Countries in sub-Saharan (SSA), including Tanzania, will suffer a shortfall of about $2.79billion (about Sh3.63 trillion) per country in foreign financing this year due to the global crisis, a British development think-tank has said.

According to the Overseas Development Institute (ODI), the shortfall in financial resources will stem from a decline in trade balance, international bank loans, remittances, portfolio flows and foreign direct investment (FDI).

In a report released early this month, the ODI puts the total financing deficit for the 48 SSA countries in 2009 at $134 billion (about Sh174.2 trillion).

However, the ODI has said Tanzania is among African countries least affected by the crisis, and has a good prospect of recovering from the effects of the recession starting next year.

In an email to The Citizen earlier this month, the author of the document, Dr Dirk Willem te Velde, attributed Tanzania's resilience to better terms of trade obtained mainly from high gold prices during the crisis.

He also said Tanzania managed to put on a brave face during the slump because of good economic policies manifesting themselves in two areas.

"First, Tanzania has had a period of good macro-economic policies building up reserves to deal with the crisis and secondly it acted quickly and decisively by putting in place a task force to deal with the crisis which led to a fiscal stimulus," the ODI research fellow noted.

"There have however been some challenges in agriculture exports and significant declines in tourism services exports which are very important for Tanzania and postponements of FDI plans in mining exploration."

The report, supported by the African Economic Research Consortium, also says that 10 African countries are experiencing a decline in real gross domestic product (GDP) by as much as five per cent compared to forecasts made before the crisis.

They are Botswana, Angola, Seychelles, Equatorial Guinea, Madagascar, Gabon, Democratic Republic of Congo, Lesotho, South Africa and Nigeria, Kenya, Tanzania and Uganda.

"At the beginning of the crisis last year, many predicted that sub-Saharan Africa would not be affected as much as other parts of the world. Our research has shown this not to have been the case," Dr Velde notes in the report.

It is now clear that there have been both real effects through dramatic changes in trade values and financial effects through fewer portfolio flows, less than expected foreign direct investment and withdrawals of international bank lending, he adds.

"While some sub-Saharan African countries have been resilient to the crisis, many are suffering growth deficits far worse than anyone predicted and people are being pushed into poverty as a result," Dr Velde says in the document titled: Economic Policies in G-20 and African Countries during the Global Financial Crisis: Who's the Apprentice, Who's the Master?

"African countries may not have been able to provide bailouts and fiscal stimuli at the scale of developed countries, but many have arisen from the crisis as better reformers than G-20 countries.

"There are also some innovative institutional responses. Mauritius and Tanzania, building on a period of successful macro-economic management, have set up crisis task forces to deal with the challenges emerging from the crisis which was swiftly followed by the announcement of new policies and fiscal stimuli."

Apart from international financing problems, Tanzania is also reeling from shortfalls in domestic revenues due to failure to meet collection targets. The Bank of Tanzania (BoT) says the global recession is to blame for the 10 per cent shortfall in revenue in 2008/09.

According to monthly revenue reports, the Tanzania Revenue Authority has in the first five months of the current financial year missed its tax collection target by nearly Sh200 billion. During July, August, September and October, the government's budgetary operations recorded a Sh891.7 billion deficit after the taxman missed the tax income target by Sh163 billion.

This forced the government to borrow Sh775.8 billion from foreign sources and Sh13.4 billion locally to fill the financing gap, which shrank to Sh789.2 billion after making the required adjustments. In its November monthly economic review, BoT also attributes the budget deficit to a slowdown in grant disbursements.

FDI and tourism receipts are among areas that have suffered the most from the global slump with registration of investment projects plummeting to unprecedented levels in the current financial year.

By the end of last month, the value of projects registered by Tanzania Investment Centre (TIC) was about $2.27 billion (nearly Sh3 trillion) compared to about $6.68 billion (about Sh8.68 trillion) during the whole of last year and $5.71 billion (about Sh7.42 trillion) in 2007.

Registration of projects is expected to fall to 546 at the end of this year and further to 500 in 2010 from the 871 recorded last year. Last month alone, the investment promotion agency registered only 29 projects worth $102 million (Sh132.6 billion) compared to the 92 that were recorded during the same month last year, which injected $579 million (Sh752.7 billion) into the economy.

"2009 has been a very difficult year for us especially during the first five months of the second half (July to November 2009) I hope, we may be able to start recovering by mid next year if pertinent issues are dealt with," TIC executive director Emmanuel Ole Naiko told The Citizen in a recent interview.

Before the recession that has devastated global tourism, Tanzania had expected to host 950,000 visitors this year, who would have injected some $1 trillion into the national economy. Some quarters of the hospitality industry say the number of arrivals may fall as much as 20 per cent but preliminary official figures show that the decline may not be as big as initially forecast.

"The challenges on FDI and tourism will be resolved especially when the world economy is doing better. There are some signs of recovery, but there are also risks such as running out of stimuli packages, increases in oil prices and debt overhang in public and private sectors," Dr Velde told The Citizen.