Tanzania: Experts Upbeat On Economic Performance

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EXPERTS are more optimistic on Tanzania’s projected economic growth which is above the regional average, but say the government needs to focus on agricultural and energy sectors.

They said Tanzania had registered robust economic performance, but the growth was not broad-based because of low contribution of the agricultural sector that employs about 78 per cent of the population. “We need to focus more on the agricultural and energy sectors.

If these two perform well we will have higher growth with desirable effects to many people,” the Bank of Tanzania (BoT) Director of Economic Research and Policy, Dr Joseph Masawe, told the ‘Daily News’ in an interview. Tanzania is among five fastest growing economies in the sub-Saharan Africa with its growth well above the regional average.

According to International Monetary Fund (IMF) projections, Tanzania’s economy will grow to 7 per cent in 2013 above estimates for the sub-Saharan region expected to reach 5.4 per cent this year and 5.7 per cent in 2014. However, according to experts, the growth in Tanzania is driven by the mining sector, construction and service industries.

The contribution from agriculture has, in recent years, not been significant because the sector is not performing well. “The fastest growing sectors in Tanzania do not involve the majority of the people,” said Dr Masawe arguing that the growth was not all-encompassing since agriculture was not developing adequately.

He said the economy also suffered from severe power problems that had negative effects on its growth. “You know hydro-electricity has let us down but we remain optimistic that with the ongoing efforts to diversify the sources of energy and the discovery of natural gas, the energy sector will contribute much more,” Dr Masawe said.

He said the government was taking various measures to develop the agricultural sector, such as the Agricultural Sector Development Programme (ASDP) and the ‘Kilimo Kwanza’ initiative. Dr Honest Ngowi of the Mzumbe University said he was optimistic on the economy but cautioned that the growth had not touched on many people, because it was based on capital intensive sectors of mining and construction.

“The question is, to what extent is the growth broad-based, inclusive and appropriate to alleviate poverty,” he said. He said for economic growth in Tanzania to be more meaningful, it needs be based on sectors that involve many in the country, such as agriculture.

Dr Ngowi said another concern was on the environment whereby as countries strive for growth, they also need to consider preservation of the environment. “The current debate is about green and inclusive growth and poverty alleviation. That’s let us grow, but we must also take care of our flora and fauna,” he said.

Speaking at Tanzania Economic Forum organised in Dar es Salaam, the Stanbic Bank Regional Head – Macroeconomic Research, Mr Phumelele Mbiyo, said looking on the trend, the economy in Tanzania was set to grow further as policy makers are keen to stick to macroeconomic fundamentals.

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