DAR ES SALAAM: ECONOMISTS and development experts are optimistic about the growth of Tanzania's economy amid escalating global geopolitical tensions.
Speaking to the 'Daily News' in separate interviews yesterday, the pundits emphasised the importance of self-reliance and high production to withstand external shocks.
They stated that strengthening self-reliance in key strategic areas such as energy and agricultural production, including wheat, will reduce the impact of geopolitical tensions, such as the Russia-Ukraine war, on the economy.
According to them, this can be achieved by bolstering the supply chain through the effective utilisation of domestic resources for both short-term and long-term benefits and resilience.
They made the remarks in response to the recently released World Economic Situation and Prospects 2024 report.
The report forecasts that economic growth in Africa will remain modest, increasing from an estimated 3.3 per cent in 2023 to 3.5 per cent in 2024, due to the region being affected by the global economic slowdown and tighter monetary and fiscal conditions.
According to the report, the least developed countries (LDCs), are projected to grow by 5.0 per cent in 2024, up from 4.4 per cent in 2023, but still below the 7.0 per cent growth target set in the Sustainable Development Goals (SDGs).
Economist Dr Isaac Safari, from the Saint Augustine University of Tanzania (SAUT), expressed confidence in Tanzania's economic growth trend.
He highlighted key indicators such as the impressive growth of the National Income (NI) and the increasing domestic and foreign investments.
However, he emphasised the need for self-reliance to withstand global geopolitical shocks.
"Our economic growth is still good in every dimension, with the impressive growth of National Income (NI), notable attraction of investments, and provision of education and social services," stated Dr Safari.
"However, the area of concern is how we can strengthen self-reliance to reduce the impact of geopolitical shocks. Today, most shops have imported goods, making it easy for global supply chain disruptions to affect our economy. We can achieve resilience through self-reliance," he added.
He suggested that the country can achieve self-reliance by effectively utilising abundant resources, such as land, through extensive large-scale farming in staple crops like wheat, while also focusing on value addition.
He also recommended utilising available rainfall for food production by matching seed planting with the volume of rainfall in each region across the country.
To address fuel challenges resulting from geopolitical tensions, including the Middle East crisis, Dr Safari proposed that Tanzania transition to alternative energy sources, such as gas, to power vehicles and industries.
He commended the government for effectively supervising the Julius Nyerere Hydro Power Plant (JNHPP), which is currently at over 94 per cent completion.
Once operational, the plant will generate a total of 2,115 Megawatts, providing additional electricity to the national grid and aiding the transition to electric vehicles.
Dr Safari advised the government to prioritise one major area for attracting investment, which would have multiple effects on other sectors. He also emphasised the importance of research in supporting intensive investment in all sectors.
However, he noted that concerted efforts from the government and citizens are critical in the short term for all people to participate in the transformation to self-reliance, which should be characterised by patriotism, innovation and the utilisation of high technologies in production.
Economist and Investment Banker Dr Hildebrand Shayo emphasised the need for Tanzania to prosper and remain resilient amidst escalating geopolitical tensions.
He suggested modifying the country's supply chains, business models, strategies, and sustainability plans to manage ongoing projects and agendas.
Dr Shayo said; "Increased geopolitical tensions in the Middle East, sparked by the conflict between Israel and Hamas, will not only strain the already fragile recovery from the tension between Russia and Ukraine but also increase the cost of logistical transit, which could have catastrophic effects on the world economy."
He urged maximising the utilisation of water resources through the blue economy, highlighting the increasing value of oceans and lakes for the economy and national defence.
Dr Shayo pointed out that marine channels handle 90 per cent of the world's goods commerce, but many of the busiest marine transit routes are vulnerable to geopolitical disruption.
He called for heightened operation of the Dar es Salaam Port to take advantage of this opportunity, as it serves over five land-linked nations, including the Democratic Republic of Congo (DRC).
Dr Shayo commended the government for implementing necessary macro-fiscal reforms to address high inflation and low fiscal revenues, which have hindered economic growth.
He stated that these reforms will help Tanzania break free from the cycle of macroeconomic instability, low investment, slow economic development, growing poverty, and fragility, as long as they are maintained.
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Business expert Mr Merdad Wilfred, based in Mwanza, suggested that Tanzania can use its iconic political stability to boost agro-production, especially in the food and tourism sectors, which thrive in peaceful environments.
He emphasised the country's potential to serve the East African Community (EAC) and Southern Development Community (SADC) market and called for intensified investment in high-demand areas like food to achieve a favourable Balance of Trade (BOT).
Mr Wilfred proposed reducing reliance on imported farming inputs to boost agricultural production and productivity across the country.
The World Economic Situation and Prospects 2024 report is produced by the United Nations Department of Economic and Social Affairs (UN DESA), in partnership with the United Nations Conference on Trade and Development (UNCTAD) and the five United Nations regional commissions, including the Economic Commission for Africa (ECA), the Economic Commission for Europe (UNECE), and the Economic and Social Commission for Western Asia (ESCWA).
In 2023, Tanzania's Gross Domestic Product (GDP) grew by 5.2 per cent, and it is projected to reach 5.8 per cent by 2024, according to the Minister for Finance, Dr Mwigulu Nchemba.
He also stated that the inflation rate for this year will remain in the single digits, averaging between three to seven per cent.
