The performance and increasing trends of the GDP is attributed to a great extent by buoyant performance of construction, trade, agriculture, services and transport sectors.
The GDP projection and trends are promising contrast to the real picture behind the scene. The distribution of the national cake is still unequal in urban and rural population.
The World Bank overview report on Tanzania shows that, about 12 million Tanzanians are still living in poverty.
The same development challenges that faced Tanzania since 1961 are still debates and topics of the day. Mwalimu Julius Nyerere (the founding father of the nation) declared war against diseases, poverty and ignorance.
Worse enough, fifty years down the line, with five presidential terms, the country and its administrative system is still swimming in the same ocean with increased tragedies and development challenges such as fraud, rampant corruption, infrastructural bottlenecks, unemployment, illiteracy, diseases, poverty and power accessibility.
There have been numerous development programmes, slogans and jargons with little or no profound achievements especially looking at the value for money.
The same story goes to Big Results Now (BRN) programme, MKUKUTA, MKURABITA and the likes.The national debt burden and the gap between the haves and the have nots are widening.
The trend of the public debts shows that in 2013 stood at 27trn/-, in September 2014, it stood 30trn/-and the IMF projections shows that it will increase to between 33.8trn/- and 42trn/- in 2016 and 2017/18 respectively.
However, the projections are based on the assumptions that recent borrowing and spending on recurrent expenditure remains unabated. It is apparent to conquer with the projections for a number of reasons.
First, the national account has spent a lot of money for the 2015 general election; second, there are no any profound and bold measures in place to alter the balance of payment problem (BOP), inflation and the fall of our currency value against other nation’s currencies.
Thirdly, the government has not shown any profound measures to direct its borrowings for long term investment but rather most of borrowings are directed to recurrent expenditures such as buying MPs’ cars, paying for public cars oil, fuel and repairs and paying for salaries to mention but a few.
According to World Economic Forum in its global competitiveness report (2014-2015) in which Tanzania was ranked 121st, there are problems (with their rankings) which required immediate attention.
To mention a few, they are: Rampant corruption and embezzlement of funds (98th), opaqueness in policy making (111th), poor infrastructural facilities such as roads and ports (130th), Unreliable electricity (125th), despite the discovery of Mtwara gas and other initiatives in place.
All these hurdles including other attributes have far reaching negative effects both direct and indirect in the economy.
Namely deterring investment, both local and foreign direct investments (FDIs), reduced local production which in turn results into increased importation and balance of payment (BOP) problems.
From analytical point of view, if all is said and well understood we must not concentrate on faults and critics only but the remedies are vital for progress.
The question is, should Tanzania stop borrowing or what should be done with respect to the present economic situations facing the country.
The recent political reign under Dr John Maguful shows a promising future especially in accountability and good governance. However, it is too early to judge with respect to kilometres and challenges lying ahead.
Ever since the creation of the world no any country has yet moved from underdeveloped to developed or industrialised without borrowing.
Therefore, the problem is not borrowing or the size of borrowing but how do we use the credit towards economic growth and development.
Magufuli’s reign should ensure that, the country’s channels of borrowings should be directed to investment projects rather than recurrent expenditure.
Efforts must be in place to ensure all the investment projects realize the value for money as per the specified objectives and time frame.
For instance, it is worth for Tanzania to borrow with the purpose of boosting the agriculture, value addition and manufacturing sector aiming at meeting local and international market.
This will in the future generate profit returns, employment and increase government revenues and pay the debts timely if effectively managed.
On the other hand, there should a separate agency with fully autonomy entitled by law for auditing all the government borrowings and produce reports in a very transparent manner.
To make things more transparent, the report should be discussed and debated in the parliament. This will ensure optimal and effective use of government borrowings.
Contracts transparency is an issue of concern and should be addressed immediately. Contracts relating to extractive industry such as oil, gas and mining should be disclosed and well known to the public.
Those who have experience with participatory rural appraisal (PRA) techniques would concur with me that, citizens either educated or not are researchers. They are good in investigation and information seeking.
Therefore, through contract disclosure, citizens will be allowed to monitor contracts in areas such as environmental compliance where they may be better placed than the government.
It further reduces or eliminates the resource curse problem to Tanzania which is facing other countries like Nigeria, Sudan and Somalia.
The back born of Tanzania’s economy with more than 50 million estimated populations is based on agriculture. This suggests that the government has to take several reforms to free the agricultural sectors from all technical and business related shackles.
Among the key areas for agricultural reforms include increase agricultural subsidy, price stabilisation, adoption and sustaining of agricultural based irrigation, promoting agricultural extension, agricultural mechanisation and more efficient intermediation of savings into capital formation for agriculture and its related activities.
Investment in industrial sector is vital and inevitable. Tanzania is experiencing inflation, loss of currency value against other currencies and balance of payment problems (BOP) caused by importation of litany of goods which can even be produced locally.
It’s only through revamping the old and dead industries and increasing investment into other new industries.
The investment in industrial sector will have far reaching direct and indirect impacts to the economy and community at large through employment creation, government revenue, addressing balance of payment problems through increased exportation and reduced importation.
The production, supply and distribution of reliable electricity require attention. Electric power is an engine and heart for increased production in all sectors of the economy such as industries, mining and agriculture to mention a few.
It is high time for follow up of the government’s 532 km gas pipeline from Mnazi Bay to Dar es Salaam to ensure its completion and operations.
This pipeline is expected to allow the country to double its electricity generation capacity to 3,000 megawatts by this year 2016.
Kochecha Heriel, is a Student at the Mzumbe University-Dar es Salaam Campus Msc. Applied Economics and Business. Contacts: 0717 338211; Email:hkochecha@gmail.com
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