Tanzania’s central bank has cancelled plans to raise $600 million
through a private placement managed by Rand Merchant Bank of South Africa,
citing fallout from the Greek debt crisis.
Head of economic research and policy at the Bank of Tanzania Joseph
Masawe said “because of the Greece default, conditions attached to the loan are
going to be more stringent. We are waiting when market conditions are better.”
The central bank said last month it agreed to raise $800 million of
loans from Rand Merchant and China Development Bank Corporation to bolster its
foreign-exchange reserves and plug a budget deficit.
The Tanzanian shilling weakened 23 percent against the U.S. dollar
this year and is Africa’s worst-performing currency in that period, according to
Bloomberg news agency.
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| Tanzania Shillings |
The government already received $200 million from China Development
Bank, $100 million from the World Bank and $77 million from African Development
Bank.
The loans will be used to support the budget and boost foreign-currency
reserves.
Tanzania is raising money for its budget after foreign donors,
including the World Bank and the U.K., withheld $558 million of aid because of
a corruption scandal in the energy ministry.
The budget deficit of East Africa’s second largest economy will widen
to 4.2 percent of gross domestic product this year from 4 percent last year, according
to Finance Minister Saada Mkuya.
The central bank spent $410 million between January and May trying to
stabilise the Tanzania shilling.