Ubumuntu
JF-Expert Member
- Oct 21, 2010
- 14,316
- 10,782
Salaam,
Recently, there has been a discussion re the World Bank's new country classifications by income level.
The classification indicated that Tanzania's economy has changed from being low to lower middle income level.
The change has sparked discussions, which have largely based on crediting this change to President Magufuli's government.
One thing that hasn't been raised by both critics and proponents is that despite the change, Tanzania is still a borrowing country under the International Development Association (IDA) scheme of the World Bank.
What is IDA?
IDA "is the part of the World Bank that helps the world’s poorest countries. Overseen by 173 shareholder nations, IDA aims to reduce poverty by providing loans (called “credits”) and grants for programs that boost economic growth, reduce inequalities, and improve people’s living conditions. IDA lends money on concessional terms. This means that IDA credits have a zero or very low interest charge and repayments are stretched over 30 to 38 years, including a 5- to 10-year grace period. IDA also provides grants to countries at risk of debt distress. In addition to concessional loans and grants, IDA provides significant levels of debt relief through the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI)."
IDA complements the World Bank’s original lending arm — the International Bank for Reconstruction and Development (IBRD). IBRD was established to function as a self-sustaining business and provides loans and advice to middle-income and credit-worthy poor countries." The sentence in bold indicates that IDA provides "credits" to poor countries that aren't creditworthy - Tanzania is still one of such countries.
My point is, proponents should slow down and think through what it means to be a lower middle income economy, which is still not creditworthy to be part of the IBRD. As a country we still have a long way to go. And honestly, I still cannot see significant changes in real economy, if agriculture isn't given the first priority - you don't need to be a rocket scientist to understand the significance of agriculture in real economic changes.
Recently, there has been a discussion re the World Bank's new country classifications by income level.
The classification indicated that Tanzania's economy has changed from being low to lower middle income level.
The change has sparked discussions, which have largely based on crediting this change to President Magufuli's government.
One thing that hasn't been raised by both critics and proponents is that despite the change, Tanzania is still a borrowing country under the International Development Association (IDA) scheme of the World Bank.
What is IDA?
IDA "is the part of the World Bank that helps the world’s poorest countries. Overseen by 173 shareholder nations, IDA aims to reduce poverty by providing loans (called “credits”) and grants for programs that boost economic growth, reduce inequalities, and improve people’s living conditions. IDA lends money on concessional terms. This means that IDA credits have a zero or very low interest charge and repayments are stretched over 30 to 38 years, including a 5- to 10-year grace period. IDA also provides grants to countries at risk of debt distress. In addition to concessional loans and grants, IDA provides significant levels of debt relief through the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI)."
IDA complements the World Bank’s original lending arm — the International Bank for Reconstruction and Development (IBRD). IBRD was established to function as a self-sustaining business and provides loans and advice to middle-income and credit-worthy poor countries." The sentence in bold indicates that IDA provides "credits" to poor countries that aren't creditworthy - Tanzania is still one of such countries.
My point is, proponents should slow down and think through what it means to be a lower middle income economy, which is still not creditworthy to be part of the IBRD. As a country we still have a long way to go. And honestly, I still cannot see significant changes in real economy, if agriculture isn't given the first priority - you don't need to be a rocket scientist to understand the significance of agriculture in real economic changes.
