Macroeconomic Overview of Tanzania

Only available on StudyMode
  • Download(s) : 134
  • Published : December 26, 2012
Open Document
Text Preview
Tanzania
A M acroeconomic Analysis

1 2/15/2011

1

CONTENTS
Sl. NO.

TOPIC

PAGE NO.
2

1.

General Overview of Tanzania

2.

Macroeconomic Performance in the
recent past

3.

Macroeconomic Difficulty-1
§ Overview
§ Possible Solutions

8
10

Macroeconomic Difficulty-2
§ Overview
§ Possible Solutions

12
13

References

14

4.

5.

3

2
The United Republic of Tanzania is a nation in Eastern Africa which was formed in 1964 with the union of two states Tanganyika and Zanzibar. In the following section we present an overview of the nation from the political-economic-social-technologicalecological-legal (PESTEL) perspective. Tanzania-Political Environment

Tanzania has a relatively stable political environment as compared to the countries neighbouring it. The nation has a multiparty democracy in place. The Revolution party has been in power since independence and the union with Zanzibar on April 26, 1964 which led to the formation of United Republic of Tanzania. The President, who along with the members of the unicameral National Assembly, is elected by direct popular vote for a five year term, is the head of state and he selects the cabinet of ministers and also appoints the Prime Minister who represents the Government in the National Assembly. Mr. JakayaKikwete, a veteran of the country s CCM (Chama CheMapinduzi) party has been president of Tanzania since 2005. He won a fresh five year term in October 2010. Although, multiparty democracy is in place, CCM is the dominant party (more than 75% of National Assembly Seats) with the opposition being too weak to pose any serious challenge.

The Union with Zanzibar makes for a very unique form of government in the nation. The relationship can be best described as semi-autonomous. Zanzibar has a separate 76 member House of Representatives in place. This body can make laws for Zanzibar but not for Union designated matters. Five members from Zanzibar are also present in the National Assembly. In matters of international relations, the Tanzanian government has maintained good relationships with the West and the investment climate is favourable regards to FDI and investment by foreign companies in Tanzania. Tanzania-Economic Environment

Tanzania has a mixed economy which blends together free market and state controlled economies. The system has evolved out of the state centered socialist policies that were in place from 1961 till 1986 when economic reforms were implemented. Since 1986, investment interest in Tanzania has increased rapidly across all sectors. Another major development was the authorization of foreign banks in 1991 which strengthened the banking industry and made it more competitive. The 29 licensed banks in the country include names like Standard Chartered Bank, Stanbic Bank, Citibank, Bank of Africa Tanzania, Diamond Trust Bank, Exim Bank, National Bank of Commerce and National Microfinance Bank. The relatively stable Tanzanian Shilling is the trading currency but prices are more often than not indicated in US Dollars. Agriculture is the mainstay of the economy accounting for more than half of the nation s GDP, three fourths of the total exports and it also employs an equal proportion of the country s workforce. Tanzania is blessed with large quantities of natural reserves including gold, diamond, nickel, chrome, iron, coal, platinum among many others. Tanzanite is a rare gemstone mined only in the country. Natural gas is also abundant. Despite such abundance, mining and extraction currently contribute towards a small fraction of the country s output. Great variety in wildlife, world renowned sanctuaries like Serengeti and scenic places like the Kilimanjaro peak makes tourism a huge industry in Tanzania which is otherwise dependent mainly on agricultural processing and manufacture of light consumer goods.

Tanzania-Social & Cultural Environment
Tanzanian culture draws heavily from Arab, Western and tribal Bantu...
tracking img