Govt bullish about growth prospects

DODOMA: THE economy expanded by 5.1 per cent in 2023 despite the impacts of adverse global economic situation, and is projected to grow to 6 per cent this year, the government has said.

Presenting the state of the economy for 2023 in the National Assembly on Thursday, the Minister of State in the President’s Office (Planning and Investments), Professor Kitila Mkumbo said the main drivers of growth were strategic investments in energy and transport infrastructure, tourism and mineral exports as the government undertook measures to cushion the economy from adverse impacts of global economic uncertainties.

However, despite stellar growth of the economy, it was slightly below 5.2 per cent target for 2023 mainly because of the rise in production costs in some sectors, and prolonged rains which affected agricultural production and damaged roads and bridges in some areas, he said.

The minister said the situation was also compounded by the impact of monetary policy tightening in advanced economies, which increased cost of borrowing from global financial markets, contributing to tight credit conditions, negatively affecting production.

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Growth slowed to 4.7 per cent in 2022 from 4.9 per cent in 2021, due in part to the impact of the war in Ukraine that sent commodity prices, notably on food and energy, soaring.

The minister said in 2023 Tanzania’s GDP value in current prices reached 188.588tri/- up from 171.3tri/- in 2022. With a population of about 61.7 million in 2023, GDP per capita increased by 7.1 per cent to 3,055,606/- (equivalent to 1,275.5 US dollars in 2022) up from 2,854,072/- in 2022 (equivalent to 1,233.1 US dollars) in 2022.

Agriculture accounted for 26.5 per cent for the total economy, followed by construction 13.2, minerals (9.0 per cent), trade and repairs (8.3 per cent).

In 2023, growth of agricultural activities that include cultivation of crops, livestock, forestry and fishing was 4.2 per cent up from 3.3 per cent in 2022, thanks to government’s fertiliser subsidy programme that made the agricultural input more affordable to farmers as well as sufficient and timely rains in many areas.

Arts and entertainment sector led in growth of 17 per cent, followed by financial and insurance sector, (12.2 per cent), minerals (1.3 per cent), food and accommodation (8.3 per cent) and information and communication (7.6 per cent).

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Despite leading in growth, arts and entertainment sector contributed little in economic growth as it has attracted a few people in various activities which include film, drama, music, sculpture, painting and tailoring.

The minister said in 2023 growth of mining activities reached 11.3 per cent up from 10.8 per cent due to increase in mineral production particularly coal, zinc, diamond, limestone and copper.

Contribution of the mining activities to the national economy was 9.0 per cent last year, unchanged from 2022.

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