Tanzania faces a new debt crisis unless the government moves fast to contain its current borrowing appetite, which has seen national liabilities more than double in less than 10 years, economists and development experts have warned. The last crisis in the late 1990s and early last decade cost the country and the national economy dearly with its severe consequences still being felt today. Resources which the government would have used to fund development projects and invest in improving delivery of basic services went into repaying debts. While some experts put the current ratio at a conservative rate of around 40 per cent of GDP, others say it is already above 50 per cent. Tanzania's gross domestic product (GDP) is estimated to be about Sh50 trillion at the moment while the public debt had reached some Sh26 trillion in October last year. The recommended debt to GDP ratio for low-income countries is 50 per cent. The government and international assessments say the debt is still sustainable. Bank of Tanzania (BoT) governor Benno Ndulu said that what this means is that it is not growing faster than the economy and the government is still in a position to pay it without having to accumulate arrears. ( Mwananchi, The Citizen on Monday, et al)
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