Tanzania economic difficulties can be attributed to many factors which include rising unemployment, poor productivity, inaccessibility to credit facilities, and the current state of country’s infrastructure. On both short and long terms, these factors must be closely scrutinized for any meaningful
economic change in the next five to ten years. The country’s economic outlook might look much gloomier in days ahead. Otherwise natural gas discovery in Tanzania will be something to cheer about, if right investment and economic decisions are made
Wages in almost all sectors of the economy do not reflect the actual cost of living. Consumers are having little to spend that would foster economic growth. Currently, a Tanzanian consumer is spending the little he/she has just to get by. Majority are living hand to mouth, providing for their families basics of life such as food, and shelter. Very few can afford spending on capital goods. Neither do they have the luxury to save or sustainably invest which is not good for economic vitality.
Consumer spending power is the foundation of a nation’s economic strength. When that power (purchasing power) diminishes, the economy crumbles. Even though Tanzania Bureau of Statistics places the inflation rate at 10.4percent for the month of February 2013, the actual number could be much higher considering various economic events in the past few months. Depreciation of the domestic currency and Commodity prices could perhaps highlight where the economy stand in the short term
The rate of unemployment in Tanzania is particularly troubling. When you have four out of ten young men jobless, by any standards, something must be wrong. According to the International Labor Organization, Urban unemployment in Tanzania has passed 20 percent threshold while youth unemployment stands above 40 percent. In other words, unemployment may prove to be a thorny issue to the government, unless extra ordinary measures are taken to curb the most severe aftereffects
Whenever credit facilities become inaccessible to ordinary citizens, country’s economy hangs by the thread. In that sense, small scale to mid level entrepreneurs that creates most jobs crucial in keeping the economic engine running, are facing enormous difficulties in borrowing from domestic lending institutions. Or if they do, exuberant charges and interest rates are levied on the borrowed capital, which in turn forces the borrower to basically, work for the lender; a discriminative practice that retards economic growth. Under conventional business practices, startup-businesses have no room to grow when they can’t borrow
Bank of Tanzania recorded a $250.6million deficit in the month of December 2012, that means the country is importing and consuming more than it is producing and exporting, and the immediate effect of that, has been the shilling losing ground against major foreign currencies especially the US Dollar.
In a span of two months, the Tanzanian shilling has lost 4% of its value against the US dollar. From Tsh. 1565 to Tsh.1616 per US Dollar between January and March alone; a weaker currency translates to higher cost of foreign goods, high cost of living and the diminished value of individuals’ wealth. This means the country is not doing too well economically.
Both short and long term goals must be geared towards boosting the country’s productivity, as well as improving the country’s infrastructure to attract Foreign Direct Capital. These are essential ingredients in boosting the economy and correcting country’s balance of trade
Considering the country’s natural wealth, turning the country’s economy around could be a short term project if the government is willing to do so. Natural gas discovery in Tanzania’s southern corridor is a key to the country’s long term economic ascendance, given robust economic blueprint. Nonetheless, there must be a political will to push the country forward by tackling the culture of ten-percent in dubious contracts. Otherwise, Tanzania economic outlook may be off the cliff in both short and long-terms
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| John Mashaka |
Wages in almost all sectors of the economy do not reflect the actual cost of living. Consumers are having little to spend that would foster economic growth. Currently, a Tanzanian consumer is spending the little he/she has just to get by. Majority are living hand to mouth, providing for their families basics of life such as food, and shelter. Very few can afford spending on capital goods. Neither do they have the luxury to save or sustainably invest which is not good for economic vitality.
Consumer spending power is the foundation of a nation’s economic strength. When that power (purchasing power) diminishes, the economy crumbles. Even though Tanzania Bureau of Statistics places the inflation rate at 10.4percent for the month of February 2013, the actual number could be much higher considering various economic events in the past few months. Depreciation of the domestic currency and Commodity prices could perhaps highlight where the economy stand in the short term
The rate of unemployment in Tanzania is particularly troubling. When you have four out of ten young men jobless, by any standards, something must be wrong. According to the International Labor Organization, Urban unemployment in Tanzania has passed 20 percent threshold while youth unemployment stands above 40 percent. In other words, unemployment may prove to be a thorny issue to the government, unless extra ordinary measures are taken to curb the most severe aftereffects
Whenever credit facilities become inaccessible to ordinary citizens, country’s economy hangs by the thread. In that sense, small scale to mid level entrepreneurs that creates most jobs crucial in keeping the economic engine running, are facing enormous difficulties in borrowing from domestic lending institutions. Or if they do, exuberant charges and interest rates are levied on the borrowed capital, which in turn forces the borrower to basically, work for the lender; a discriminative practice that retards economic growth. Under conventional business practices, startup-businesses have no room to grow when they can’t borrow
Bank of Tanzania recorded a $250.6million deficit in the month of December 2012, that means the country is importing and consuming more than it is producing and exporting, and the immediate effect of that, has been the shilling losing ground against major foreign currencies especially the US Dollar.
In a span of two months, the Tanzanian shilling has lost 4% of its value against the US dollar. From Tsh. 1565 to Tsh.1616 per US Dollar between January and March alone; a weaker currency translates to higher cost of foreign goods, high cost of living and the diminished value of individuals’ wealth. This means the country is not doing too well economically.
Both short and long term goals must be geared towards boosting the country’s productivity, as well as improving the country’s infrastructure to attract Foreign Direct Capital. These are essential ingredients in boosting the economy and correcting country’s balance of trade
Considering the country’s natural wealth, turning the country’s economy around could be a short term project if the government is willing to do so. Natural gas discovery in Tanzania’s southern corridor is a key to the country’s long term economic ascendance, given robust economic blueprint. Nonetheless, there must be a political will to push the country forward by tackling the culture of ten-percent in dubious contracts. Otherwise, Tanzania economic outlook may be off the cliff in both short and long-terms
Mungu Ibariki Tanzania
John Mashakamashaka.john@yahoo.com
Mashaka, you didn't write this.The standard has dipped a little.if your intentions were to remind of economic destitution, well, you rambled along the passage and had had you been giving speech on this, I would see you fambling all over the topic.Brother, go back and prepare to come up with quality composition,the ones you used to deliver
ReplyDeleteMdau (John) DSM
Theories, theories and too many theories.Tanzania has a problem of INCOPETANCE and CORRUPTION. Neo-slavery is still rampant in Tanzania.The so called foreign would be investors (siphoning the country)are killing the country.
ReplyDeleteKili
Bw. Mashaka, akili ulizo nazo ungewagawia mawaziri kama 10 hivi, akiwemo Yule wa Waziri wa Elimu wa Zimbabwe na Pemba, hii nchi ya magumashi ingeendelea sana. Yaani tumebaki ya magumashi tu na dili kila kukicha. Mara chama gani kinatengeneza ufisadi na TPA. Really? . Tanzania ni nchi ya vituko kweli, mara ghorofa kuanguka, mara mwandishi katekwa, mara , mkuu wa madktari kanyofolewa kucha, mara polisi wameua, mara mtu kapachikia kesi yaani vurugu tupu. Ni bora vijana kama mashaka wakashika atamu ya uongozi. Tumechoka na ufisadi, vurumai na uongozi usioleweka. Nchi sasa ina kila dalili ya kutokutawalika. Nimechoka Tanzania kusema kweli
ReplyDeleteMashaka mara nyingi anaona mbali katika maandiko yake ila serikali yetu kama kawaida inaona hizi kama porojo. Kuna siku hii nchi haitakalika wataalamu wetu kama mashaka wakiendelea kupuuzwa
ReplyDeleteHii ni tanzania bwana mashaka. siyo Marekani. Hizi economic analysys are not applicable kwa maana kwamba serikali haijali
ReplyDeleteJohn Mashaka
ReplyDeleteI must say that am very fond with your analysis and how you put 1 to 1 together for many of us to be able to understand our country's economic situation and for that i say thank you. However, my brother Mashaka J. I have been reading these kind of articles from my schooling years till now and sad is from our geniuses aka academicians and am afraid you are amongst them and none of you guys when after finishing analysing our country's sailing you are ending up with only recomendations which i must say they are flying 30K feet and not 5 feet to their implementations. By now the Tanzania's situation is well known and its problems are very far clear and yes the biggest part is the political will in accepting our problems and staring dealing with them, plus other problems which you have clearly mentioned them. i will not dwell much on this one.
My brother and mentor, let me now tell you how your next articles should look like. It is high time now for our think tanks mostly academicians to start doing analysis and come out with programmes based recommendations and not planned kinda of. We all know the the plans that are there in our country are very good and stipulated very clearly but we don't see things move, this is where we should start asking ourselves what needs to be done for these plans to deliver their expectation. And i come with suggestion of having programme analysis and programme based recommendation rather than the plan based analysis or planned based recommendations. I will give you the example of the programme based recommendation. I know you are an economist and from your writings you seem to be very much good in fiscal and monetary economics. Tanzania is having negative BoP and that also contribute to the falling and unstabilizing of our shilling. in your analysis i would expect that ypu would have said something like introducing quotaz to our imports to the acceptable levels not to harm or distabilize economy and also you recommend on the interest rates, or money market which you think can be regulated together with analysis of the export driving sectors to reduce the BoP or imports. After doing this analysis you can come out with the detailed programme that will highlights key areas to be changed or strengthen in order to bring the expected changes. to end my contribution to your article i agreed with the things you have highlighted in your artilce and yes Tanzania we need to take a good look at ourselves and realize we are at the verge of graduating to higher economies and that puts us to be vulnerable and if we will not be careful we may kiss away goodbye our aspirations and eventually ending up more poor than we already are.
with this few key notes i commend you for the well work done and GOD bless you
EN
In Tanzania we need more better Policies and applications than theories and Politics.
ReplyDeleteTuangalie mifano miwili hapa chini:
1.Meli inazama MV Bukoba, wanaitwa Wanasiasa na Watawala kama Mkuu wa Mkoa kutoa maamuzi badala ya Military Engineers, Construction Engineers na Civil or Operation Engineers kutoka Vyuo Vikuu!
2.Mtaala wa Elimu mbovu, Hoja inakataliwa Bungeni, wiki mbili baadaye Matokeo mabaya Mitihani Kidato cha nne inaundwa Tume kuchunguza!
Hii ndio Tanzania Siasa zaidi kuliko Taaluma na Sayansi!
Tanzania ndio kama tuijuavyo!
gas and oil will not help us, all the money will end up with mafisadi. Come 2015 and wait how they will fight it out for the presidency.
ReplyDeleteMnahangaika tu na akina Mashaka.Hawa ni wakufunzi tu wasioweza kuongoza.Wanajua kinachoendelea kwenye makaratasi,lakini wanayoelimu ndogo sana katika field.Hawajui kinachoendelea kwa hali halisi.Debe tupu haliachi kuvuma.
ReplyDeleteMwanasiasa wa kweli hapambani akiwa nje ya nchi.Nenda kasaidie kwenye mapambano front line.Unasoma nje halafu unabaki hukohuko nje na baadaye unakosoa tu,kaone hali halisi na uwasaidie kwa hayo mawazo mapya.
Once Mwalimu Nyerere addressing the South African Parliament said: "What is this Tanzania? This is something we created during my/our life time ...I hve been to Tanzania, so what is this Tanzania?
ReplyDeleteSource: www.youtube.com/watch?v=wBnOdfTU5Gw
And I still wonder as Nyerere wondered: What is this Tanzania?
Dr.John Mashaka,
ReplyDeleteKiongozi nina wasiwasi kama kweli mawazo haya mazuri kutoka kwako yanafika kwa wahusika huko Matawi ya juu, labda tumwombe Balozi wetu Mhe.Michuzi ayafikishe kwa maandishi huko ili yafanyiwe kazi, ama upewe Fursa ya kuonana ana kwa ana na Wakubwa ili utoe mchango wako muhimu nchini kwa faida yetu wote.
Balaa kubwa tulilokuwa nalo nchini mwetu ni kuwa tupo kwa idadi 45Milioni lakini masuala nyeti hayashirikishwi watu kwa kutoa mawazo. inakuwa kama vile wanao amua mambo ni watu 45 tu miongoni mwetu!