The nation's economy is on track to reach 7.2 per cent as projected for 2016 due to impressive growth in key economic sectors, compared to 7 per cent in 2015, the Bank of Tanzania (BoT) has said.
Central Bank Governor, Professor Benno Ndulu, said different economic indicators "are showing that the country's economy will grow in 2016." The indicators include generation of electricity, which has increased, thus helping to boost economic growth.
In the first quarter of 2016, power generation has increased by 14.5 per cent to reach kWh 3,454.2m compared to kWh 3,016.7m in 2015. The increase of power generation has been attributed to the use of gas.
"Power generated from gas has increased by 52.2 per cent; this situation will spur production in various industries in the country," Prof Ndulu noted. According to him, cement production has increased by 7 per cent in the first quarter of 2016, reaching a total of 725,000 tonnes, compared to 680,000 tonnes of cement, produced in the same period in 2015.
The increase in cement production in the first three months of 2016 is attributed to the establishment of Dangote Cement Factory in Mtwara Region. Good performance of key sectors in the first three months of 2016 is also attributed to the impressive growth, which will see the nation attain its targeted 7.2 per cent growth in 2016.
These key sectors are agriculture (11.7 per cent), trade (10.6 per cent), transportation (10.1 per cent), Finance (10.1 per cent) and Communication (10 per cent). Economic activities that recorded high growth in the first quarter of 2016 were Finance (13.5 per cent), Communication (13.4) and public administration (10.2 per cent).
Other activities Prof Ndulu named that will boost the economy's growth include ongoing efforts by the government to curb corruption, construction of major infrastructure projects such as the standard gauge railway line, Uganda-Tanzania crude oil pipeline, increased production of electricity, full capacity production by Dangote Cement to 3 million tonnes and expansion of national and international airports in the country.
"We are confident that the ongoing economic activities in the country will boost the growth of the economy by 7.2 per cent this year as it was projected earlier," Prof Ndulu explained.
He noted further that the Fifth Phase Government was not giving a chance to corruption practices and instead ensured strong supervision of resources and setting up strong infrastructure for building an industrial economy under the National Five-Year Development Plan.
The export of industrial goods has recorded good performance as well in the past six months compared to the same period in 2015, with the value of export goods from Tanzania reaching 728.5 million US dollars, an increase of 15.6 per cent compared to goods exported in the same period last year.
According to the central bank's chief, importation of raw materials to Tanzania industries has increased by 19.4 per cent in the last six months due to the increase of production in the manufacturing concerns.
Tax collection in the past six months has also increased compared to the same period in 2015, indicating that the government has so far managed to supervise the collection of tax and strengthening of the economy, Prof Ndulu noted.
In the first six month of 2016, the current account deficit decreased by 61.7 per cent, reaching 970.4 million US dollars from 2,532.5 million US dollars in 2015, with Prof Ndulu attributing the decrease to increased value of industrial products, tourism income and export services.
Prof Ndulu explained that the inflation rate in the first six months of 2016 has continued going down reaching 5.5 per cent and 4.9 per cent in June and August, this year, respectively, from 6.8 in December 2015.
"The inflation is expected to remain in single digit in the next few months and reach the midterm target of 5 per cent. This will be due among other factors, stability in domestic food prices, strength of the local currency and a slight increase in oil price in the world market," he explained.
The national debt has increased to 20,851 million US dollars by end of June, this year, from 19,861 million US dollars in December 2015. The increase is due to increase in loans and outstanding debts.
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