Sunday, October 22, 2006

Jakaya Kikwete's Tanzania In Deep Crisis: Prepare For The Worst

This blogger has been deeply criticized in the recent past (see the post in this blog with the highest number of comments by far) for being biased against Tanzanians and the government of Jakaya Kikwete. I have taken this very seriously because despite whatever shortfalls this blog has, one thing that it has achieved is a reputation for accuracy. Biased views and news are not consistent with accuracy.

It is for this reason that I have remained tight-lipped on any Tanzania news or comment for an extended period of time now. I have even resisted the urge to comment on the current phase of collecting views from citizens of the three nations on the proposed East African Federation (my view is that the nation of Tanzania holds the key and at the moment they all see integration and a federation as a threat).

The truth is that I deeply love the nation of Tanzania and my closest friends are indeed Tanzanian nationals. It is a nation that I understand very well. My conscience has been eating away at me as I have remained silent in the wake of unprecedented events which have been unfolding in that nation. Events that will soon explode into a full-blown crisis for all to see.

Considering the numbers (albeit rapidly dwindling) of Kenyan nationals in Tanzania and the fact that Kenya is the second largest foreign investor in the country, anything that happens in Tanzania is of deep concern to Kenyans and this Kenyan blog.

It is said that President Kikwete receives hundreds of SMS's on his cell phone every day from ordinary Tanzanians and sometimes even finds time to reply to some of them. If this is true then it dismisses the widely held view that the man is a victim of bad advisors because it would mean that he is directly getting the views of ordinary folks on the ground.

Recently the government has gone on a massive unprecedented campaign to demolish all illegal structures in a move that has ruined many small traders and entrepreneurs, not to mention the livelihoods that have been affected. There is of course nothing wrong with cleaning up a city except for two critical issues in this case;

1) The timing
2) The Implication on the Tanzanian economy

Coming at a time when the country has been going through a crippling 12 hour dawn to dusk electricity rationing regime, the demolitions which have been simultaneously carried out in every corner of the city, including low income and slum areas have caused untold suffering to millions of ordinary Tanzanians who have been depending on them for a livelihood.

The implications on the Tanzanian economy go way beyond dramatically increasing the unemployment numbers. In a country where there are no supermarket chains or units targeting ordinary folks, the demolished structures have always been the main sales outlets for a wide range of fast moving consumer items. What this has meant is that industries grappling with power rationing have also found themselves facing a sudden drop in sales caused by the elimination of tens of thousands of distribution outlets across the city.

But by far the most worrying aspect of the whole Tanzanian crisis is the reaction of the administration. There has been a deliberate effort in recent times to release positive economic figures and news on the performance of the economy. Most of the figures are from last year and not the last 10 months that President Kikwete has been in power. There was a unique exception last week when it was revealed that the government's debt had in 9 short months (from January to September, this year) shot up by a staggering $302 million to a total of $9.383 billion. The main culprits, experts say are "unrestricted domestic borrowing and unnecessary foreign debts."

With all due respect to the highest authority in the Tanzanian nation, the governments' lukewarm response to the deepening crisis has caused many, including this blogger to arrive at only one chilling conclusion. That there is a lack of understanding and grasp of fundamental economics, and the impact of decisions being made on the economy of the nation, at the highest level of decision-making in the country.

How else would you explain the following;

a) A deliberate and aggressive campaign against foreign domination in various areas of the economy including hunting and mining, at the beginning of the year, that clearly sent jitters across the investment community in the country. Did nobody see the impact this was going to have on investor confidence? Has nobody in this government been able to link this to the rapidly depreciating Tanzanian shilling (caused mainly by capital flight?)

b) The decision recently to have the BOT (Bank Of Tanzania) release massive amounts of foreign currency into the market in a bid to stabilize the Tanzanian shilling. Did nobody in government understand that this was a futile exercise without dealing with the structural causes of the depreciating shilling? Like restoring investor confidence amongst those investors already in the country, and dealing with the power-rationing crisis? As it is, a day after the release of massive amounts of dollars by BOT, there was a shortage of dollars, a tell-tale sign that there were massive transfers of forex out of the economy still going on.

c) The decision to go ahead with the demolition of semi-permanent structures in every corner of Dar-es-salaam when the economy was already reeling from the crippling power rationing regime. Did nobody in government see the impact that this would have on the economy?

What To Expect In Tanzania Over The Next Few Months
a) Rate of crime will shoot up dramatically triggered by loss of income from both the current electricity rationing and the demolishing of structures used by traders.

b) Tanzanian shilling will weaken further against major foreign currencies.

c) Many foreign investors will continue their strategic retreat, causing further weakening of the local currency as a result of capital flight.

d) A political crisis of sorts will result that will put enormous pressure on President Jakaya Kikwete’s government.

(Tomorrow: How The Current Power Rationing Was Caused By Corruption In High Places.)

=======
Join in the raging debate over this thorny Luo-Kikuyu relationship issue
(Please scroll down to the bottom of the page (and click on the "Post A Comment" button) to post your comment.)

========================
See also Problem Tribes in Kenyan politics

Get more help with you invention ideas by reading this invention ebook by a man who has sold millions of units of his own inventions.

Use Software To Earn Millions From Adsense And Blogger

27 comments:

  1. Am one of the Kenyans who suffered the brunt of the Tanzania government explusion of Kenyan investors. I was employed as a country manager by a large Kenyan concern and I was declared persona non grata for refusing to employ a girlfriend of a senior govt official.

    I had employed 50 TZ nationals and obnly one Kenyan and when I left, the company decided to scale down their operations and now has 5 employees and are reluctant expand the business and are only servicing the existing clients.

    JK will kill the Tanzania Economy for sure.

    Thanks for highlighting this.

    ReplyDelete
  2. The Tz economy is already dead as a dodo.

    Inflation is out of control and not even a parachute can save he free-falling Tanzanian shilling.

    I know another Kenyan investor who found it a lot cheaper to abandon his massive investment and leave with nothing but a suitcase. His business was bringing in hard currency into Tanzania. How many other similar cases do you think there are?

    P.S. It is being whispered that Mwana and Arusha are soon going to be in total darkness. And even in Dar, most people now have less than 12 hours of electricity daily. Imagine that!! BTW the beginning of this power crisis in Tz can also be linked to corruption in high places as I will reveal here tomorrow.

    ReplyDelete
  3. You know something? President Kikwete was elected in a landslide victory and he was enomously popular. In turn it made him a populist, is it a bad thing that he is a populist? It is this populism that made him begin kicking out foreigners working and investing in Tz economy in order to create jobs. If there were any economists in the Kikwete government, they would have told him that this excercise would infact lead to less jobs for Tanzanians. Reality is now downing on local citizens that kumbe their president was not all he was cut out to be...
    I hear that the newspapers reported that some regions now have over 24hrs blackout. In Arusha I hear the average blackout is 18Hrs per day. Kweli Watanzania walihitaji nguvu mpya ili waweze kujimudu wakati huu wa giza. Poleni.

    //Imagine guys, even after all these issues backfiring, they have not even changed one policy yet. Talk of not abandoning a sinking ship(policies).

    GM

    ReplyDelete
  4. Let me tell Tanzanians one thing that they seem not to realize. We Kenyans are just capitalists and it has nothing to do with hatimg each other. Actually it is the contrary, and sometimes I feel ashamed that we love foreigners(tanzanians) more than our own. Proof:- GADO the tanzanian cartoonist is still working in Kenya illegally, Swaleh Mdoe a Tanzanian working illegally as a news anchor in Kenya. When he was arrested the other day Kenyans from all walks of life demamded his unconditional release. By the way I was one of those Kenyans.
    But what happenned when Nation Media Group Journalists from Kenya were deported from Tz, they(Tzdnians) all celebrated. We protect your own in Kenya but you mishandle us in your country. Tutaona mtafika wapi. If you guys knew how many Tanzanians are working in kenya illegally you would not even ask me...

    Guys if you have time you must read this. Even Chris could not write better than this East Africa: Cry Tanzania. Cry the beloved country After reading this I think you will agree with me that the game is over

    GM

    ReplyDelete
  5. I have tried to stay away from the Tanzanian question but it seems while Bw Kikwete is being fated abroad for being a great leader, he has alot to deal with at home.
    What remains to see is if Tanzania's leaders will face up to the problems bedevilling their nation or keep their heads in the sand.
    @ GM
    That was a very succint article, thanks for the link!

    ReplyDelete
  6. @GM Who is this Job Jabiro anyway? Excellent article, excellent analysis. Even I know when I'm staring defeat straight in the face.

    Now that's the perfect example of a link that adds value. Thanx GM.

    Kumekucha.

    ReplyDelete
  7. Chris unlike you I had conveniently forgotten about Tanzania. That was until I saw the editorial piece written by Charles Onyango-Oboo in The East African. Onyango is not prone to idle speculation and thus my alarm. This situation is serious and deserves urgent attention. I will reiterate again that Kenya does not need another neighbout in free fall. Somalia is case enough to keep us occupied upto the next millenium. I hope our brothers and sisters in Tanzania wake up from this deadly stupor they are currently in.

    ReplyDelete
  8. Tanzanians need to realize one thing. They have the biggest country in east africa, the most natura resources in terms of minerals etc, that other countries don;t have. The only problem is thhis. It may sound biased, but ask any kenyan who goes to TZ, they will all agree on one thing. Tanzanians are lazy...Might not necesarily imply laziness, but actuall some sort of slaggishness. Of course there are people who work hard, not everyone is slow and slack in whatever they do, but generally, a kenyan will notice that in TZ. I think its something that has to do with the country's history and for TZ to attain any reasonable sustainable level of economic growth, a much more aggressive approach by her citizens and a willingness to go out of their comfort zone is a pre-requisite. Look deep within, TZ has everything to become an economic giant, but the problem is her citizens are left wobbling in illiteracy while the learned few control the masses exploiting that fact. Look at this article...
    http://www.ipp.co.tz/ipp/columnist/index.html surely, tell me this is not a dictatorship? A government that dictates how people should dress one day will soon decide how "other things" should be done. What is Kikwete covering up for? He should be busy cleaning up the corruption that has riddled his 10 year government. By the way, this guy was too popular.. he wasn't a good choice. He can sway the masses and get away with anything.
    Tanzanians need to wake up from their slumber, otherwise you will always lag behind even though you have the biggest country, best chance of making an economic breakthrough in the region. Basi wacha tukune mnazi tu na tuogelee baharini....

    ReplyDelete
  9. If you actually give any credibility to the article of "Cry the beloved country" then you really have no clue. Please we have enough issues as is without dragging the hutus and tutsis. Let them sort their mess out first, which won't be anytime soon.You think Kenyans are hated in Tz,, chk the hutus/tutsis. We don't differentiate anyone with blood in their hands.

    Back to basics here and this is in regards to the TZ economy and direction. We are the children of Nyerere that is very much in our blood. Therefor as you have noticed dealing with hard times is something we are very willing to sacrifice..and that might be a problem at times but it is what has kept us this stable. Imagine the power cuts in like these in Kenya. Show we riot or are we fools to just deal through tough times? Whichever way you look at it the simple fact is we like who we are. Kikwete can take this kind of measures(expelling Kenyans) because he knows that he really does have support of the people. And believe me, the people in TZ influence the govt more than the other way round. Kikwete(rightly or wrongly) responds more to the peoples request with his policies. And unfortunately/fortunately since the people still have Nyerere in their blood, our steps towards achieving what we and everyone else sees will go slowly because the state of the people is really a priority. Look at the eviction of squatters. This was conducted with the least of distrubance and dare you show me how that exercise was conducted in other cities in Africa. You know why, because when the govt tried the first time, the people made noise and the govt had to stop step back and figure out a better stratergy while giving time to the squatters. As it happens when their time came, the squatters could not make much noise because they know the public will not support them this time. So my fellow Kenyans, feel free to judge us and label us but we are very proud of the entire package we possess as Tanzania cos for every issue you highlight, you ignore the other side of the coin. We are good listeners, we hear what you say but we are aware of the other side of the coin (cos the cons have its pros i.e. challenges in english is a result of strong swahili which has contributed so much to kill tribalism...and make us one people) and whatever we have to learn from you, we try our best so that it doesn't affect the other side of the coin which we Nyerere and cos had worked so hard to build and we are very happy with.

    The arrogance that you might see now despite the current poverty is because we are confident that the foundation was built properly and building the house will be a much easier process wth the resources that are available to us. Its more difficult fixing the foundation when you are already on the third floor.

    Bado sisi ni watu wa upendo kwahio itakuwa vigumu sana kusikia mtanzania kumchukia mkenya despite what you have done wrongly taken from us. You see, even you kenyans do benefit from us looking at the other side of the coin. Another
    -v/+ve we got from Nyerere depending on how you look at it.

    ReplyDelete
  10. @Anonymous said...

    "If you actually give any credibility to the article of "Cry the beloved country" then you really have no clue."

    I really did not understand your comment above, hey did anyone understand it?
    Anyways, my friend I want you to listen to me very carefully. A year or two from now Uganda and Kenya will finally realise that TZ is not interested in the EAC (the Hq was to be build in Tz!!- for you who dont know). So they will decide to go it alone while embracing Rwanda and Burundi.
    But that is not all. Later good things will happen in those parts of the world, and maybe someday we will consider to give you some Aid. But for you to join us, we will put some tougher rules than the ones EU is giving to Turkey. :)

    The idea of Kenyans being chased out of Tz was not as a result of a populist view (I witnessed its birth) it was a result of a few faceless politicians who encouraged newspapeers including IPPMEDIA.com to start a hate campaign against Kenyans even before Kikwete warmed his seat of the presidency. The mistake he did is that he stayed silent, then slowly started supporting it. It is not supported wholy by TZ citizens and that is a fact. I was there when it all cooked up.

    By the way now that you guys forgot to look at the other side of the COIN when harrasing Kenyans maybe you can read this Immigration officers looking for Mdoe’s brother and sister Do I support all these, I don't but I havent forgotten about what the TZ gava did to Mutuma Mathiu of Nation Media and his collegue; they were handled like thugs(AND ALL OTHER KENYANS CURRENTLY IN TZ IMMIGRATION JAILS).

    I think KIbaki should make a friendly visit to Tz or something bwana. Is there a cold war? Over 40% of Kenyans who worked in Tz have been hounded out of Tz. I am a moralist but I will suggest "painfully" to the Kenyan Immigration Department to work harder.

    //@Chris & Aco
    Thanks guys I am smitten.

    GM

    ReplyDelete
  11. You guys are sick, our economy is growing and Kenyans are slower na ni washamba kuliko Watanzania, thats why wanawake zenu wanatutamani tulale nao au tuwaoe why? this is the real report kutoka kwa Gavana, you mother fucken bias Kenyans


    GAVANA wa Benki Kuu Tanzania (BOT), Daudi Ballali amesema uchumi uliotengaa ndio msingi wa kukua kwa uchumi na kuondoa umasikini.

    Ballali alibainisha hayo juzi katika hotuba yake ya uzinduzi wa majengo mawili mapya ya Makao Makuu ya BoT, yaliyopo katika Mtaa wa Sokoine na Mirambo, jijini Dar es Salaam.

    Alisema kutokana na msingi huo, Tanzania imefanya mabadiliko mbalimbali katika sekta ya fedha na hivyo kuufanya uchumi wake kuinuka na kutengamaa kwa kiwango kikubwa.

    Kwa mujibu wa Ballali, sekta ya fedha ndio sekta inayoongoza kwa mabadiliko ikifuatiwa na sekta ya Mawasialiano na Uchukuzi.

    Alisema kila Mtanzania anapaswa kuelimishwa umuhimu wa kusimamia na kuhakikisha uchumi wa nchi unatengamaa vizuri.

    Ballali alisema kutokana na kukua kwa uchumi, pato la ndani limeongezeka na inakadiriwa mwaka huu kufikia asilimia saba.

    Aliyataja mambo matatu ya msingi yaliyotokea katika uchumi wa Tanzania kuwa ni pamoja na uongozi mzuri wa Rais Benjamin Mkapa katika kuhakikisha uchumi unakuwa kwa haraka.

    Ballali alisema idadi ya wafadhili na wawekezaji wa kigeni imeongezeka baada ya kuvutiwa na mazingira mazuri ya kiuchumi.

    Rais mstaafu, Benjamin Mkapa alisema chini ya uongozi wake wa miaka 10, amefanikiwa kuhakikisha uchumi wa nchi na kiwango cha umasikini kimepungua.

    Hata hivyo alisema mafanikio hayo yametokana na mabadiliko katika sekta mbalimbali ikiwemo sekta ya fedha na benki.

    Alisema alipoingia madarakani uchumi ulikuwa ukikuwa kidogo lakini mwaka jana uliongezeka hadi kufikia asilimia 6.7 na mwaka huu unatarajia kukua na kufikia asilimia saba.

    Mkapa alitoa wito kuwa ili mafanikio hayo yaweze kudumu kwa muda mrefu ni lazima ukuaji wa uchumi uendelezwe zaidi na kuhakikisha hautetereki tena.

    "Mabadiliko katika sekta mbalimbali yatakuwa yamefanikiwa kama yatadumu kwa muda mrefu...hivyo tusiache mabadiliko haya ya uchumi yapotee bure," alisema.

    Akizungumzia mafanikio katika sekta binafsi, alisema sekta hiyo imechangia kukua kwa uchumi na jitihada za kuondoa umasikini.

    Alitoa mfano wa sekta ya madini ambayo alisema kutokana na mabadiliko ya Sheria ya Madini, Tanzania imekuwa nchi inayoongoza kwa uzalishaji wa madini Afrika.

    ReplyDelete
  12. So thats our Gavana, so all the bla bla about the economy is jelous, show me the real number and stop hating Tanzania. Tanzania on the rise

    ReplyDelete
  13. Tanzania inflation is less than 5% while Kenya is about 10%, about exchange rate Tanzania is in the free trade exchange rate while Kenya is in the group of goverment fixing exchange rate. You guys need to study first and know your facts mazee!!, go and find the real data and show us. Our Gavana, CIA fact Sheet is not supporting your bias numbers. Kenyans need to have a life you still have 50% of people below the poverty line the largest in East Africa, why dont you invest in your our people and reduce the poverty. In every two Kenyans one is living below poverty level, and you assume you have a good economy where all the money go mazee!!. CIA Factsheet not me Kenyans. show me the numbers.. fucken poor Kenyans. You feel tired of fighting each other now you want to fight Tanzania, you guys are going to loose because you are going to fight with 37 million people and not kikuyu or luo. Tanzania is one and is rising thats why you guys are scared and want this EA shit, we dont need because our economic numbers are better.How can you say Kenyan economy is well managed at 10% iflation and 50% below poverty level??

    ReplyDelete
  14. @Anonymous said...
    "You guys are sick,"

    Wacheni matusi,
    All your comments in this blog and others is only filled with matusi and some 5yr old Fact sheet, enough already.

    If you want to abuse people do it like a man not under anonymous.
    The CIA fact sheet are OLD. As in during Mkapas Tenure. Can you please give us the fact sheet of say say July 31st 2006 for starters.

    GM

    ReplyDelete
  15. I think this situation is very very simple. Kenyans feel they are doing us a favour, we feel we don't need them. So if the Kenyans decide NOT to do us a favour and we decide to continue NOT needing them then we should all be happy right? But nope, those very people who are doing us a favour are mad at us for refusing the favour.
    Please go ahead, dump us and pick up Rwanda and Burundi. Till then I think we can all be happy with the current status quo.

    ReplyDelete
  16. This discussion is going out of hand. I think what we want is for Tanzania to stop harrasing Kenyans in their country. And stop the negative media propaganda against Kenyans. It is not about how superior one economy is etc. What is important is that they should stop what they are doing to our brothers in that country because we are watching closely. It is too much and we cannot continue to ignore it. Kenyans are not the only foreigners in that country. There are so many Tanzanians in Kenya only that they have acquired ID cards illegally but most are just illegal immigrants.

    The point is do to your neighbor what you would want them to do to you.

    ReplyDelete
  17. "@ Chris said...
    GM Who is this Job Jabiro anyway?"

    I don't have any idea but please note that HabariTanzania got to read the clip and this is how they replied
    "The person in point, shamelessly and dubiously, has registered but fear, naivety, mediocrity and all the like instead of giving reply to our article. Suffering from inssanismadogmata, bulimia and horror, the guy, has but absurdly and wrongly, alleged what he cannot prove. How can ones say that Tanzanians are afraid of competition from SUCH TINY AND SICK COUNTRIES! Stop such phantasmagolic assertions."
    "What a farce! Anyway we will never apply the same rotten and sick mentality to go about this constitutional right. Instead of wasting our time subscribing to such cheap lie blaagh blaagh and daydreams, we will stand firmly to educate our poor friends wherever they might be."

    WOW!

    You can read more of what HabariTanzania.com wrote in their reply to Job Jabiro here Special regards from Kigali after reading this, it came to my understanding that East Africa is up against "A Great Wall of Tanzania" personally I do not think a mainstream media (if it is one) should write an article the way they did. But mostly I believe they have answered alot of our questions concerning Tanzanian ideology on other East African Nations. :(
    What do you think Chris?

    GM

    ReplyDelete
  18. HabariTanzania is a privately held paper, and views expressed in there are the same as those you sometimes might read in this blogspot. Its stupid to claim views from there have the legal stamp of the TZ govt just like if we TZ link the shit you Kenyans write in this glog as Kenya govt policy.

    Its fair if Kenyans feel that your people in Tanzania are being harassed, without reason. They should be protected. But the noise coming form Kenyans is not about that. Its about much more..and it seems like you want to dictate to us how we should approach the EAC and how we should run our country. That is crossing the line.

    ReplyDelete
  19. We dont need Kenya or Uganda in TZ, go home Mazee "you guys are still sick" keep on assuming about TZ

    ReplyDelete
  20. Tanzanian Gavana said this just a week ago, so what the f... are you talking about the update numbers

    ReplyDelete
  21. real info keep on kelele and politics


    The Cabinet reshuffle by Tanzanian President Jakaya Kikwete a few months after being elected was aimed at stamping his authority on the government.

    This is the verdict of a new analysis of Tanzania by the London-based Economic Intelligence Unit.

    It says that ministries and departments seem more dynamic, in line with the new president, and the government is far more media-savvy.

    In addition, in late June, Kikwete cemented his influence over the ruling Chama cha Mapinduzi (CCM) when he assumed the party's presidency and appointed his supporters to key positions.

    The report argues however, that even though Kikwete continues to consolidate his political power base, there is still considerable resentment within sections of CCM over the battle that saw him emerge as the party's presidential candidate in mid-2005.

    Although this is insufficient to challenge his hold on power, the president will face residual sniping from senior party members, and his ability to implement policy changes as quickly as he would like will be curtailed for some time.

    jkwaliobadilishwa.jpgGoing forward, the report predicts that Tanzania will maintain good relations with its regional neighbours and with donor countries. Relations with donors will focus on technical matters such as ensuring better accounting and co-ordination of aid flows into the country.

    At the regional level, the report says that the implementation of the Customs Union protocol of the East African Community (EAC) – which comprises Kenya, Tanzania and Uganda – will remain a source of political contention as trade barriers between the three countries are slowly reduced.

    The situation is complicated by the long-running debate over Tanzania's membership of regional organisations.

    At present, Tanzania is also a member of the Southern African Development Community (SADC), having withdrawn from the Common Market for Eastern and Southern Africa (Comesa) in 2001.

    However, some influential voices in the private sector argue that the country would be better off in Comesa. The government seems unlikely to be rushed into a decision on the issue.

    Tanzania has seen a substantial pick-up in real GDP growth since 2000 – to an annual average of around 7 per cent in 2002-04 – against a background of low and stable inflation.

    The main problem for the government has been how to translate macroeconomic stability and higher donor-supported spending on healthcare and education into an increase in employment and improvements to the welfare of ordinary Tanzanians.

    The recent budget and comments from key ministers indicate that no radical alteration in the direction of economic policy can be expected in 2006-07, but policy may become, at least in rhetoric, more nationalistic, with the concept of economic empowerment a clear theme.

    Drought, largely in the north of the country, in late 2005 and early 2006 looks set to undermine Tanzania's growth this year.

    As well as the negative impact on agriculture, water levels in the dams that provide the country's hydroelectric power are very low and hence, since the start of the year, most major cities have suffered from prolonged power cuts, which will impact on overall economic activity even if the power crisis eases in the second half of the year after the long rains and the provision of additional emergency generators.

    As a result, the Economic Intelligence Unit forecasts that real GDP growth will fall back in 2006, to 5.8 per cent, from an estimated 6.8 per cent in 2005.

    Assuming normal rainfall, and recoveries in the agricultural and manufacturing sectors, real GDP growth should rebound to 6.7 per cent in 2007. The report also expects further growth in construction and tourism, and the mining sector should pick up as new projects come on stream in late 2007.

    On inflation, the report says that the Bank of Tanzania did not meet its target of year-on-year inflation of 4 per cent in the year to end-June 2006, despite a sharp fall in the inflation rate in June to only 6.8 per cent.

    Before then, inflation had risen sharply with the year-on-year rate reaching 7.7 per cent by May, the highest since June 1999.

    The rise was driven by the increase in food price inflation, which rose to 12.3 per cent in May, owing to the drought.

    The drought and high world oil prices have also led to sharp increases in prices for fuel, power, water and transport, which have raised the inflation rate.

    Although the BoT has indicated that it expects further steep falls in the inflation rate in the second half of 2006, the Economic Intelligence Unit says it believes that the decline will be slower than forecast by the central bank, owing to the ongoing effects of high oil prices and public-sector wage increases, as well as continuing electricity shortages.

    As a result, it predicts that annual inflation to average 5.9 per cent in 2006 – its highest level for a number of years.

    ReplyDelete
  22. @ annonymous said;

    "But mostly I believe they have answered alot of our questions concerning Tanzanian ideology on other East African Nations. :(
    What do you think Chris?..."

    I agree 1000%.

    It proves that our Tanzanian brothers are in more serious trouble than was earlier envisaged... I mean with an attitude like that, in this modern fast-paced world...

    ReplyDelete
  23. CIA FACT HSIT,(deliberate mispellin)*

    Foreign exchange rate:
    Jan 2005
    1 Ksh = 14 Tshs

    Oct 2006
    1 Ksh = 17.8 Tshs


    //Congratulations, Tz economy is growing at a galloping pace. By next year it would have grown so large that its currency will exchange at 25Tsh to the Kenyan shilling.
    Do we have economists in the comments section? Jamani, nisaidieni kuchambua, yananichanganya.

    GM

    ReplyDelete
  24. Who cares about exchange rate, low exchange rate is good for our economy,most of our businesses are importing more than exporting so whenever the businesses increase the demand for forex increases and this result in to decrease the value of TSH. Uganda for example has more foreign reserve than Tanzania and Kenya, but Uganda shilling is the lowest. Our low TSH is helping our economy by making our products cheaper, due to increase in power prices is the sounding strategy. We should also realize that Kenya is fixing their KSH for their own benefit, but TZ and UG are under free trade forex system, our system is perfect for TZ and ky system is perfect for Kenya we need to understand how forex works before we jump to the topic. China and Japan is the good example they are tring to trade below their real money value just to make their product cheaper, and US is complaining that China money is undervalued. For some countries its very important to devalue their money inorder to increase exports. Our exchange rate is a reflection of our real value and not fixing value. The important numbers is economic growth rate, inflation and population below poverty line.

    ReplyDelete
  25. I (partially) agree with Anon, that limited devaluation/undervaluation of the currency can help exports BUT China & Japan are NET exporters whereas TZ is NET importer...

    So it will cost TZ citizens a lot more in the long-run... In any case, the best judge is the market i.e. let the TShs float & it will find its own level.

    As far as Kenya is concerned, a low TShs is good coz Kenya can import more from TZ esp citrus, diamonds, etc... Exports to TZ might take a hit for elastic goods but NOT for inelastic goods...

    Most manufactured foodstuffs (Cooking fats, flour, etc) are INELASTIC so Tz will have to buy in KShs! In fact the power cuts mean that TZ will have no choice but to import MORE of these goods whatever the price... or they starve!

    Kenya should import all the capital goods e.g. timber it can from TZ while their economy is in the dumps... And get it as cheap as possible... We can use the timber for houses, electricity poles, etc for the LONG-TERM... but at cheaper prices today!

    Let's make lemonade out of these lemons!

    ReplyDelete
  26. I am a Tanzania and i am happy about the direction of the economy, ia am not satisfied and we still have alot of corruption just like our neighbour but i am happy for the progress.

    ReplyDelete
  27. A new lodestar for Africa?

    Jonathan Power
    International Herald Tribune

    The wheels seem to spin in the sand as we hurtle down the bush track mile after mile from Mtwara, a small town on the border of Tanzania and Mozambique. The land is parched, waiting desperately for the rains. In the villages we pass, little thatched houses give way to fields stripped bare of their meager produce. This is truly one of the poorest backwaters of this very poor country.

    Suddenly there is a clearing and in it, well, what? The set for a James Bond film? Or a secret Tanzanian missile site, perhaps rented out to the encroaching Chinese-African empire?

    The new president of Tanzania, Jakaya Kikwete, jumps out of our convoy's lead car and briskly walks up to a white man in a white helmet and grabs his hand. Soon we are all ensconced in helmets and goggles and led past rows of large windowless containers to view a space-age machine that drives a pipe deep into the ground. A burly Canadian tells me he works 28 days - 12 hours a day, seven days a week - and then gets a free ticket home for 28 days off.

    We have arrived at the saving grace of Tanzania's mounting energy crisis. Tanzania has depended on plenty of rain, full lakes and cheap hydroelectric power, but the recent drought depleted the lakes and knocked nearly two percentage points off Tanzania's once rapid rate of growth. God works in mysterious ways, however. Underneath these coastal sands a Canadian company, Artumas, last year discovered gas - enough to provide electricity to Mtwara for 800 years - and more is likely to be found.

    Before Christmas, Mtwara and nearby Lindi will have the gas flowing into the turbines and the electricity into their streets, factories and homes. The nearby villages will also be lit up. There will be no repeating the mistakes that have plagued Nigeria's oil-rich delta region, where the locals have been bypassed.

    Another field has been found to the north and is starting to power the capital, Dar es Salaam. Gas is going to save Tanzania's economy and by next year its growth should be restored to last year's 7 percent. The president tells me he believes it can go to 8 percent, and he yearns for 10 percent.

    When I was here two years ago Western diplomats thought 7 percent was a pipe dream. But after the country's stellar performance last year they have swallowed their doubts. As Lelde Schmitz, the International Monetary Fund's Tanzania chief, told me, once they get over this energy hump, "Why not more than 7 percent?"

    Even at 7 percent, Tanzania could achieve the United Nations millennium goals: cutting infant mortality by half and putting 10 years on life spans within a decade.

    Kikwete won the presidency a year ago, after a bruising party primary and then an open general election (albeit against an opposition party that is only just finding its stride). Before him presided Julius Nyerere, Tanzania's founding father and benign semidictator, who ruined the economy with his radical socialist ideas but knitted the diverse tribes of Tanzania into a peaceful whole.

    Later came Nyerere's former press secretary, Benjamin Mkapa, who set Tanzania on the path to political and economic reform, producing handsome economic growth, a primary school in every village and a more open political system.

    If Nyerere was Tanzania's headmaster and Mkapa was its management guru, Kikwete is its font of youthful energy - but a thoughtful one. He is Africa's Bill Clinton - driven by ideas, charismatic, clear minded, a communicator who likes nothing more than to step into a crowd and parley with it. A moderate Muslim in a dangerous neighborhood, he has become a favorite of President George W. Bush who has granted him the kind of access once reserved solely for Africa's big economic powers, Nigeria and South Africa.

    The gas field behind us, we slog for three days along dusty, potholed back roads, deep into the country. In every village, the crowd is waiting, in every third village Kikwete stops, climbs on top of his car and - using the state-of-the-art sound truck that accompanies us - ad libs words of encouragement. He cracks jokes about condoms, makes them laugh furiously and outlines a future that visibly whets their appetites.

    In the evening, when the convoy stops, we eat together informally and chat to the president. Everything seems possible. Tanzania, and maybe Africa too, has found its human lodestar.

    I have been covering Africa for 40 years. I have never been so impressed.


    http://www.iht.com/articles/2006/12/01/opinion/edpower.php

    ReplyDelete

Any posts breaking the house rules of COMMON DECENCY will be promptly deleted, i.e. NO TRIBALISTIC, racist, sexist, homophobic, sexually explicit, abusive, swearing, DIVERSIONS, impersonation and spam AMONG OTHERS. No exceptions WHATSOEVER.