03 October 2017

The Economy Of Tanzania

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The Economy Of Tanzania

Tanzania is among the country of East African, it is the biggest of the East Africa countries (i.e. Kenya, Uganda and Tanzania). Has a spectacular landscape of mainly three physiographic regions namely the Islands and the coastal plains to the east; the inland saucer-shaped plateau; and the highlands.
Tanzania has bordered in north by Kenya and Uganda ,West by Rwanda, Burundi and Democratic, South by Zambia, Malawi and Mozambique Republic of Congo and east is bordered by Indian Ocean.

Tanzania has a tropical type of climate. In the highlands, temperatures range between 100c and 200c.during cold and hot seasons respectively. The rest of the country has temperatures never falling lower than 200c. The hottest period spreads between November and February (250c - 310c) while the coldest period occurs between May and August (150c - 200c). Two rainfall regimes exist over Tanzania. One is unimodal (December - April) and the other is bimodal (October -December and March - May). The former is experienced in southern, south-west, central and western parts of the country, and the later is found to the north and northern coast. In the bimodal regime the March - May rains are referred to as the long rains, whereas the October - December rains are generally known as short rains.

For a long time the Tanzania economy has experienced several shocks with severe destabilizing effects. They include the oil shocks. collapse of commodity prices, drought, breakup of the East African Community and the Uganda war. These shocks coupled with a poor policy regime culminated in severe economic crisis in the early I 930s. Several adjustment measures were implemented since 1981 but by mid 1990 fiscal instability was still severe.
The privatisation programme is now concentrating on the large and monopolistic enterprises whose privatisation has to be preceded by formulation of a legal and regulatory framework.

As of October 2003, a new, 3-year Poverty Reduction and Growth Facility (PRGF) was in negotiation. In June 2003, the Tanzanian Government successfully completed a previous three-year PRGF arrangement with the International Monetary Fund, the successor program to the ESAF. From 1996-1999, Tanzania had an ESAF agreement. Tanzania also embarked on a major restructuring of state-owned enterprises. The program has so far divested 335 out of some 425 parastatal entities. Overall, real economic growth has averaged about 4% a year, much better than the previous 20 years, but not enough to improve the lives of average Tanzanians. Also, the economy remains overwhelmingly donor-dependent. Moreover, Tanzania has an external debt of $7.9 billion. The servicing of this debt absorbs about 40% of total government expenditures. Tanzania has qualified for debt relief under the enhanced Heavily Indebted Poor Countries (HIPC) initiative. Debts worth over $6 billion were canceled following implementation of the Paris Club VII Agreement.

Tanzania Gross Domestic Product (GDP) at constant 1992 prices recorded an average of real growth rate of 4.0 percent per annum during 1996-1999. Given the annual population growth rate of 2.8 percent, per capita real growth rate was around 1.2 percent. The composition of GDP is such that, agricultural sector accounts for around 50.0 percent, followed by trade sector which accounts for around 16.0 percent. Financial and business services rank third at the tune of 10 percent, followed by the industrial sector by around 8.0 percent. The mining sector has been contributing around 2.0 percent, but there is a bright future for the sector as foreign investments continue to flowing in. It is apparent that in the near future the sector will record a significant proportion of GDP.

Major exports from Tanzania are agricultural commodities. During 1996-99 agricultural exports accounted for around 56 percent of total merchandise exports. Major agricultural exports are coffee, cotton, tea, tobacco, cashew nuts, and sisal. Industrial exports have been on the rise following adoption of trade liberalization, and privatization of public enterprises. Tourism is a booming sector recording earnings of over US $ 500 million annually. Exports of minerals account earnings of around US $ 50 million, but given heavy foreign investments flowing it this sector, it is expected that the value of such exports will increase significantly in the near future. The value of total merchandise exports has been declining since 1996 as a result of declining agricultural exports caused by unfavorable weather conditions.
Accounting for only about 10% of GDP, Tanzania's industrial sector is one of the smallest in Africa. It has been hit hard recently by persistent power shortages caused by low rainfall in the hydroelectric dam catchment area, a condition compounded by years of neglect and bad management at the state-controlled electric company. Management of the electric company was contracted to the private sector in 2003. The main industrial activities include producing raw materials, import substitutes, and processed agricultural products.
Also Zanzibar's economy is based primarily on the production of cloves (90% grown on the island of Pemba), the principal foreign exchange earner. Exports have experienced from the downturn in the clove market. Tourism is an increasingly promising sector, and a number of new hotels and resorts have been built in recent years.
The Government of Zanzibar has been more aggressive than its mainland counterpart in instituting economic reforms and has legalized foreign exchange bureaus on the islands. This has loosened up the economy and dramatically increased the availability of consumer commodities. Furthermore, with external funding, the government plans to make the port of Zanzibar a free port.

For more information on visiting Tanzania Wild Things Tanzania Safari

For more information on Climbing Kilimanjaro visiting Tanzania's mountains contact Climb Kilimanjaro with Mountain Kingdom
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