THE annual growth of credit to the private sector slowed to 16.1 per cent recorded in the year ending September, this year, down from 29.4 per cent recorded in the corresponding period of 2011, with manufacturing sector having a drop of 1.7 per cent.
The decrease according to the Bank of Tanzania (BoT) monthly economic review for September this year was attributed to decrease in government expenditure coupled with good performance in revenue collection.
Statistics show that the Tanzania Revenue Authority (TRA) registered a record 754bn/- collection in September, being the monthly highest ever in the history. The lower growth of net claims on government and a slow-down in the growth of credit to the private sector slowed down annual growth of net domestic assets to 13.7 per cent from 19.5 per cent registered in August 2012 and 40.1 per cent in 2011.
During the period under review, all economic activities recorded slower growth in credit with the exception of building and constructions activities which recorded 46.8 per cent up from 34 per cent in August and 30.9 per cent of the corresponding period 2011.
Manufacturing sector for example, recorded a negative growth of 1.7 per cent from 23.9 per cent in August and 9 per cent of the corresponding period in 2011. Agriculture recorded 8.4 per cent, down from 31.7 per cent of the previous month and 42.8 per cent of the year ending September 2011.
Transport and Communication recorded a minimal growth of 6.3 per cent from 15.8 per cent of the preceding month and 10 per cent of the year 2011.
According to the BoT report, trade activities and personal loans continued to hold the largest share of outstanding loans from the banking system accounting for 21 and 20.7 per cent respectively.
In the meantime, net claims on government decreased by 367.2bn/- in the year ending September 2012 compared with an increase of 48.2bn/- and 660.3 recorded in the preceding month and September 2011 respectively.
The growth of extended broad money supply (M3) between August and September this year was largely driven by foreign currency deposits, which increased by 2.8 per cent in the period under review compared with a growth of negative 0.3 per cent of the preceding month.
Despite this development, the shares of M3 components did not record any significant changes from the levels recorded in August 2012 and in the corresponding period of 2011. The annual growth of M3 was 10.1 per cent compared to 9.0 per cent in August 2012 and 23.7 per cent registered in the corresponding period in 2011.
Net Foreign Assets (NFA) of the banking system grew by 6 per cent compared to a growth of negative 1.8 per cent in August 2012 and 9.3 per cent recorded in the year before.