11 February 2016

Tanzania: Why We Must Try Harder to Stabilise the Shilling


The Bank of Tanzania (BoT) and independent economists are optimistic that the local currency will be relatively stable this year. They predict that though the shilling will continue depreciating, the rate will be slower compared to that of 2015, projecting that it may lose value by about 12 per cent during the entire 2016.

This compares fairly well with a 25 per cent depreciation rate that the shilling underwent in 2015. And, that is good news for Tanzania.

In an import-laden country like Tanzania, one needs not overstate the economic advantages of our shilling versus the US dollar.

This was why the impact of a weakened shilling was felt by almost everyone when the shilling reached a record low of Sh2,400 against the greenback in June 2015, down from Sh1,731 in January 2015, forcing the BoT to intervene and bring it back to Sh1,900 levels during the first week of July.

We don't produce oil yet, which means that when the shilling loses value against the dollar, consumers fail to benefit from the existing lower prices of petroleum products. Ironically, oil imports account for almost 30 per cent of Tanzania's import bill.

A weak shilling means that we will be paying more when importing goods like transport equipment, construction equipment and machinery, fertiliser, industrial raw materials as well as consumer goods.

Even those sending their children to English medium schools and colleges that charge in dollars will pay more when the shilling is weak. Similarly, the price of a hotel room and that of food at a restaurant will go up when our currency overly weakens against the mighty dollar.

With imports outstripping exports by almost 50 per cent, Tanzania has every reason to worry when the shilling loses value. This is why we will always advocate strategies that will increase exports and check the shilling against further depreciation.


Ample supply of clean and safe drinking water is becoming more problematic in many parts of the country due to an increase in destructive human activities. Water is now scarce and a huge amount of what is available is polluted at the source or as it flows to consumers.

The good news, however, is that it is possible to harvest rainwater for industrial and domestic use. This source of water is underutilised in Tanzania. This, while all that is needed is suitable rainwater infrastructure and knowledge of how to harvest and preserve it.

This is what the Singida Regional Commissioner, Dr Parseko Kone, wants to see happen in his area of jurisdiction. Dr Kone has directed that all public buildings in the region must have requisite rainwater infrastructure and is encouraging residents and institutions to have rainwater harvesting mechanisms in their buildings.

We feel that, this is long overdue. Actually, with the number of buildings being erected in many parts of the country, we wouldn't have water supply problems if we learned how to harvest and preserve rainwater. We need to move in that direction instead of depending on water catchments or rivers.

What we are saying is: rainwater harvesting should be promoted nationwide so that we reduce water supply problems to the barest minimum.


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