Mining, telecoms grow Tanzania’s economy; GDP low

Tuesday November 5 2019

A miner inside the Bulyanhulu gold mine in northern Tanzania. PHOTO | FILE

A miner inside the Bulyanhulu gold mine in northern Tanzania. FILE PHOTO | NMG 

ROSE MIREMBE
By ROSE MIREMBE
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Tanzania's economy expanded by 7.2 per cent in the second quarter of 2019 compared with 6.1 per cent in 2018.

According to A Tanzania National Bureau of Statistics report released recently, the fast growth of the gross domestic product in the April-June 2019 period was due to improved performance of construction, mining and communications sectors.

“The largest share to GDP in the second quarter of 2019 was from tertiary activities which accounted to 41.5 per cent, followed by primary activities by 32.9 per cent and secondary activities had the least share of 25.7 per cent, before adjustment for taxes,” the report said.

Construction recorded the highest growth of 19.6 per cent followed by mining and quarrying (17.2 per cent) and information and communication (10.3 per cent), it said.

The economy grew by 6.6 per cent in the first quarter of 2019 and government expects full-year GDP growth to expand by 7.1 per cent this year, up from 7 per cent last year.

In the second quarter, construction recorded a double-digit growth rate, at 19.6 per cent compared with 5.2 per cent in the corresponding quarter of 2018.

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The growth was attributed to an increase in local production of construction materials like cement, iron and steel that are used in construction.

The activities that followed were mining and quarrying at 17.2 per cent in the second quarter compared with a growth rate of 6.8 per cent in the similar quarter of 2018.

Growth was mainly due to an increase in production of gold, coal, and diamond.

According to the IMF, Sub-Saharan Africa’s growth is expected at 3.2 per cent in 2019 and 3.6 per cent in 2020, slightly lower for both years than in the April 2019 World Economic Outlook.

The IMF further adds that economies in Africa that are typically more diversified are experiencing solid growth.

The Information and communication sector increased by 10.3 per cent in the second quarter of 2019 compared with 12.4 per cent in the corresponding quarter of 2018.

This growth was attributed to an increase in airtime used by mobile phone customers and the expansion of broadcasting and Internet services in the country.

“The softening of consumption growth is supported by Tanzania Revenue Authority data showing lower consumption tax collection, as well as tight controls on public consumption expenditures.

“Investment growth remains positive but dampened as indicated by significant under-execution of public development plans, lower levels of FDI inflows and improved but relatively low private sector credit growth,” said the WB economic overview.

Rwanda’s economy expanded by 12.2 per cent compared with 6.8 per cent in 2018, (5.4 percentage increase).

Uganda’s economy recorded a growth rate of 5.4 per cent compared with 5 per cent in 2018 (an increase of 1.3 percentage points).

Kenya grew by 5.6 per cent compared with a 6.4 per cent in the second quarter of 2018 equivalent to slowdown of 0.8 percentage points.

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