Tanzania: Credit to Private Sector Grows By 26 Percent - Central Bank

Dar es Salaam — Credit to the private sector growth continued to pick up by 25.6 per cent in the year ending June this year from 16.3 per cent recorded in the previous year, the central bank has said. "The growth reflects recovery of banks confidence in the economy following easing of the global financial crisis," states the Bank of Tanzania's monthly economic review for July.
According to the report, banks credit to all major economic activities experienced annual growth rates in the year to June 2011, compared with the rates recorded June last year, except for manufacturing, and transport and communication activities.

The report, which was released over the weekend, indicates that contribution to total private sector, personal loans continued to account for the largest part followed by trade, manufacturing, agriculture and transport and communication activities.
It states that net government borrowing from the banking system grew to Sh821.4 billion compared with the estimate of Sh297 billion, recording an increase of 177per cent.
The increase in government borrowing associated with the need to finance infrastructure developments, due to delays in realization of non-concessional borrowing.
In June this year, extended broad money supply (M3) registered an annual growth rate of 22per cent, compared with the estimate of 20.1 per cent.

These development into a relatively higher growth in extended broad money supply of 22 per cent in June this year, compared with the estimate of 20.1 per cent.
In the same period, the net foreign assets (NFA) of the banks dropped by Sh130.3 billion. The decrease in the growth of NFA of banks partly mirrored the improvement in the expansion of dollar as well as shilling denominated credit to the private sector.
On the liability side, the bank report states that change in money supply during the year pronounced more in currency circulation and foreign currency deposits.
This outturn was partly associated with the depreciation of the Shilling against US dollar.
In terms of share to M3 all compounds remained broadly unchanged.