Front Matter Page
© 2003 International Monetary Fund
January 2003
IMF Country Report No. 03/2
Tanzania: Selected Issues and Statistical Appendix
This Selected Issues and Statistical Appendix for Tanzania was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with the member country. It is based on the information available at the time it was completed on November 6, 2002. The views expressed in this document are those of the staff team and do not necessarily reflect the views of the government of Tanzania or the Executive Board of the IMF.
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Front Matter Page
CONTAINS CONFIDENTIAL INFORMATION
INTERNATIONAL MONETARY FUND
TANZANIA
Selected Issues and Statistical Appendix
Prepared by a staff team consisting of Jüprgen Reitmaier (head), Volker Treichel, Koffie Ben Nassar, Ashok Bhundia (all AFR), Annalisa Fedelino (FAD), and Mumtaz Hussain (PDR)
Approved by the African Department
November 6, 2002
Contents
Selected Issues
I. Fiscal Developments and Issues
A. Introduction
B. Structure of the Public Sector
C. Revenue
D. Expenditure and Expenditure Management
E. Budget Financing
F. Summary and Conclusions
References
Figures
I.1. Fiscal Performance and Inflation, 1991/92-2001/02
I.2. Revenue Developments, 1991/92-2001/02
I.3. Expenditure Developments, 1991/92-2000/01
I.4. Budget Financing, 1991/92-2001/02
Boxes
I.1. Institutional Structure of the Government Sector and Data Framework
I.2. Exemptions Granted at Customs
I.3. Tax Incentives
I.4. Civil Service Reform
I.5. Foreign-Financed Development Expenditure
I.6. Accumulation of Domestic Arrears
Tables
I.1. Regional Comparison of Fiscal Performance, 1999/2000
I.2. Nonzero Tariff Rates, 1996/97-2001/02
I.3. Indirect Taxes, 1997/98-2001/02
I.4. Taxation of Petroleum Products, 1997/98-2001/02
II. Recent Issues in the Implementation of Monetary Policy
A. Background
B. The Monetary Policy Framework
C. Implementation of Policy
D. Impediments to Bank Lending
E. Concluding Remarks
Annex I
Annex II
Figures
II.1. Deviations of Base Money and Broad Money from Their Upper Bands, June 1997-June 2002
II.2. Subscriptions for 91 -Day Treasury Bills, January 1998-June 2002
II.3. Price Developments, June 1996-June 2002
II.4. Interest Rate Developments, January 1998-June 2002
II.5. Twelve-Month Growth of Broad Money, Foreign Currency Deposits, and Reserve Money, June 1997-June 2002
II.6. Weighted Treasury Bills and Bank Rates, October 1999-June 2002
II.7. Exchange Rates, January 1997-July 2002
Tables
II.1. Selected Economic and Financial Indicators, December 1996-June 2002
II.2. Turnover in the Interbank Foreign Exchange Market, January 1999-June 2002
II.3. Repurchase Operations, January 1998-June 2002
II.4. Total Loans and Overdrafts, January 1996-June 2002
III. External Competitiveness and Export Performance of Tanzania
A. Introduction
B. PPP-Based Real Exchange Rate and Competitiveness
C. Equilibrium Real Exchange Rate and Competitiveness
D. Qualitative Measures of Competitiveness
E. Tanzania’s Export Performance in the 1990s
F. Conclusions
References
Figures
III.1. Real and Nominal Effective Exchange Rates, December 1990-June 2002
III.2. Export-Weighted Real Effective Exchange Rates, 1990:1-2002:0
III.3. Bilateral Real Exchange Rates for Major Currencies, 1990:1-2002:11
III.4. Regional Real Effective Exchange Rates, 1990:1-2002:11
III.5. Bilateral Real Exchange Rates with Regional Competitors, 1990:1-2002:0
III.6. Comparison of Actual REER and Long-Run Equilibrium Real Exchange Rate
III.7. Exports and Imports Indices (based on U.S. dollar values) and Real Effective Exchange Rates (REER), 1990-2001
III.8. Changes in Composition of Goods Exports, 1990-2001
Tables
III.1. Trade Weights for Real Effective Exchange Rate (REER) of Tanzania
III.2. Real Effective Exchange Rates (REERs) and Their Components for Tanzania and Other Regional Economies
III.3. Fundamentals of Long-Run Real Exchange Rate in Tanzania
III.4. Comparative Competitiveness of EAC Countries for Selected Crops
III.5. Selected Costs of Doing Business in EAC Countries
III.6. Competitiveness of Tanzania Relative to African Countries
III.7. Exports Growth
III.8. Competitiveness of Tanzania’s Exports Relative to Kenya’s
IV. An Assessment of Public Debt Sustainability in Tanzania After the HIPC Initiative
A. Introduction
B. The Analytical Framework
C. Projections
D. Fiscal Effort Under Alternative Cases
E. Conclusions
Annex
Figures
IV.1. Required Primary Balance for Debt Sustainability
IV.2. Impact of a Real Exchange Rate Depreciation on Case II
Table
IV.1. Summary of Macro economic and Other Assumptions
V. Privatization and Regulatory Reform in Tanzania
A. Introduction
B. The Institutional Framework
C. Progress of the Privatization Process and Remaining Agenda
D. Problematic Issues Affecting Privatization
E. Conclusions
Box
V.1. Retrenchments: the TANESCO Experience
Tables
V.1. Use of Privatization Receipts, 1993/94-2001/02
V.2. Regulatory Agencies
V.3. Parastatal Divestiture by Type of Divestiture, 1992-2001/02
V.4. Status of Preparation for the Privatization of Large, Government-Owned Monopolies
V.5. Parastatal Debt at June 2001
Statistical Appendix Tables
1. Gross Domestic Product at Constant 1992 Prices, 1995–2001
2. Gross Domestic Product at Current Prices, 1995–2001
3. Gross Domestic Product and Expenditure at Constant 1992 Prices, 1995–2001
4. Gross Domestic Product and Expenditure at Current Prices, 1995–2001
5. Production of Major Food Crops and Purchases of Principal Exports, 1997/98–2001/02
6. Production of Selected Manufactured Commodities, 1995–2001
7. Gross Capital Formation by Public and Private Sectors, 1995–2001
8. Analysis of the Savings-Investment Relationship, 1995–2001 (at current prices)
9. Analysis of the Savings-Investment Relationship, 1995–2001 (at constant 1992 prices)
10. Average Producer Prices for Selected Export Crops, 1995/96–2001/02
11. Central Government Operations, 1997/98–2001/02
12. Summary of Central Government Revenue, 1997/98–2001/02
13. Summary of Central Government Expenditure, 1997/98–2001/02
14. Budgetary Transfer Payments, 1997/98–2001/02
15. Central Government Expenditure on Priority Sectors, 1998/99–2001/02
16. Monetary Survey, 1995–2002
17. Summary Accounts of the Bank of Tanzania, 1995–2002
18. Summary Accounts of Domestic Money Banks, 1995–2002
19. Commercial Bank Domestic Lending by Borrowing Sectors, 1995–2002
20. Structure of Interest Rates of Financial Institutions, 1995–2001
21. Balance of Payments, 1997–2001
22. Value, Unit Value, and Volume Indices of Exports and Imports, and Terms of Trade, 1993/94–2001
23. Value, Volume, and Unit Values of Principal Exports, 1993–2001
24. Composition of Exports, 1991–2001
25. Destination of Exports, 1993–2001
26. Value of Principal Imports, 1993–2001
27. Composition of Imports, 1993–2001
28. Sources of Imports, 1993–2001
29. Services Account of the Balance of Payments, 1997–2001
30. Zanzibar: Selected Economic Indicators, 1990–2001
31. Zanzibar: Social and Demographic Indicators, 1999–2000
32. Summary of the Tax System as of July 1, 2002