World Bank projects Tanzania’s economy to grow up to 5.5 percent
Dar es Salaam. The World Bank is projecting that Tanzania’s economy will expand between 4.5 percent and 5.5 percent this year.
This is almost in line with projections by the Ministry of Finance and Planning which put Tanzania’s economic growth estimates in 2022 at 5.2 percent.
Though the growth projection is better than the 4.3 percent of 2021, it is also lower than the country’s long-run potential growth rate of about 6 percent.
In its 17th Tanzania Economic Update - which was released on Tuesday, March 1 – the World Bank attributes the growth rate to a rollback of coronavirus-related restrictions in many countries which was boosting tourism and trade.
The World Bank Country Director for Tanzania, Dr Mara Warwick, said data showed that Tanzania’s economy was recovering from the adverse effects of the global Covid-19 pandemic.
“High-frequency data suggest that economic activity in Tanzania is gradually recovering. The accommodation and restaurants, mining, and electricity sectors drove a sharp rebound in quarterly GDP during the Third Quarter of 2021,”
According to her, leading indicators such as cement production, electricity generation, private-sector credit, goods and services exports, nonfuel goods imports, telecommunications, mobility, and tourist arrivals all improved in 2021, though activity in most sectors remains below pre-pandemic levels.
She said that the risks to Tanzania’s economic outlook have moderated, but the recovery continues to hinge on external developments and domestic health policies, as well as continued support to the private sector.
“An accelerated domestic vaccination program, increased regional trade and cooperation, and policy reforms designed to improve the business environment and support the growth of the private sector have somewhat mitigated downside risks, but the emergence of new coronavirus variants, reduced capital flows, elevated debt levels, persistent inflationary pressures, and supply bottlenecks continue to threaten the projected recovery,” she said.
According to Dr Warwick, Tanzania needs to strengthen its pandemic response in the short term while laying the groundwork for a private-sector-led recovery over the medium-to-long term.
“In August 2021 Tanzania launched a nationwide Covid-19 vaccination program, but its progress has been slower than anticipated with only 3.2 million vaccine doses administered,” she said
She added: Accelerating the pace of the vaccination program is crucial for underpinning a stable recovery of international travel and tourism, which together account for more than one-quarter of the country’s total exports.