Tanzania is set to allow East Africans to freely move capital in and out of the country — a move that is expected to increase cross-border investment and deepen economic integration.
The IMF in its latest disclosure on the Tanzanian economy said that the country had informed it that it had opened its capital account to East African nationals ahead of full liberalisation, which will allow the rest of the world to bring capital in and out of Tanzania with no restrictions.
The changes are part of a wider plan to loosen state control of the economy, which will also see the country allow its currency greater exchange rate flexibility and adopt new monetary tools.
“As a first step, the authorities have allowed for freer flows of capital among East African Community (EAC) residents since June, which they see facilitating trade, financial and investment flows within the region.
The next step would be to extend this with the rest of the world by end-June 2015, in line with Tanzania’s commitments under the EAC Common Market Protocol,” said the IMF. Under the Common Market Protocol, countries are supposed to open up their economies to allow the free movement of people and capital.