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- Sep 19, 2010
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A University of Dar es Salaam (UDSM) economist said in an interview yesterday that Tanzanians should brace for tough life this year despite the latest prediction by the World Bank (WB) that Africa in general will record economic growth.
Dr Jehovaness Aikaeli said this was due to the 18.5 per cent increase of power tariff which would make individuals and institutions fail to pay for basic needs. "Power tariff increase means the price of every commodity will increase, meaning an ordinary Tanzanian will find life very hard this year."
Although Tanzania is currently not doing badly in terms of economic development it would be very difficult to achieve latest World Bank global economic prospects for the year 2011, which predicted steady growth of 6 per cent in developing countries, Aikaeli said.
The hiked power tariff would affect the production sector, a factor that would correspondingly hike prices of common consumer products.
The World Bank report says developing countries will continue to outstrip developed countries in terms of economic growth as the growth in high income countries is projected to stand at 2.4 per cent this year and 2.7 per cent next year
The bank says the world economy is recovering from post crisis on a slower but solid growth. It further said countries' gross domestic products (GDP) regained levels that would have prevailed, had there been no boom bust cycle.
According to WB, high household debt and unemployment as well as weak housing and banking sectors are likely to mute economic recovery without corrective domestic policies.
Meanwhile, hardware dealers in Dar es Salaam's Kariakoo Market said the current high prices of building materials and other commodities can be justified due to what they said was skyrocketing of wholesale prices..
A random survey by The Guardian on Sunday found that a 50kilogramme bag of cement now sells at Sh13,500, up from 12,000 before the power tariff increase last month. The price of a corrugated iron sheet has gone up to Sh16,000 .from the previous Sh14,000.
The price of a five litre tin of colour paint is between Sh9,000 and Sh12,000 depending on the quality of paint. Iron bars prices have also gone up, from Sh12,000 to Sh15,000 for a 14mm bar.
Josephine Chato who owns a hardware shop in Kariakoo said prices of materials have gone up generally but there is no standard price. "There is no written notice for the price increase of the materials but this is considered to be as a result of the hiked tariff price," she said .
As for prices of foodstuff in the market, Kilombero and Mbeya rice is sold at between Sh1,000 and 1,300 per kilogramme.
There is also rice sold at between Sh700 and Sh800. Other foodstuffs sold at the market include maize flour, cooking oil, meat, small fish and fresh vegetables.
Last week Joel Bowazi, a trader in Kariakoo, said foodstuff prices going up during festivities and holidays is a common phenomenon, adding however that the grinding poverty of many Tanzanians is behind complaints over foodstuff prices.
Aikaeli said it is very difficult to directly link the increase of price of electricity and building materials.
The WB's projections have come amid United Nations Development Programme (UNDP) 2010 report that shows that Tanzania has made marginal improvements in human development, ranking the country 148th out of 169 in the Human Development Index (HDI).
However, according to Amarakoon Bandara, UNDP Tanzania economics advisor, many people in urban areas are facing life problems because of increased population. The report was released in November last year.
Bandara said people are leaving rural areas to live in towns in search of green pastures but end up finding extremely difficult conditions.
The rural-urban gap in the provision of basic necessities is a critical issue in human development. The inability to meet basic needs in rural areas remains high despite efforts to narrow the gaps in Tanzania.
"And this is making many people to migrate to towns, thus making life harder for urban dwellers," said Bandara,
SOURCE: GUARDIAN ON SUNDAY
Dr Jehovaness Aikaeli said this was due to the 18.5 per cent increase of power tariff which would make individuals and institutions fail to pay for basic needs. "Power tariff increase means the price of every commodity will increase, meaning an ordinary Tanzanian will find life very hard this year."
Although Tanzania is currently not doing badly in terms of economic development it would be very difficult to achieve latest World Bank global economic prospects for the year 2011, which predicted steady growth of 6 per cent in developing countries, Aikaeli said.
The hiked power tariff would affect the production sector, a factor that would correspondingly hike prices of common consumer products.
The World Bank report says developing countries will continue to outstrip developed countries in terms of economic growth as the growth in high income countries is projected to stand at 2.4 per cent this year and 2.7 per cent next year
The bank says the world economy is recovering from post crisis on a slower but solid growth. It further said countries' gross domestic products (GDP) regained levels that would have prevailed, had there been no boom bust cycle.
According to WB, high household debt and unemployment as well as weak housing and banking sectors are likely to mute economic recovery without corrective domestic policies.
Meanwhile, hardware dealers in Dar es Salaam's Kariakoo Market said the current high prices of building materials and other commodities can be justified due to what they said was skyrocketing of wholesale prices..
A random survey by The Guardian on Sunday found that a 50kilogramme bag of cement now sells at Sh13,500, up from 12,000 before the power tariff increase last month. The price of a corrugated iron sheet has gone up to Sh16,000 .from the previous Sh14,000.
The price of a five litre tin of colour paint is between Sh9,000 and Sh12,000 depending on the quality of paint. Iron bars prices have also gone up, from Sh12,000 to Sh15,000 for a 14mm bar.
Josephine Chato who owns a hardware shop in Kariakoo said prices of materials have gone up generally but there is no standard price. "There is no written notice for the price increase of the materials but this is considered to be as a result of the hiked tariff price," she said .
As for prices of foodstuff in the market, Kilombero and Mbeya rice is sold at between Sh1,000 and 1,300 per kilogramme.
There is also rice sold at between Sh700 and Sh800. Other foodstuffs sold at the market include maize flour, cooking oil, meat, small fish and fresh vegetables.
Last week Joel Bowazi, a trader in Kariakoo, said foodstuff prices going up during festivities and holidays is a common phenomenon, adding however that the grinding poverty of many Tanzanians is behind complaints over foodstuff prices.
Aikaeli said it is very difficult to directly link the increase of price of electricity and building materials.
The WB's projections have come amid United Nations Development Programme (UNDP) 2010 report that shows that Tanzania has made marginal improvements in human development, ranking the country 148th out of 169 in the Human Development Index (HDI).
However, according to Amarakoon Bandara, UNDP Tanzania economics advisor, many people in urban areas are facing life problems because of increased population. The report was released in November last year.
Bandara said people are leaving rural areas to live in towns in search of green pastures but end up finding extremely difficult conditions.
The rural-urban gap in the provision of basic necessities is a critical issue in human development. The inability to meet basic needs in rural areas remains high despite efforts to narrow the gaps in Tanzania.
"And this is making many people to migrate to towns, thus making life harder for urban dwellers," said Bandara,
SOURCE: GUARDIAN ON SUNDAY
