DAR ES SALAAM: TANZANIA is the leading least indebted nation in Africa, the International Monetary Fund (IMF) has stated.
According to the IMF's latest report, though the region grapples with economic challenges, Tanzania emerges as a beacon of fiscal responsibility, boasting a debt-to-GDP ratio of 41.8 per cent.
The accomplishment reflects a prudent and balanced monetary approach that contributes significantly to the country's economic stability and resilience.
The debt-to-GDP ratio is a crucial metric that compares a country's total debt to its economic output.
Commenting on the report, Economist, Dr Isaac Safari said by being listed as the least indebted country in Africa by IMF, Tanzania still has ability to obtain loans from development funders and service them.
"It is the responsibility of the government to ensure all loans bring the desired outcome of fostering development, especially in executing development projects which can later contribute to generating government revenue.
"Debt are not sins as long as they stimulate production which can generate income for repaying them rather than borrowing to repay previous loans," he said.
He called upon the government to diversify production in an effort to make a shift from the lower middle income status to the upper middle income whereby ultimate inclusivity of all citizens in development will be realised.
In the case of Tanzania, the relatively low ratio signifies robust economic stability, reassuring global investors and influencing interest rates on government bonds. This positive indicator highlights Tanzania's ability to meet its debt obligations, setting the stage for sustained economic growth.
The IMF's Regional Economic Outlook report released last year paints an optimistic picture for sub-Saharan Africa, forecasting a 4.2 per cent growth in the region's economy in 2024, a notable improvement from the 3.6 per cent recorded in 2023.
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Approximately 80 per cent of countries are expected to experience accelerated gross domestic product (GDP) growth, driven by increased private consumption and investment.
The growth rate dip from 3.9 per cent in 2022 to 3.6 per cent in 2023 is attributed to several factors outlined in the report.
Tanzania's outstanding debt management and the subsequent low debt-to-GDP ratio position the nation favourably in the eyes of international investors. This financial prudence not only bolsters the country's economic resilience but also signals a commitment to sustainable growth.
As the global economic landscape continues to evolve, Tanzania stands as a testament to the importance of sound fiscal policies in navigating challenges. The nation's achievements underscore the potential for others to learn and adopt similar strategies, contributing to a more robust and stable economic future for the entire African continent.
