TANZANIA economy shrugged off Covid-19 restrictions to continue its growth as the rest of the world plunged into worst recession.
A World Bank report said on Wednesday that Tanzania performed better despite the Coronavirus outbreak that plunged the global economy deep slump last year.
The country, said the World Bank, fared well compared to its regional peers on maintaining the economy status during the pandemic thanks to favourable conditions, including implementing no lockdown policy.
President Dr John Magufuli has since the outbreak of the novel virus refused to take a lockdown approach, urging Tanzanians to continue with socio-economic activities, whilst imploring Tanzanians to adhere to preventive measures.
As the world grappled with the novel virus, on July 1, last year, the World Bank announced that the Tanzanian economy had qualified from low to lower-middle income status.
The feat, which was attained five years ahead of time, was attributed to steady economic growth in the country and a focus on improving Tanzania’s infrastructure, in particular in the transportation and energy sectors.
WB’s Country Director for Tanzania, Malawi, Zambia and Zimbabwe, Mara Warwick, said the report focused on the country recent achievement after graduating to lower-middle income status.
“Tanzania, it’s one of a few economies that avoided recession in 2020 due the pandemic…,” Ms Warwick said when launching ‘The 15th Tanzania Economic Update, Raising the Bar: Achieving Tanzania’s Development Vision’ report.
The report, he noted, focused on how Tanzania recent achievement to graduate to lower-middle income status will propel the country to the middle income status.
The WB said entering lower-middle income status is “a point of departure” and that, the Bretton Wood institution is looking forward to what it will take to achieve the goals of the Tanzania Development Vision 2025.
“However, there is an important opportunity for the country to raise its own bar, providing greater opportunities and economic security for the large proportion of Tanzanians still living in poverty amidst serious impacts from the global Covid-19 pandemic,” Ms Warwick said.
Realising the goals of vision 2025 will require concerted efforts to restore the economy’s growth momentum while expanding access to economic opportunities, noted the WB.
Despite the positive economic growth witnessed by the country over the last year, the Covid-19 pandemic, according to World Bank, still has significantly impacted lives and livelihoods and economic growth—which slowed down.
However, Ms Warwick said, “every cloud has a silver lining…Tanzania has macroeconomic advantage to feature favourable sweet recovery.” The country representative mentioned some of the macroeconomic advantages as low ratio of the debt stress that create some space to utilise debt financing, reasonable foreign reserves and combination of high gold and low oil prices.
Mzumbe University Professor of Economics Honest Ngowi said the early measures of Central Bank to contain the pandemic economic contagion saved the nation from recession.
“BoT measures managed well to contain the recession… but focus should dwell on poverty reduction and inclusive growth, which is crucial,” Prof Ngowi noted. He said to stimulate further the economy policies should focus on tax reduction and sectors with multiplier effects.
WB Economist Miguel Saldarriaga said despite the country’s success to avoid recession compared to its regional peers, economic growth slowed down significantly. Also, due to the pandemic GDP per capita contracted for the first time in 25 years, reported the World Bank.
“The crisis could push an additional 600,000 people below national poverty line,” Mr Saldarriaga said during the launch.
Though the WB said the economy contracted to 2.0 per cent last year, the Bank of Tanzania (BoT) said in the first nine months of last year, the GDP grew by 4.7 per cent and economic activities were promising, meaning that the growth was set to hit 5.5 per cent as projected.
For this year, the WB said the GDP is projected to grow between 3.0 and 5.3 per cent but BoT projection is a 6.0 per cent growth.