Tanzania sees mega projects as key to easing dollar crunch
Tanzania's Finance Minister, Dr. Mwigulu Nchemba
What you need to know:
- Tanzania has been grappling with a shortage of dollars since last year, which has largely been attributed to external factors such as the impact of the global Covid-19 pandemic, the war between Russia and Ukraine, the US Federal Reserve’s decision to raise interest rates and climate change.
Dar es Salaam. Minister for Finance Mwigulu Nchemba is confident that the supply of dollars in Tanzania will stabilise once mega projects are operational, easing the pressure of importing necessary equipment.
Dr Nchemba remarked during the “2024 Technical Level Strategic Dialogue” meeting that focused on Vision 2050.
The meeting, attended by experts, government officials, and development partners, looked at how Tanzania can accelerate resilience and ensure inclusive development in times of uncertainty.
Stakeholders identified key focus areas crucial for shaping the national development vision for 2050. They emphasised the government’s attention to investing in agriculture, education, industries and the formulation of favourable policies to attract foreign investments, thereby bolstering the country’s economy.
Dr Nchemba emphasised the ongoing execution of significant projects such as the Standard Gauge Railway (SGR) and the Julius Nyerere Hydropower Project, both requiring substantial foreign currency (dollars) for the procurement of raw materials.
“Once these projects conclude, the scarcity of dollars will be history. We are also focused on enhancing crop production and expanding the value chain to facilitate the sale of more products abroad, thereby increasing the availability of dollars,” he said at the meeting.
Tanzania has been grappling with a shortage of dollars since last year, which has largely been attributed to external factors such as the impact of the global Covid-19 pandemic, the war between Russia and Ukraine, the US Federal Reserve’s decision to raise interest rates and climate change.
Such challenges have recently resulted in the emergence of the black market, which has hit hard at oil suppliers who claim to buy the dollar at higher than displayed prices.
The Economic and Social Research Foundation (ESARF) executive director, Prof Fortunata Makene, urged the government to prioritise sectors where many Tanzanians are employed to elevate their economic standards.
She also highlighted the importance of the education sector, emphasising its role in stimulating creativity for individual contributions to the country’s development.
“The issue of education is paramount, and while stakeholders acknowledge policy reforms, there are still challenges,” she noted. Prof Makene also advocated for the empowerment of the agricultural sector, encouraging a shift from traditional production methods to align with advancements in science and technology.
Minister for Labour and Investment in Zanzibar, Mr Sharif Ali Sharif, highlighted the Blue Economy Policy, emphasising priorities such as fisheries and aquaculture, maritime trade and infrastructure, and energy.
“The recent dialogue with stakeholders emphasised the need for us to find proper channels to enhance the country’s economic performance and build an inclusive and resilient economy,” he remarked.
The Executive director of the Research on Poverty Alleviation (Repoa), Dr Donald Mmari, acknowledged the Tanzanian achievements in reaching middle-income status but emphasised the persisting challenges. “To improve the business environment and reduce production costs, we need to collectively address challenges, enhance competitiveness and inclusivity, and create more jobs through private sector investments,” he said.
The Tanzania Development Vision for 2025 is concluding, and while progress has been made, concerted efforts are ongoing to overcome challenges and foster a more robust and inclusive economy.
