31 May 2012

Tanzania: Economist Faults Bans on Food Exports

An economist on Wednesday faulted the government policy of banning food exports allegedly to avert food insecurity, saying the move has adverse impact on the nation's economic growth.

Standard Bank East Africa Micro Economist Phumelele Mbiyo said in Dar es Salaam that restrictions on food imports not only denies countries foreign currencies but also lead to inflationary pressure, on the long run.

"Uganda that allowed food exports for instance had her food inflation fluctuating between 16 and 50 per cent but it has come down to 16 per cent. Tanzania banned exports to maintain food inflation below 20 per cent, but today Tanzanian inflation remains higher than Uganda's," he said.

Mr Mbiyo told the Stanbic Bank Economic Forum that restrictions on food exports discourage production, leading to food shortage in the long run. But, export markets offer lucrative prices that motivate farmers to produce more.

He decried minimum trading among African countries, saying the continent was losing huge business opportunities as they unsuccessfully struggle to trade with America and Europe. Jeremy Stevens and Goolam Ballim, in their paper 'an uncertain world -- implications for East Africa,' said China today accounts for 18 per cent of Africa's trade, up from 10 per cent in 2008.

"Last year overall trade between China and Africa reached 160 billion US dollars, a 28 per cent rise from the previous year. In contrast, Africa's trade with developed economies remains underwater when compared to 2007," they argued. The economists condemned corruption, which they said impedes economic growth in Africa, pushing for the war against the evil by the Africans themselves.

Mr Mbiyo said, "I don't think corruption can be dealt through conditionalities from the World Bank or IMF (International Monetary Fund)... it's the citizens themselves who can decide to end corruption."

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