Brace for 'Economic Tsunami', Dar es Salaam Told

M-pesa · 2011-10-06T06:47:36+00:00

With fears mounting that financial uncertainties in the Eurozone could trigger another global economic downturn, experts have called on Tanzanians to stay alert to avert its impact. And as the West sneezes, Dar - and indeed the region - is catching a cold, with the shilling having depreciated against the dollar by 13 per cent in a year. The local currency has hit a 17-year record low against the greenback as importers' appetite for dollars continues to rise amid a scarcity of foreign exchange in the money market. Now experts say although it has not yet been established that recession will precisely occur, it is important to forestall it "Although the world has not yet recovered fully from the previous turmoil there is a possibility that it will be hit by the second, deeper downturn between the beginning and the middle of next year," Dr Honest Ngowi, a Mzumbe University economics lecturer, told The Citizen in a telephone interview The onset of the looming crisis would see key sectors such as manufacturing, construction and financial services disrupted from surging financing costs, higher input costs and lower international and local demand. "The recession is likely to lead to a decline in our export earnings," he added.Already, the unresolved debt crisis in the Eurozone has reduced the Tanzanian and other East African currencies to their lowest levels ever amid the rising inflations. The shilling has nosedived in the past eight weeks, losing 100 units (Sh100) against the dollar. It lost value from an average of Sh1,550 in early August to around Sh1,650 against the dollar this week. The situation is similar in Uganda and Kenya, where the local currencies lost an average of Ksh10 (Sh170) and Ush200 (Sh120) against the dollar during the same period, respectively.

Thread starter M-pesa
Start date Oct 6, 2011

M-pesa

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Brace for 'Economic Tsunami', Dar es Salaam Told

M-pesa

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