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Tanzania's economy growing at 'snail's pace'
A Dar es Salaam resident buys sugar at a supermarket. There is worry that Tanzania is growing at a snail's pace. File Photo
By Abduel Elinaza
Posted Monday, June 7 2010 at 00:00
THE EAST AFRICAN
Tanzania's gross domestic product will grow at less than one per cent for the next four years, which does not augur well for the country's fight against poverty.
According to data from the Ministry of Finance and Economic Affairs, the GDP will grow at an average of 0.2 percentage points per year for the next four years from 2010/11, meaning the economic growth rate will only be 7.8 per cent by 2013/14.
Economic pundits are now saying that to have the desired economic growth with a trickle down effect, the economy has to grow by at least 8.0 per cent, a figure that cannot be achieved until after 2014.
This is the picture painted by Treasury in pre-budget meetings and which negates the spirit of MKUKUTA - now in its third stage - the Kiswahili acronym for the National Strategy for Growth which is pro-poor and anti-poverty.
The Treasury's state of economy report was issued prior to the East African member states budget reading day this Wednesday.
It shows that from 2010, the economy will grow from 7.0 per cent, to 7.1 per cent in 2011, 7.4 per cent in 2012 and 7.8 per cent in 2013.
The growth is "very minimum" and will not have the desired economic impact.
The chairman of parliament's Finance and Economic Affairs committee Dr Abdallah Kigoda, told The EastAfrican that, "It's obvious the economy is growing at snail's pace."
The committee in a meeting with the Ministry of Finance and Economic Affairs in pre-budget discussion last week expressed concern that even the projected revenue collections to GDP in the next three years are growing at an unsatisfactory rate.
Dr Kigoda said that the expectation was that the economy would grow at over 8.0 or 10 per cent, but from the look of things, the budget does not support it.
The government plans to spend Tsh11.11 trillion ($8.23 billion) in 2010/2011, with domestic revenue projected at Tsh6.0 trillion ($4.44 billion), while recurrent expenditure is projected to consume Tsh7.9 trillion ($5.85 billion).
Donor dependent
Committee member Siraju Kaboyonga said it does not make sense to borrow to finance recurrent expenditure since common sense demands that one should collect more and spend less and use the surplus for development.
"However the budget plans tells us that we will continue to borrow or depend to donors to pay our teachers and doctors salaries. We cannot develop this way," he added.
"The economy is stagnant because the fiscal regime does not address industries and revenue collections issues or protecting local factories," said Mr Kaboyonga and adding: "This shows that business we are still doing business as usual where our industries are neither doing business nor expanding and nobody at Treasury is concerned about it. At this rate we cannot eradicate donor dependency."
The committee deputy chairman Hamza Mwenegoha faulted the poor fiscal regime which has failed to protect local industries and has affected 16 cooking oil factories which were now on the verge of collapse.
A Dar es Salaam resident buys sugar at a supermarket. There is worry that Tanzania is growing at a snail's pace. File Photo
By Abduel Elinaza
Posted Monday, June 7 2010 at 00:00
THE EAST AFRICAN
Tanzania's gross domestic product will grow at less than one per cent for the next four years, which does not augur well for the country's fight against poverty.
According to data from the Ministry of Finance and Economic Affairs, the GDP will grow at an average of 0.2 percentage points per year for the next four years from 2010/11, meaning the economic growth rate will only be 7.8 per cent by 2013/14.
Economic pundits are now saying that to have the desired economic growth with a trickle down effect, the economy has to grow by at least 8.0 per cent, a figure that cannot be achieved until after 2014.
This is the picture painted by Treasury in pre-budget meetings and which negates the spirit of MKUKUTA - now in its third stage - the Kiswahili acronym for the National Strategy for Growth which is pro-poor and anti-poverty.
The Treasury's state of economy report was issued prior to the East African member states budget reading day this Wednesday.
It shows that from 2010, the economy will grow from 7.0 per cent, to 7.1 per cent in 2011, 7.4 per cent in 2012 and 7.8 per cent in 2013.
The growth is "very minimum" and will not have the desired economic impact.
The chairman of parliament's Finance and Economic Affairs committee Dr Abdallah Kigoda, told The EastAfrican that, "It's obvious the economy is growing at snail's pace."
The committee in a meeting with the Ministry of Finance and Economic Affairs in pre-budget discussion last week expressed concern that even the projected revenue collections to GDP in the next three years are growing at an unsatisfactory rate.
Dr Kigoda said that the expectation was that the economy would grow at over 8.0 or 10 per cent, but from the look of things, the budget does not support it.
The government plans to spend Tsh11.11 trillion ($8.23 billion) in 2010/2011, with domestic revenue projected at Tsh6.0 trillion ($4.44 billion), while recurrent expenditure is projected to consume Tsh7.9 trillion ($5.85 billion).
Donor dependent
Committee member Siraju Kaboyonga said it does not make sense to borrow to finance recurrent expenditure since common sense demands that one should collect more and spend less and use the surplus for development.
"However the budget plans tells us that we will continue to borrow or depend to donors to pay our teachers and doctors salaries. We cannot develop this way," he added.
"The economy is stagnant because the fiscal regime does not address industries and revenue collections issues or protecting local factories," said Mr Kaboyonga and adding: "This shows that business we are still doing business as usual where our industries are neither doing business nor expanding and nobody at Treasury is concerned about it. At this rate we cannot eradicate donor dependency."
The committee deputy chairman Hamza Mwenegoha faulted the poor fiscal regime which has failed to protect local industries and has affected 16 cooking oil factories which were now on the verge of collapse.
