Economic overview of Tanzania


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Economic overview of Tanzania

  2. 2. FAST FACTS ABOUT TANZANIA  The name Tanzania is a portmanteau of Tanganyika, the mainland, and Zanzibar, the nearby archipelago in the Indian Ocean.  It has a surface area of 947,300sq. kms. & a population of approximately40.4 million.  Agriculture remains the mainstray of Tanzania’s economy,accounting for one-quarter of GDP & approx. 80 percent of employment.
  3. 3. TANZANIA IS PERFORMING WELL IN…  Economic performance in Tanzania has been solid in recent years with high levels of growth,increasing level of exports &financial deepening in terms of growth.  Tanzania’s tourism industry has been a source of dynamism over the past decade,growing from 7.5 percent of GDP in 2001 to 16 percent in 2010.  FDI flows to Tanzania are greater than to other East African community countries.  International debt reduction initiatives have allowed Tanzania to dramatically reduce its external debt,from 77 percent of GNP.
  4. 4. YET MAJOR DEVELOPMENT CHALLENGES ARE………..  Tanzania has the highest rate of extreme poverty in the world.  Low labor and land productivity constrains the ability of agriculture.  Access to finance remains low.  Restrictions to doing business in the country are still pervasive.  Access to electricity in Tanzania is extremely low.
  5. 5. Birth rate 31.81 births/1,000 population (2011 est.) Death rate -0.29 migrant(s)/1,000 population (2011 est.) Urbanization urban population: 26% of total population (2010) Sex ratio total population: 0.98 male(s)/female (2011 est.) infant mortality rate total: 65.74 deaths/1,000 live births
  6. 6. ENVIRONMENT AND NATURAL RESOURCES • The natural environment is diverse. It includes -agriculture -fishery -forestry sectors -minerals
  7. 7. CONTD………….. • A range of challenges require attention. -Deforestation is taking at a high rate. -Lack of clean water . -Overgrazing has led to soil degradation and desertification. • Biodiversity is threatened by overfishing and illegal hunting. • Government measures are being taken to sustain the environment and natural resources.
  8. 8. ECONOMY OF TANZANIA  Intensification of reforms since 1990s has led to increased inflows both FDI and foreign aid.  Growing faster than sub saharian economies and fastest growing non oil economies.  A 16.2 billion economy  GDP has recorded high growth in recent years.  Agriculture remains the mainstay of the economy.  with 29% share to GDP, Industry 24% and services 47%.  Droughts occur in Tanzania with regularity reducing agricultural output  Although the agricultural sector is growing, labour and crop productivity is still low.  This is due to global food crisis. 0 1 2 3 4 5 6 7 8 Sub - Saharan Africa Tanzania
  9. 9.  Manufacturing sector is small but growing.  Manufacturing represents 8% of GDP, low compared to sub – Saharan African average of 14.  It is growing steadily since 2000.  Lack of technology expertise and labour force are constraints, making it to contribute only 3% of GDP  The size of informal sector is substantial.  Informal Economic activity is equivalent to 60% of GDP as of 2002-03.  This is due to dearth of formal sector and opportunity it avails to incubate new business ideas into viable enterprises.  Improved domestic revenue collection has been supporting fiscal policy.  Domestic Revenue saw a upward trend since 2000s.  Rose from 16% in 2007-08 to 18% in 2008-09.  But deficit before grants increased from 5.5% of GDP in 2000 to 12.5% of GDP in 2008.  Inflation has intensified.  Inflation pressures have intensified in 2008 - CPI inflation was 13.5% y-o-y as on Dec 2008.
  10. 10. ECONOMIC INDICATORS  GDP - $23.71 Billion at current prices(2011)  GDP PERCAPITA - $1500  LABPOUR FORCE – 21.23M  REVENUE - $4.60B, EXPENDITURE - $6.12B  INFLATION 12.7%  INDUSTRAIL PRODUCTION GROWTH – 7%  EXPORTS - $5.43B, IMPORTS – $8.63B  CURRENCY – TANZANIAN SHILLING = 0.0006USD
  11. 11. TANZANIA - WITH THE WORLD  Tanzania is member of several regional economic blocks  EAC – East African Community  Southern African Development Community  African Union 0 5 10 15 20 25 30 china India Netherlands Germany UAE Japan UK SA Malawi %oftotalexports 0 2 4 6 8 10 12 14 %oftotalimports
  12. 12. Foreign Direct Investments have grown in recent years. $474.5 million in 2006, which is 3.3% of GDP. Annual ODI inflows of 13.8% of GNI reflects the stable political environment. 0 100 200 300 400 500 600 Tanzania Uganda Kenya Rwanda $million FDI inflows to Tanzania 2004 2005 2006
  13. 13. Government And Business Environment •Reforms are being Implemented but business environment in Tanzania is still poor. Tanzania Investment Act & Business Environment Strengthening Tanzania(BEST) has created to better the business environment •Privatization efforts have been partially successful Opening the Economy to more Foreign Investments; Encourage Lending to Pvt sector
  14. 14. • Small and Medium Enterprises contribute significantly to the economy but face numerous constraints A series of reforms have been taken up to support the small and medium enterprises, 161% of GNI per capita is decreased to 92% to set up a new business • Infrastructure is underfunded, in a poor state and a major constraint to growth Electricity is a major Issue in Tanzania as only 10% of the nation is having an access to electricity No focus on transportation, leading to lengthy supply chains
  15. 15. • Financial sector has undergone deep reforms but access to funds remain low Lending has been encouraged to the private sector Microfinance institutions are trying to fill in the gap • The banking sector remained relatively unharmed amid the global financial crisis Liquidity is adequate; credit to private sector has continued to grow; Banks continue to lend each other at 5% rate • The fight against corruption in both private and public sector, continues A Public Procurement Act has been taken up to curb the corruption problems Transparency International Reports say that the corruption condition tend to remain same in Tanzania
  16. 16. Trade relationship with India India is the second largest destination for Tanzanian export after China, which represents 9% of total value of exports. Exports include :  cashew nuts,  Pulses  ores and metal scrap  Gemstones  cloves & other spices  tanning/dyeing, co loring materials Imports include :  mineral fuels, oils  Pharmaceuticals  motor vehicles  electrical machinery/ Equipment  yarn, apparel & clothing  articles of iron & steel  plastic products  rubber items including tyres  cotton fabrics
  17. 17.  The Major companies in Tanzania are Bank of Baroda, Bank of India, Tata International Limited, Life Insurance Corporation of India, Reliance Industries Limited, Bharti Airtel, and others.  Government of India had extended a Line of Credit of US$ 40 million for financing Tanzanian agriculture sector.  Two Indian funded projects were set up : A Centre of Excellence in ICT by C- DAC; and the Pan African e-Network Project by TCIL. The Centre is named “India-Tanzania Centre for Excellence in Information and Communication Technology” [ITCoEICT.  A number of Indian companies like ONGC, Larsen & Toubro Limited, NMDC were involved in various government and non-government projects in Tanzania
  18. 18. THANK YOU