Tanzania: Fuel, Fertiliser Subsidies to Ease Inflation
Zanzibar — FUEL and fertiliser subsidies, tax relief on essential food imports and tighter market price monitoring are among measures being used to curb inflation and protect the purchasing power of the currency, the House of Representatives heard yesterday.
Deputy Minister for Finance and Planning Dr Hamad Omar Bakar outlined the measures while responding to a basic question from Women's Special Seats Representative Fatma Ramadhan Mohamed during a House of Representatives session in Chukwani.
The representative had asked what measures were being taken to protect the value of the currency and strengthen the economy amid rising living costs.
Dr Hamad said monetary policy continued to ensure that liquidity in the economy remained in line with the needs of economic activities, helping to control inflation, particularly inflation caused by excess liquidity in circulation.
He said authorities also recognised that a significant proportion of inflation was driven by rising food prices resulting from production challenges and fluctuations in global commodity prices, including crude oil.
"Because of this, the government continues to implement specific policy measures to increase food production, strengthen food security systems in Zanzibar and provide subsidies for essential commodities such as fuel and fertiliser to help contain price increases," Dr Hamad said.
He said the measures were designed not only to cushion consumers from rising prices but also to support broader economic stability while addressing pressures from both domestic and international markets.
The deputy minister said the Zanzibar Fair Competition Commission (ZFCC) continued to monitor market conditions and take action against unfair price increases or business practices that violated competition regulations.
He added that tax measures had also been introduced to reduce the cost of importing essential food commodities, particularly rice brought in from mainland Tanzania.
"The government has also taken measures to remove or reduce the tax burden on importers of essential food commodities, particularly rice imported from mainland Tanzania, with the aim of lowering the costs associated with food imports and distribution," he said.
Dr Hamad said the combination of monetary policy, food production initiatives, subsidies and tax interventions reflected a broader strategy for tackling inflation over different timeframes.
"These measures demonstrate that the government is using a combination of short-, medium- and long-term policies to address inflation," he said.
He said the overall objective was to keep inflation at manageable levels, protect the value and purchasing power of the currency, reduce the cost of living and ensure that people could continue accessing essential goods at affordable prices.
"Our goal is to keep inflation under control, protect the purchasing power of the currency and ensure that essential goods remain affordable for the people," Dr Hamad said.
He said the measures formed part of wider efforts to maintain economic stability while responding to production challenges and changes in international commodity markets that continued to influence domestic prices.
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