Economy on track to achieve nation’s middle income status!

BY EDITOR

27th October 2015.

Tanzania is ambitious to eject itself from the Least Developed Countries (LDCs) bracket and assume the status of middle income economy by the end of the first quarter of this century at the latest.  

According to a brief presented at the 17th Annual Research Workshop of the Research on Poverty Alleviation (RePoA) in Dar es Salaam recently, to attain that status requires the relevant authorities – and, indeed, all and sundry – to work hard towards fulfilling the requisite  development criteria, if the ambition is not to prove mere wishful thinking.

In that regard, the Planning Commission of the government conducted an analysis in 2011 to determine what it would take for Tanzania to  make the quantum leap needed to achieve the envisaged middle income status by 2025. 

The study came up with various factors that can facilitate the economic transition yearned for. For instance, it was calculated that a Gross National Income (GNI) per capita of US$2,700 would have to be achieved just to reach the lower middle-income country threshold. 

And, to reach that threshold, an average annual GNI growth rate of  eight per cent would have to be attained and sustained over the next 15 years. This is equivalent to a GNI growth per capita of about five per cent – given a population growth of around three per cent.
The study further pointed out that Tanzania would also have to be transformed from a mainly agricultural economy to a semi-industrialised one. 

Therefore industrialisation is expected to happen along various lines.

 First, increased productivity in agriculture would increase production and generate excess labour supply – with both fuelling agro-processing and leading to a sharp expansion in the manufacturing sector. 

Second, increased activities in the downstream nodes of value chains would create employment and growth in the industrial sector. 

In principle, these endeavours point to shifting to, or leaning towards,   socio-economic transformation. This is commonly defined as a process in which increasing proportions of economic output and employment are generated by sectors other than agriculture. 

The process of transformation connotes a shift from agriculture-based societies to urban, industrial and/or service-based economies with sustained high GDP growth rates.

However, the World Bank (WB) insists that a predominant agricultural economy is the quickest way towards inclusive growth and poverty reduction. 

Without electricity and higher agricultural productivity, Africa’s development cannot prosper and African governments, Tanzania is no exception- are intent on changing this.   

Based on evidence from countries that have achieved phenomenal economic success during the last 30-50 years – including Vietnam, China, Namibia, Brazil, Singapore, South Korea, Botswana and the United Arab Emirates – as well as insights from Tanzania’s own development path. 

The state must identify national priorities. decide how best to sequence the various initiatives within each area or sector of focus; assess which activity delivers the greatest impact within the prioritised initiatives, and direct the bulk of resources to a few strategic interventions of high value. 

The government needs to sustain its support to agriculture through formulating the right set of agricultural and land policies.

We have been blessed with a wide variety of natural resources such as gas and oil…but even our tourism industry and agriculture sector are sufficient to push our economy to the next level.

SOURCE: THE GUARDIAN