DAR ES SALAAM: BANK lending to key economic activities accelerated in the period ending August this year, with mining and quarrying, transport and communication recording the fastest growth, signalling stronger demand for financing across productive sectors of the economy.
According to the latest Bank of Tanzania (BoT) Monthly Economic Review, credit extended to transport and communication grew by 72.6 per cent in August this year, compared with 18.8 per cent in the corresponding period last year.
The sharp increase placed the sector among the fastest growing recipients of bank financing, reflecting rising demand for funds to support transport, communication and related services.
Mining and quarrying recorded an even stronger acceleration, with annual credit growth reaching 75.9 per cent, up from 3.2 per cent in August last year.
The expansion points to increasing financing needs in the extractive industry, where investment in exploration, production and supporting infrastructure requires substantial capital to sustain operations and expand capacity.
Credit to trade also maintained strong growth, rising by 47.1 per cent, compared with 29.2 per cent in August last year.
The increase indicates stronger financing activity among businesses involved in the movement and sale of goods.
Similarly, lending to building and construction expanded by 41.8 per cent, up from 14.8 per cent in the corresponding period last year, suggesting increased demand for financing in construction related activities.
Agriculture also recorded notable growth, with bank credit rising by 38.4 per cent, compared with 30.1 per cent a year earlier
. The increase highlights continued demand for financing in a sector central to employment, food production and industrial raw materials.
Credit extended to personal activities grew by 24.9 per cent, up from 15 per cent in August last year, while lending to hotels and restaurants increased to 24.6 per cent from 11.4 per cent.
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Manufacturing recorded a more moderate acceleration, with credit growth reaching 12.9 per cent, compared with 3.4 per cent in the corresponding period last year.
The figures show that credit growth strengthened across all the selected economic activities, although the pace varied considerably between sectors.
The sharp increases in mining, transport and communication suggest that financing demand was particularly strong in activities linked to investment, infrastructure and economic services.
Meanwhile, growth in trade, agriculture and construction points to continued demand for credit among businesses engaged in commercial and productive activities.
The broad-based expansion highlights the role of bank lending in supporting business operations, investment and economic activity.
However, the figures measure the growth rate of credit rather than the total amount of financing extended to each sector.