The government is now keen on addressing structural problems that fuel inflation. Presenting in the National Assembly the State of the Economy for 2012 and the Development Plan for 2013/14, the Minister of State in the President’s Office (Social Relations and Coordination), Mr Stephen Wassira, said the government would now focus on the factors that lead to increased inflation.
Minister of State in the President’s Office (Social Relations and Co-ordination) Mr Stephen Wassira
He said as a result of government intervention in the structural sectors such as infrastructure, inflation has been going down for more than five months in a row. The inflation rate in Tanzania was recorded at 8.30 per cent in May, easing for a fifth month in a row to the lowest rate in two years. This was down from 9.4 per cent in April and 9.8 per cent in March.
Wasira said the rate of inflation for goods and services averaged at 16.0 per cent in 2012 compared to 12.7 per cent in 2011, mainly due to rising oil prices on the world market and food prices. He said the rise in food prices was partly due to increased demand for food in the neighbouring countries. He said the index of food prices accounted for most of the overall sharp rise in inflation, as food constitutes half of the goods and services in the consumer goods basket used to compute price indices.
The minister said the government took several measures to address rapidly rising prices of goods and services, including ensuring sufficient supply of food in the country. Other measures include expanding the cultivation of food crops and increasing the availability of agricultural inputs, particularly fertilizers, pesticides and improved seeds, he said.
Others are continuing to strengthen food security by buying more grains through the National Food Reserve Agency and the construction of grain storage silos. Mr. Wasira said priorities of the Development Plan for 2013/14 included infrastructure, agriculture, human resource development and services in tourism, trade and the financial sector.
He said with regard to infrastructure the government would continue with the construction of the gas pipeline from Mtwara to Dar es Salaam, concurrent with the construction of two gas-fired plants at Kinyerezi in Dar es Salaam.
The government would also continue to strengthen power transmission lines including the Makambako- Songea 220kV line with a distance of 250 kilometres, Iringa-Shinyanga 400kV and North-West grid 400kV, he said. The government would also continue to implement rural electrification projects, he said. Mr Wasira said the government would continue to strengthen rail, road, air, marine and inland water transport projects.
For railways, emphasis would be on continuing with the replacement of railway to 801b/yard, maintenance and purchases of locomotive engines and wagons. Others in the railway subsector include rehabilitation of the Kaliua-Mpanda, Isaka-Mwanza rail stretches, and the Mtwara-Mbamba Bay and Mchuchuma-Liganga rail project.
The government would also develop regional rail projects, including the Tanga- Arusha-Musoma and DSM-Isaka-Kigali railways. The government would also introduce new railway lines in Dar es Salaam, he said
Source Tanzania Daily News
