Tanzania is expected to achieve micro-economic stability in a few months to come as the inflation rate keeps on declining.
Chief Economist with the Standard Bank Group, Mr Goolam Ballim
“The inflation rate is now coming down…the decline shows that interest rates are going to come down systematically, which means there will be more stability in economy,” Phumelele Mbiyo, Regional Head- Macroeconomic Research, Stanbic Bank Tanzania said during an economic forum organized by the bank.
He said that micro economies are the fuels of growth in emerging economies. Therefore Tanzania is assured of sustainable growth more than ever before.
Mr. Mbiyo said that, over the course of this year, there is the possibility for the inflation rate to depreciate more due to the fact that food production is going up, oil prices are likely to go down, electricity supply is going to be stable, hence give more opportunity for the microeconomy to experience growth.
He further advised the government to positively embrace a tight monetary policy so as to stabilize the shilling and keep inflation in check. Statistics show that Tanzania’s economy has been growing at a rate of 6 to7 percent for about a decade now.
Economically speaking, 6 or 7 percent is an impressive record in growth, but it does not necessarily lead to economic development. “Tanzania has to embark on infrastructure development so as to beef up its development strategies. I would advise the government to use the discovered natural gas for power production so as to speed up the development of the country,” Goolam Ballim, Standard Bank Chief Economist said.
He said that when the country becomes more stable locally, it becomes easier to attain more growth for the good of the country. “The manufacturing sector for example, is likely to grow at a good speed following the government decision to use the gas resource in producing power,” Mr. Ballim explained.
Mr. Ballim further said that, Africa is now stepping ahead to become the new center of the global economy, therefore Tanzania has to take advantage of the trend to connect itself to the rest of African continent and the global economy. In the last five years to December last year, Sub-Saharan Africa was the second fastest growing region in the world.
This evidences that Africa is now becoming independent from external sources. During the same period Africa has grown by 40 per cent. The current trend shows that the global economy is going to suffer from global recession in coming years, but Africa is still showing resilience.
For the past 10 years, the Bank of Tanzania (BoT) has been announcing promising growth figures that have been supported by both the World Bank and International Monetary Fund. Stanbic Bank Tanzania, although a private entity, has been a major player in equipping its clients with the required skills to making decisions that will positively influence their businesses through the economic forum which is organized annually.
