Economy of Tanzania
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| Economy of Tanzania | |
|---|---|
| Currency | Tanzanian shilling (TZS) |
| Fiscal year | 1 July - 30 June |
| Trade organisations | African Union World Trade Organisation |
| Statistics | |
| GDP | $57.5 billion (2009[update]) Rank: 85th (2009[update])[1] |
| GDP growth | 4.5% (2009[update]) |
| GDP per capita | $1,400 (2009[update]) |
| GDP by sector | Agriculture (26.6%), Industry (22.6%) Services (50.8%) (2009[update]) |
| Inflation (CPI) | 11.6% (2009[update]) |
| Population below poverty line |
36% (2009[update]) |
| Labour force | 21.23 million (2009[update]) |
| Labour force by occupation |
Agriculture (80%), Industry and Services (20%) (2002[update]) |
| Unemployment | N/A (2009[update]) |
| Main industries | Agricultural processing (sugar, beer, cigarettes, sisal twine), diamond, gold and iron mining, soda ash, oil refining, shoes, cement, apparel, wood products, fertilizer, salt |
| External | |
| Exports | $2.744 billion (2009[update]) |
| Export goods | gold, coffee, cashew nuts, manufactures, cotton |
| Main export partners | India 9.1%, Japan 6.5%, the People's Republic of China 6.3%, United Arab Emirates 5.7%, Netherlands 5.5%, Germany 5.1% {2008[update]) |
| Imports | $5.545 billion (2009[update]) |
| Import goods | consumer goods, machinery and transportation equipment, industrial raw materials, crude oil |
| Main import partners | the People's Republic of China 13.7%, India 13.4%, South Africa 7.4%, Kenya 6.6%, United Arab Emirates 5.6% {2008[update]) |
| Public finances | |
| Public debt | 24.8% of GDP (2009[update]) |
| Revenues | $3.78 billion (2009[update]) |
| Expenses | $4.693 billion (2009[update]) |
| Economic aid | $1.2 billion (2001[update]) |
| Main data source: CIA World Fact Book All values, unless otherwise stated, are in US dollars |
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Contents |
[edit] History
Significant measures have been taken to liberalize the Tanzanian economy along market lines and encourage both foreign and domestic private investment. Beginning in 1986, the Government of Tanzania embarked on an adjustment program to dismantle socialist economic controls and encourage more active participation of the private sector in the economy. The program included a comprehensive package of policies which reduced the budget deficit and improved monetary control, substantially depreciated the overvalued exchange rate, liberalized the trade regime, removed most price controls, eased restrictions on the marketing of food crops, freed interest rates, and initiated a restructuring of the financial sector.
Current GDP per capita of Tanzania grew more than 40% between 1998 and 2007. In May 2009, the International Monetary Fund approved an Exogenous Shock Facility (ESF) for Tanzania to help the country cope with the global economic crisis[1]. Tanzania is also engaged in a Policy Support Instrument (PSI) with the International Monetary Fund, which commenced in February 2007 after Tanzania completed its second 3-year Poverty Reduction and Growth Facility (PRGF), the first having been completed in August 2003. The PRGF was the successor program to the Enhanced Structural Adjustment Facility (ESAF), which Tanzania also participated in from 1996-1999. The IMF's PSI program provides policy support and signaling to participating low-income countries and is intended for countries that have usually achieved a reasonable growth performance, low underlying inflation, an adequate level of official international reserves, and have begun to establish external and net domestic debt sustainability.
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.
[edit] Macro-economic trend
This is a chart of trend of gross domestic product of Tanzania at market prices estimated by the International Monetary Fund with figures in millions of Tanzanian Shillings. See [2]
| Year | Gross Domestic Product | US Dollar Exchange |
|---|---|---|
| 1980 | 45,749 | 8.21 Shillings |
| 1985 | 115,006 | 17.87 Shillings |
| 1990 | 830,693 | 195.04 Shillings |
| 1995 | 3,020,501 | 536.40 Shillings |
| 2000 | 7,267,133 | 800.43 Shillings |
| 2005 | 13,713,477 | 1,127.10 Shillings |
[edit] Agriculture
The Tanzanian economy depends heavily on agriculture, which accounts for more than 25% of GDP, provides 85% of exports, and employs 80% of the work force[3]. Topography and climatic conditions, however, limit cultivated crops to only 4% of the land area. Cash crops, including coffee, tea, cotton, cashews, sisal, cloves, and pyrethrum, account for the vast majority of export earnings. The volume of all major crops--both cash and goods, which have been marketed through official channels--have increased over the past few years, but large amounts of produce never reach the market. Poor pricing and unreliable cash flow to farmers continue to frustrate the agricultural sector.
[edit] Industry
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. Foreign exchange shortages and mismanagement continue to deprive factories of much-needed spare parts and have reduced factory capacity to less than 30%.
[edit] External trade and investment
Tanzania's past record of political instability has discouraged foreign direct investment. Government steps to improve that climate include redrawing tax codes, floating the exchange rate, licensing foreign banks, and creating an investment promotion center to cut red tape. Tanzania has mineral resources and a largely untapped tourism sector, which might make it a viable market for foreign investment.
The stock market capitalisation of listed companies in Tanzania was valued at $588 million in 2005 by the World Bank.[2]
[edit] Zanzibar
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 suffered 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. Rehabilitation of current port facilities and plans to extend these facilities will be the precursor to the free port. The island's manufacturing sector is limited mainly to import substitution industries, such as cigarettes, shoes, and process agricultural products. In 1992, the government designated two export-producing zones and encouraged the development of offshore financial services. Zanzibar still imports much of its staple requirements, petroleum products, and manufactured articles.
[edit] See also
[edit] References
[edit] External links
- Economy of Tanzania at the Open Directory Project
- Tanzania Economic Forum
- Confederation of Tanzanian Industries
- CIA World Factbook Tanzania economy
Government ministries, agencies and sites
- Ministry of Finance and Economic Affairs
- Ministry of Industry, Trade and Marketing
- Ministry of Infrastructure Development
- Bank of Tanzania
- Economic and Social Research Foundation
- Tanzania Socioeconomic Database
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