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World Bank revises Tanzania’s 2021 growth forecast to 5%
The World Bank has revised Tanzania’s economic growth projections for 2021 with the country now expected to have a 5 per cent growth from a previous 2.5 per cent estimation, Raphael Maganga, Economic Analyst joins CNBC Africa for more.
Tue, 12 Jan 2021 09:59:58 GMT
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AI Generated Summary
- Tanzania's economic growth forecast for 2021 revised to 5% by the World Bank, up from the previous estimate of 2.5%.
- Key sectors such as infrastructure and mining driving the growth with projects like the hydro power dam and gold production.
- President Mago Fouli's decision not to lockdown during the pandemic credited for maintaining employment and economic stability.
Tanzania's economic landscape is set for a significant boost as the World Bank has revised its growth projection for the country in 2021 to 5%. This upward adjustment from the previous estimate of 2.5% comes as a testament to the resilience and strategic measures adopted by the Tanzanian government amidst the challenges posed by the global pandemic. Raphael Maganga, an economic analyst from Wanzha in Tanzania, shed light on the factors contributing to this positive outlook during an interview with CNBC Africa. The decision by President John Kondraman not to enforce a strict lockdown and instead keep the economy operational during the COVID-19 crisis played a crucial role in Tanzania's economic performance. While many nations opted for stringent restrictions, Tanzania pursued a different path, allowing businesses to operate as usual. This approach led to the steady functioning of key sectors, including hospitality, industries, and infrastructure projects. One standout initiative is the construction of a massive hydro power dam, set to become one of the largest in Africa, generating 2115 megawatts of electricity. The project, spanning 1,400 kilometers from Resalam to Wanzar, has been a beacon of progress amidst the pandemic, providing employment opportunities and stimulating related industries. Infrastructure investments have been pivotal to Tanzania's growth, with developments such as the standard gauge railway line and numerous airport projects contributing to the country's economic expansion. Despite challenges in the tourism sector due to reduced travel, Tanzania's service industry is rebounding swiftly. The banking sector has reported robust profits, signaling a positive trajectory for the economy. Furthermore, the mining sector, particularly gold production, has been a stabilizing force, cushioning the impact of decreased tourist income on the country's revenue. Tanzania's gold output, coupled with favorable market prices, has bolstered its economic resilience during the pandemic. The Tanzanian approach to infrastructure projects, such as the standard gauge railway line, sets it apart from neighboring nations like Kenya, which have encountered issues with overpricing and debt burdens. Tanzania's strategy of funding projects primarily through government resources has mitigated the risk of excessive indebtedness. For instance, the initial phases of the railway project from Darisalam to Adodoma were financed internally, demonstrating prudence in financial management. The partnership with China on key infrastructure developments, like the standard gauge railway, emphasizes cost-effectiveness and operational efficiency. This collaboration is expected to enhance connectivity within the region while maintaining fiscal stability. President Mago Fouli's decision not to implement a stringent lockdown has been instrumental in preserving jobs and sustaining economic activity in Tanzania. Schools remained open throughout the crisis, enabling continuity in education, while industries operated steadily, ensuring minimal disruption. The Tanzanian government's focused and pragmatic response to the challenges posed by the pandemic has set a commendable example for African nations, highlighting the importance of tailored solutions to regional circumstances. As Tanzania charts a course of growth and development in 2021, the revised growth forecast of 5% reflects a nation poised for recovery and progress in a challenging global environment.
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