By Helen Nyambura-Mwaura

DAR ES SALAAM (Reuters) - Resource-rich African countries keen on developing their minerals must not ignore the agricultural sector if they are to beat mounting inflation, the head of the International Monetary Fund said on Friday.

Inflation in much of Africa has been on the increase due to higher food and petroleum prices. Food prices have risen on demand from growing economies such as China, and on bad weather in 2007, IMF Managing Director Dominique Strauss-Kahn said.

"This is particularly meaningful mainly in southern Africa where agriculture has been left aside because other resources including oil were so important and the economy was refocused on energy, forgetting that the rest of the economy also had to be developed," he said.

"In the long run, you certainly have to reconsider more balanced economies taking into account mineral resources of course but not (leaving) aside the traditional agricultural side of the economy," Strauss-Kahn told a news conference.

The director was in Tanzania on the final leg of a three-nation Africa tour that also took him to Burkina Faso and Nigeria.

Strauss-Kahn praised Tanzania for good macro-economic policies and for fighting corruption.

"The economic results in Tanzania have been rather impressive. We have to pay tribute to the policies which have been carried out in this country," he said.

"You experienced governance problems in the past months and the president addressed the problem correctly. Even if everything is not yet behind us, what has been done until now was the correct way to deal with such a question."

IRREGULAR PAYMENTS

Earlier this month, former Prime Minister Edward Lowassa resigned after he was criticised in a parliamentary investigation into a controversial power generation contract.

In January, President Jakaya Kikwete sacked the central bank governor over irregular payments amounting to $116 million made by the bank.

Eliminating graft has been a top priority for Kikwete. Last year, parliament passed a tougher anti-corruption law targeting government procurement.

"My only hope that in the coming weeks, the rest of what has to be solved will be solved," Strauss-Kahn said.

On his visit, the managing director also discussed macro-economic stability, revenue collection, energy-sector problems and good governance in east Africa's largest country.

Finance Minister Mustafa Mkulo told the news conference that they had also discussed Tanzania's dilapidated roads and the possibility of floating sovereign bonds in international markets to raise money for infrastructural development.

The east African nation is heavily dependent on international aid with some 40 percent of its budgetary needs met by donors.

Strauss-Kahn said a political deal reached in neighbouring Kenya on Thursday to share power between President Mwai Kibaki and his opposition rival Raila Odinga augured well for the region.

"The whole (east African) community was very afraid of the disruption which could take place not only in Kenya but also in the rest of Africa," he said. "It was very fortunate for everybody that a solution could be found and people looking at Africa are very happy about what happened."

Protests and ethnic clashes over the re-election of Kibaki following an election at the end of December killed 1,000 people and hit the economies of neighbouring landlocked countries that rely on Kenya for imports and exports.