BUSINESS & THE ECONOMY

Exchange rates: £1 = Shs 2,010
$1 = Shs 1,110

In its third review of Tanzania’s ECONOMIC PERFORMANCE under the three year Poverty Reduction and Growth Facility (PRGF) arrangement, reported in the Guardian, Agustin Carstens, the Deputy Managing Director of the IMF said that the results were excellent. Tanzania had made further strides in enhancing macroeconomic stability and addressing key impediments to growth through the accelerated pursuit of structural reforms. The report said the completion of the review enabled a further release of about $4.2million bringing total disbursements under the programme to the equivalent $17 million.

However, there were some critical observations. Trade with the US saw a large deficit in the past year because of the purchase of the presidential Gulfstream jet. Progress in amending banking laws was not satisfactory. The country would need to sustain its reform efforts in the areas of energy, infrastructure, trade facilitation, governance, fiscal management, and financial sector reform to make deeper inroads into poverty. The Guardian commented that all growth-poverty analysts agreed on one point – that given the rate of population growth in the country, only GDP growth rates of seven per cent could start denting poverty compared with the existing growth level of six per cent. Tanzania might be getting poorer.

The UN has placed Tanzania in the ‘fast track’ category of developing countries, which have used donor funds effectively towards attainment of MILLENIUM DEVELOPMENT GOALS (MDGs). Addressing a press conference at the launch of the UN Millennium Report in January, UNDP Resident Representative John Hendra said Tanzania was among a small number of poor countries that have demonstrated quick and effective utilisation of aid. Hendra noted how the country has made tremendous progress in poverty reduction and primary school enrolment and that strides had been made in eliminating gender inequality and improving environmental sustainability. In September 2000, world leaders adopted the Global Millennium Declaration containing MDGs to be reached by the year 2015.

TANESCO has announced plans for coping with the GROWING DEMAND FOR ELECTRICITY by conversion of the Independent Power Tanzania Limited (IPTL) thermal units to using natural gas and developing new hydrosites. Two additional units – 38MW each – would be installed at the Songas site at Ubungo this year. But vandalism was becoming a major problem. Since January some 49 transformers had been vandalized in Dar es Salaam Region alone, causing the company a loss of Shs 343 million. Transformers had been blowing up because of lack of coolant oil, which was being stolen. Vandals were selling it mainly for making illicit cosmetics for face bleaching and as engine oil for vehicles – Guardian.

Barrick Gold Corporation announced in March that it has started production at the NEW TULAWAKA MINE in Kagera Region. It is expected that Tulawaka will produce some 70,000-75,000 ounces at a total cost of about $210-$220 per ounce.
The Business Times (January 8) reported on a visit to Tanzania by ZIMBABWEAN WHITE FARMERS who had lost their farms under that country’s land reform programme and wished to invest in Tanzania. But, said the paper, they were turned off by the country’s land policies and legislation (since modified). About 100 finally decided to settle in Mozambique. Others went to Zambia and Nigeria, where they have already established farming activities. According to the paper, critics were saying that, 43 years after Independence from foreign rule, the majority of farmers in Tanzania continue to use the hand hoe to scratch the land in sustenance agriculture, and cultivate cash crops whose earnings in the world market are determined by forces beyond their control. Had Tanzania been serious in its agriculture, it would have been capable of producing food in a single farming season that would be enough for its population, with food to spare to feed its neighbors.

Zanzibar Chief Minister Vuai Nahodha said his government would not allow EXPLORATION OF PETROL to start in Zanzibar without an agreement over revenue sharing. He told the House of Representatives that negotiations were going on between the Union and Zanzibar governments but no agreement had been reached so far. He said the Zanzibar Government would like oil to be an internal matter to Zanzibar in the same way as minerals were to the mainland – Mtanzania.

RSS feed for comments on this post · TrackBack URL

Leave a Comment

You must be logged in to post a comment.