ZANZIBAR is celebrating its 50 years of revolution mid this month with her economy generally resilient to external shocks.
The economy is flexible to the external shocks that are absorbed by the increasing real growth which pointed northward in the last five years.
The growth reached 7.0 per cent in 2012, up from 6.7 per cent attained in 2011. "This was mainly associated to growth in the industrial and services sectors, the major growth driving sectors of the economy," Bank of Tanzania said in Zanzibar Economic Development 2012/13 report.
The growth pushed up the standard of living for a Zanzibaris by 4.5 per cent to over one million shillings in a year, up from 960,000/- of 2011. The living standard, assumed is equal divided to the population, was almost tallying with inflation rate of 4.7 per cent of 2012.
According to economists, the increase signifies that the benefits of growth are almost trickling down as per capital to be meaningful has to be above the inflation rate.
An economist, Mr Leonard Mwanga said the GDP per capita very closely reflects the 'average' revenue per person in the isles, where its growth assumes that everyone in the chain benefits.
"The growth will have a trickledown effect on the population, thus improving standard of living but it must be above inflation rate to be felt," Mr Mwanga said.
The per capita could increase further if more tourists toured the twin isles of Zanzibar and also if revenue from clove had not declined during the period under review. The services sector growth rate picked up by merely 0.1 percentage points to 8.7 per cent in 2012.
The value of hotels and restaurants, exhibited a mild performance having increased to 87.5bn/- in 2012 from 87.4bn/- recorded in 2011.
"This performance is associated with low tourism activities as a result of a 3.3 per cent decline in the number of tourist arrivals to 169,223 in 2012," BoT indicates.
The decline of tourist arrivals was mainly associated with economic problems in the EURO zone, weak demand in advanced economies and in the emerging markets.
The agricultural activities grew by 1.3 per cent in 2012, down from a growth rate of 2.7 per cent recorded in 2011, mainly associated with the unfavourable weather conditions which affected food and some export crops production, especially cloves.
The growth was boosted by transport and communication subsector that rose by 18 per cent to 130.6bn/- during 2012 compared to 110.7bn/- recorded in 2011. "The growth in the sub-sector was associated with the expanded activities of the telecommunication companies," BoT says.
During 2012, the industrial sector grew by 9.2 per cent compared with 5.8 per cent recorded in 2011. This growth was associated with a significant increase in mining and quarrying and construction subsectors.
Banking Sector Developments At the end of last September, the number of banks based or with branches in Zanzibar were ten.
While the operations in the isles continued to improve in terms of deposits and lending to the private sector. Total deposits increased by 17.6 per cent to 429.4bn/- at the end of last year's third quarter.
"The increase in deposits was partly attributed to employment of various saving mobilisation strategies by commercial banks," BoT said in the report.
The report attributed the deposits increase to the introduction of mobile banking services, among others. While total lending to various sectors of the economy and individuals grew by 18.4 per cent to 178.4bn/- for the quarter ending September 2013.
But the "lending to deposit ratio rose marginally to 41.5 per cent from 41.3 per cent during the same period," according to the BoT.
This is an increase of merely 0.2 percentage points in almost a year. The dominant sectors are personal loans, tourism and trade activities, accounting for 75.5 per cent of total loans issued.
Budgetary Operations During 2012/13, the isles government managed to reduce a budgetary deficit after it recorded a shortfall of 58.6bn/- after grants, compared to a discrepancy of 82.7bn/- registered in previous year.
Total resources during the period under review amounted to 398bn/-out of which 266.2bn/- or 70 per cent was from domestic sources and the balance was grants. Revenue Performance Revenue collections during 2012/13 missed its target by almost 10 per cent after collecting 266.2bn/- against the annual target of 294.1bn/-.
However, cumulatively, revenue collection registered a growth rate of 21 per cent from 220bn/- collected in 2011/12. Tax revenue amounted to 254.4bn/- or 95.6 per cent of the total revenue collections and was below the target by 7.3 per cent mainly on account of low performance of tourism related activities.
"Non-tax revenue amounted to 11.8bn/-, below the annual target by 40.1 per cent and was below previous fiscal year collection by 51.8 per cent," BoT said in the report Debt Developments At the end of last September, Zanzibar total debt stock increased to 281bn/-from 247bn/- recorded in the corresponding period in previous year.
The ratio of debt stock to GDP increased to 20.8 per cent from 20.6 per cent registered at the end of September, 2012.
Government Expenditure Total Government expenditure during 2012/13 was below the annual estimated by 21 per cent which amounted to 514.3bn/-, the mainly on account of low out turn of donor funds, notably for development projects.
The spices islands gained independence from Great Britain on 10 December 1963, a month later, the Zanzibar Revolution took place and indigenous government was installed.