TANZANIAN ECONOMY POSTS 6.7 PC GROWTH IN 2016 FIRST HALF

BOT Governor, Prof. Benno Ndulu.

The economy grew 6.7 per cent in the first half of 2016 compared to 5.7 per cent of the corresponding period last year boosted by fast growth in transportation, mining and gas and communication sectors.

The Bank of Tanzania Governor, Prof. Benno Ndulu told reporters in Dar es Salaam today that the growth rate of the second quarter in 2016 which reached 7.9 per cent had offset the dismal performance in the first quarter of 5.8 per cent and put the nation firmly on course to meet growth targets of 7.2 per cent for 2016.

“It is obvious that we are on track to meet the growth target of 7.2 per cent putting in mind July to December is the period of exports of main cash crops and it when tourism season reaches its peak,” he said.

Exports of main cash crops and tourism receipts would add to projections of huge expansion in construction sector on the back of huge infrastructure projects including construction of the standard gauge railway line, Uganda oil pipeline and ports expansion.

The National Bureau of Statistics announced on Thursday that the economy had expanded 7.9 per cent in the second quarter of 2016 compared to 5.8 per cent during the same time last year driven by mining, manufacturing and energy sectors.

Prof Ndulu said agriculture sector had expanded by 3.4 per cent in the first half of 2016 providing significant contribution of the total growth of the economy.

Agriculture is the main backbone of the economy employing about 75 per cent of the population and contributing about quarter of the economy.

Although agriculture was not among the fastest growing sectors, it had the largest contribution to the first half growth in the economy, he said.

Prof Ndulu said transportation sector had expanded by 17.4 per cent due to growth in railway transportation after upgrading of the railway infrastructure and fleet modernization in the Tanzania Railway Limited (TRL).

Growth in the transport sector was due to a significant increase of transit cargo volume from Dar es Salaam port to neighbouring landlocked countries of Zambia, Burundi, Rwanda, Malawi, and Uganda contrary to widespread speculations that transit cargo had declined.

He said transit cargo volume to Rwanda had increased by 17.5 per cent, and Uganda by 22.3 per cent, Malawi (14 per cent), Burundi (4.8 per cent) and Zambia (3.7 per cent).

According to him transit cargo to DR Congo had declined by 12.7 per cent after Congolese importers were attracted to use Durban port in South Africa whose cost had declined due to depreciation of the Rand.

He, however, said after Rand stabilised he had been informed that the traders were coming back to Dar es Salaam port.which grew to 13.7 per cent on the back of significant increase in gas production, a slight rise in gold prices and opening of mining sites of some major mining companies. Tanzania is the fourth-largest gold exporter in Africa after Ghana, Mali, and South Africa.

The bullion is the main source of foreign exchange and contributes close to three per cent of the national economic output. “There are indications of them coming back after Rand stabilised,” he said.

The growth in the first half was also driven by growth in tourism, currently leading in foreign exchange earnings, and increased exports from the manufacturing sector.

He said the number of tourists who visited the country in January to June period reached 1,137,442 compared to 1,075,541 of corresponding period last year which is equivalent to 5.8 per cent increase.

There was a 12.6 per cent increase in exports from the manufacturing sector to maintain its position as the second largest foreign exchange earner after tourism.

Gold exports had also boosted growth in the first half after price recovery in the global market and increase in volume export, he said adding that it brought in the country 1.384bn/- compared to 1.2bn obtained in the similar period last year which is equivalent to 7.0 per cent increase.