DODOMA (Tanzania), July 5 (NNN-DAILYNEWS) — TANZANIA has been advised to invest more in technology, electricity and services to attract more foreign investments which will help attain a credit rating of ‘A’ with a positive outlook in accessing credit from global financial markets, UNDP Chief Economist for Africa, Raymond Gilpin said.
In March this year, Tanzania was named one of the few countries in Africa with high credit ratings, thus improving creditworthiness, according to the ratings provided by the international credit rating agencies of Moody’s and Fitch.
Tanzania has credit rating of B2 with a positive outlook, while Fitch has rated the country at B+ with a stable outlook for the previous year.
Gilpin said the country is doing well in managing the economy but needs more investments in the areas such as technology, electricity and services.
He expressed his sentiments during a capacity workshop on Navigating the Credit Rating Process: Unlocking Affordable Development Financing in Africa for officials from the Ministry of Finance, Bank of Tanzania, national power utility (Tanesco), Isle’s government officials and the Tanzania Investment Centre (TIC).
“As the country continues to do better in economic development in terms of managing economy, it needs more investments so that by the next credit rating it attains ‘A’ rating, enabling it to access loans at a low interest rate from the global financial markets” he said.
He added: “What is seen is that like in the past when there were a lot of aid coming to Africa, in the future there could be more investment and cost of investment determined by the credit rating of the country”.
Currently, he said, out of 33 African countries rated, only two have investment grade with lower interest rate.
Speaking during the capacity building workshop, UNDP Resident Representative in Tanzania, Shigeki Komatsubara said the training was aimed at strengthening their skills and also help create a community practices around credit rating professions in Africa and share information.
“Tanzania is one of the fastest growing economies in Africa. I want to commend the government and other stakeholders for the efforts. Further efforts should now be focused on improving the country’s credit ranking,” he said.
By telling stories and working together and sharing good stories of experience of Tanzania, he was optimistic that they can make important contributions by investing more resources to prepare Tanzania to become an upper middle income country.
Deputy Permanent Secretary in the Ministry of Finance Elijah Mwandumbya said recently that the country’s good credit rating has been provided by the international credit rating agencies of Moody’s and Fitch.
“We are grateful that Tanzania is one of the few countries that are creditworthy and can continue enjoying access to credit from global lenders,” Mwandumbya said.
The Deputy PS who represented the Finance Minister, Dr Mwigulu Nchemba, was speaking during the 56th session of the Economic Commission for Africa and Conference of African Ministers of Finance, Planning and Economic Development that took place in Zimbabwe.
Moody’s credit rating for Tanzania was last set at B2 with a positive outlook, while Fitch’s credit rating was last reported at B+ with stable outlook last year.
Fitch Ratings affirmed Tanzania’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘B+’ with a Stable Outlook in December last year, reflecting the country’s relatively strong macroeconomic performance with high real GDP growth, low inflation and a moderate level of debt, underpinned by increased reform momentum backed by an IMF programme.
Fitch expected real GDP growth to rise to 5.0 per cent in 2023 and 5.5 per cent in 2024, from 4.7 per cent in 2022, supported by increased agriculture, mining and tourism activity, as well as infrastructure investment. — NNN-DAILYNEWS