DAR ES SALAAM: INFLATION in Dar es Salaam has surged above 8.0 per cent year-on-year, surpassing the national medium-term target, largely driven by rising prices of non-food items.
The Bank of Tanzania (BoT) said in its latest Consolidated Zonal Economic Performance report that, in 2023/24, inflation remained within the country’s medium-term target of 3.0 per cent to 5.0 per cent in five zones—excluding Dar es Salaam.
“The increase in headline inflation in the Dar es Salaam zone was largely driven by a rise in the prices of non-food items, including clothing and footwear, housing, transport and restaurant and accommodation services,” the report said.
Although the zonal report did not specify the reasons behind the rise in non-food item prices, exchange rate fluctuations may be a key factor contributing to the price surges in Dar, Tanzania’s business capital.
Inflation in Dar dropped to nearly 1.0 per cent in June last year before spiking to 8.0 per cent by the end of June this year.
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The central bank divides the country into six economic zones: Central, Dar es Salaam, Northern, Lake, South Eastern and Southern Highlands.
In contrast, inflation in the Southern Highlands zone fluctuated between 1.0 per cent and 6.0 per cent year-on-year for both 2022/23 and 2023/24, closing the year within the national target range.
The Lake Zone experienced deflation, with an inflation rate of -0.8 per cent, down from nearly 6.0 per cent in June 2022 and ended the period well below the national target.
The Central zone registered an inflation rate of 2.5 per cent in June, while the Northern and South zones recorded inflation rates of 1.0 per cent and 2.0 per cent, respectively, at the close of 2023/24.
“The easing of inflation in most zones was mainly driven by a decrease in food prices, thanks to good harvests during the 2022/23 crop season,” the BoT report said.
Overall, food production increased during the 2023/24 crop season, driven by favourable weather, enhanced government support in providing quality seeds and subsidised fertilisers, improved extension services and measures to control pests and diseases.
Additionally, an increase in cultivated land area contributed to the improvement in food production. The total cultivated area increased to 11,489,113 hectares, up from 11,137,874 hectares in 2022/23.
The usage of subsidised fertilisers also rose to 622,054 tonnes, compared to 580,628 tonnes the previous year. In the 2023/24 crop season, total food production reached 22,803,316 tonnes, up from 20,402,014 tonnes in 2022/23. Cereal production amounted to 14,587,177 tonnes, while non-cereal production was 8,216,139 tonnes.
Maize accounted for 44.2 per cent of total food production, followed by rice at 13.4 per cent and legumes at 10.9 per cent.
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