TANZANIA has recorded an impressive economic growth of 7 per cent last year, which was accompanied by a modest decline of poverty rate.
IMF officials presenting the Regional Economic Outlook report for Sub-Saharan Africa to economic experts and other delegates at the Research on Poverty Alleviation (REPOA) premises yesterday lauded the government’s Big Results Now (BRN) initiative.
IMF Resident Representative, Thomas Baunsgaard, said IMF has been encouraged by the BRN initiative, which has identified problem areas to development that if implemented accordingly will boost the country’s economic growth through job creation.
April’s regional economic outlook notes that although Sub-Saharan Africa anticipated a peak up in economic growth this year, the region still faced risks from both external and internal factors, which include slower growth in emerging markets that will impact on export demand and commodity prices.
Mr Baunsgaard said the economic growth of recent years in the region has helped improve development outcomes and lower poverty, but at a slow rate due to slow growth in sectors that were seen as the possible contributors to high economic growths such as agriculture, employment and services.
Citing an example, he said Mozambique has generally enjoyed as rapid a growth as Vietnam in recent years although the decline in poverty has been more pronounced in Vietnam, adding that the reason for this is Vietnam’s labour-intensive manufacturing-led growth, coupled with strong improvements in agricultural productivity.
He said the government needs to ensure macroeconomic stability to sustain the strong economic growth and set appropriate policies that would ensure benefits from sectors such as natural gas benefits all citizens and hence speedily reduce poverty rates.
Discussing the IMF Regional Economic Outlook report for Sub-Saharan African, a local economist and politician, Prof Ibrahim Lipumba, said the report has pointed out the areas that need more effort from the government to hasten economic growth rates and reduce poverty at much faster rates.
“The IMF regional report has pointed out areas that need policy focus from the government such as agriculture, employment creation and services where more investment in agriculture is needed for the government to improve revenue collection and also cut down on unnecessary expenses,” he explained.
Prof Lipumba said the report also noted that shifting global economies, especially in some of the Asian countries such as China, which is likely to shift downwards, will impact on countries that export raw material such as gold, copper and iron.
“Tanzania is among the countries that export raw materials such as gold, so we are likely to be among those that will be affected,” he explained.
On his part, REPOA’s Director of Research on Growth and Development, Dr Donald Mmari, said the country’s expenses outpaced revenue collected, which will likely cause inflation rates to go high.
He noted that in such a situation, those mostly affected are workers with fixed income, stressing that Africa’s economic growth has not benefitted the majority of the local people compared to Asian countries.
Dr Mmari added that the IMF regional outlook report has provided pointers that should be taken by policy makers on which areas to focus on while preparing the 2013/14 financial budget to hasten economic growth and ensure it trickles down to the people.
A renowned don, Prof Samuel Wangwe, said the report has provided the country with a picture of the real situation on the ground as well as recommendations on revenue collection and expenditure.