Dar es Salaam. The economic recovery is gaining momentum as Tanzania has seen an increase in exports of goods and services, as well as the provision of loans to finance economic activities by the private sector.
According to the Monthly Economic Review of the Bank of Tanzania, exports of goods and services amounted to $ 9.56 billion (approximately Sh 21.9 trillion) as of October 31, 2021, more than $ 8.63 billion. dollars (approximately 19.8 trillion shillings) in the corresponding period. period in 2020.
This is due to an increase in exports of manufactured goods and non-traditional products other than minerals, a trend analysts consider as things have started to return to normal after being hit for two years by Covid-19. .
Exports of goods increased nearly 10.4% to $ 6.7 billion, while non-traditional products increased 13.4% to reach $ 5.72 billion.
Exports of manufactured goods amounted to $ 1.17 billion (about 2.6 trillion shillings) from $ 864 million (about 1.9 billion shillings) in the year ending 2020, with a significant increase in other export products, especially cereals.
Economist and business expert Donath Olomi told The Citizen yesterday that improving exports means the impact of the pandemic on global economies is diminishing.
“The current trend suggests that on the one hand, markets are opening up now and on the other hand, the logistics sector is now recovering to allow a smooth flow of goods and raw materials,” noted Dr Olomi.
In addition, it implies that individuals’ incomes have increased, as have expenses, added Dr Olomi, who is also the director general of the Institute for Management and Entrepreneurship Development.
On the other hand, he said that the current performance trend is attributed to a favorable business environment under the leadership of President Samia Suluhu Hassan.
“A favorable business environment has increased the confidence of local and foreign investors. Let’s keep the momentum, if we want to do even better, ”said Dr Olomi.
Professor Abel Kinyondo of the School of Economics at the University of Dar es Salaam appears to have read the same page.
“In the short term, the president’s signals boost the confidence of traders and investors to invest in the country,” he said in a telephone conversation with The Citizen.
The head of state has been cited repeatedly as singing about the need to create a conducive business environment to boost trade and cement international relations.
But for his good intention to last, Dr Kinyondo believed that the government should now move on from good declarations to drafting laws, regulations and policies on the same.
“We have to create an environment of certainty. Investors need predictability in the legal framework because they want to be sure of their future. They want to be sure of the returns on their investment, ”he recommended.
“With a legal framework, investors will perceive us as we are really serious,” said Dr Kinyondo.
He also suggested that the government accelerate the implementation of the Business Blueprint in order to make the business environment even more attractive for investors.
“All laws that hinder the implementation of the Master Plan must be changed.
Confederation of Tanzanian Industries (CTI) policy and advocacy director Akida Mnyenyelwa said an increase in the value of manufactured exports was a good sign the industry was recovering from the pandemic.
“When Covid-19 was at its peak last year, it was not easy to import raw materials due to logistical issues with blockages,” Mnyenyelwa told The Citizen yesterday – noting that the challenge has reduced production volumes. On the other hand, he said, increasing the value of exports could mean that Tanzanian manufactures have become competitive in both quality and price.
Analysts are convinced that an increase in credit to the private sector will stimulate economic recovery. Credit to the private sector continued to recover, registering an annual growth of 5.6% in October 2021 compared to 4.9% recorded in the corresponding period last year.
Credit growth to the private sector is expected to maintain an upward trajectory towards the average growth target of 10.6% in 2021/22.
This, according to the Central Bank of Tanzania (BoT), is supported by the continued implementation of the policy measures it rolled out in July 2021, coupled with the recovery of the global economy which has started to affect activities. national economies. Bank interest rates charged on loans and offered on deposits remained broadly unchanged in October 2021 compared to previous months.
Global and one-year loan rates averaged about 17 percent.
Meanwhile, negotiated loan rates charged to Preferred Customers averaged 13.65%.
The costs of loanable funds are expected to decline in the medium term, following the operationalization of the policy measures deployed by the BoT in July 2021, coupled with the ongoing implementation of accommodative monetary policies.