- The World Bank has warned that Tanzania’s risk of debt distress has worsened from low to moderate.
- The poor performance of the tourism sector during the last two years was a major blow to the economy.
- Tourism sector is the biggest contributor to Tanzania’s economy.
The World Bank has warned that Tanzania’s risk of debt distress has worsened from low to moderate. The poor performance of the tourism sector during the last two years was a major blow to the economy. Tourism sector is the biggest contributor to Tanzania’s economy.
The late President of Tanzania John Magufuli, refused to acknowledge the spread of the Pandemic. He downplayed the impact of coronavirus and refused to impose lockdown and restrictions to curb COVID 19. This led to the isolation of the country by the regional and international community and the country lost international business and investments. To tide over the economic crunch, Tanzania resorted to borrowing non-concessional loans.
According to World Bank’s 17th Tanzania Economic Update, released on March 1, the downgrade was primarily driven by the collapse of tourism exports during the Covid-19 pandemic, that led to increased non-concessional borrowing and rising debt service. The Bank has advised the country to focus on key areas like enhancement of public-sector debt statistics, focusing on projects that promise clear socioeconomic payoffs and balancing emergency spending with broader development agenda.
Tanzania under the leadership of President Suluhu launched various measures to deal with the health and economic crisis. Experts are of the view that Tanzania’s debt risk is still lower to its East African Community (EAC) counterparts like the Democratic Republic of Congo, Kenya, South Sudan and Burundi are in the ‘distress’ and “high” distress category. Tanzania joins Rwanda, Uganda in the “moderate” zone, according to World Bank. The Bank has projected that Tanzania’s economy is likely to grow by 4.5 percent to 5.5 percent this year compared to 4.3 percent in 2021.
https://trendsnafrica.com/lack-of-cashew-processing-leads-to-huge-losses-for-tanzania-report/
https://trendsnafrica.com/uganda-tanzania-mou-to-remove-non-tariff-barriers/
