Even as World Bank said Tanzania remains one of Africa’s top three fastest growing economies, a 0.5 per cent cut in economic growth projections need not be taken rightly.
On Monday, World Bank unveiled its 10th edition of Tanzania economic update in which it lowered the East African country’s economic growth to 6.6 per cent this year, from the government’s projection of a 7.1 per cent growth.
Even as World Bank said Tanzania remains one of Africa’s top three fastest growing economies, a 0.5 per cent cut in economic growth projections need not be taken rightly. This is particularly so because it comes from an institution whose figures are respected all over the world. Investors use the figures, among other factors, to make investment decisions.
This means our policymakers must spring to action following the revelation of World Bank projections. They ought to scrutinise the reasons that made World Bank lower the projections in the review.
All in all, there are facts that need some serious thinking and analysis. Existing literature shows that Tanzania’s economy is characterised by lower credit growth to the private sector, difficult business environment, under-execution of development budget, high level of arrears as well as high levels of the non-performing loans (NPLs) in the financial sector.
The above is clearly reflected in the latest financial statements for commercial banks and the recent Bank of Tanzania’s Monthly Economic Reviews. From the above, it is logical to assert that there is a fundamental problem somewhere that requires immediate corrective action.
If commercial banks decide to stop issuing loans to the productive sector to tackle increasing levels of NPLs and instead shift their attention to risk-free government securities, the realisation of an industrial economy in the foreseeable future may not be reached.
The private sector, crucial for economic growth, needs loans to thrive. In its absence, there will be no job creation and no production. Our experts can work on the highlighted challenges and put Tanzania’s economic growth back on the right track.
Sort out commuters’ woes
Rapid transit by any other name -- metro, subway, tube, underground, heavy rail, etc. -- is a special high-capacity, rapid urban commuter transport system using vehicles that operate on an exclusive right-of-way not accessed by others.
The system has been in operation worldwide in one form or another for generations. Tanzania clambered upon the rapid transit bandwagon only recently, with the system starting operations in Dar es Salaam on May 10, 2016. Before that, the sprawling metropolis was served by a parastatal (Uda) and later by private operators, ‘daladalas.’
Then a rapid transit system – Usafiri Dar Rapid Transit (UDaRT) – was introduced, reportedly to ease commuter transport at affordable fares for the city’s 5.5 million population.
A report enigmatically titled ‘Taken for a Ride’ released on Monday after a 19-year study commissioned by Policy Research for Development (Repoa) – and conducted by London University’s Dr Matteo Rizzo – categorically states that researchers don’t see this happening anytime soon. The study makes no bones about it, urging the government “to devise ways to ensure Tanzanians of all walks of life are encompassed” by such projects.
We earnestly urge the government to seriously heed, adopt and work on the Rizzo report findings and recommendations if it’s to efficaciously solve the urban commuter transport woes that have plagued Tanzanians for generations.