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Wednesday, June 10, 2009

TweetThis! President Kikwete "Tanzania to compensate slowdown losses"

DODOMA, Tanzania (Reuters) - Tanzania will spend 1.7 trillion shillings on measures to compensate companies in the east African country hit by the global economic slowdown, President Jakaya Kikwete said on Wednesday.

Speaking to legislators and elders in the administrative capital Dodoma, Kikwete said the government would guarantee debt rescheduling for some companies in tourism, agriculture and other sectors -- and reimburse some losses directly.
"The cost of all these measures announced is 1,692.5 billion shillings. That money we have put in the budget," Kikwete said.

The global slowdown has hit Tanzanian tourism receipts, its biggest foreign exchange earner, dented demand for its coffee and cotton exports and prompted foreign investors to suspend significant projects in the mining sector.

The government and analysts polled by Reuters predict 5 percent growth in 2009, down from 7.4 percent last year. Growth is seen rising to 5.7 percent in 2010 and 7.5 percent in 2012.

Tanzania unveils its budget for 2009/10 on Thursday and is expected to boost spending by 32 percent with a focus on farming, schools and infrastructure to ease the strain from the global economic slowdown.

"We will compensate those who got losses in 2008/09. The government will compensate cooperatives, companies for a total loss of 21.9 billion shillings," Kikwete said.

"The government will pay straight away to the banks that lent to them. We will not pay old debts that had nothing to do with the global economic crisis," he told the meeting.

Other companies struggling with debt from the global slowdown would be helped by rescheduling and repayment holidays, Tanzania's president said.

"The second (measure) will be to guarantee debt rescheduling of those who were affected -- industries, tourism, agriculture. We will guarantee this and postpone their repayment for two years. We will guarantee 70 percent of these debts, he said.

"By April this year 48,000 people have lost their jobs due to this crisis." - http://af.reuters.com/

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