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World Bank sees Tanzania’s economy expanding up to 5.5% this year

THE World Bank predicts Tanzania’s economy to expand between 4.5% to 5.5% this year compared to 4.3% in 2021, as a rollback of coronavirus-related restrictions in many countries boosts tourism and trade, its country director said.

After initially downplaying the severity of the COVID-19 pandemic under the late President John Magufuli, Tanzania changed its approach under his successor, President Samia Suluhu Hassan, and launched a vaccination programme in August last year.

“The vaccination programme is crucial for underpinning a stable recovery of international travel and tourism, which together account for more than one-quarter of the country’s total exports,” Mara Warwick, World Bank Country Director for Tanzania, said at a launch of a report on the country’s economy.

However, Warwick said the potential emergence of new coronavirus variants, reduced capital flows, elevated debt levels and persistent inflationary pressures as well as supply bottlenecks posed risks to the projected growth.

A joint IMF-World Bank analysis of Tanzania’s debt sustainability conducted in September last year said the country’s risk of external debt distress had increased from low to moderate.

“The downgrade primarily reflected the collapse of tourism exports during the COVID-19 pandemic in a context of increased non-concessional borrowing and rising debt service,” the Bank said.

The World Bank growth projection range is broadly in sync with the ministry of finance which forecast in November the country’s economy would expand at 5.2% this year.

By The African Mirror