Tanzania's chief auditor cautions gov't over rising domestic borrowing

Tanzania's Controller and Auditor General (CAG) on Monday cautioned the government over the increasing domestic borrowing, saying it's bad for the economy.

Mussa Assad, the CAG, urged President John Magufuli's administration to find other viable sources to finance the budget.

In his 2014/2015 audit report for the central government, Assad noted that internal borrowing has been increasing during the past few years, a situation that eventually increased the cost of living among citizens.

"This is because when commercial banks do much of their business with the government, they tend to raise lending rates to the private sector, which then transfers the same to the final consumer," said the CAG in a report tabled to the National Assembly in the country's political capital Dodoma.

According to the report, internal borrowing -- which is mainly for budget and rollover financing -- reached nearly 2 billion U.S. dollars during the 2014/2015 financial year, which was 34.64 percent more than the approved estimates.

In January, Magufuli ordered government departments, state-owned firms and corporations to open accounts with the central bank.

It was reported then that various public departments, state-owned firms and corporations maintained bank accounts, with close to 300 million dollars in various commercial banks. Endit