The shilling has been weighed down by a strong US dollar, high liquidity, seasonally low export earnings and high repatriation of corporate dividends, according to the central bank.
Speaking during the official opening of Dodoma branch of Bank of Tanzania (BoT) here yesterday, the President noted that the business community trading in foreign countries already feels the pinch of the currency depreciation.
“You have done well so far but if you can do more it will be better to reduce the burden.” he said, adding that it could have been worse if no action was taken.
He said there has been a lot of public outcry, more so from Tanzanians who have to purchase goods outside the country who are compelled to pay more.
The burden, he said, is also on those who have loans from international financial institutions and have no option but to pay back a lot of money.
But speaking with ‘The Guardian’ after the event, Central Bank governor, Prof Benno Ndullu said his office was doing a lot to revert the trend but noting that the anomaly has been necessitated by several external factors.He said there has been an increased demand for the US dollar for fuel imports – itself fueled by increased demand for fuel, mainly in the growing manufacturing sector of the economy. “There is a mismatch between the US dollar supply and demand,” said the governor.
The low supply of the US dollar in the market is the result of reduced export earnings and a severe cut in foreign grants, as well as speculative behaviour of investors that is linked to the looming General Election.
According to Prof Ndullu, the US dollar has stabiliwed against several currencies globally and not only in Tanzania.
During the event, the head of state also officially opened the zonal treasury building in Dodoma as well as the Controller and Auditor General (CAG)’s zonal office.
The President praised the Ministry of Finance for building such good zonal offices, adding that they will enhance performance of the ministry.
He urged CAG office to remain more vigilant in an effort to maintain financial discipline among government officials.
On a different note, the president ordered the Capital Development (CDA) to ensure Dodoma is well planned and allow only modern buildings in the capital city.
Dodoma is becoming one of the biggest towns in the country as it hosts the biggest university and the biggest hospital in the country and Africa at large.
According to the President, the town is connected to different regions by tarmac roads, thus if not well planned it might soon become a squatter city.
On October 6, 1973, following the decision to move the capital from Dar-es-Salaam to Dodoma, the founding President, Mwalimu Julius Nyerere established a ministerial portfolio and set up the Capital Development Authority (CDA) as the government implementing agency for the task.
To implement the capital transfer decision to Dodoma its work has since then been proper planning of the national Capital City, management of urban development process and provision of high quality services on land delivery, infrastructure development and environmental management to its stakeholders.
SOURCE: THE GUARDIAN
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