Experts have expressed concern over the country’s trend of expanding foreign debts to finance projects that do not help on increasing export capacity.
According to them, most of the accumulated debts are spent on servicing old debts rather than creating new investments that can help the country to diversify exports and expanding tax base in the economy.
Delivering his presentation during a seminar yesterday at Nyerere Resources Centre (NRC), an economics and business researcher of Kampala International University, Mr Bravious Kahyoza said that although the country has been accumulating debts sustainably, their impacts on exports are still marginal.
“Although Tanzania’s national debt look sustainable as the economy showed increased economic growth of above six per cent from 2010, the ratio of the present value of debt service to both exports and revenue is projected to increase in 2017.
This indicates a large ratio of country’s revenue is directed to service debts than creating new investments,” Mr Kahyoza said. He advised that the government should focus on strengthening the export sector through sell of intermediate goods and the mineral sector.
Intermediate goods, according to economists are the processed goods with value addition, whose prices are stable and predictable in the world market.