ChingaMzalendo
Senior Member
- Nov 9, 2008
- 192
- 3
Wakuu mnadhani uchumi wa Tanzania utaanguka jinsi huyu mzushi anavyodhania?
Source Michuzi Blog:
John Mashaka on Tanzanias Economic Outlook For 2011 Debate
As the global economic crisis seems to relent; our eyes must now be focused on 2011 with caution due to the obvious remaining threats. European debt crisis, currency tensions between the Chinese and the Americans, along with the delicate global banking financial- sector, are all factors to watch very closely. On our domestic front, we must look into economic indicators, and other factors that are could change the economic playing field, seriously weakening or strengthening our already delicate economy
According to Bank of Tanzanias October economic review, there are no clear indicators that could provide a true picture of what to expect for 2011. BOT records a significant decrease in inflation rate from 6.6% to 4.5% from a previous year. It also records a slowdown in banks credit or money supply to major economic activities compared to a year before with exception of manufacturing, construction and hospitality. Credit to manufacturing grew by 62% compared to a decline of 4.7% in the year ending 2009. Construction grew by 48% compared with a decline of 11.4%, while that of hotels grew to 37.8% compared to a decline of 1.4% in the same period
With exception of gold which recorded 42.2% from 35.8% a year before, and manufactured goods rose to 23.0% from 20.1%, all other exports hit negative territories. The service sector recorded literally no growth so to speak. Capital goods importation recorded negligible decrease; however, national debt sky rocketed to USD 10,685.6million a whopping 14.5% higher than USD 9,330.3million in 2009. Sadly enough 78.7% of the national dent was external and only 21.3% being domestic.
While the Bank of Tanzania shows a decrease in inflation, the value of shilling has steadily declined against major global currencies from a year before. One USD fetched a median of Tsh. 1,320 in 2009; today, one USD is being exchanged at TSH.1, 450, a 9.85% higher. Since domestic services such as education, housing, air travel and hotel accommodation in some segments are priced and charged in US Dollar; an artificial demand for the dollar has risen against its supply, pinching the pockets of the ordinary consumer whose wages are flat, and this has translated into economic hardship, not only on the year we are leaving behind, but also on the coming year
In brief, Tanzanias main GDP contributors have showed no significant growth. Productivity is flat, there is no optimism in the horizon .Unless the political establishment revamps its approach to boost domestic productivity, and export needed to cut the ever ballooning trade deficit. There must be seriousness and will in the political structure to tackle corruption and embezzlement which are other impediments to the economic leap. Out of control and excessive government spending, unemployment which stands at 26%, discriminative lending practices, high interest rates, and continuously rising inflation, bear hallmarks of negative economic growth, and must be tamed.
There is no solid ground for us to rejoice for the year 2011 as of yet, as manufacturing, service and even the agricultural sectors are in for a big trouble in the face of the chronic and unreliable supply of energy. Even though Dr. William Ngeleja is shouldering the TANESCO fiasco, the problem seems to more of political than administrative for him to solve; meaning the only body that can un-puzzle the riddle is the parliament. We may also see a global crude oil price increase relatively to the demand in the coming year. This is due to the growing thirst for energy in the Asian countries of China and India. Major adjustments therefore, will have to be implemented not only by companies, but also by individual consumers to remain solvent, and this could have some impact on our growth.
These are indeed tough economic times; TANESCOs proposed 18.5% price increase may spell disaster to the economy. Companies are struggling to remain operational, Increase in the cost of energy will be balanced by massive lay-offs, and other spending cutbacks which is extremely dangerous to the economic growth. The government must step in either by subsidizing the proposed increase or by simply providing an alternative source of electricity. Economists, policymakers and other experts must come up with immediate creative ideas to aid President Kikwete and his team in their effort to steer the economic wheel into the right direction for the good of the country. This is my perspective, what is yours?
Heri Ya Mwaka Mpya, Na Mungu Aibariki Tanzania
John Mashaka
Mashaka.john@yahoo.com
Source Michuzi Blog:
John Mashaka on Tanzanias Economic Outlook For 2011 Debate
As the global economic crisis seems to relent; our eyes must now be focused on 2011 with caution due to the obvious remaining threats. European debt crisis, currency tensions between the Chinese and the Americans, along with the delicate global banking financial- sector, are all factors to watch very closely. On our domestic front, we must look into economic indicators, and other factors that are could change the economic playing field, seriously weakening or strengthening our already delicate economy
According to Bank of Tanzanias October economic review, there are no clear indicators that could provide a true picture of what to expect for 2011. BOT records a significant decrease in inflation rate from 6.6% to 4.5% from a previous year. It also records a slowdown in banks credit or money supply to major economic activities compared to a year before with exception of manufacturing, construction and hospitality. Credit to manufacturing grew by 62% compared to a decline of 4.7% in the year ending 2009. Construction grew by 48% compared with a decline of 11.4%, while that of hotels grew to 37.8% compared to a decline of 1.4% in the same period
With exception of gold which recorded 42.2% from 35.8% a year before, and manufactured goods rose to 23.0% from 20.1%, all other exports hit negative territories. The service sector recorded literally no growth so to speak. Capital goods importation recorded negligible decrease; however, national debt sky rocketed to USD 10,685.6million a whopping 14.5% higher than USD 9,330.3million in 2009. Sadly enough 78.7% of the national dent was external and only 21.3% being domestic.
While the Bank of Tanzania shows a decrease in inflation, the value of shilling has steadily declined against major global currencies from a year before. One USD fetched a median of Tsh. 1,320 in 2009; today, one USD is being exchanged at TSH.1, 450, a 9.85% higher. Since domestic services such as education, housing, air travel and hotel accommodation in some segments are priced and charged in US Dollar; an artificial demand for the dollar has risen against its supply, pinching the pockets of the ordinary consumer whose wages are flat, and this has translated into economic hardship, not only on the year we are leaving behind, but also on the coming year
In brief, Tanzanias main GDP contributors have showed no significant growth. Productivity is flat, there is no optimism in the horizon .Unless the political establishment revamps its approach to boost domestic productivity, and export needed to cut the ever ballooning trade deficit. There must be seriousness and will in the political structure to tackle corruption and embezzlement which are other impediments to the economic leap. Out of control and excessive government spending, unemployment which stands at 26%, discriminative lending practices, high interest rates, and continuously rising inflation, bear hallmarks of negative economic growth, and must be tamed.
There is no solid ground for us to rejoice for the year 2011 as of yet, as manufacturing, service and even the agricultural sectors are in for a big trouble in the face of the chronic and unreliable supply of energy. Even though Dr. William Ngeleja is shouldering the TANESCO fiasco, the problem seems to more of political than administrative for him to solve; meaning the only body that can un-puzzle the riddle is the parliament. We may also see a global crude oil price increase relatively to the demand in the coming year. This is due to the growing thirst for energy in the Asian countries of China and India. Major adjustments therefore, will have to be implemented not only by companies, but also by individual consumers to remain solvent, and this could have some impact on our growth.
These are indeed tough economic times; TANESCOs proposed 18.5% price increase may spell disaster to the economy. Companies are struggling to remain operational, Increase in the cost of energy will be balanced by massive lay-offs, and other spending cutbacks which is extremely dangerous to the economic growth. The government must step in either by subsidizing the proposed increase or by simply providing an alternative source of electricity. Economists, policymakers and other experts must come up with immediate creative ideas to aid President Kikwete and his team in their effort to steer the economic wheel into the right direction for the good of the country. This is my perspective, what is yours?
Heri Ya Mwaka Mpya, Na Mungu Aibariki Tanzania
John Mashaka
Mashaka.john@yahoo.com
