Is Tanzania becoming an economic miracle?
Tanzania’s economic performance is receiving more and more praise from the international community. Some analysts are even wondering whether the country’s performance might be described as an economic miracle.
Under the heading ‘Tanzania’s new dawn’ the October issue of BUSINESS IN AFRICA presented a glowing review of Tanzania’s ‘rise from a socialist economic backwater to one of the most attractive investment destinations on the continent’. The article described it as a heartening story and pointed to the low inflation, the 5% GDP growth, the privatisation of two thirds of its public companies, and the likelihood of more than $5 billion in investment in the next five years.
Similar praise came from the usually critical ECONOMIST (October 21). In an article headed ‘A modest success story’ the article referred to President Mkapa as ‘privatising and liberalising with gusto’ and how the results had been striking. Average incomes had increased at about 1 % annually since he came to power. ‘Internet cafes on every corner throng with surfers learning about the outside world, chatting with relatives in Europe or hawking curios to buyers in Hong Kong….but Tanzania faces three main obstacles to faster economic growth -socialism squelched the entrepreneurial spirit. .. the infrastructure is improving but still primitive … and education is a mess … (Thank you Debbie Simmons for sending this item -Editor).
WORLD INVESTMENT REPORT (October 3) wrote that Tanzania was in 8th position in Africa and well in the lead in East Africa as the most attractive investment destination. It came three times ahead of Kenya and five times ahead of Uganda in a survey of 296 transnational companies by the UN Conference on Trade and Development (UNCTAD).
Dar es Salaam’s BUSINESS TIMES (September 22) under the headline ‘Why Tanzania attracts investors’ pointed out that in Harvard University’s ‘Competitiveness Report of 2000’ among the 24 African countries covered, Tanzania came 14th compared with Uganda 17th and Kenya 24th. In the Optimism Index Tanzania came second only to Nigeria whereas Uganda was 11th and Kenya 14th.
At the end of the World Bank Country Performance Review on September 5 Country Director Jim Adams said that Tanzania had achieved an impressive performance in its economic record and its portfolio during the past two years not only within the Africa Region but also relative to the performance of countries elsewhere. In the assessment 95% of the portfolio was described as satisfactory (75% in 1997) and projects at risk had fallen from 52% in 1997 to 5% this fiscal year.
“We are expecting in the near future that Swedish investment in Tanzania will increase and that Sweden will become one of the leading investors in the country” Sten Rylander, Swedish Ambassador said recently.
Tanzania has also just qualified, together with 34 out of48 African nations, for duty-free treatment in exporting to the USA under America’s new ‘African Growth and Opportunity Act (AGOA)’.
President of ‘Manchester Trade Limited’ Stephen Lande was quoted in the BUSINESS TIMES as saying that Tanzania possessed special qualities including a stable society, a strong democratic tradition, a reforming government, an educated population, a deep water port, hydro-electric potential and competitive location.