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Why Tanzania’s economy is projected to grow by 6.1 percent
A section of Tanzania's commercial capital Dar es Salaam
What you need to know:
- Ongoing strategic projects, security of investors’ capital and PPPs are among factors outlined by the government for Tanzania’s 6.1 percent economic growth projected by the IMF.
Dar es Salaam. The government has outlined several seasons for Tanzania’s projected 6.1 percent economic growth next year.
They include ongoing strategic projects, the security of investors’ capital and participation of the private sector in various development projects.
The government’s remarks are in response to a report released recently by the International Monetary Fund (IMF).
The report, titled Navigating Global Divergences, shows that Tanzania is among the top ten African countries with the highest economic growth and its GDP is expected to expand by 6.1 percent next year from 5.2 percent currently.
Tanzania will be the second fastest growing economy in East Africa behind Rwanda, which will post 7.1 percent growth.
The IMF report says, however, that global recovery from the Covid-19 pandemic remains slow and uneven.
It says global inflation is forecast to decline steadily from 8.7 percent in 2022 to 6.9 percent and 5.8 percent in 2023 and 2024, respectively.
“But the forecasts for 2023 and 2024 are revised up by 0.1 percentage point and 0.6 percentage point, respectively, and inflation is not expected to return to the target until 2025 in most cases,” the report says.
Finance deputy permanent secretary (Economic Management) Elijah Mwandumbya told The Citizen that the last two years have witnessed major changes in the country that have enabled the economy to further open up, thus facilitating business and agricultural activities.
”The government has provided agricultural subsidies and this has enabled farmers to expand cultivated areas. This is among reasons that have spurred economic growth and that is why international institutions have forecast swift GDP growth in the next one year.
”The message to Tanzanians is that the economy is growing and will continue to grow. It is important that they grab opportunities that are now available as a result of various measures the government has been taking in recent years,” he said.
Mr Mwandumbya urged foreign investors to continue regarding Tanzania as the right destination for their capital.
”We will continue to oversee and implement ongoing strategic projects and work closely with the private sector,” he said.
Finance and banking analyst Tobias Swai said strategic projects are the main driver of economic growth and when complete, projects such as the Julius Nyerere Hydropower Station and standard gauge railway will play a key role in promoting industrialisation.
He added that construction of modern markets and bus terminals will set the stage for the formalisation small businesses and have a positive impact on the economy.
“The IMF projection sends the message around the globe that Tanzania is a safe destination for investment and public-private partnerships,” Dr Swai added.
He urged the government to speed up the execution of strategic projects to increase foreign direct investment inflows into the country.
University of Dodoma (Udom) economist Lutengano Mwinuka said manufacturing, mining, tourism and agriculture are the mainstays of Tanzania’s economy and their growth is pivotal to the overall expansion of GDP.
