Dar es Salaam. Tanzania can now employ new options in its effort to source funds to implement its development projects, thanks to its graduation from a least developed country (LDC) to a lower middle income country (LMIC) status.
“Attaining middle-income status means a lot to us….it would widen the commercial loan accessibility base for implementation of development projects,” Finance and Planning minister Philip Mpango said late on Wednesday.
He said it would also, to some extent, help the country to do away with challenges associated with dependency.
This would provide a room for freedom in expenditure plans.
“I commend President John Magufuli for enabling Tanzania to enter a middle-income status five years before 2025, a targeted year as envisioned in the National Development Vision,” noted Dr Mpango.
He also gave a thumbs up to players in all economic sectors for playing their part in making Tanzania realise its dream earlier than expected.
Dr Mpango applauded the Bank of Tanzania (BoT) for being a good custodian of the economy.
Tanzania officially graduated into a lower middle-income country (MIC) on Wednesday after decades of sound economic growth rates.
Tanzania’s economy has been growing at a rate of between six and seven percent for over 25 years consecutively to effectively raise the country’s per capita gross domestic product (GDP) to LMIC status.
The World Bank defines countries’ economic status depending on the levels of their gross national incomes (GNI).
GNI is the total amount of money earned by a nation’s people and businesses. It is used to measure and track a nation’s wealth from year to year. The number includes the nation’s gross domestic product plus the income it receives from overseas sources.
GNI is an alternative to GDP as a means of measuring and tracking a nation’s wealth and is considered a more accurate indicator for some nations.
For the World Bank’s 2021 fiscal year, low-income economies are defined as those with a GNI per capita of $1,035 or less in 2019.
On the other hand, lower middle-income economies are those with a GNI per capita of between $1,036 and $4,045 while upper middle-income economies are those with a GNI per capita between $4,046 and $12,535.
High-income economies are those with a GNI per capita of $12,536 or more.
Presenting the State of the National Economy in Parliament in June this year, Dr Mpango said in 2019, Tanzania’s GDP - at current prices - was Sh139.9 trillion compared to Sh129 trillion in 2018.
With an estimated population of 54,265,158 million people in 2019, the per capita GDP for 2019 was Sh2,577,967 compared to Sh2,452,406 in 2018.
In US dollar terms, average per capita income increased from $1,078 in 2018 to $1,121 in 2019.
But World Bank figures put Tanzania’s GNI at $1,080 in 2019, a rise from $1,020 in 2018.
Tanzania is joining 21 other African countries in the LMIC status.
The list includes: Angola, Algeria, Kenya, Benin, Senegal, Lesotho, Tanzania, Cameroon, Tunisia, Comoro and Congo Brazzaville.
Others are: Ivory Coast, Morocco, Djibouti, Egypt, Zambia, Eswatini, Nigeria, Zimbabwe, Mauritania, Ghana and Cape Verde.
Government spokesman Hassan Abbasi said attaining the lower middle-income status suggests that Tanzanians are not poor, but rich, though, not very rich.
“This should not be a ticket for us to stop working. Let us keep working hard so that we graduate to upper middle-income level,” cautioned Dr Abbasi.
According to the Household Budget Survey (HBS) by the National Bureau of Statistics, the basic needs poverty in Tanzania has declined marginally from 28.2 percent during the 2011/12 HBS period to 26.4 percent in the 2017/18 HBS.
“There is every sign for it (poverty rate) to keep falling as we are counting our positive outlook on the stability of our economy,” said Dr Abbasi.
Meanwhile, the 2025 Vision insists that the middle-income status should be realised through industrialisation.
In response to that, Dr Abbasi said Tanzania had over 60,000 manufacturing industries since Independence, with over 8000 of them being established during the fifth phase regime under President Magufuli.
“As I speak, Tanzania produces all kinds of products. We will keep doing all in our power to put in place what it takes to strengthen our economy even further,” he pledged.
He commended former Presidents (Julius Nyerere, Ali Hassan Mwinyi, Benjamin Mkapa and Jakaya Kikwete) for setting up strong economic foundations.
“If we are to realise the dream of moving to upper middle-income level, it is inevitable for us to maintain peace and stability that we are endowed with,” noted Dr Abbasi.