Gross domestic product (GDP) growth in agriculture has been shown to be at least twice as effective in reducing poverty as growth originating in other sectors.

 

The Tanzania agriculture sector that employs over 70 per cent of the workforce contributes about 25 per cent to the Gross Domestic Product (GDP), 34 per cent of foreign exchange earnings and 125 per cent of food sufficiency.

 

The World Bank has said Tanzania is expected to sustain 7 per cent or more economic growth rate in the next two years with analysts emphasising on the quality of growth that will create more jobs and reduce poverty.

 

A senior economist from the University of Dar es Salaam Prof Humphrey Moshi said in Dar es Salaam that it's a good thing for the country to register such growth but would mean nothing if agriculture and industry sectors do not grow. "It's the quality of growth that matters more.

 

 

Real economic growth for Tanzania should be reflected from the agriculture and industry sectors that have huge impact in terms of job creation and poverty alleviation," he said.

 

He added, "If mining, gas and oil grow faster than agriculture and industry sectors, the impact job creation and poverty reduction remain minimal because they area capital intensive," In a bid to enhance agriculture sector contributions to the economy, the government last month launched Agriculture Development Bank that will end farmers' problem of failing to access finance as most commercial banks regards agriculture as too risk business to lend.

 

Apart from providing loans, the bank will finance putting in place important infrastructures for agriculture development including irrigation schemes to reduce over dependency of rainfall.

 

For the projections on economic growth to have impact on low-income earners, substantial investment should be channeled to the agriculture sector, particularly more irrigation schemes that would transform and commercialize farming. Similarly, he said industry sector should grow faster, increase the level of employments as well as bolstering the export sector.

 

 

The overall macroeconomic performance remains strong. Real GDP grew by 7.3 per cent in 2013 and 7.0 per cent in 2014 with the main contributors to growth being agriculture, construction, trade and transport sectors.

 

Last month, the International Monetary Fund (IMF) said Tanzania's recent macroeconomic developments have continued to be broadly favourable.

 

According to the IMF mission, the economy was estimated to have grown by 6.5 per cent in the first quarter of 2015, with strong performance recorded in transport, electricity generation, and information, communication, and financial services.

 

Economic growth is expected to remain close to seven per cent in the remainder of 2015 and in 2016, it said. The statement said inflation rose gradually in the past few months to 6.4 percent in August 2015.

 

"This was largely driven by supply side factors, particularly food prices, and the exchange rate depreciation in the first half of 2015, which raised the domestic cost of imports and partly offset the relief from the fall in global oil prices."

Source : allafrica.com