Joseph Isangura
Tanzania’s Minister of Finance, Dr. Mwigulu Nchemba revealed that the country’s foreign reserves have increased to approximately $5.3 billion.
Although this figure reflects a slight decrease from $5.4 billion recorded in 2023, the rise is seen as a positive development amid ongoing efforts to strengthen Tanzania’s economy. The announcement came during the presentation of the government’s budget proposals for the fiscal year 2024/2025, highlighting the government’s focus on economic resilience and growth
Dr. Nchemba outlined that the increase in foreign reserves positions the government to facilitate imports of essential goods and services, which is crucial for sustaining economic stability and growth. He emphasized that this boost in reserves is part of a broader economic strategy aimed at stimulating key sectors, including agriculture, mining, energy, and tourism. The government’s efforts are geared towards enhancing local production capabilities while reducing dependency on foreign imports
The Minister underscored that a significant component of this economic strategy involves supporting local industries through various initiatives. One of the primary measures includes the introduction of a zero percent value-added tax (VAT) on domestically produced goods such as fertilizers, textiles, and edible oils made from locally sourced materials. This tax relief is expected to make local products more competitive, thereby encouraging investment and production within Tanzania
In addition to tax incentives, the government plans to implement amendments to the Import Control Act to introduce new levies on certain imported goods. For instance, a 10 percent levy will be imposed on beer and energy drinks, while other products will face varying rates aimed at protecting local manufacturers and promoting domestic production
To further address the challenges posed by foreign currency shortages, the government has introduced initiatives designed to stimulate the domestic gold refining industry. By applying a zero percent VAT on gold sold to local refineries, the government aims to ensure that more value remains within the country, thus enhancing foreign reserves while supporting local businesses
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Additionally, as part of its commitment to boosting the economy, the Tanzanian government has outlined plans to continue significant infrastructure projects, such as the Standard Gauge Railway and the Julius Nyerere Hydropower Project. These strategic investments are expected to create jobs and improve the overall economic landscape
The commitment to enhancing foreign reserves, supporting local industries, and improving the investment climate reflects a comprehensive approach to achieving sustainable economic growth. Stakeholders and citizens alike will be closely monitoring these developments as the country aims to enhance its economic standing on the global stage.
