Tanzania Economy Grows Steadily During Global Crisis

According to recent reports by the Tanzania central bank, the Tanzania economy grew by approximately 7.5 percent in the last year, which is slightly lower that the forecasted 7.7 percent, but still an increase from the 7.1 percent economic growth that the country experienced in 2007.

The Guardian recently reported that the Bank of Tanzania (BoT) February Monetary Policy Statement indicated that the realization of the 7.5 percent growth would likely come along with a strong performance in several of the countries strongest performing sectors.

“Real economic growth of 7.5 per cent is likely to be achieved in line with a good performance in agriculture, as well as the strong performance … in manufacturing, construction, and communication,” said the BoT in their Monetary Policy Statement.

A primary reason that has been given for the slightly reduced projected growth was the unexpected onset of the global credit crunch, which imposed a downward revision toward the end of last year.

Nevertheless, with a population of approximately 40 million people and a reputation for maintain relative stability in an often unpredictable and unstable region of Africa, Tanzania displayed its capability for continued economic growth in spite of the economic crisis

In fact, the BoT has indicated that the financial crisis has not stifled the productivity of the country, which has withstood the crisis relatively well overall in the first half of its current fiscal year (July 2008 – June 2009).

“Despite the turbulent global environment,” said the BoT, “the Tanzanian economy continued to maintain solid growth during the first half of 2008/09.”

According to a projection that was made in June 2008, the overall economic growth of the country is expected to accelerate to 9.2 percent in 2011.

Overall, Tanzania has proved itself to be one of the more attractive frontier markets as the result of a combination mining, agriculture and tourism industries along with the availability of wildlife parks and beach resorts.

The recent report by the Guardian indicated that the BoT has pointed to the need to control any outside or internal speculation on the fate of the country’s currency as a result of the current global crisis as being one of the largest challenges that is currently facing the country during the remainder of the current fiscal year.

Currently, the exchange rate of the shilling, the Tanzania national currency, is market-driven, however the central bank has indicated a willingness to intervene in order to put an end to possible speculation.

In addition, the bank has also made it clear that the global credit crunch has not resulted in a direct loss for any commercial bank in the country as of yet.