NBS report highlights sectors to watch as Q1 growth tops 6.6pc

Dar es Salaam. Construction, transport and storage have continued to maintain their position as Tanzania’s top economic growth contributors.

The three sectors were among the top five main contributors of economic growth last year, according to the State of the Economy 2018 report released by the National Bureau of Statistics (NBS).

The NBS highlights for the first quarter published recently show that the economy grew by 6.6 per cent during the first quarter of this year, down from 7.5 per cent recorded during the same period last year.

Construction (general and specialised activities for buildings and civil engineering works) was the top mover, after growing at 13.2 per cent.

It was followed by transport and storage, which grew by 11.1 per cent.

Analysts say ongoing road infrastructure development, private real estate and government office projects in Dodoma are driving the boom in construction.

There is also the regular expansion of Dar es Salaam metropolitan housing projects, which has remained a major activity driving the sector.

However, observers were quick to say that for the positive trend to trickle down, the projects implementation should consider local content.

Prof Samwel Wangwe, a seasoned economist, maintained that local content should be a must.

“We have seen that most of the contactors in major projects are foreign firms; this should also stimulate the participation of local firms,” he said in an interview yesterday.

He said a local content law should spell out terms for a level playing field that allows the participation of locals in projects.

Last Saturday, representatives of local manufacturers also appealed to the government to consider local materials in ongoing projects. They made the appeal during a meeting with Industry and Trade minister Innocent Bashungwa in Dar es Salaam.

Mr Prosper Ernest from BWB Building Materials took the government to task over its “preference” for imported materials. “This has dealt us a major blow,” he said.

According to him, many contractors have been using materials from India, Israel and China, claiming that locally-manufactured products aren’t up to standard. He dismissed the claim as false.

Commenting on the new NBS report, Dr Donath Olomi, director of Institute of Management and Entreprises Development (IMED), said ongoing infrastructure and construction projects have had a major impact on economic growth.

“The impact of the ongoing construction of the SGR (standard gauge railway), the flyovers and bridges have started to be seen,” he said.

“But looking ahead, it is the SGR and Rufiji hydro-power projects that will have a much bigger impact on the economy.”

However, he was also quick to explain that local content was vital for the projects to have a huge impact.

The NBS report shows that transport and storage activities also grew due to the implementation of rail, pipeline, roads, ports and airports construction projects.

Presenting the State of the Economy report for 2018 in Parliament last month, Finance and Planning Minister Dr Phillip Mpango said last year the real GDP growth was 7 per cent, higher than 6.8 per cent recorded in 2017.