In the fiscal year ending September, private sector credit expansion decelerated to 19.5%, showcasing a noteworthy shift from the 22% recorded in the previous year. This downtrend is attributed to the favorable business environment fostered by comprehensive reforms.
The Bank of Tanzania, in its October economic review, highlighted the role of supportive monetary and fiscal policies, along with ongoing structural changes, in influencing this moderation. Although broad money supply growth exhibited a second consecutive month of slowdown, specific sectors thrived during this period.
Agricultural activity emerged as the frontrunner with an impressive 55.5% surge in credit, closely followed by mining and quarrying at 33.4%. The agricultural sector, a key player attracting commercial lenders and employing three-quarters of the country’s workforce, constitutes nearly 30% of Tanzania’s GDP.
Diversification is evident in the private sector credit distribution, with personal loans claiming the lion’s share at 38.1%. Trade, agriculture, and manufacturing follow suit at 15.4%, 10.4%, and 9.2%, respectively.
Comparing September 2023 to August, the annual growth rate experienced a slight dip from 17.4% to 14.5%. Despite this decline, the current rate surpasses the 13.6% recorded in the corresponding period last year, indicating resilience and adaptability in Tanzania’s economic dynamics.