40tri/- national debt feasible, attests Mpango
RISING national debt to 19 billion US dollars (over 40tri/-) as of last December remains sustainable, the government said here yesterday, charging that the debt effects on the national budget are minimal.
Finance and Planning Minister, Dr Philip Mpango, assured members of the public of reaccessible loans from commercial banks that had stopped issuing credits following the government directive to have all public institutions withdrawing their fixed accounts from the banks to the Bank of Tanzania (BoT).
Dr Mpango told the National Assembly here yesterday that the government was optimistic that once the banks get used to the new government’s directive, they will continue issuing loans, adding liquidity to the economy.
He said some banks had ceased the loan issuance pending evaluation of the new directive’s implementation during the transition period, saying, however, that out of the 66 operational banks in the country, only CRDB Bank and Tanzania Investment Bank (TIB) were affected, recording losses during the period spanning July-December, last year.
Giving details on the national debt, the minister said Tanzanians have nothing to worry about as the rising debt stock was manageable, with repayments adhering to maturity.
“The average time to maturity for the current debt is 12 years, implying low refinance risk to the national budget,” he assured while presenting the economic status report to Members of Parliament (MPs). To make it even safer, the government has been repaying the debts as per their contracts.
For the period between July and December, last year, the government spent 2.5tri/- to pay the debts of which 747bn/- and 1.36tri/- settled the external and internal debts, respectively.
“It’s the intention of the government to repay all matured loans according to their agreements,” he said, adding that the government is duty-bound to conduct Debt Sustainability Analysis every year to establish the state and sustainability of the debts for the short, medium and long terms.