 2015 have diminished the country’s economic prospects. The country’s economy is also affected by President Magufuli’s decision to terminate the appointment of key personalities in various industries.
The Government’s Reaction To Blocking IMF’s Report
Denying the accusations of blocking the report to the country’s parliament, the Finance and Planning Minister of Tanzania, Mr Phillip Mpango, said;
“The government is still holding consultations with the IMF. We have not blocked the report in any way whatsoever. They should not rush this debate, we are still consulting with the IMF on this report.”
Mr Mpango added that the talk with IMF is centred around including Tanzania’s views into the final report before it is published. He stated that;
“Under the IMF’s own procedures, they submitted their draft report to us which I received on March 18, but our views are yet to be included (in the final report),”.
The Reality Of The Nation’s Economy
The IMF in Washington agreed that there have been discussions with the government but the ball is in the court of the Tanzanian authorities to consent to the publication of the report.
Tanzania has taken bold actions towards industrialization, however, unfavourable government intervention in the mining and agricultural industry saw a decrease in foreign investment in the country.
According to the IMF,
“Delays or little progress in implementing structural reforms, unpredictable and interventionist policies, and a rushed scaling-up of public investments that may not have a high rate of return will have a detrimental effect on growth and development.”
Hence, based on the economic status quo, the IMF predicts a GDP growth of 4-5 per cent in the medium term as opposed to the Tanzanian government’s prediction projection of 7.3 per cent in 2019 after about 7.2 per cent increase the previous year.