Tanzania economy slips, official figures show

RUCCI · 2016-09-11T06:58:11+00:00

Recent data from the National Bureau of Statistics (NBS) shows that Tanzania’s economy took a dent in the first quarter of this year. Bank of Tanzania (BoT) also corroborated the data noting that economic growth rate dropped to 5.5 per cent in the first quarter of this year compared to 5.7 per cent recorded in the same period last year. Answering a question by Mr Freeman Mbowe, who is the leader of Opposition in Parliament, on Thursday, Prime Minister Kassim Majaliwa insisted that there was a need to conduct a research to prove Mr Mbowe’s assertion that the country’s economy was in shambles. NBS data, though, shows that the slump in the economic growth was chiefly caused by underperformance of the three major sectors, namely, construction, transport and manufacturing. Going by NBS data, the construction sector growth slumped to 4.3 per cent in the first quarter of 2016 compared to 23.2 per cent recorded during the same period a year earlier. Transport sector declined to 7.9 per cent compared with14.51 per cent, while growth in the manufacturing sector dipped to 7.4 per cent from 9.9 per cent last year. The state-owned NBS further attributes the decline in the performance to low investment in the sectors during the period under review. For its part, the World Bank (WB) links the fall in economic growth to a couple of factors, the first being additional fiscal resources needed for provision of free basic education and expansion of higher education students’ loans programme. “The economic growth is hit by additional expenditure needs, which is equivalent to 0.7 per cent of the country’s Gross Domestic Product (GDP),” reads part of the WB report. The report also attributes the situation to weak implementation of the new 2015 Value Added Tax (Vat) Act, that was meant to capture revenue on other forms of trade which were previously not included in the 1997 Act. In his question in Parliament on Thursday, Mr Mbowe expressed concerns that the economy was not doing well and wanted to know what the government was doing to address the situation. He noted, for instance, that drop of cargo at the Dar es Salaam Port was one of the major signs that all was not well. “Some transport companies have reportedly cut their operations by up to 40 per cent, while others have relocated to neighbouring countries because of uncertainty in the business environment in Tanzania. Is the government aware of this? What steps is it taking to address the situation?” Mr Mbowe asked. However, Premier Majaliwa said in his reply that there was no concrete evidence the economy has not been performing well in recent months. The Premier told Parliament that it was difficult for the government to come up with a definitive answer without first carrying out an in-depth study. All is not bad The government expressed optimism that the economy would mushroom and enable it to meet the annual target of 7.2 per cent growth as projected by the International Monetary Fund (IMF). “If we were to judge economic performance by using one quarter, we would not record a 7 per cent growth last year given that our starting was not impressive, I believe we will make it,” reads a part of the WB report. It shows for instance that even in 2015 the economic growth in the first quarter fell to 5.7 per cent, down from 8.2 per cent during a similar period a year before, but at the end of the year amounted to an average of 7 per cent, similar to 2014 record. BoT’s optimism is supported by a relatively good performance in the mining sector which grew to 6.5 per cent in quarter one of 2016 compared to 0.6 per cent recorded during the same period a year before. It also had expectations from the communications and agriculture sectors which grew from 11.5 per cent and 1.9 per cent respectively, in quarter one last year to 13.4 per cent and 2.7 per cent in the same period this year. The government also believes in good performance in export and services earnings, cement production, Source: The citizen

Thread starter RUCCI
Start date Sep 11, 2016

RUCCI

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Tanzania economy slips, official figures show

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