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By Ludger Kasumuni
The Citizen Reporter
Dar es Salaam. The World Bank forecasts Tanzania’s economy to grow by about six per cent this year.
This is in stark contrast to a macroeconomic country forecast report by the Netherlands-based Currency Exchange Fund (TXC), which predicted this week that Tanzania’s growth would slump to three per cent this year due to various challenges including inflationary pressures.
But the government criticised the TXC’s predictions as “too pessimistic”, saying it was confident growth this year would not deviate much from last year’s.
“The growth for the third quarter of last year was 6.4 per cent. This affirms to us that even this year we will see a real growth of 7.2 per cent,” Finance minister Mustafa Mkulo said.
The World Bank said in a report yesterday that Tanzania’s economy would grow in the range of six per cent, but many Tanzanians would remain poor.
“Economic growth has failed to eradicate poverty, with one third of households still living below the poverty line. If Tanzania wants to reduce income gap between itself and middle income countries, it will have to grow faster and better,” World Bank acting Country Director for Tanzania, Uganda and Burundi Mercy Tembon said when presenting the report entitled Tanzania Economic Update; Stairways to Heaven.
Dr Tembon said Tanzania could attain its goal of accelerated and shared growth through combination of fiscal prudence, cost effective reforms in the education sector, and smart policies aimed at promoting the transformation of firms.
The World Bank’s Lead Economist for Tanzania, Mr Jacques Morisset, said the country must find new drivers of growth after three years of rapid fiscal expansion.
“The challenge is to create new impulse for growth through better education outcomes and skills, which will in turn sustain job creation and transformation of firms,” he said.
The WB report will be issued bi-annually. It also underlies the cornerstone of education sector in attaining higher pace of economic growth, because education is the major producer of human resources which are needed in every sector of the economy.
Bank of Tanzania governor Benno Ndulu said the report was an eye-opener indicating that there were vast opportunities for Tanzania to attain its development goals.
“Report clearly shows that we are going to the storm for achieving higher pace of economic growth. If we are well prepared, gas and oil economy is going to transform our economy,” said Prof Ndulu.
A prominent local businessman, Mr Ali Mufuruki, said there was a need for Tanzania to develop its human resources as it was lagging among East African Community (EAC) member states. “When real competition comes we shall not have enough competitive strength. Competitive strength in the industrial sector depends on development of human resources,” he said.
The Chief Executive of Tanzania Women’s Bank, Ms Margaret Chacha, said the country was facing a major challenge of transforming the small and medium enterprises (SMEs). She said increased credit schemes or financial resources alone for the SMEs is not a panacea for their development as there is a great need to transform the mindset of those who run them.
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