Economy expected to remain resilient

Tanzania’s economy will remain resilient this year if the government makes “inclusive growth” a key element of its policy platform, according to experts.

What you need to know:

  • The economy is project to grow at 7.2 per cent this year, the International Monetary Fund showed in its October 2016 World Economic Outlook.

Dar es Salaam. Tanzania’s economy will remain resilient this year if the government makes “inclusive growth” a key element of its policy platform, according to experts.

The economy is project to grow at 7.2 per cent this year, the International Monetary Fund showed in its October 2016 World Economic Outlook.

But the Tanzania Meteorological Agency (TMA) has warned that rain will be below average in half of major cereal-producing regions.

Its late last year’s report showed that Dar es Salaam, Tanga, Coast, Morogoro, Kilimanjaro, Arusha, Manyara, Kigoma, Katavi, Tabora, Dodoma and Singida would receive rain below average.

However, the University of Dar es Salaam’s Prof Haji Semboja said: “The likely decline in agriculture this year is just posing short-term risks. But the livelihoods of households that rely on agriculture for income are particularly vulnerable.”

He called on the government to hasten reforms in the corporate sector and make credit more accessible to people. He also calls for the need of filling infrastructure gaps by rebalancing public expenditure, increasing public-private cooperation and improving the efficiency of public investment management.

He also recommends that the potential of technology in transforming financial services and increasing financial inclusion be harnessed. To reap the gains from financial innovation, legal and regulatory frameworks should be enhanced to protect consumers. “The country still faces significant risks to growth, and the country needs to take measures to address financial and fiscal vulnerabilities,” noted Prof Semboja.

But for the medium-term, he added, the outlook remains positive. But easing macroeconomic vulnerabilities and sustaining higher medium-term growth would need a bolder implementation of structural, fiscal and banking sector reforms.

He suggested that macroeconomic management and fiscal discipline be sustained and policies reformed.

Economics Prof Samuel Wangwe said drought would not seriously y affect agriculture and economy at large if immediate measures are taken. They include planting drought-resistant and quick yielding crops to minimise the impact of drought.

However, he warned that widespread drought would seriously hit the economy as majority of Tanzanians depend on agriculture.

“We can only make the most out of our agriculture if we can plan well, but our past years tell a different story. We did not plan well.” said Prof Wangwe.

“We have not maximised the potential of agriculture.”

Irrigation practices can enhance water efficiency, gaining an economic advantage while also reducing environmental burdens and pave a way for economic growth, according to him.

“But economic growth alone does not automatically translate into human development progress. Pro-poor policies and significant investments in people’s capabilities—through a focus on education, nutrition and health, and employment skills—can expand access to decent work and provide for sustained progress.” He called for the public and private sectors to increase cooperation.

Mzumbe University economics Prof Honest Ngowi hopes that the economy will grow despite drought.

He also urged the government to spend more funds on infrastructural projects to stimulate growth of other economic sectors.

“In an economy like ours, the government is one of the major purchasers, so expenditure tightening reduces the volume of money in circulation. This can affect growth of some sectors,” Prof Ngowi said.