Economic growth futile if the people don’t feel it

Every year we are given economic forecasts, with economists telling us how the economy will perform during the year. For instance, this year economic pundits have said Tanzania’s economy will grow by 7.3 per cent.

In a simple language, the total value of goods and services produced within twelve months, known in economic terms as Gross Domestic Product (GDP), will grow by 7.3 per cent.

But, the biggest challenge is whether the so-called growth is being felt by the people, more so the ordinary man and woman on the street. This is so because, at the end of the day, you cannot tell hungry people to eat statistics!

No matter what kind of statistics experts use to back economic growth forecast, if the acknowledged increase in wealth doesn’t trickle down to ordinary folks, it is useless.

This year, for instance, electricity prices have gone up by an average of 40 per cent, though in some category of users, tariff almost doubled. The price of gas has also gone up by 16 per cent.

Fuel prices are also expected to remain higher during the next twelve months.

Fuel, electricity and gas play a crucial role in any economy and therefore any increment is likely to hamper the economic growth.

We are also not sure about the food security in Tanzania during 2014. Already there is a severe shortage of food in some parts of the country, and the situation is expected to worsen in the next six months because of the bad weather.

Under this situation, even if there would be billions of dollars flowing as direct investment into the natural gas sector in the country, the projected economic growth will be meaningless.

Real economic growth should mean better living conditions for the people and reduction of the gap between the rich and the poor. If it doesn’t achieve that, it won’t be of much relevance.