FINANCE FORUM
TANZANIA REMAINS
IN THE TOP 10
Edited by Leon Louw
The Tanzanian shilling was fairly stable in 2019, exchanging at an average
of 2,290 to the US dollar, compared with 2,263 in 2018.
T
anzania is amongst the world's 10 fastest-growing
economies at the rate of 6.8%, reveals the new 2020
African Economic Outlook report. Other five African
countries are Rwanda at 8.7%, Ethiopia at 7.4%, Côte
d'Ivoire at 7.4%, Ghana at 7.1% and Benin at 6.7%.
East Africa maintained its lead as the continent's fastest growing
region, predicted with an average growth estimated at 5.0% in
2019; North Africa was the second fastest, at 4.1%, while West
Africa's growth rose to 3.7% in 2019, up from 3.4% the year before.
The report highlights that Tanzania's growth is projected to
be broadly stable at 6.4% in 2020 and 6.6% in 2021, subject to
favourable weather, prudent fiscal management, mitigation of
financial sector vulnerabilities, and implementation of reforms
to improve the business environment.
While the external public debt shows that 63% of its
concessional – constituted 70.4% of total public debt in 2019.
The current account deficit slightly widened to 3.4% of GDP in
2019 from 3.3% in 2018.
According to the outlook, early signs of slow but steady
structural transformation in key sectors include the continued
shift of labour from agriculture to services, and even to industry.
Employment in agriculture declined from 71.4% of total
employment in 2008 to 66.3% in 2018, while employment
in industry increased to 7.1% from 5.7% and employment in
services to 26.6% from 22.9%, it illustrates.
The report poses the challenges of poverty, inequality,
and youth unemployment as persisting despite the recent
robust growth.
Overall, Africa's economic growth stabilised at 3.4% in 2019 and
is expected to pick up to 3.9% in 2020, and 4.1% in 2021, but to
remain below historical highs. "Poverty declined, but at a slower pace of 6.4% between 2012 and
2018 than the 18.0% between 2007 and 2012," says the report.
A markedly diversified economy, characterised by robust
private consumption, substantial public spending, strong
investment growth, and an upturn in exports, underpinned the
positive outlook. The special theme this year is delivering education and skills
for Africa's workforce of the future. Despite progress in recent
decades, Africa still lags behind other developing regions in
education and skill development.
The report prepared by the African Development Bank (AfDB)
further observes that tourism, mining, services, construction,
agriculture, and manufacturing are notable sectors in the country. It is proposed that policy actions should include measures to
improve both the quantity and the quality of education and
align education policy with labour market needs.
The growth's fundamentals are also improving, notes the
report, with a gradual shift from private consumption toward
investment and exports. This requires expanding access to schools in remote areas,
increasing incentives to invest in education, developing a
demand-driven education system that caters to employers'
needs, investing in nutrition to help poorer children.
"For the first time in a decade, investment accounted for more
than half the continent's growth, with private consumption
accounting for less than one third."
It further points out that, Tanzania's inflation fell to an estimated
3.3% in 2019 from 3.6% in 2018 due to improved food supply.
The Tanzanian shilling was fairly stable in 2019, exchanging at an
average of 2 290 to the dollar, compared with 2 263 in 2018.
However, the fiscal deficit, financed mainly by concessional
external debt, stood at 2.0% of GDP in 2019, up from 1.3% in 2018,
and is projected to stabilise at 1.9% in 2020 and 2.2% in 2021.
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African Mining March 2020
Government policy improving the business and investment
climate remains a work in progress, states the report, particularly
in tax policy and administration, access to affordable finance,
and government processes.
Meanwhile, the 2019 Global Competitiveness Report pointed
to some key improvements in ICT adoption, macroeconomic
stability, financial system, and business dynamism, reports the
outlook.
SOURCE: APO Group on behalf of Embassy of the United Republic of
Tanzania Tel Aviv, Israel.
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