TANZANIA'S ECONOMY IS FLYING HIGH

World Bank Country Director for Tanzania, Ms Bella Bird.

With the exception of some challenges in water resource management, Tanzania remains one of the best economic performers in Africa, according to the latest World Bank report.

The World Bank’s Tanzania Economic Update, “Managing Water Wisely” says Tanzania is already water stressed, with the resources remaining the same against the expansive population, which has doubled over the past 25 years.

But, the World Bank Country Director, Ms Bella Bird, speaking in Dar es Salaam yesterday, commended Tanzania’s impressive performance as one of Africa’s top three growing economies and the fastest growing economy in East Africa.

She however noted some signs of softening economy in recent months. Ms Bird said the country’s economic activities expanded by 6.8 per cent in the first half of 2017, lower than the 7.7 per cent recorded in the same period last year.

She cautioned that growth rates do fluctuate quarterly and yearly in any country, arguing that the most important aspect is to watch the long term trends.

“Macro-economic management has stayed strong. Inflation has remained low and stable. The current account has continued to improve because of low import bill, which has more than offset the small decline in the value of exports,” said Ms Bird in her key address prior to the presentation of the bank’s 10th Tanzania Economic Update.

She said foreign reserves increased to the equivalent of more than four months’ imports, while the value of the shilling remained relatively stable over the period under review. The presented economic updates show that Tanzania has continually topped the East African region, with the highest economic growth although it softened in the last quarter of last year.

At seven per cent last year, Tanzania’s rate of economic expansion exceeded all East African Community (EAC) member states, the report says, adding that across Africa, the rate was exceeded only by Cote D’Ivoire and Ethiopia’s 7.9 and 7.5 per cent, respectively.

The update shows that the growth rate declined to 5.6 per cent in the final quarter of 2016, significantly lower than the eight per cent recorded in the same quarter in 2015 due to weak business environment, record low levels of private sector credit growth and weak implementation of budget implementation, especially in capital projects.

On the supply side, the economic slowdown has persisted into the first half of 2017 driven particularly by a deceleration in growth of service sector. During the first half of 2017, the economic growth was 6.8 per cent, lower than the 7.7 per cent recorded in the same period in 2016.

With the exception of services, growth in all economic sectors, including agriculture, manufacturing and non-manufacturing, recorded higher growth rates during the first half of 2017 than in the corresponding period in 2016.

However, the expansion rate of the service sector declined significantly during the first half of 2017 due to continued slowdown in activities related to transport, education, real estate and financial subsectors.

Public administration contracted by about 3.8 per cent during the first half of 2017 partly due to removal of unqualified public servants and ghost workers after the government conducted an audit of public civil servants to identify those without required qualifications.

Daily News