By Dr. Hildrebad ShayoAs Tanzania enters into second session of its 4th Government Under the leadership of President Jakaya Mrisho Kikwete, the issue of economic development, fighting poverty, empowering young people and security must be an underlining focus for any succeeding administration. And as the president round out his team, how such team plan to address the issues of poverty alleviation, national economic growth, fighting corruption and sustainable development will be of paramount interest to many Tanzanians, both in and out of the country.
Tanzania lies below the global poverty line, and it can be argued that as long as the conditions of poverty continue to persist, our national future will be threatened and endangered. It is therefore not an overstatement to argue that any future government in Tanzania that will fail to give urgent priority to supporting individual’s economic growth in particular, and sustainable development in general is doomed.
In this article, an attempt will be made to offer a suggestion that could help in addressing the issue of individual economic improvement, which would translate into macro-economic growth, and would contribute to our nation’s sustainable development efforts. This is meant to be simplistic, and a food for thought as we struggle to overcome the conditions of poverty and social stagnation.
The Tanzania Economy: To begin, let’s take a closer look at the Tanzanian economy, and try to understand a few of its peculiarities. This should then joggle our economic sub-consciousness, which would be needed to appreciate the discussions that follow.
Dr. Shayo,
ReplyDeleteThanks for your luminous article. It was nice to read it. However I have few doubts that I would like to share with the public.
It seems here that the most important focus is in the approach generally used by the mainstream economists, especially those Keynesian in origin- or simply saying the demand-side-economists. No wonder why you have written and I quote you:
--A key peculiarity and perhaps the most telling feature of the Tanzanian economy is that it is a cash-and-carry economy. This means that everything bought is paid for in cash. As a result, the economy will only grow to the point where INDIVIDUAL PURCHASING POWER grows--
Firstly: I argue that the peculiarity and the most telling feature of the Tanzanian economy, in comparison to the British economy that you have discussed as a case study, is that Tanzanian economy has still many INFORMAL characteristics in the sense that the majority of the households are still producing for self-consumption. This means that what you termed it as a cash-and-carry economy, although I might accept the fact that it is a perhaps the most telling feature ONLY in the formal economy (in the towns and cities), it cannot be the key peculiar feature of Tanzanian economy. What I think it should be the primary task for the next upcoming government is to FORMALISE the economy. More appropriate labour, industrial and consumer laws are to be enacted and enforced. We need to be accurate in our systems of recording data and statistics.
Secondly: Now let me turn to this FORMAL sector that you like the most. I find it inappropriate to assert that ‘everything bought in Tanzanian economy is paid in cash’. What about the interbank transactions and other M2 and M3 transactions commonly used by Fisadi? What is their contribution to the GDP? The poorest in cities and towns are living into a cash and carry economy, but the real problem of the country at the moment is also the market of bonds, titles and shares. In such markets is where you find UFISADI. The new government must tackle the problems arising from that sector.
Lastly, but not the least: Since you think that it is the increasing of the Household consumption to boost the economy, and since Tanzania is a poor country, and being poor its citizens need to be given credits so that they can consume more than what their salaries could afford, I have a question for you regarding this. Why do you think Ireland and Greece are suffering from a debt crisis? Why do you think the mortgage crisis in the USA pinched the world into crisis? We all want to live the life our salaries cannot afford, but please let us also be cautious with the sovereign debt crises. Where the money to offer credit to Tanzanians will come from? Who is that investor to enjoy giving credit to people so that they can consume more? Are you suggesting our President kutujaza mapesa ya mikopo au Bank Kuu imchapishie? Atalipa Rais atakayekuja? Credit to boost consumption will lead a country into a debt crisis in long run. I suggest that you review your interest in observing the relationship between the demand-side economics and credit expansion. Credit expansion should be for the development of productive sector rather than household consumption. Mambo ya nipe mkopo nikanywe bia yataumiza uchumi wa Tanzania. Nipe mkopo nitengeneze bia ndiyo jibu.Tukishindwa kuuza bia nchini, tutauza hata Kenya. After all, our new markets are mostly influenced by the scale of production per unit of time invested on it. More credit should rather be given to those who can produce and innovate new products to be sold cheaply. We must not be very over-conscious about who will buy our products before producing them. The new government should invest highly in competitive and innovative projects. Not to those who want to consume more than what their salaries could afford.
Dr. Boniface Mhella
Dr. Shayo,
ReplyDeleteThanks for your luminous article. It was nice to read it. However I have few doubts that I would like to share with the public.
It seems here that the most important focus is in the approach generally used by the mainstream economists, especially those Keynesian in origin- or simply saying the demand-side-economists.
Since you think that it is the increasing of the Household consumption to boost the economy, and since Tanzania is a poor country, and being poor its citizens need to be given credits so that they can consume more than what their salaries could afford, I have a question for you regarding this. Why do you think Ireland and Greece are suffering from a debt crisis? Why do you think the mortgage crisis in the USA pinched the world into crisis? We all want to live the life our salaries cannot afford, but please let us also be cautious with the sovereign debt crises. Where the money to offer credit to Tanzanians will come from? Who is that investor to enjoy giving credit to people so that they can consume more? Are you suggesting our President kutujaza mapesa ya mikopo au Bank Kuu imchapishie? Atalipa Rais atakayekuja? Credit to boost consumption will lead a country into a debt crisis in long run. I suggest that you review your interest in observing the relationship between the demand-side economics and credit expansion. Credit expansion should be for the development of productive sector rather than household consumption. Mambo ya nipe mkopo nikanywe bia yataumiza uchumi wa Tanzania. Nipe mkopo nitengeneze bia ndiyo jibu.Tukishindwa kuuza bia nchini, tutauza hata Kenya. After all, our new markets are mostly influenced by the scale of production per unit of time invested on it. More credit should rather be given to those who can produce and innovate new products to be sold cheaply. We must not be very over-conscious about who will buy our products before producing them. The new government should invest highly in competitive and innovative projects. Not to those who want to consume more than what their salaries could afford.
Dr. Boniface Mhella
Uchumi huo wa kukopa na kutumia pesa ambazo hawana ndio umeifikisha dunia hapa ilipo kwenye Depression. Watu wako stressed na madeni yasiyokwisha, na tena serikali zenyewe za UK na US na nyinginezo kama Greece na juzi tu Ireland wako hoi bin taabani kwa madeni na wanaintroduce cuts.
ReplyDeleteShayo umekumbwa na nini mpaka kutushauri kitu kama hicho? Nakujua vizuri uwezo wako kwanini unataka tuchukue njia ambayo unajua kabisa imewasababishia wenzetu matatizo kibao ya kiuchumi na kuzidi kuzifanya familia ziwe masikini?
Mimi nafikiri hatuna haja ya kujifananisha na wazungu, kama tunataka kuondoa umasikini basi tutafute njia mbadala lakini sio hiyo ya credits!
Ndugu Shayo,
ReplyDeleteUsitulaghai bwana. Uchumi mzuri ni ule wa kutumia ulicho nacho. Yaani kusihi ndani ya uwezo wako.
Uchumi wa kuishi nje ya uwezo wako sio mzuri hata kidogo. Bora niendeshe kagari ka milioni tano lakini ambazo nimelipa in cash badala ya gari ya milioni 20 ambayo ni mkopo nitakaolipa milioni 30 pamoja na riba.
"Lookin' a yur crystal ball culture man.., luk'n a yur cristal ball...;
ReplyDeletewat do youuu!!! see.... culture man; luk'n a your crystal ball"
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"I see politician...uh.. a making wohoo"
Najua ni wachache sana watakaokuwa wameelewa hii.
Niandike...,nisiandike...???
ReplyDeleteDr Shayo, I have fallen in love with you.. You are so handasome and intelligent too. Whatelse does a woman want in a man...
ReplyDeleteThats nice to hear kwamba Tanzanians have waken up and have seen the evil of CCM. Well, Just one question to Dr. Shayo and Dr. Mhella, with due respect, this title of Dr. do you have PHD ama ni Dr. just by title? Tanzanians mnapenda kujipa vi titles ndoo maana nauliza..mara Profesa, Dr, Pilot etc hakati qualification amna...well, its my oppinion, NO HARD FEELINGS!
ReplyDelete