TANZANIA'S economy has experienced a growth rate of 6.9 per cent in the second quarter of 2012, statistics from the National Bureau of Statistics (NBS) and The International Monetary Fund (IMF) have shown.
NBS Director of Economic Statistics, Mr Morris Oyuke told journalists that the Gross Domestic Product (GDP) for this quarter was 4,730,709m/- in 2012 as compared to 4,426,905m/- for the second quarter of 2011."While economic growth is increasing by 6.9 per cent thanks to increased production of services and goods within the country, the per capita income is now projected at 870,000/- per annum," he said.
Mr Oyuke said that in the first two quarters, the agriculture sector had done immensely well where surplus has been produced in many regions. GDP for crops, livestock and forestry was recorded to have grown by 5.2 per cent in the second quarter.He said that during the period, the quantity of maize harvested went up by 7.0 per cent, from 3,246 thousand tonnes in the second quarter of 2011 compared to 3,474 thousand tonnes in the similar quarter for 2012.
Fishing activities had also recorded a growth rate of 4.0 per cent in the second quarter of 2012 compared to a growth rate of 0.3 per cent in the corresponding quarter of 2011."One challenge that slows economic growth is poor packaging of products especially agricultural produce. Another challenge is the lack of storage facilities but it's encouraging to note that the Ministry of Agriculture, Food Security and Cooperatives is working on that," he said.
The mining sector has also recorded growth of 1.2 per cent in the second quarter compared to 5.6 per cent during the same quarter in 2011 where 9,819 kilogrammes of gold was produced compared to 10,405kg for the second quarter of 2011. During the same period, 36,434 carats of diamond were produced compared to 7,453 carats in the same quarter for the year 2011 where slow growth was attributed to the temporary closure of Geita Gold Mine due to major maintenance of the plant.
The energy sector also recorded improvement as the growth rate of electricity was 5.6 per cent in the second quarter of 2012 as compared to 10.3 per cent in the similar quarter of 2011."The growth rate is attributed to the increase in electricity generation. Total electricity generated during the quarter increased to 1,385 million Kwh from 1,285 million Kwh in the corresponding quarter of 2011," the director added.
The manufacturing sector recorded a growth rate of 8.2 per cent in the second quarter of 2012 compared to 8.5 per cent attributed to reliable supply of power while the construction sector grew by 4.3 per cent compared to 4.9 per cent and this was attributed to increased activities. The health sector also saw an increased growth of 4.5 per cent in the second quarter of 2012 compared to 4.0 per cent in a similar quarter with the attribution going to increase in the provision of other social, community and personal services.
The IMF said Tanzania's economy has continued to perform strongly. Economic activity has remained robust, with gross domestic product (GDP) growth projected at 6.5-7 per cent in 2012. "However, headline inflation at about 15 per cent and core inflation (which excludes food and energy prices) at 9 per cent in August 2012 (year-on-year) still remain above desirable levels," the IMF said in a statement issued yesterday after conclusion of its mission to Dar es Salaam, led by Mr Paolo Mauro.
The mission noted that sufficient foreign reserves had managed to cushion Tanzania against external purchasing shocks. According to the IMF, the imports bill was made more manageable following adequate foreign reserve fund. "External vulnerabilities are made more manageable by the adequate level of foreign reserves," the statement noted further.
The Bank of Tanzania (BoT) monthly economic review for August indicates that at the end of July, gross official reserves amounted to 3.86 billion US dollars. Also in the same period, the gross foreign assets of BoT stood at 908 million US dollars. The foreign reserves are sufficient to cover about 4.1 months of projected imports of goods and services, which economists say is not enough on the back of weak signs of the global outlook.
However, experts said that the country has managed to accumulate more foreign reserves in the past. In early 2000s, reserves hit a nine-month equivalent to imports."I beg to differ with IMF," Dr Honest Ngowi of Mzumbe University's Dar es Salaam Business School told the 'Daily News', "the amount is sufficient. But looking at global signs our exports might decline."
The senior economics lecturer said global future outlook was not certain as the global giant importers, the US and Euro Zone economies are still shaky and could hinder smooth inflows of export revenues. "Hope was pegged on emerging markets (China and India) but the global economy outlook painted a dim picture showing imports from these economies to be on the decline," Dr Ngowi said.
"It's like a case where one runs out of fuel while on the road. The only option at that stage is to refuel. The level should be somewhere between six and 12 months of imports," said another economist who preferred anonymity. He said in recent years the country graduated from exporting only traditional crops to manufactured goods, but efforts have been frustrated by erratic power supply.