THE UNITED REPUBLIC OF TANZANIA THE ECONOMIC SURVEY 2010 Produced by: The Ministry of Finance DAR ES SALAAM TANZANIA August, 2011 Printed by KIUTA Dar es Salaam - Tanzania
Table of Contents LIST OF TABLES... i ABBREVIATIONS AND ACRONYMS... vii IMPORTANT ECONOMIC EVENTS IN 2010... x CHAPTER 1... 1 THE DOMESTIC ECONOMY... 1 Economic Growth... 1 Rebasing of the National Consumer Price Index (NCPI)... 5 New weights and a new reference period... 5 Classification of Goods and Social Services... 6 NCPI Methodology... 7 The Link between the new and old NCPI... 8 Price Trend... 8 Inflation Rate excluding Food and Energy... 8 Capital Formation... 10 CHAPTER 2... 40 THE STATE OF THE WORLD ECONOMY AND INTERNATIONAL ECONOMIC CO-OPERATION... 40 THE STATE OF THE WORLD ECONOMY... 40 World Economic Growth... 40 Trend in World Trade... 40 Economic Development in Sub-Saharan Africa... 43 East African Community (EAC)... 45 Africa Union and Economic Commission for Africa... 45 Joint Permanent Commission (JPC)... 46 Southern Africa Development Community (SADC)... 46 African Peer Review Mechanism (APRM)... 47 World Economic Forum (WEF)... 47 CHAPTER 3... 49 EXTERNAL SECTOR... 49 INTRODUCTION... 49 MERCHANDISE EXPORTS... 49 Coffee... 50 Cotton... 50 Tea... 50 Tobacco... 50 Cashewnuts... 51 Cloves... 51 Minerals... 51 Manufactured Goods... 52 Fish and Fish Products... 52
Horticultural Products... 52 Other goods exports... 52 Service Receipts... 54 MERCHANDISE IMPORTS... 54 Capital goods... 54 Intermediate Goods... 54 Consumer Goods... 55 SERVICES PAYMENTS... 55 TRENDS IN SELECTED REGIONAL AND BILATERAL TRADE.. 55 BALANCE OF PAYMENTS... 60 Balance of Merchandise Trade... 60 Balance on Services... 61 Balance on Investments Receipts and Payments... 61 Balance on Current Transfers... 61 Balance on Current Accounts... 61 Balance on Capital Transfers... 61 Balance on Investment Payments... 62 Overall Balance of Payments... 62 Foreign Currency Reserves... 62 EXCHANGE RATE... 62 CHAPTER 4... 76 GOVERNMENT FINANCE... 76 Domestic Revenue... 76 Expenditure... 78 Sectoral Allocation of Government Budget... 79 National Debt... 80 External Debt... 81 External Debt Stock by Creditor Category... 81 Domestic Debt Stock... 82 Public Debt Service... 83 CHAPTER 5... 88 MONEY AND FINANCIAL INSTITUTIONS... 88 Money Supply and Domestic Credit... 88 Deposits in Commercial Banks... 89 Parastatal Pension Fund (PPF)... 90 Public Service Pension Fund (PSPF)... 90 National Social Security Fund (NSSF)... 91 Government Employees Provident Fund (GEPF)... 92 National Health Insurance Fund (NHIF)... 93 Local Authorities Pensions Fund (LAPF)... 94 Tanzania Insurance Regulatory Authority (TIRA)... 95 Dar es Salaam Stock Exchange (DSE)... 96 Tanzania Postal Bank... 97 ii
CHAPTER 6... 103 HUMAN RESOURCES... 103 Population and Development... 103 Labour Force and Employment... 105 CHAPTER 7... 108 PRIVATE SECTOR DEVELOPMENT... 108 Investment in the Country... 108 The Regional Distribution of Projects... 109 The Improvement of Business Environment... 110 ECONOMIC EMPOWERMENT... 111 Mwananchi Empowerment Fund... 111 Access to Credit... 112 CHAPTER 8... 115 CROSS CUTTING ISSUES... 115 HIV/AIDS... 115 Environment... 115 Good Governance... 117 Gender... 118 Public Safety... 119 CHAPTER 9... 121 REVIEW OF THE IMPLEMENTATION OF NATIONAL STRATEGY FOR GROWTH AND REDUCTION OF POVERTY (NSGRP)... 121 Introduction... 121 Growth and Reduction of Income Poverty... 121 Improving Quality of Life and Social Well-being... 123 Good Governance and Accountability... 124 CHAPTER 10... 127 EXPANDING FINANCIAL SERVICES TO THE UNBANKED COMMUNITY... 127 Introduction... 127 Financial Sector in Tanzania... 129 Mobile Phone Payment... 131 Development of Microfinance Institutions... 133 Challenges... 135 Conclusion... 137 CHAPTER 11... 140 AGRICULTURE AND COOPERATIVES... 140 Growth... 140 Food Crops... 140 Cash crops Production... 141 Production of Oil seeds... 142 Investment in Agriculture... 142 Irrigation Farming... 142 iii
Extension Services and Trainings... 143 Research Activities... 144 Agriculture Input Trust Fund... 145 Provision of Subsidies for Farming Inputs... 145 LIVESTOCK... 146 Livestock Production and its Products... 146 Trading of Livestock and Its Products... 147 COOPERATIVES AND MARKETING... 150 Cooperative Development... 150 Trend of Cash Crops Prices... 151 CHAPTER 12... 161 NATURAL RESOURCES AND TOURISM... 161 Growth Rate... 161 Forestry and Beekeeping... 161 Wildlife... 164 FISHERIES... 165 Tourism... 168 Archives and Antiquities... 171 CHAPTER 13... 184 MINING... 184 Growth Rate... 184 Mineral Prospecting... 184 Mining and Mineral Sales... 184 Diamond... 184 Gold... 184 Gemstones... 185 Coal... 185 The value of Mineral Exports... 185 CHAPTER 14... 188 MANUFACTURING AND INTERNAL TRADE... 188 Growth Rate... 188 Small Enterprises... 188 Production Cost... 188 Production in Selected Industries... 188 Internal Trade... 189 Dar es Salaam International Trade Fair... 189 CHAPTER 15... 198 CONSTRUCTION AND LAND DEVELOPMENT... 198 CONSTRUCTION... 198 Growth Rates... 198 Road Network... 198 Roads and Bridges Maintenance... 199 Road Board Fund... 199 iv
Contractors Registration Board... 200 Engineers Registration Board... 200 Architects and Quantity Surveyors Registration Board... 201 National Building Council... 202 Tanzania Building Agency... 202 LAND DEVELOPMENTS... 203 Human Settlements and Rural Development... 207 Housing Development... 209 CHAPTER 16... 210 TRANSPORT AND COMMUNICATION... 210 Introduction... 210 TRANSPORT... 210 Road Transport... 210 Urban Commuter Services... 210 Usafiri Dar es Salaam (UDA)... 211 RAILWAY TRANSPORT... 212 Tanzania Railways Limited (TRL)... 212 Tanzania and Zambia Railway Authority (TAZARA)... 212 AIR TRANSPORT... 213 Tanzania Airport Authority (TAA)... 213 METEOROLOGICAL SERVICES... 214 WATER TRANSPORT... 214 Marine Transport... 215 The Marine Service Company Limited (MSCL)... 217 SINOTASHIP... 217 COMMUNICATION SERVICES... 218 Tanzania Posts Corporation (TPC)... 218 Tanzania Communication Regulatory Authority (TCRA)... 220 INFORMATION AND COMMUNICATION TECHNOLOGY (ICT)... 222 National ICT Infrastructure Backbone... 222 Tele-centers... 222 National Physical Address and Postal Codes... 222 SCIENCE, TECHNOLOGY AND INNOVATION... 223 The Development of Scientific Research in Tanzania... 223 National Research Registry... 223 Human Resource Development... 224 Radiation Control... 224 CHAPTER 17... 232 ENERGY... 232 Growth Rate... 232 Electricity... 232 Exploration of Petroleum and Gas... 236 v
Fuel Prices... 236 ALTERNATIVE SOURCES OF ENERGY... 236 Minor Waterfalls... 236 Solar Power... 236 Geothermal and Biofuel... 237 CHAPTER 18... 238 WATER... 238 Introduction... 238 Rural Water Supply... 238 Urban Water Supply... 239 CHAPTER 19... 241 EDUCATION AND TRAINING... 241 Pre primary Education... 241 Primary Education... 241 Secondary Education... 242 Teachers Education... 242 Adult Education... 245 Schools and Colleges Inspection... 245 Vocational Training... 246 Technical Education... 247 Higher Education... 247 CHAPTER 20... 260 HEALTH... 260 Introduction... 260 Health Facilities... 260 Health Facilities Inspection... 261 Community Health Education... 262 Maternal and Child Health... 262 Life expectancy... 262 National Malaria Control Programme (NMCP)... 262 Food and Nutrition... 263 Social Welfare... 264 CHAPTER 21... 269 COMMUNITY DEVELOPMENT... 269 Folk Development Colleges... 269 Gender and Women Development... 269 Children Development... 270 Coordination of Non-Government Organisations (NGOs)... 271 vi
LIST OF TABLES Table A: Table B: Table 1: Table 1A: Table 2: Table 2A: Table 2B: Table 3: Table 3A: Table 4: Table 4A: Basic Economic Statistics Statistics Tanzania Mainland... xi Trends in Selected Macroeconomic Indicators, 2002-2010...xii Gross Domestic Product by Kind of Economic Activity, at current prices... 12 Gross Domestic Product (Monetary & non-monetary GDP mp) by Kind of Economic Activity, at current prices... 13 Sectoral Contribution to Overall GDP at Market Price (at current prices)... 14 Sectoral Contribution to Overall GDP Monetary & Non-Monetary, at current prices... 15 Gross Domestic Product and Expenditure, at current Market prices... 16 Gross Domestic Product (GDP mp) by Kind of Economic Activity, at constant 2001 prices... 17 Gross Domestic Product (Monetary & non-monetary) by Kind of Economic Activity, at constant 2001 prices... 18 Gross Domestic Product (GDP mp) by Kind of Economic Activity - Percentage Growth Rates, at constant 2001 prices... 19 Gross Domestic Product (Monetary & non-monetary GDP mp) by Kind of Economic Activity - Percentage Growth Rates, at constant 2001 prices... 20 Table 4B: Sectoral Contribution to Overall GDP (%) at constant 2001 prices... 22 i
Table 4C: Sectoral Contribution to Overall GDP (%) - Monetary & non-monetary at constant 2001 prices... 25 Table 4D: Gross Domestic Product and Expenditure, at constant 2001 market prices... 26 Table 5: Capital Formation by Type of Assets, at current prices... 27 Table 6: Capital Formation by Type of Assets, at constant 2001 prices... 28 Table 7: Capital Formation by Public and Private Sectors, at current price 29 Table 8: Table 9: Table 10: Table 11: Table 12: Table 13: Table 14: Table 15: Table 16: Index of Retail Prices of goods consumed by minimum wage earners in Dar es Salaam (2001=100).... 30 Index of Retail Prices of goods consumed by minimum wage earners in Dar es Salaam (2001 = 100)... 31 Cost of Living Index of goods and services consumed by middle grade wage earners in Dar es Salaam (2001=100).... 32 Cost of Living Index of goods and services consumed by middle grade wage earners in Dar es Salaam (2001=100).... 33 Cost of Living Index for the high income group in Dar es Salaam (2001=100).... 34 Cost of Living Index for high income group in Dar es Salaam (2001=100).... 35 Cost of Living Index of goods and services consumed by urban dwellers in Tanzania Mainland (2001=100).... 36 Cost of Living Index of goods and services consumed by urban dwellers Tanzania Mainland (2001=100)... 37 Different Indices of goods and services consumed by urban residents in Tanzania Mainland (2001 =100).... 39 ii
Table 17: Value of Tanzania's Foreign Trade... 63 Table 18: Volume and Value of Domestic Exports... 64 Table 19: Table 20: Volume and Value of Traditional and Non-traditional Exports... 65 Export Prices of Principal Commodities (Tshs/Ton)...70 Table 21: Export Prices of Principal Commodities (US$/Ton)...71 Table 23: Composition of Imports... 73 Table 24: Balance of Payments... 74 Table 25: Trends in Government Finance... 86 Table 26: Classification of Central Government Expenditure by Purpose... 87 Table 27: Monetary Survey: Tanzania Mainland... 99 Table 28: Table 29: Growth of Money Supply and Domestic Credit: Tanzania Mainland... 100 Trend of Exchange Rates of the Tanzania Shs. against the US$.......100 Table 30: Commercial Banks Lending by Sectors... 101 Table 31: Trend of Commercial Banks Deposits... 102 Table 32: Average Nominal Interest Rates... 102 Table 33: Regional Distribution of Tanzania Population (2005-2010)... 106 Table 34: Tanzania Investment Centre (TIC): Approved Projects... 114 iii
Table 35: Domestic Production and Consumption of Sugar.... 152 Table 36: Cotton procurement and local sales... 153 Table 37: Tea crop area, production and local sales... 154 Table 38: Coffee procurement and local sales... 155 Table 39: Sisal plantations, production and local sales... 156 Table 40: Tobacco procurement and local sales... 157 Table 41: Pyrethrum procurement and local sales... 158 Table 42: Cashewnuts procurement and local sales.... 159 Table 43: Summary of Marketed Quantities and Value of Principal Cash Crops... 160 Table 45: Tree Planting - Seedlings planted... 173 Table 47: Exports of Forestry Products... 174 Table 48: Export of Government Trophies... 175 Table 48A: Earnings from Tourist Hunting and Export of Live Animals... 176 Table 48B: Number of Tourist Hunters... 176 Table 50: Production in the Fisheries Sector (1993-2010)... 177 Table 51: Export of Fish Products... 178 Table 51A: Summary of Fish Export Products (1996-2010)... 179 Table 51B Trends of Nile Perch Exports (1996 2010)... 179 iv
Table 52: Number of visitors, hotel bed-nights and foreign exchange earnings... 180 Table 53: Number of Tourists and Foreign Exchange Earnings (1995-2010)...181 Table 55: Tourist Accommodation in Tanzania (2005-2010)... 182 Table 55A: Number of Tourists visited Tourist Attractions... 183 Table 56: Minerals Production... 186 Table 57: Minerals Exports (2005-2010)... 187 Table 58: Production and Consumption of Cement... 191 Table 59: Production in selected industries... 192 Table 60: Industries - Estimated number of employees... 193 Table 61: Industries - Estimated labour costs... 194 Table 62: Industries - Summary Statistics... 195 Table 63: Industries - Regional Summaries... 196 Table 65: Performance Indicators in the Industrial sector...197 Table 67: Tanzania Railways Corporation (TRC).... 225 Table 68: The UHURU Railway (TAZARA).... 226 Table 69: Shipping Statistics: Dar es salaam, Tanga & Mtwara... 227 Table 70: Postal Services Statistics... 230 Table 73: Air Tanzania Corporation (ATC).... 231 Table 74: Electricity: Installed Capacity and Total Units Generated by Station... 233 v
Table 75: Electricity sales by Type of Use... 234 Table 76: Quantity of Electricity Sold by Region... 235 Table 78: Total Number of Boreholes Drilled during the year 2010... 240 Table 79: Water Supply in Urban City Centre 2010...240 Table 80: Government Secondary Schools: Number of Students by Form. 249 Table 81: Private Secondary Schools: Number of Students by Form... 259 Table 84: Health Facilities in the Country... 266 Table 85: Health Services: Training Output in 2010... 268 Table 87: Number of Medical Personnel... 269 Table 87A: Number of Hospital Beds in the Country... 269 vi
ABBREVIATIONS AND ACRONYMS APRM ASDP ARVs TAA AU ATMS BEST BRELA BoT Cif COSTECH CARMATEC CPI CRDB COICOP COMESA DAWASCO D by D DSM DSE DADPs DITF DIT ECA EAC EPZ EWURA f.o.b FDI GEPF GBS GDP HESLB HBS - African Peer Review Mechanism - Agricultural Sector Development Programme - Anti-retroviral - Tanzania Airports Authority - African Union - Automatic Teller Machine - Business Environment Strengthening for Tanzania - Business Registration and Licensing Authority - Bank of Tanzania - Cost insurance and freight - Tanzania Commission for Science and Technology - Centre for Agricultural Mechanisation and Rural Technology - Consumer Price Index - CRDB Bank - Classification of Individual Consumption by Purpose - Common Market for Eastern and Southern Africa - Dar es Salaam Water and Sewerage Corporation - Decentralization by Devolution - Dar es Salaam - Dar es salaam Stock Exchange - District Agricultural Development Plan - Dar es Salaam International Trade Fair - Dar es Salaam Institute of Technology - Economic Commission for Africa - East African Community - Economic Processing Zone - Energy and Water Utilities Regulatory Authority - free on board - Foreign Direct Investment - Government Employees Provident Fund - General Budget Support - Gross Domestic Product - Higher Education Students Loan Board - Household Budget Survey vii
ISO ILFS JPC IFMS LUKU LSRP LAPF LGRP LGA M 2 M 3 IMF MDGs MKUKUTA MACEP MAIR MMS MSCL MRCC MSMEs MW NAIC NSSF NASCAP NEMC NEPAD NGO s NHIF NIC NMB PHDR PSRP PSPF PPF PFMRP PCCB PEDP RAHCO RITES - International Organization for Standardization Intergrated Labour Fource Survey - Joint Program Commissions - Integrated Financial Management System - Lipa Umeme Kadri Unavyotumia - Legal Sector Reform Programme - Local Authorities Pensions Fund - Local Government Reform Program - Local Government Authority - Broad Money Supply - Extended Broad Money Supply - International Monetary Fund - Millennium Development Goals - Mkakati wa Kukuza Uchumi na Kupunguza Umasikini Tanzania - Marine and Coastal Environmental Management Project - MKUKUTA Annual Implementation Report - MKUKUTA Monitoring System - Marine Service Company Ltd - Maritime Rescue Coordination Centre - Medium, Small and Micro Enterprises - Mega Watts - The National Artificial Insemination Centre - National Social Security Funds - Anti-Corruption Strategy and Action Plan - National Environmental Management Council - New Partnership for Africa s Development - Non-Governmental Organisations - National Health Insurance Fund - National Insurance Corporation - National Microfinance Bank Poverty and Human Development Report - Public Service Reform Program - Public Service Pensions Fund - Parastatal Pensions Fund - Public Financial Management Reform Program - Prevention Combating of Corruption Bureau - Primary Education Development Program - Railway Holding Company - RITES Company of India viii
RITA SACCOS SADC SCULT SMEs SUMATRA TaESA TANESCO TANROADS TAZARA TEUS TDHS TIRA TCAA TMA TCRA TICTS TRA TRC TRL TTCL Tshs UAE UFI VAT WEF WDL WMO WSDP - Registration, Insolvency and Trusteeship Agency - Savings and Credit Cooperative Societies - Southern Africa Development Community - Savings and Co-operatives Union League of Tanzania - Small and Medium Enterprises - Surface and Marine Transport Regulatory Authority - Tanzania Employment Service Agency - Tanzania Electricity Supply Company - Tanzania Roads Agency - Tanzania Zambia Railway Authority - Twenty Equivalent Units - Tanzania Demographic and Health Survey - Tanzania Insurance Regulatory Authority - Tanzania Civil Aviation Authority - Tanzania Meteorology Agency - Tanzania Communications Regulatory Authority - Tanzania International Container Terminal Services - Tanzania Revenue Authority - Tanzania Railways Corporation - Tanzania Railways Company Limited - Tanzania Telecommunications Company Limited - Tanzanian Shilling - United Arab Emirate - Global Association of the Exhibition Industry Formerly known, Union Des Foires Internationales - Value Added Tax - World Economic Forum - Williamson Diamonds Limited - World Meteorological Organization - Water Sector Development Program ix
IMPORTANT ECONOMIC EVENTS IN 2010 Date Month Events 5 7 May World Economic Forum WEF May The Southern Agricultural Growth Corridor (SAGCOT) was Launched 08 July Tanzania signed Comprehensive Africa Agriculture Development Program CAADP Compact 1-7 July The Dar es Salaam International Trade Fair took August September place in Dar es Salaam, Tanzania The Public Private Partnership PPP Act Na. 19 of 2010 was enacted Tanzania awarded a certificate for good performance in primary schools enrolment, that indicates the way of reaching MDGs targets in 2015, during MDGs Summit 31 October Tanzania National Election 17 December Central Bank of Tanzania printed new currency whereby its circulation started on 01 st January 2011 x
Table A BASIC ECONOMIC STATISTICS - TANZANIA MAINLAND 2004 2005 2006 2007 2008 2009 2010 % Change 2009/10 Population (millions) 35.3 36.2 37.5 38.3 39.5 40.7 41.9 2.9 Gross Domestic Product, at current prices (Shs. million) 13971592 15965294 17941268 20948403 24754457 28212646 32293479 14.5 Gross Domestic Product, at constant 2001 prices (Shs. million) 11239735 12068090 12881163 13801921 14828345 15721301 16828563 7.0 GDP per capita, at current prices (Shs.) 395796 441030 478434 547081 627097 693470 770464 11.1 GDP per capita, at constant 2001 prices (Shs.) 318406 333373 343498 360446 375642 386431 401499 3.9 Consumer Price Index (%) 4.2 4.3 7.3 7.0 10.3 12.3 5.5 Balance of merchandise trade (US$ million) -1009.7-1321.8-1946.5-2634.0-3433.5-2539.5-2828.3 11.4 Current Account balance (US$ million) -383.2-867.6-1143.2-1580.1-2595.4-1768.3-1853.5 4.8 Consumption of cement ('000 Tons) 1280.9 1375.2 1421.5 1629.9 1755.8 1940.8 2312.0 19.1 Electricity sold (KWH million) 3686.0 3623.0 2464.0 3057.0 3369.0 4802.1 5138.0 7.0 Tourist earnings (US$ million) 746.0 823.0 862.0 1198.0 1354.0 1159.8 1254.5 8.2 Railways: Cargo transportation ('000 Tons) 1300 1467 1073 1012 727 535 563 5.2 Education: Students in Primary Schools ('000)* 48276.0 72035.0 79598.8 83169.3 84372.4 84415.5 84193.0-0.3 Education: Students in Secondary Schools ('000)* 432.6 524.3 675.7 1020.5 1222.4 1466.4 1638.7 11.7 Education: Students in Higher Learning Institutions (number) 1 - - - - - - - Hospitals: Number of beds 49074 37048 37228 37228 37228 40118 45241 12.8 Doctors (number) - - 862 1198 1354 1159.8 578 Exports of Cash Crops (Mill.US$) Traditional Commodities Coffee 49.80 74.30 61.40 98.10 103.32 111.66 117.31 5.1 Cotton 74.60 111.50 55.80 66.40 80.87 111.15 97.79-12.0 Sisal 7.20 7.30 6.10 6.80 0.00 0.00 8.51 Tea 30.10 25.60 31.00 28.70 41.96 34.50 47.32 37.2 Tobacco 57.60 80.80 65.20 72.90 175.92 127.29 129.19 1.5 Cashewnuts 68.10 46.60 39.40 13.20 69.37 71.51 125.34 75.3 Cloves 10.30 8.50 8.20 4.20 13.52 14.73 8.14-44.7 Non-Traditional Commodities Minerals 680.20 711.30 836.80 886.50 42.52 1114.80 1560.10 39.9 Manufactured goods 110.10 156.10 155.90 309.20 94.19 98.70 93.40-5.4 Other exports 385.10 454.40 436.30 520.70 2163.84 2163.17 2072.40-4.2 Monetary Aggregates 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11p Money supply (Shs. billion) 2 2603.0 3266.5 5317.2 6527.8 7834.1 9801.8 Net domestic credit (Shs. billion) 1123.6 1504.2 2169.5 2477.7 4771.7 6124.1 Government Finance Government Recurrent Revenue (Shs. billion) 1716.3 2066.8 2739.0 3502.6 4293.1 4661.5 6003.6 28.8 Government Recurrent Expenditure (Shs. billion) 2017.5 2649.9 3137.5 3796.9 4681.5 5562.4 6950.6 25.0 Government Development Expenditure (Shs. billion) 1091.6 1385.2 1337.2 2201.1 2130.4 2611.3 3819.1 46.3 Source: Ministry of Finance * For Government and Private Schools ** From 1998, Base year is 2001 1 Academic year ending in the respective years 2 Extended Broad Money (M3) - Not available xi
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Table No. B: TRENDS IN SELECTED MACROECONOMIC INDICATORS, 2002-2010 NATIONAL ACCOUNTS 2002 2003 2004 2005 2006 2007 2008 2009 2010 Real GDP growth at market price 7.2% 6.9% 7.8% 7.4% 6.7% 7.1% 7.4% 6.0% 7.0% Agriculture, Hunting and Forestry 4.9% 3.1% 5.9% 4.3% 3.8% 4.0% 4.6% 3.2% 4.2% Fishing 6.8% 6.0% 6.7% 6.0% 5.0% 4.5% 5.0% 2.7% 1.5% Industry and Construction 9.4% 10.9% 10.9% 10.4% 8.5% 9.5% 8.6% 7.0% 8.2% Manufacturing 7.5% 9.0% 9.4% 9.6% 8.5% 8.7% 9.9% 8.0% 7.9% Construction 11.9% 13.8% 13.0% 10.1% 9.5% 9.7% 10.5% 7.5% 10.2% Services 7.7% 7.8% 7.8% 8.0% 7.8% 8.1% 8.5% 7.2% 8.2% Trade and Repair 8.3% 9.7% 5.8% 6.7% 9.5% 9.8% 10.0% 7.5% 8.2% Communications 10.4% 15.6% 17.4% 18.8% 19.2% 20.1% 20.5% 21.9% 22.1% Money 10.1% 10.7% 8.3% 10.8% 11.4% 10.2% 11.9% 9.0% 10.1% GDP growth at current prices 14.8% 15.9% 15.4% 14.3% 12.4% 16.8% 18.3% 13.8% 14.5% PRICES AND INTEREST RATES CPI Inflation (annual Average) 4.5% 5.3% 4.7% 5.0% 7.3% 7.0% 10.3% 12.1% 5.5% GDP deflator inflation (market price) 7.1% 8.4% 7.0% 6.4% 5.3% 9.0% 10.1% 7.4% 4.9% Short term lending rate 15.9% 15.6% 14.2% 15.7% 15.7% 15.0% 13.6% 14.0% 14.4% Long term lending rate 13.2% 12.5% 12.6% 14.1% 14.9% 16.7% 16.5% 14.5% 14.6% 12 months deposit rate 5.7% 5.0% 5.8% 7.7% 8.8% 10.1% 8.3% 9.0% 7.1% Deposit rates 2.7% 2.5% 2.6% 2.6% 2.6% 2.7% 2.7% 2.8% 2.4% MONEY M3 growth rate 25.6% 18.0% 13.5% 34.8% 21.5% 20.5% 19.8% 17.7% 25.4% M2 Growth rate 21.6% 17.8% 19.8% 33.9% 16.7% 27.2% 24.4% 20.8% 21.8% Growth rate of credit to private sector 41.5% 42.8% 32.8% 29.3% 40.1% 43.1% 44.6% 9.6% 20.0% BALANCE OF PAYMENTS (RATIO TO GDP) Exports of Goods 9.1% 10.5% 11.5% 11.9% 12.2% 12.0% 15.0% 15.7% 18.4% Exports of goods and Services 17.6% 18.6% 20.3% 20.9% 22.9% 23.1% 24.7% 24.4% 27.6% Imports of Goods 14.0% 16.6% 19.3% 21.2% 27.1% 28.8% 33.8% 27.3% 30.4% Imports of goods and Services 19.8% 22.8% 26.9% 29.8% 35.8% 37.1% 41.8% 35.3% 38.2% Reserves (Months of Imports) 8.8 9.3 7.7 6.0 5.0 4.8 4.3 5.6 6.3 GOVERNMENT BUDGETARY OPERATIONS (Ratio to GDP) 2001/2 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 Revenue 10.7% 10.8% 11.2% 11.9% 12.4% 14.1% 15.9% 16.2% 15.2% Expenditure 21.9% 21.8% 26.6% 29.4% 31.9% 31.7% 22.8% 25.7% 26.9% Recurrent Expenditure 18.4% 18.9% 20.9% 22.2% 24.2% 24.8% 14.9% 17.7% 18.3% Development Expenditure 3.5% 2.9% 5.7% 7.2% 7.7% 6.9% 7.9% 8.0% 8.6% Deficit (exl. Grants) -4.3% -5.3% -8.3% -9.7% -11.4% -9.9% -8.6% -9.3% -11.0% Deficit (inl. grants ) -0.4% -1.0% -2.9% -4.9% -5.5% -4.9% -1.7% -4.5% -6.4% Foreign Borrowing 1.2% 1.4% 3.3% 3.9% 3.3% 3.7% 3.2% 3.6% 4.5% Source: Ministry of Finance and Bank of Tanzania xiii
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CHAPTER 1 THE DOMESTIC ECONOMY Economic Growth 1. In 2010, the real GDP grew by 7.0 percent compared to 6.0 percent in 2009. This growth resulted from increased growth rates in economic activities that have substantial contribution to GDP including agricultural; trade and repair; and construction. Economic activities that recorded the highest growth were: communication (22.1 percent); construction (10.2 percent); electricity and gas (10.2 percent); financial intermediation (10.1 percent) and manufacturing (7.9 percent). However, manufacturing and fishing were the only economic activities that recorded lower rates of growth in 2010 compared to 2009. The share of services; and industry and construction economic activities to overall GDP continued to increase in 2010 whereas that of agricultural activities declined, implying diversification of economic activities to other sectors. 2. The GDP in 2010 amounted to shs. 32,293,479 million at current market prices or shs. 16,828,563 million at 2001 constant prices. Meanwhile, according to the population growth rate of 2.9, the total population of Tanzania Mainland was estimated at 41,914,311 in 2010. Thus, the per capita income was shs. 770,464.3 in 2010 at current market prices compared to shs. 693,185 in 2009, equivalent to an increase of 11.1 percent. 3. The growth rate of agriculture economic activities increased to 4.2 percent in 2010 compared to 3.2 percent in 2009. This growth was mainly attributed to increased crop production due to good weather in the 2009/10 agricultural season; improved irrigation infrastructure; Government initiative on input subsidies; and the implementation of ASDP. The growth rate of crop sub activity increased from 3.4 percent in 2009 to 4.4 percent in 2010. This was a result of improved crop production particularly maize, millet, sorghum and cassava. The growth rate of livestock sub activity increased from 2.3 percent in 2009 to 3.4 percent in 2010. The increase in the growth rate of livestock 1
includes availability of adequate pasture and increase in livestock extension services. Forest and hunting sub activities grew by 4.1 percent in 2010 compared to 3.5 percent in 2009. This was due to increase in the production of forest products and tourist hunting. 4. The growth rate of monetary agriculture increased to 5.3 percent in 2010 compared with 2.2 percent in 2009. With regard to non-monetary agriculture, the growth rate decreased to 2.0 percent in 2010 compared with 5.0 percent in 2009. The decrease reflects an increase in monetary agricultural activities visà-vis subsistence agriculture. The contribution of agricultural activities to GDP was 24.1 percent in 2010 compared to 24.6 percent in 2009. 5. Fishing activities grew by 1.5 percent in 2010 compared with 2.7 percent in 2009. The slowdown in growth rate was caused by decreased demand for fish and fish products in the foreign markets; decrease in fish harvest particularly in lakes as a result of destruction of marine ecosystems in fish hatcheries; overfishing; illegal fishing practices; and use of poor fishing gears. The share of fishing activities to overall GDP remained the same at 1.4 percent in 2010 as it was in 2009. 6. Industry and construction economic activities grew by 8.2 percent in 2010 compared to 7.0 percent in 2009. This growth was attributed to improved performance in: construction; water supply; and electricity and gas economic activities. However, the rate of growth of manufacturing sub activity declined marginally in 2010. The share of industry and construction economic activities to GDP increased marginally to 22.4 percent in 2010 from 22.0 percent in 2009. 7. The growth rate for manufacturing sub activity was 7.9 percent in 2010 compared with 8.0 percent in 2009. The slowdown in growth was a result of increased cost of production. Nonetheless, the contribution of manufacturing sub activity to GDP increased to 9.0 percent in 2010 from 8.6 percent in 2009. 2
8. The growth rate of the mining and quarrying sub activity increased from 1.2 percent in 2009 to 2.7 percent in 2010. This growth was attributed to increase in gold production, exacerbated by the rise in prices of gold in the world market after being destabilized by the Global Financial Crisis. The contribution of mining and quarrying sub activity to GDP remained at 3.3 percent in 2010 as it was in 2009. 9. Construction sub activities grew by 10.2 percent in 2010 compared to 7.5 percent in 2009. This growth was attributed to an increase in the construction and rehabilitation of roads and bridges; residential and non residential buildings; airports; and water infrastructure. The share of construction sub activity to GDP was 8.0 percent in 2010 compared with 7.9 percent in 2009. 10. The growth rate of electricity and gas sub activities was 10.2 percent in 2010 compared to 8.4 percent in 2009. This was attributed to an increase in hydro-electric power generation; and the government initiatives to install gasfired machines. Electricity and gas sub activity accounted for 1.8 percent of the total GDP in 2010 compared to 1.7 percent in 2009. 11. The water supply sub-activity grew by 6.3 percent in 2010 compared to 5.6 percent in 2009. The increase was attributed to the continued efforts by the Government to improve water infrastructure in the rural and urban areas and increase in the number of people supplied with water. The contribution of water supply sub activity to GDP continued to be 0.4 percent since 2003. 12. The growth rate of service economic activities was 8.2 percent in 2010 compared to 7.2 percent in 2009. The growth rate of all services sub economic activities increased in 2010 owing to the recovery of activities that were affected by the GFC such as financial intermediation; hotels and restaurants; trade and repair; and transport. The share of services activities to GDP was 43.9 percent in 2010 compared with 43.6 percent in 2009. 3
13. The trade and repairs sub activity grew by 8.2 percent in 2010, compared to 7.5 percent in 2009. The growth was mainly attributed to increased demand on the account of recovery in the GFC. The contribution of the trade and repairs sub activity to GDP was 12.1 percent in 2010, compared to 11.8 percent in 2009. 14. The hotel and restaurants sub activity (including tourism), grew by 6.1 percent in 2010, compared to 4.4 percent in 2009. The growth was mainly attributed to recovery of the global economy and initiatives to promote tourist attractions both locally and in the foreign countries. The contribution of the hotel and restaurants sub activity to GDP was 2.3 percent in 2010, as it was in 2009. 15. The transport sub activity grew by 7.0 percent in 2010 compared to 6.0 percent in 2009. This growth was due to increase in cargo freight on road and marine; and increase in passengers in domestic and international flights. The contribution of transport sub activity to GDP was 5.1 percent in 2010, compared to 5.0 percent in 2009. 16. In 2010, communication sub activity recorded highest growth compared to other economic activities. The growth rate for this sub economic activity was 22.1 percent in 2010 compared to 21.9 percent in 2009. The growth was attributed to increase in customers of mobile phone services. The contribution of communication sub-activity to GDP continued to be 2.1 percent in 2009 as it was in 2009. 17. The financial intermediation services sub activity grew by 10.1 percent in 2010 compared to 9.0 percent in 2009. The growth emanated from successful implementation of the Second Generation Financial Sector Reform Program; increase in credit to private sector; increase in the demand for money for investment purposes; insurance; and business services. The contribution of financial intermediation sub activity to GDP was 1.8 percent in 2010 compared to 1.7 percent in 2009. 4
18. The growth rate of real estate and business services sub activity was 7.0 percent in 2010 compared to 6.8 percent in 2009. The growth rate of non monetary real estate and business services decreased to 6.1 percent in 2010 compared to 9.0 percent in 2009. However, the growth rate of monetary real estate and business service activities increased to 7.5 percent in 2010 from 5.7 percent in 2009. This was attributed to the successful implementation of the Business and Property Formalization Program as well as increase in growth of business services related to non residential and residential buildings. The contribution of real estate and business services to GDP was 8.8 percent in 2010 compared to 9.0 percent in 2009. 19. In 2010, public administration sub-activity grew by 6.5 percent compared to 4.4 percent in 2009. The growth of this sub-activity was due to continued implementation of the Public Sector Reform Program Phase II and increase of new employment in defence, security and judiciary. The share of public administration sub-activity to GDP in 2010 decreased marginally to 8.0 percent compared to 8.1 percent in 2009. 20. The rates of growth in education and health sub-activities were 7.3 and 6.9 percent in 2010 compared to 7.1 and 6.7 percent in 2009 respectively. The growth in education sub-activity was due to implementation of education development programs in Primary and Secondary Education Phase II and increase in recruitment of teachers. Likewise, the growth in health sub-activity was attributed to improvement in immunization programmes; control of malaria; Tuberculosis (TB) and HIV/AIDS. The contribution of education and health sub-activities to GDP continued to be 1.4 and 1.6 percent respectively in 2010 as it was in 2009. Rebasing of the National Consumer Price Index (NCPI) New weights and a new reference period 21. The National Bureau of Statistics has updated the NCPI market basket weights from 2001 to 2007 using results of the 2007 Household Budget 5
Survey. The new NCPI weights are based on monetary expenditures relating to consumption for all survey types of households in the 21 geographic regions of Tanzania mainland. The new index weights are based on expenditures of all types of private household from both urban and rural areas, while the old index covered only private urban households. The reference period for the NCPI has been changed from December, 2001=100 to September 2010=100. Classification of Goods and Social Services 22. The rebased NCPI follows the internationally recommended Classification of Individual Consumption by Purpose (COICOP). The use of COICOP results in a change in the publication format for the NCPI. The composition of the 12 major groups of COICOP is different from the composition of the major groups of the old NCPI. As seen in the table below, these major groups have been analysed further and form four additional index aggregations, which are: 1) Food and Non -alcoholic Beverages - combining food consumed at home and food consumed in restaurants; 2) Energy and Fuels combining electricity and other fuels for use at home with petrol and diesel; 3) All Items Less Food and Non -alcoholic Beverages and 4) All Items Less Food, Energy and Fuels. 6
Table No. 1.1: NCPI Linked Index Series NEW NCPI OLD NCPI SNO. MAIN GROUP WEIGHT MAIN GROUP WEIGHT Food and Non Alcoholic 47.8 1 Beverages Food 55.9 Alcoholic Beverages and 3.3 2 Tobacco Beverages and Cigarettes 6.9 3 Clothing and Foot wear 6.7 Clothing and Foot wear 6.4 Housing, Water, Electricity, 9.2 4 Gas and Other Fuel Rent 1.4 Furnishing, Housing Equipment and Routine 6.7 Electricity, Kerosene and 8.5 5 Maintenance of the House Water 6 Health 0.9 Health Services 2.1 7 Transport 9.5 Transport 9.7 Furniture and Household 2.1 2.1 8 Communication Utensils 9 Recreation and Culture 1.3 Recreation and Entertainment 0.8 10 Education 1.7 Education 2.6 Services and other Household 6.4 11 Restaurants and hotels Requirements 2.1 Miscellaneous goods and 4.5 12 services Others 1.5 TOTAL ALL ITEMS TOTAL ALL ITEMS 100 INDEX INDEX 100 1 2 3 4 Food and Non-alcoholic Beverages - combining food consumed at home and food consumed in restaurants 51.0 Energy and Fuels - combining electricity and other fuels for use at home with petrol and diesel 5.7 All Items Less Food 49.0 All Items Less Food and Energy 43.3 NCPI Methodology 23. Apart from being based on new classification system, the new NCPI incorporates a number of methodological improvements including the use of geometric means as opposed to arithmetic average for compiling elementary index aggregates and improved procedures for collecting and processing prices. The modified Laspeyres index formula continues to be used for computing higher level aggregates for the NCPI. The sample of goods and services has been updated to include many new items and eliminate those items that have become less representative of current consumption patterns. 7
The Link between the new and old NCPI 24. The new NCPI has been compiled with a 12 month overlap in order to facilitate the calculation of 12 month index changes based on the same index market basket and weights. However, the new NCPI with a reference base of September 2010=100, only became the official Index starting in October 2010. The NCPI for the previous period will be maintained up to September 2010. Although the old NCPI has been linked to the new NCPI at the all items level, it is not feasible to construct linked index series for the new major groups of the new NCPI due to significant differences in the composition of these major groups relative to those of the old NCPI. Price Trend 25. Inflation during the period ended October 2010 was 4.2 percent using the geometric mean compared to 4.5 percent recorded in September 2010 using the old methodology of arithmetic mean. If the arithmetic mean was used, inflation would have been 4.1 percent in October 2010 compared with 4.2 percent for the same month using the geometric means. In general terms, when comparing the inflation results using the two methodologies, the difference is insignificant. The annual headline inflation increased from 5.6 percent for the year ended December 2010 to 6.4 percent in January 2011 and continued upwards to 8.6 percent in April 2011. This rate of increase in inflation was largely attributed to increased price indices of electricity, water and food. Inflation Rate excluding Food and Energy 26. This type of NCPI excludes food consumed at home and restaurants, non alcoholic beverages, petrol, diesel, gas, kerosene, charcoal and electricity. Excluding food and energy which are the most volatile components in the total NCPI provides a more stable Inflation figure for policy makers. The Annual Inflation rate which excludes food and energy for the year ended March 2011 using the rebased NCPI increased to 6.3 percent from 5.2 percent in February 2011. The annual Inflation rate for energy increased to 17.2 percent while food inflation decreased to 8.3 percent in March 2011 compared to 13.0 percent and 8.6 percent registered in February 2011 respectively. Tables 8 16 show the 8
97.82 Percent 98.99 Price Index 99.9 99.94 100.47 100 99.9 100.2 100.12 99.89 99.56 101.7 price indices for various goods and services. Since the new NCPI is used for the first time, the new classification has been shown for 2010 only. Figure No. 1.1: The trend of price index January December 2010 12 10.9 102 10 9.6 9 9.4 101 8 6 7.9 7.2 6.3 6.6 4.5 4.2 5.5 5.6 100 99 98 4 97 2 96 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 95 Price Index Inflation 9
Figure No. 1.2: Monthly NCPI Movements and Inflation Rate (2010) 105 12 C o n s u m e r P r i c e 100 I95 n d e 90 x 85 10.90 9.60 9.00 9.40 7.90 7.20 6.30 6.60 4.50 4.20 10 8 6 5.50 5.60 4 2 I n f l a t i o n ( % ) 80 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Food and Non-alcoholic Beverages Energy and Fuels All Items Less Food All Items Less Food and Energy Inflation Rates 0 Capital Formation 27. Capital formation at current prices increased to shs. 10,342,536 million in 2010 from shs 8,173,221 million in 2009, equivalent to an increase of 26.5 percent. Further, capital formation in 2001 prices increased from shs. 3,982,283 million in 2009 to shs. 4,385,837 million in 2010, equivalent to an increase of 10.1 percent. The ratio of capital formation to Gross Domestic Product at current prices was 32.0 percent in 2010 compared to 29.0 percent in 2009. 28. Capital formation which includes buildings, other construction works and equipment increased from sh. 3,928,805 million in 2009 to sh. 4,332,960 million in 2010 at 2001 constant prices, equivalent to 10.0 percent increase. Capital formation in building activities at 2001 constant prices increased from sh. 1,211,008 million in 2009 to sh. 1,284,866 million in 2010, equivalent to 6.1 percent increase. The growth rates of residential building, rural own account and non residential buildings were 6.6, 5.4 and 6.3 percent in 2010 respectively as it was in 2009. 10
29. Other construction works including land improvement, roads and bridges, and water supply increased from sh. 952,312 million in 2009 to sh. 1,004,548 million in 2010, at 2001 constant prices, equivalent to an increase of 5.5 percent. The growth rate of land improvement and water supply were 5.3 and 6.3 percent in 2010 as it was in 2009 respectively. However, capital formation in roads and bridges activities grew by negative 10.2 percent in 2010 compared to negative 6.5 percent in 2009. 30. Importation of capital equipment increased from sh. 1,765,485 million in 2009 to sh. 2,043,546 million in 2010 at 2001 constant prices, equivalent to an increase of 15.7 percent. The import value of transport equipment increased by 27.5 percent compared to 38.5 percent in 2009. In addition, imports of machinery and other equipment increased by 8.5 percent in 2010 compared to 4.9 percent in 2009. On the other hand, importation of capital equipment at current prices increased by 41.5 percent from sh. 2,561,532 million in 2009 to sh. 3,624,582 million in 2010. 31. The value of change in stock decreased by 1.1 percent to sh. 52,877 million in 2010 compared to sh. 53,478 million in 2009 at 2001 constant prices. In addition, the value of change in stock at current prices increased by 8.3 percent from sh. 152, 252 million in 2009 to sh. 164,843 million in 2010. 32. Capital formation in the public sector (including central government, institutions and parastatals) increased from sh. 2,241,507 million in 2009 to sh. 2,607,525 million in 2010 at current prices, equivalent to an increase of 16.3 percent. The public sector s contribution to capital formation decreased to 25.2 percent in 2010 compared to 27.4 percent in 2009. Capital formation in private sector increased from sh. 5,779,463 million in 2009 to sh. 7,570,168 million in 2010, at current prices, equivalent to an increase of 31.0 percent. Contribution of private sector to capital formation increased to 73.2 percent in 2010 compared to 70.7 percent in 2009. 11
Table No.1 ECONOMIC ACTIVITY GROSS DOMESTIC PRODUCT BY KIND OF ECONOMIC ACTIVITY At current prices 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Shs.million %change 2009/10 Agriculture, Hunting and Forestry 2636193 2988383 3479646 4116444 4410478 4708556 5413257 6374476 6945213 7782138 12.1% Crops 1945945 2236209 2641586 3122896 3272143 3452690 3983327 4700326 5187080 5757659 11.0% Livestock 459448 502800 563136 669021 791823 867772 990996 1169375 1135527 1239996 9.2% Hunting and Forestry 230800 249374 274924 324527 346512 388094 438934 504774 622606 784484 26.0% Fishing 153660 172989 187693 207025 225658 241454 277189 296592 399715 459673 15.0% Industry and construction 1638459 2051559 2538485 2899263 3316757 3723978 4431057 5194434 6193765 7225731 16.7% Mining and quarrying 159979 220000 288200 357368 457431 576363 742932 839513 941094 1072847 14.0% Manufacturing 762400 866228 1002827 1129558 1269145 1395282 1625504 1935975 2434754 2899094 19.1% Electricity, gas 196860 209640 227081 244977 271925 276915 335898 421216 479768 571130 19.0% Water supply 43840 48666 53925 61474 68605 75809 84982 93310 104263 113691 9.0% Construction 475380 707025 966452 1105886 1249651 1399609 1641741 1904420 2233885 2568968 15.0% Services 4139962 4617402 5174913 5870447 6786597 7773898 9076622 10846587 12300072 14188185 15.4% Trade and repairs 1182797 1298349 1454527 1593717 1752826 2044421 2416506 2875642 3341496 3909550 17.0% Hotels and restaurants 250978 269120 286883 319365 394417 459584 559722 649278 635414 754037 18.7% Transport 487062 526710 577977 637720 706291 769830 886844 1037608 1409636 1646704 16.8% Communications 112783 130496 161623 206877 277216 374241 487132 611350 596230 691627 16.0% Financial intermediation 140000 179715 204766 229370 265261 299734 345000 403727 477492 567822 18.9% Real estate and business services 936440 1008089 1135252 1270108 1520109 1723571 1982107 2378528 2532770 2848855 12.5% Public administration 640649 754654 866917 1076215 1278881 1440913 1652556 2026815 2282763 2579522 13.0% Education 188733 211372 223409 236813 251022 268594 289617 333060 392507 455308 16.0% Health 118972 151993 174789 200933 233032 275726 327658 383360 454990 532339 17.0% Other social and personal services 81548 86904 88770 99329 107542 117284 129482 147221 176775 202422 14.5% Gross value added before adjustments 8568274 9830333 11380737 13093179 14739490 16447886 19198125 22712088 25838765 29655726 14.8% less FISIM -80000-90400 -105382-120588 -141723-169661 -208281-260029 -328478-358049 9.0% Gross value added at current basic prices 8488274 9739933 11275355 12972591 14597767 16278225 18989844 22452059 25510287 29297677 14.8% add Taxes on products 612000 704574 831707 999001 1367527 1663043 1958559 2329620 2702359 2995802 10.9% GDP (At current market prices) 9100274 10444507 12107062 13971592 15965294 17941268 20948403 24781679 28212646 32293479 14.5% Source : National Bureau of Statistic 12
Table No.1A GROSS DOMESTIC PRODUCT (Monetary & Non-monetary GDPmp) BY KIND OF ECONOMIC ACTIVITY At current prices ECONOMIC ACTIVITY 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 13 Shs.million %change 2009/10 A. MONETARY Gross Domestic Product at market prices 7638099 8795422 10214161 11680834 13431438 15152834 17761462 20834475 24325365 27474463 12.9% Agriculture, Hunting and Forestry 1610975 1824450 2104035 2404037 2589263 2737686 3154263 3696524 4439294 4486903 1.1% Crops 1151820 1324078 1523553 1743041 1831665 1901931 2250434 2638184 2904765 3259561 12.2% Livestock 307313 336310 399611 447491 529630 580430 631254 744879 982709 991996 0.9% Forestry and hunting 151842 164062 180871 213505 227968 255325 272575 313461 551820 235345-57.4% Fishing 149760 168598 182929 201771 219930 235045 269831 288719 389105 436863 12.3% Industry and construction 1550360 1957554 2437259 2776974 3149293 3515928 4173741 4895331 5847691 6864302 17.4% Mining and quarrying 159979 220000 288200 357368 457431 576363 742932 839513 941094 1072847 14.0% Manufacturing 762400 866228 1002827 1129558 1269145 1395282 1625504 1935975 2434754 2899094 19.1% Electricity, gas 196860 209640 227081 244977 271925 276915 335898 421216 479768 571130 19.0% Water supply 29840 32421 37597 42697 47696 54872 57816 63482 70934 79584 12.2% Construction 401281 629265 881554 1002374 1103096 1212496 1411592 1635146 1921141 2241647 16.7% Services 3795004 4230646 4763613 5419639 6247148 7170793 8413349 9884310 11275394 13048643 15.7% Trade and repairs 1182797 1298349 1454527 1593717 1752826 2044421 2416506 2875642 3341496 3909550 17.0% Hotels and restaurants 250978 269120 286883 319365 394417 459584 559722 649278 635414 754037 18.7% Transport 487062 526710 577977 637720 706291 769830 886844 1037608 1409636 1646704 16.8% Communications 112783 130496 161623 206877 277216 374241 487132 611350 596230 691627 16.0% Financial intermediation 140000 179715 204766 229370 265261 299734 345000 403727 477492 567822 18.9% Real estate and business services 591482 621333 723952 819300 980660 1120466 1318834 1416251 1508091 1709313 13.3% Public administration 640649 754654 866917 1076215 1278881 1440913 1652556 2026815 2282763 2579522 13.0% Education 188733 211372 223409 236813 251022 268594 289617 333060 392507 455308 16.0% Health 118972 151993 174789 200933 233032 275726 327658 383360 454990 532339 17.0% Other social & personal services 81548 86904 88770 99329 107542 117284 129482 147221 176775 202422 14.5% Gross value added before adjustments 7106099 8181248 9487836 10802421 12205634 13659452 16011184 18764884 21951483 24836710 13.1% less FISIM -80000-90400 -105382-120588 -141723-169661 -208281-260029 -328478-358049 9.0% Gross value added at current basic prices 7026099 8090848 9382454 10681833 12063911 13489791 15802903 18504855 21623005 24478661 13.2% Add Taxes on products 612000 704574 831707 999001 1367527 1663043 1958559 2329620 2702359 2995802 10.9% Non-monetary Gross domestic product at market prices 1462175 1649085 1892899 2290757 2533855 2788434 3186941 3947204 3887282 4819016 24.0% Agriculture, Hunting and Forestry 1025218 1163933 1375611 1712407 1821215 1970870 2258995 2677952 2505920 3295235 31.5% Crops 794125 912131 1118034 1379855 1440478 1550759 1732893 2062143 2282315 2498098 9.5% Livestock 152135 166490 163524 221530 262193 287342 359742 424496 152818 247999 62.3% Forestry & hunting 78958 85312 94053 111022 118544 132769 166360 191313 70786 549139 675.8% Fishing 3900 4391 4764 5254 5727 6409 7358 7873 10610 22810 115.0% Industry and construction 88099 94005 101224 122289 167464 208050 257315 299103 346074 361428 4.4% Water supply 14000 16245 16327 18777 20909 20937 27166 29828 33330 34107 2.3% Construction 74099 77760 84897 103512 146555 187113 230149 269274 312744 327321 4.7% Services 344958 386756 411300 450807 539449 603105 663273 962277 1024678 1139542 11.2% Real estate & business services 344958 386756 411300 450807 539449 603105 663273 962277 1024678 1139542 11.2% Total GDP (at market prices) 9100274 10444507 12107060 13971591 15965293 17941268 20948403 24781679 28212646 32293479 14.5% Source: National Bureau of Statistic
SHARES OF GROSS DOMESTIC PRODUCT BY KIND OF ECONOMIC ACTIVITY Table No. 2 At market current prices Percentages ECONOMIC ACTIVITY 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Agriculture, Hunting and Forestry 29.0 28.6 28.7 29.5 27.6 26.2 25.8 25.7 24.6 24.1 Crops 21.4 21.4 21.8 22.4 20.5 19.2 19.0 19.0 18.4 17.8 Livestock 5.0 4.8 4.7 4.8 5.0 4.8 4.7 4.7 4.0 3.8 Hunting and Forestry 2.5 2.4 2.3 2.3 2.2 2.2 2.1 2.0 2.2 2.4 Fishing 1.7 1.7 1.6 1.5 1.4 1.3 1.3 1.2 1.4 1.4 Industry and construction 18.0 19.6 21.0 20.8 20.8 20.8 21.2 21.0 22.0 22.4 Mining and quarrying 1.8 2.1 2.4 2.6 2.9 3.2 3.5 3.4 3.3 3.3 Manufacturing 8.4 8.3 8.3 8.1 7.9 7.8 7.8 7.8 8.6 9.0 Electricity, gas 2.2 2.0 1.9 1.8 1.7 1.5 1.6 1.7 1.7 1.8 Water supply 0.5 0.5 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 Construction 5.2 6.8 8.0 7.9 7.8 7.8 7.8 7.7 7.9 8.0 Services 45.5 44.2 42.7 42.0 42.5 43.3 43.3 43.8 43.6 43.9 Trade and repairs 13.0 12.4 12.0 11.4 11.0 11.4 11.5 11.6 11.8 12.1 Hotels and restaurants 2.8 2.6 2.4 2.3 2.5 2.6 2.7 2.6 2.3 2.3 Transport 5.4 5.0 4.8 4.6 4.4 4.3 4.2 4.2 5.0 5.1 Communications 1.2 1.2 1.3 1.5 1.7 2.1 2.3 2.5 2.1 2.1 Financial intermediation 1.5 1.7 1.7 1.6 1.7 1.7 1.6 1.6 1.7 1.8 Real estate and business services 10.3 9.7 9.4 9.1 9.5 9.6 9.5 9.6 9.0 8.8 Public administration 7.0 7.2 7.2 7.7 8.0 8.0 7.9 8.2 8.1 8.0 Education 2.1 2.0 1.8 1.7 1.6 1.5 1.4 1.3 1.4 1.4 Health 1.3 1.5 1.4 1.4 1.5 1.5 1.6 1.5 1.6 1.6 Other social and personal services 0.9 0.8 0.7 0.7 0.7 0.7 0.6 0.6 0.6 0.6 Gross value added before adjustments 94.2 94.1 94.0 93.7 92.3 91.7 91.6 91.6 91.6 91.8 less FISIM - 0.9-0.9-0.9-0.9-0.9-0.9-1.0-1.0-1.2-1.1 Gross value added at current basic prices 93.3 93.3 93.1 92.8 91.4 90.7 90.7 90.6 90.4 90.7 add Taxes on products 6.7 6.7 6.9 7.2 8.6 9.3 9.3 9.4 9.6 9.3 GDP (At current market prices) 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: National Bureau of Statistic 14
SHARES OF GROSS DOMESTIC PRODUCT BY KIND OF ECONOMIC ACTIVITY - Monetary & Non-monetary Table No. 2A At current prices Percentages ECONOMIC ACTIVITY 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 A. MONETARY Gross domestic product at market prices 83.9 84.2 84.4 83.6 84.1 84.5 84.8 84.1 86.2 85.1 Agriculture, Hunting and Forestry 17.7 17.5 17.4 17.2 16.2 15.3 15.1 14.9 15.7 13.9 Crops 12.7 12.7 12.6 12.5 11.5 10.6 10.7 10.6 10.3 10.1 Livestock 3.4 3.2 3.3 3.2 3.3 3.2 3.0 3.0 3.5 3.1 Forestry and hunting 1.7 1.6 1.5 1.5 1.4 1.4 1.3 1.3 2.0 0.7 Fishing 1.6 1.6 1.5 1.4 1.4 1.3 1.3 1.2 1.4 1.4 Industry and construction 17.0 18.7 20.1 19.9 19.7 19.6 19.9 19.8 20.7 21.3 Mining and quarrying 1.8 2.1 2.4 2.6 2.9 3.2 3.5 3.4 3.3 3.3 Manufacturing 8.4 8.3 8.3 8.1 7.9 7.8 7.8 7.8 8.6 9.0 Electricity, gas 2.2 2.0 1.9 1.8 1.7 1.5 1.6 1.7 1.7 1.8 Water supply 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.2 Construction 4.4 6.0 7.3 7.2 6.9 6.8 6.7 6.6 6.8 6.9 Services 41.7 40.5 39.3 38.8 39.1 40.0 40.2 39.9 40.0 40.4 Trade and repairs 13.0 12.4 12.0 11.4 11.0 11.4 11.5 11.6 11.8 12.1 Hotels and restaurants 2.8 2.6 2.4 2.3 2.5 2.6 2.7 2.6 2.3 2.3 Transport 5.4 5.0 4.8 4.6 4.4 4.3 4.2 4.2 5.0 5.1 Communications 1.2 1.2 1.3 1.5 1.7 2.1 2.3 2.5 2.1 2.1 Financial intermediation 1.5 1.7 1.7 1.6 1.7 1.7 1.6 1.6 1.7 1.8 Real estate and business services 6.5 5.9 6.0 5.9 6.1 6.2 6.3 5.7 5.3 5.3 Public administration 7.0 7.2 7.2 7.7 8.0 8.0 7.9 8.2 8.1 8.0 Education 2.1 2.0 1.8 1.7 1.6 1.5 1.4 1.3 1.4 1.4 Health 1.3 1.5 1.4 1.4 1.5 1.5 1.6 1.5 1.6 1.6 Other social & personal services 0.9 0.8 0.7 0.7 0.7 0.7 0.6 0.6 0.6 0.6 Gross value added before adjustments 78.1 78.3 78.4 77.3 76.5 76.1 76.4 75.7 77.8 76.9 less FISIM -0.9-0.9-0.9-0.9-0.9-0.9-1.0-1.0-1.2-1.1 Gross value added at current basic prices 77.2 77.5 77.5 76.5 75.6 75.2 75.4 74.7 76.6 75.8 Add Taxes on products 6.7 6.7 6.9 7.2 8.6 9.3 9.3 9.4 9.6 9.3 B. NON MONETARY 0.0 0.0 0.0 Gross domestic product at market prices 16.1 15.8 15.6 16.4 15.9 15.5 15.2 15.9 13.8 14.9 Agriculture, Hunting and Forestry 11.3 11.1 11.4 12.3 11.4 11.0 10.8 10.8 8.9 10.2 Crops 8.7 8.7 9.2 9.9 9.0 8.6 8.3 8.3 8.1 7.7 Livestock 1.7 1.6 1.4 1.6 1.6 1.6 1.7 1.7 0.5 0.8 Forestry & hunting 0.9 0.8 0.8 0.8 0.7 0.7 0.8 0.8 0.3 1.7 Fishing 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 Industry and construction 1.0 0.9 0.8 0.9 1.0 1.2 1.2 1.2 1.2 1.1 Water supply 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Construction 0.8 0.7 0.7 0.7 0.9 1.0 1.1 1.1 1.1 1.0 Services 3.8 3.7 3.4 3.2 3.4 3.4 3.2 3.9 3.6 3.5 Real estate & business services 3.8 3.7 3.4 3.2 3.4 3.4 3.2 3.9 3.6 3.5 Total GDP at market prices 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: National Bureau of Statistic 15
Table No. 2B GROSS DOMESTIC PRODUCT AND EXPENDITURE At current market prices Sh. Million 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Gross Domestic Product (GDPmp) 9100274 10444508 12107061 13971593 15965296 17941268 20948403 24837930 28212646 32293479 Final Consumption 7901761 8885098 10300882 11714438 13386429 15340093 18270124 20838037 23403570 25417627 Households 6822466 7512354 8442113 9352717 10581908 12195212 14231135 16516318 18476811 20209449 Government 1079295 1372744 1858769 2361721 2804521 3144881 4038989 4321718 4926759 5208178 Investment 1587743 1795412 2320538 3153367 4001088 4957782 6209741 7381257 8173221 10342536 Gross Fixed Capital Formation 1547100 1750816 2277151 3095522 3936683 4883490 6119013 7274314 8020970 10177693 Changes in Inventory 40643 44596 43387 57845 64405 74292 90728 106943 152252 164843 Exports 1547644 1836223 2247385 2745596 3324425 4047990 5078248 6230729 6553198 8988306 Goods 746080 946834 1263064 1551554 1891705 2176987 2748509 3636824 3833992 6003332 Services 801564 889389 984321 1194042 1432720 1871003 2329739 2593906 2719206 2984974 Imports -1936874-2072225 -2761744-3641808 -4746646-6404597 -8609710-9612093 -9917343-12454990 Goods -1367474-1460825 -2008052-2615149 -3383801-4837467 -6606784-7698354 -7622953-9898943 Services -569400-611400 -753692-1026659 -1362845-1567130 -2002926-1913739 -2294390-2556047 Source: National Bureau of Statistic 16
GROSS DOMESTIC PRODUCT BY KIND OF ECONOMIC ACTIVITY Table No.3 At constant 2001 prices Shs. million 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Change ECONOMIC ACTIVITY 2009/2010 Agriculture, Hunting and Forestry 2512170 2636193 2766479 2850956 3017988 3148384 3268238 3399648 3554488 3669646 3824428 4.2% Crops 1847572 1945945 2055634 2122361 2262725 2361930 2457373 2567955 2698921 2790684 2913474 4.4% Livestock 441860 459448 472500 483001 503000 525109 537498 550398 564708 577922 597572 3.4% Hunting and Forestry 222738 230800 238345 245594 252263 261345 273367 281295 290859 301039 313382 4.1% Fishing 146675 153660 164049 173892 185543 196676 206510 215734 226521 232637 236126 1.5% Industry and construction 1536952 1638459 1792024 1988081 2204619 2433261 2639902 2889519 3138241 3357703 3633664 8.2% Mining and quarrying 140400 159979 187000 219000 254000 295000 341000 377559 386998 391642 402331 2.7% Manufacturing 726358 762400 819200 893000 977000 1071000 1162000 1263435 1388515 1499596 1618064 7.9% Electricity, gas 185847 196860 209000 223953 240708 263218 258347 286507 301978 327344 360733 10.2% Water supply 42363 43840 45084 47128 49557 51700 54905 58474 62333 65824 69955 6.3% Construction 441984 475380 531740 605000 683354 752343 823650 903544 998416 1073297 1182581 10.2% Services 3890050 4139962 4460699 4806587 5182094 5596784 6035932 6527561 7085136 7594661 8214209 8.2% Trade and repairs 1111165 1182797 1281544 1405698 1486931 1585906 1736631 1906821 2097503 2254816 2439711 8.2% Hotels and restaurants 239528 250978 267162 275836 285732 301873 314921 328859 343658 358779 380664 6.1% Transport 464481 487062 516000 541901 588574 627951 661000 703965 752539 797691 853529 7.0% Communications 103716 112783 124549 144039 169158 200900 239537 287684 346659 422577 515967 22.1% Financial intermediation 131000 140000 154108 170643 184775 204694 228000 251280 281120 306339 337356 10.1% Real estate and business services 898961 936440 1003260 1068732 1141014 1226790 1316000 1408120 1508097 1610647 1723392 7.0% Public administration 580000 640649 699561 766760 871169 970786 1033488 1102951 1180158 1232313 1312414 6.5% Education 169462 188733 202000 207606 215910 224547 235774 248742 265905 284704 305402 7.3% Health 112629 118972 129229 140437 151370 163572 177520 193142 210525 224654 240058 6.9% Other social and personal services 79108 81548 83286 84935 87461 89765 93061 95998 98974 102141 105716 3.5% Gross value added before adjustments 8085847 8568274 9183251 9819516 10590244 11375105 12150582 13032462 14004385 14854646 15908427 7.1% less FISIM -78049-80000 -87000-97154 -106931-119497 -137287-158292 -175704-190990 -208370 9.1% Gross value added at current basic prices 8007798 8488274 9096251 9722362 10483313 11255608 12013295 12874170 13828681 14663656 15700057 7.1% add Taxes on products 577542 612000 655926 701372 756422 812482 867868 927751 999664 1057645 1128507 6.7% GDP (market prices) 8585340 9100274 9752177 10423734 11239735 12068090 12881163 13801921 14828345 15721301 16828563 7.0% Source : National Bureau of Statistic 17
GROSS DOMESTIC PRODUCT (Monetary & Non-monetary GDPmp) BY KIND OF ECONOMIC ACTIVITY Table No.3A At constant 2001 prices Shs. million 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Change ECONOMIC ACTIVITY 2009/2010 A. MONETARY Gross Domestic Product at market prices 7172563 7638006 8223867 8833128 9525201 10300744 11021170 11852682 12767259 13536636 14566980 7.6% Agriculture, Hunting and Forestry 1656413 1760735 1858279 1913425 1993064 2114515 2187610 2277890 2379345 2430546 2559774 5.3% Crops 1070541 1151820 1225544 1259304 1312030 1399662 1446975 1510406 1587437 1617938 1723526 6.5% Livestock 295549 307313 316043 323067 334237 351232 359519 371398 379387 388264 400373 3.1% Forestry and hunting 147324 151842 156806 161575 165963 171937 179847 185827 191750 198686 206832 4.1% Fishing 142999 149760 159886 169479 180834 191684 201269 210259 220772 225658 229043 1.5% Industry and construction 1453272 1550268 1699749 1893028 2106686 2326418 2522828 2760870 2996217 3208502 3470768 8.2% Mining and quarrying 140400 159979 187000 219000 254000 295000 341000 377559 386998 391642 402331 2.7% Manufacturing 726358 762400 819200 893000 977000 1071000 1162000 1263435 1388515 1499596 1618064 7.9% Electricity, gas 185847 196860 209000 223953 240708 263218 258347 286507 301978 327344 360733 10.2% Water supply 28654 29748 30569 32062 33903 35417 37950 40841 43536 45418 48969 7.8% Construction 372013 401281 453980 525013 601075 661783 723531 792529 875190 944502 1040671 10.2% Services 3563385 3795004 4096913 4422457 4775960 5166826 5580151 6044462 6567737 7030934 7616302 8.3% Trade and repairs 1111165 1182797 1281544 1405698 1486931 1585906 1736631 1906821 2097503 2254816 2439711 8.2% Hotels and restaurants 239528 250978 267162 275836 285732 301873 314921 328859 343658 358779 380664 6.1% Transport 464481 487062 516000 541901 588574 627951 661000 703965 752539 797691 853529 7.0% Communications 103716 112783 124549 144039 169158 200900 239537 287684 346659 422577 515967 22.1% Financial intermediation 131000 140000 154108 170643 184775 204694 228000 251280 281120 306339 337356 10.1% Real estate and business services 572296 591482 639474 684602 734880 796832 860219 925021 990697 1046921 1125486 7.5% Public administration 580000 640649 699561 766760 871169 970786 1033488 1102951 1180158 1232313 1312414 6.5% Education 169462 188733 202000 207606 215910 224547 235774 248742 265905 284704 305402 7.3% Health 112629 118972 129229 140437 151370 163572 177520 193142 210525 224654 240058 6.9% Other social & personal services 79108 81548 83286 84935 87461 89765 93061 95998 98974 102141 105716 3.5% Gross value added before adjustments 6673070 7106007 7654941 8228910 8875710 9607759 10290589 11083223 11943299 12669982 13646844 7.7% less FISIM -78049-80000 -87000-97154 -106931-119497 -137287-158292 -175704-190990 -208370 9.1% Gross value added at current basic prices 6595021 7026007 7567941 8131756 8768779 9488262 10153302 10924931 11767595 12478992 13438474 7.7% Add Taxes on products 577542 612000 655926 701372 756422 812482 867868 927751 999664 1057645 1128507 6.7% B. NON MONETARY Gross domestic product at market prices 1412775 1462268 1528311 1590607 1714533 1767345 1859993 1949239 2061086 2184664 2261583 3.5% Agriculture, Hunting and Forestry 1002430 1029118 1072250 1111424 1210467 1230544 1287138 1337492 1401663 1471737 1500780 2.0% Crops 777030 794125 830090 863057 950694 962268 1010398 1057549 1111484 1172746 1189948 1.5% Livestock 146311 152135 156457 159934 168763 173877 177979 179000 185322 189658 197199 4.0% Forestry & hunting 75413 78958 81539 84019 86301 89407 93520 95468 99109 102353 106550 4.1% Fishing 3676 3900 4164 4414 4709 4992 5241 5475 5749 6979 7084 1.5% Industry and construction 83680 88192 92275 95053 97933 106843 117074 128648 142024 149201 162896 9.2% Water supply 13709 14093 14515 15066 15654 16283 16955 17633 18797 20405 20987 2.8% Construction 69971 74099 77760 79987 82279 90560 100119 111015 123227 128796 141910 10.2% Services 326665 344958 363786 384130 406133 429958 455781 483099 517399 563726 597907 6.1% Real estate & business services 326665 344958 363786 384130 406133 429958 455781 483099 517399 563726 597907 6.1% Total GDP (At constant 2001 prices) 8585338 9100274 9752178 10423735 11239734 12068089 12881163 13801921 14828345 15721301 16828563 7.0% Source : National Bureau of Statistic 18
Table No.4 GROSS DOMESTIC PRODUCT BY KIND OF ECONOMIC ACTIVITY - ANNUAL GROWTH RATES At constant 2001 prices Percentages ECONOMIC ACTIVITY 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Agriculture, Hunting and Forestry 4.5 4.9 4.9 3.1 5.9 4.3 3.8 4.0 4.6 3.2 4.2 Crops 4.7 5.3 5.6 3.2 6.6 4.4 4.0 4.5 5.1 3.4 4.4 Livestock 3.9 4.0 2.8 2.2 4.1 4.4 2.4 2.4 2.6 2.3 3.4 Hunting and Forestry 4.8 3.6 3.3 3.0 2.7 3.6 4.6 2.9 3.4 3.5 4.1 Fishing 2.9 4.8 6.8 6.0 6.7 6.0 5.0 4.5 5.0 2.7 1.5 Industry and construction 4.5 6.6 9.4 10.9 10.9 10.4 8.5 9.5 8.6 7.0 8.2 Mining and quarrying 14.3 13.9 16.9 17.1 16.0 16.1 15.6 10.7 2.5 1.2 2.7 Manufacturing 4.8 5.0 7.5 9.0 9.4 9.6 8.5 8.7 9.9 8.0 7.9 Electricity, gas 6.2 5.9 6.2 7.2 7.5 9.4-1.9 10.9 5.4 8.4 10.2 Water supply 3.4 3.5 2.8 4.5 5.2 4.3 6.2 6.5 6.6 5.6 6.3 Construction 0.8 7.6 11.9 13.8 13.0 10.1 9.5 9.7 10.5 7.5 10.2 Services 5.4 6.4 7.7 7.8 7.8 8.0 7.8 8.1 8.5 7.2 8.2 Trade and repairs 4.3 6.4 8.3 9.7 5.8 6.7 9.5 9.8 10.0 7.5 8.2 Hotels and restaurants 4.1 4.8 6.4 3.2 3.6 5.6 4.3 4.4 4.5 4.4 6.1 Transport 4.3 4.9 5.9 5.0 8.6 6.7 5.3 6.5 6.9 6.0 7.0 Communications 5.6 8.7 10.4 15.6 17.4 18.8 19.2 20.1 20.5 21.9 22.1 Financial intermediation 3.9 6.9 10.1 10.7 8.3 10.8 11.4 10.2 11.9 9.0 10.1 Real estate and business services 4.9 4.2 7.1 6.5 6.8 7.5 7.3 7.0 7.1 6.8 7.0 Public administration 10.7 10.5 9.2 9.6 13.6 11.4 6.5 6.7 7.0 4.4 6.5 Education 4.0 11.4 7.0 2.8 4.0 4.0 5.0 5.5 6.9 7.1 7.3 Health 5.1 5.6 8.6 8.7 7.8 8.1 8.5 8.8 9.0 6.7 6.9 Other social and personal services 3.1 3.1 2.1 2.0 3.0 2.6 3.7 3.2 3.1 3.2 3.5 Gross value added before adjustments 4.9 6.0 7.2 6.9 7.8 7.4 6.8 7.3 7.5 6.1 7.1 less FISIM 1.4 2.5 8.7 11.7 10.1 11.8 14.9 15.3 11.0 8.7 9.1 Gross value added at current basic prices 4.9 6.0 7.2 6.9 7.8 7.4 6.7 7.2 7.4 6.0 7.1 add Taxes on products 4.9 6.0 7.2 6.9 7.8 7.4 6.8 6.9 7.8 5.8 6.7 GDP (Constant prices) 4.9 6.0 7.2 6.9 7.8 7.4 6.7 7.1 7.4 6.0 7.0 Source : National Bureau of Statistic 19
Table No. 4A GROSS DOMESTIC PRODUCT (Monetary & Non-monetary GDPmp) BY KIND OF ECONOMIC ACTIVITY - ANNUAL GROWTH RATES At constant 2001 prices percentages ECONOMIC ACTIVITY 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 A. MONETARY Gross domestic product at market prices 5.0 6.5 7.7 7.4 7.8 8.1 7.0 7.5 7.7 6.0 7.6 Agriculture, Hunting and Forestry 4.3 6.3 5.5 3.0 4.2 6.1 3.5 4.1 4.5 2.2 5.3 Crops 5.8 7.6 6.4 2.8 4.2 6.7 3.4 4.4 5.1 1.9 6.5 Livestock - 1.0 4.0 2.8 2.2 3.5 5.1 2.4 3.3 2.2 2.3 3.1 Forestry and hunting 6.0 3.1 3.3 3.0 2.7 3.6 4.6 3.3 3.2 3.6 4.1 Fishing 2.9 4.7 6.8 6.0 6.7 6.0 5.0 4.5 5.0 2.2 1.5 Industry and construction 4.5 6.7 9.6 11.4 11.3 10.4 8.4 9.4 8.5 7.1 8.2 Mining and quarrying 14.3 13.9 16.9 17.1 16.0 16.1 15.6 10.7 2.5 1.2 2.7 Manufacturing 4.8 5.0 7.5 9.0 9.4 9.6 8.5 8.7 9.9 8.0 7.9 Electricity, gas 6.2 5.9 6.2 7.2 7.5 9.4-1.9 10.9 5.4 8.4 10.2 Water supply 3.8 3.8 2.8 4.9 5.7 4.5 7.2 7.6 6.6 4.3 7.8 Construction 0.1 7.9 13.1 15.6 14.5 10.1 9.3 9.5 10.4 7.9 10.2 Services 5.4 6.5 8.0 7.9 8.0 8.2 8.0 8.3 8.7 7.1 8.3 Trade and repairs 4.3 6.4 8.3 9.7 5.8 6.7 9.5 9.8 10.0 7.5 8.2 Hotels and restaurants 4.1 4.8 6.4 3.2 3.6 5.6 4.3 4.4 4.5 4.4 6.1 Transport 4.3 4.9 5.9 5.0 8.6 6.7 5.3 6.5 6.9 6.0 7.0 Communications 5.6 8.7 10.4 15.6 17.4 18.8 19.2 20.1 20.5 21.9 22.1 Financial intermediation 3.9 6.9 10.1 10.7 8.3 10.8 11.4 10.2 11.9 9.0 10.1 Real estate and business services 5.1 3.4 8.1 7.1 7.3 8.4 8.0 7.5 7.1 5.7 7.5 Public administration 10.7 10.5 9.2 9.6 13.6 11.4 6.5 6.7 7.0 4.4 6.5 Education 4.0 11.4 7.0 2.8 4.0 4.0 5.0 5.5 6.9 7.1 7.3 Health 5.1 5.6 8.6 8.7 7.8 8.1 8.5 8.8 9.0 6.7 6.9 Other social & personal services 3.1 3.1 2.1 2.0 3.0 2.6 3.7 3.2 3.1 3.2 3.5 Gross value added before adjustments 4.9 6.5 7.7 7.5 7.9 8.2 7.1 7.7 7.8 6.1 7.7 less FISIM 1.4 2.5 8.7 11.7 10.1 11.8 14.9 15.3 11.0 8.7 9.1 Gross value added at current basic prices 5.0 6.5 7.7 7.5 7.8 8.2 7.0 7.6 7.7 6.0 7.7 Add Taxes on products 4.9 6.0 7.2 6.9 7.8 7.4 6.8 6.9 7.8 5.8 6.7 B. NON MONETARY Gross domestic product at market prices 4.7 3.5 4.5 4.1 7.8 3.1 5.2 4.8 5.7 6.0 3.5 Agriculture, Hunting and Forestry 4.8 2.7 4.2 3.7 8.9 1.7 4.6 3.9 4.8 5.0 2.0 Crops 3.2 2.2 4.5 4.0 10.2 1.2 5.0 4.7 5.1 5.5 1.5 Livestock 15.4 4.0 2.8 2.2 5.5 3.0 2.4 0.6 3.5 2.3 4.0 Forestry & hunting 2.7 4.7 3.3 3.0 2.7 3.6 4.6 2.1 3.8 3.3 4.1 Fishing 3.1 6.1 6.8 6.0 6.7 6.0 5.0 4.5 5.0 21.4 1.5 Industry and construction 4.3 5.4 4.6 3.0 3.0 9.1 9.6 9.9 10.4 5.1 9.2 Water supply 2.5 2.8 3.0 3.8 3.9 4.0 4.1 4.0 6.6 8.6 2.8 Construction 4.6 5.9 4.9 2.9 2.9 10.1 10.6 10.9 11.0 4.5 10.2 Services 4.7 5.6 5.5 5.6 5.7 5.9 6.0 6.0 7.1 9.0 6.1 Real estate & business services 4.7 5.6 5.5 5.6 5.7 5.9 6.0 6.0 7.1 9.0 6.1 Total GDP at market prices 4.9 6.0 7.2 6.9 7.8 7.4 6.7 7.1 7.4 6.0 7.0 Source : National Bureau of Statistic 20
percent GDP Growth Rate at constant 2001 prices 9.0 8.0 7.0 7.2 6.9 7.8 7.4 6.7 7.1 7.4 7.0 6.0 6.0 6.0 5.0 4.8 4.9 4.0 4.1 3.0 2.0 1.0-1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 year 21
SHARES OF GROSS DOMESTIC PRODUCT BY KIND OF ECONOMIC ACTIVITY Table No. 4B At constant 2001 prices 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 ECONOMIC ACTIVITY Agriculture, Hunting and Forestry 29.3% 29.0% 28.4% 27.4% 26.9% 26.1% 25.4% 24.6% 24.0% 23.3% 22.7% Crops 21.5% 21.4% 21.1% 20.4% 20.1% 19.6% 19.1% 18.6% 18.2% 17.8% 17.3% Livestock 5.1% 5.0% 4.8% 4.6% 4.5% 4.4% 4.2% 4.0% 3.8% 3.7% 3.6% Hunting and Forestry 2.6% 2.5% 2.4% 2.4% 2.2% 2.2% 2.1% 2.0% 2.0% 1.9% 1.9% Fishing 1.7% 1.7% 1.7% 1.7% 1.7% 1.6% 1.6% 1.6% 1.5% 1.5% 1.4% Industry and construction 17.9% 18.0% 18.4% 19.1% 19.6% 20.2% 20.5% 20.9% 21.2% 21.4% 21.6% Mining and quarrying 1.6% 1.8% 1.9% 2.1% 2.3% 2.4% 2.6% 2.7% 2.6% 2.5% 2.4% Manufacturing 8.5% 8.4% 8.4% 8.6% 8.7% 8.9% 9.0% 9.2% 9.4% 9.5% 9.6% Electricity, gas 2.2% 2.2% 2.1% 2.1% 2.1% 2.2% 2.0% 2.1% 2.0% 2.1% 2.1% Water supply 0.5% 0.5% 0.5% 0.5% 0.4% 0.4% 0.4% 0.4% 0.4% 0.4% 0.4% Construction 5.1% 5.2% 5.5% 5.8% 6.1% 6.2% 6.4% 6.5% 6.7% 6.8% 7.0% Services 45.3% 45.5% 45.7% 46.1% 46.1% 46.4% 46.9% 47.3% 47.8% 48.3% 48.8% Trade and repairs 12.9% 13.0% 13.1% 13.5% 13.2% 13.1% 13.5% 13.8% 14.1% 14.3% 14.5% Hotels and restaurants 2.8% 2.8% 2.7% 2.6% 2.5% 2.5% 2.4% 2.4% 2.3% 2.3% 2.3% Transport 5.4% 5.4% 5.3% 5.2% 5.2% 5.2% 5.1% 5.1% 5.1% 5.1% 5.1% Communications 1.2% 1.2% 1.3% 1.4% 1.5% 1.7% 1.9% 2.1% 2.3% 2.7% 3.1% Financial intermediation 1.5% 1.5% 1.6% 1.6% 1.6% 1.7% 1.8% 1.8% 1.9% 1.9% 2.0% Real estate and business services 10.5% 10.3% 10.3% 10.3% 10.2% 10.2% 10.2% 10.2% 10.2% 10.2% 10.2% Public administration 6.8% 7.0% 7.2% 7.4% 7.8% 8.0% 8.0% 8.0% 8.0% 7.8% 7.8% Education 2.0% 2.1% 2.1% 2.0% 1.9% 1.9% 1.8% 1.8% 1.8% 1.8% 1.8% Health 1.3% 1.3% 1.3% 1.3% 1.3% 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% Other social and personal services 0.9% 0.9% 0.9% 0.8% 0.8% 0.7% 0.7% 0.7% 0.7% 0.6% 0.6% Gross value added before adjustments 94.2% 94.2% 94.2% 94.2% 94.2% 94.3% 94.3% 94.4% 94.4% 94.5% 94.5% less FISIM -0.9% -0.9% -0.9% -0.9% -1.0% -1.0% -1.1% -1.1% -1.2% -1.2% -1.2% Gross value added at current basic prices 93.3% 93.3% 93.3% 93.3% 93.3% 93.3% 93.3% 93.3% 93.3% 93.3% 93.3% add Taxes on products 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% Total GDP (at constant 2001 market price 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Source : National Bureau of Statistic 22
SHARE OF GROSS DOMESTIC PRODUCT BY KIND OF ECONOMIC ACTIVITIES - 2010 At 2001 Constant Prices Agriculture, Hunting and Forestry 24.0% Fishing 1.5% Services 51.6% Industry and construction 22.8% * Excluding Bank services Charges 23
SHARE OF GROSS DOMESTIC PRODUCT BY KIND OF ECONOMIC ACTIVITIES - 2009 At 2001 Constant Prices Agriculture, Hunting and Forestry 24.7% Fishing 1.6% Services 51.1% Industry and construction 22.6% * Excluding Bank Services Charges 24
SHARES OF GROSS DOMESTIC PRODUCT BY KIND OF ECONOMIC ACTIVITY - Monetary and non-monetary Table No.4C At constant 2001 prices 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 ECONOMIC ACTIVITY A. MONETARY Gross domestic product at market prices 83.5% 83.9% 84.3% 84.7% 84.7% 85.4% 85.6% 85.9% 86.1% 86.1% 86.6% Agriculture, Hunting and Forestry 19.3% 19.3% 19.1% 18.4% 17.7% 17.5% 17.0% 16.5% 16.0% 15.5% 15.2% Crops 12.5% 12.7% 12.6% 12.1% 11.7% 11.6% 11.2% 10.9% 10.7% 10.3% 10.2% Livestock 3.4% 3.4% 3.2% 3.1% 3.0% 2.9% 2.8% 2.7% 2.6% 2.5% 2.4% Forestry and hunting 1.7% 1.7% 1.6% 1.6% 1.5% 1.4% 1.4% 1.3% 1.3% 1.3% 1.2% Fishing 1.7% 1.6% 1.6% 1.6% 1.6% 1.6% 1.6% 1.5% 1.5% 1.4% 1.4% Industry and construction 16.9% 17.0% 17.4% 18.2% 18.7% 19.3% 19.6% 20.0% 20.2% 20.4% 20.6% Mining and quarrying 1.6% 1.8% 1.9% 2.1% 2.3% 2.4% 2.6% 2.7% 2.6% 2.5% 2.4% Manufacturing 8.5% 8.4% 8.4% 8.6% 8.7% 8.9% 9.0% 9.2% 9.4% 9.5% 9.6% Electricity, gas 2.2% 2.2% 2.1% 2.1% 2.1% 2.2% 2.0% 2.1% 2.0% 2.1% 2.1% Water supply 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% Construction 4.3% 4.4% 4.7% 5.0% 5.3% 5.5% 5.6% 5.7% 5.9% 6.0% 6.2% Services 41.5% 41.7% 42.0% 42.4% 42.5% 42.8% 43.3% 43.8% 44.3% 44.7% 45.3% Trade and repairs 12.9% 13.0% 13.1% 13.5% 13.2% 13.1% 13.5% 13.8% 14.1% 14.3% 14.5% Hotels and restaurants 2.8% 2.8% 2.7% 2.6% 2.5% 2.5% 2.4% 2.4% 2.3% 2.3% 2.3% Transport 5.4% 5.4% 5.3% 5.2% 5.2% 5.2% 5.1% 5.1% 5.1% 5.1% 5.1% Communications 1.2% 1.2% 1.3% 1.4% 1.5% 1.7% 1.9% 2.1% 2.3% 2.7% 3.1% Financial intermediation 1.5% 1.5% 1.6% 1.6% 1.6% 1.7% 1.8% 1.8% 1.9% 1.9% 2.0% Real estate and business services 6.7% 6.5% 6.6% 6.6% 6.5% 6.6% 6.7% 6.7% 6.7% 6.7% 6.7% Public administration 6.8% 7.0% 7.2% 7.4% 7.8% 8.0% 8.0% 8.0% 8.0% 7.8% 7.8% Education 2.0% 2.1% 2.1% 2.0% 1.9% 1.9% 1.8% 1.8% 1.8% 1.8% 1.8% Health 1.3% 1.3% 1.3% 1.3% 1.3% 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% Other social & personal services 0.9% 0.9% 0.9% 0.8% 0.8% 0.7% 0.7% 0.7% 0.7% 0.6% 0.6% Gross value added before adjustments 77.7% 78.1% 78.5% 78.9% 79.0% 79.6% 79.9% 80.3% 80.5% 80.6% 81.1% less FISIM -0.9% -0.9% -0.9% -0.9% -1.0% -1.0% -1.1% -1.1% -1.2% -1.2% -1.2% Gross value added at current basic prices 76.8% 77.2% 77.6% 78.0% 78.0% 78.6% 78.8% 79.2% 79.4% 79.4% 79.9% Add Taxes on products 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% B. NON MONETARY 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Gross domestic product at market prices 16.5% 16.1% 15.7% 15.3% 15.3% 14.6% 14.4% 14.1% 13.9% 13.9% 13.4% Agriculture, Hunting and Forestry 11.7% 11.3% 11.0% 10.7% 10.8% 10.2% 10.0% 9.7% 9.5% 9.4% 8.9% Crops 9.1% 8.7% 8.5% 8.3% 8.5% 8.0% 7.8% 7.7% 7.5% 7.5% 7.1% Livestock 1.7% 1.7% 1.6% 1.5% 1.5% 1.4% 1.4% 1.3% 1.2% 1.2% 1.2% Forestry & hunting 0.9% 0.9% 0.8% 0.8% 0.8% 0.7% 0.7% 0.7% 0.7% 0.7% 0.6% Fishing 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Industry and construction 1.0% 1.0% 0.9% 0.9% 0.9% 0.9% 0.9% 0.9% 1.0% 0.9% 1.0% Water supply 0.2% 0.2% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% Construction 0.8% 0.8% 0.8% 0.8% 0.7% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% Services 3.8% 3.8% 3.7% 3.7% 3.6% 3.6% 3.5% 3.5% 3.5% 3.6% 3.6% Real estate & business services 3.8% 3.8% 3.7% 3.7% 3.6% 3.6% 3.5% 3.5% 3.5% 3.6% 3.6% Total GDP at market prices 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Source : National Bureau of Statistic 25
Table No. 4D GROSS DOMESTIC PRODUCT AND EXPENDITURE At constant 2001 prices Shs. Million ECONOMIC ACTIVITY 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Gross Domestic Product (GDPbp) 8007798 8488274 9096251 9722362 10483313 11255608 12013295 12874170 13828681 14663656 15700057 Net taxes on product 577542 612000 655926 701372 756422 812482 867868 927751 999664 1057645 1128507 Gross Domestic Product (GDPmp) 8585340 9100274 9752177 10423734 11239735 12068090 12881163 13801921 14828345 15721301 16828563 EXPENDITURE ON GROSS DOMESTIC PRODUCT Gross Domestic Product (GDPmp) 8585339 9100274 9752178 10423735 11239734 12068090 12881163 13801921 14819704 15721301 16828563 Final Consumption 7630259 7901761 8486320 9052080 9748544 10855260 11735476 12517666 13328593 13838779 15010200 Households 6615765 6826396 7213608 7410284 7866521 8748590 9456059 10021704 10503940 10870070 11538082 Government 1014494 1075365 1272712 1641796 1882023 2106670 2279417 2495962 2824652 2968710 3472119 Investment 1421461 1587743 1711262 1945657 2144198 2535317 2938619 3358305 3616866 3982283 4385837 Gross Fixed Capital Formation 1381486 1547100 1669823 1903295 2100914 2493633 2893604 3313177 3571629 3928805 4332960 Changes in Inventory 39975 40643 41439 42362 43284 41684 45015 45128 45237 53478 52877 Exports 1321129 1547644 1666860 1991479 2157615 2449820 2369701 2768705 3311236 3479706 4533457 Goods 596796 746080 814494 1049683 1120049 1256370 1004797 1089513 1441642 1519800 2401333 Services 724333 801564 852366 941796 1037566 1193450 1364904 1679192 1869594 1959906 2132124 Imports -1787510-1936874 -2112264-2565481 -2810623-3772307 -4162633-4842754 -5436991-5579468 -7100931 Goods -1157440-1367474 -1489051-1865350 -2018283-2689212 -3146854-3861190 -4499134-4455068 -5822908 Services -630070-569400 -623213-700131 -792340-1083095 -1015779-981564 -937856-1124400 -1278024 Source : National Bureau of Statistic 26
Table No. 5 CAPITAL FORMATION BY TYPE OF ASSETS (At Current Prices) (Shs. million) Type 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Buildings: Residential 145210 150406 173687 266443 349977 390219 484652 581583 709531 865628 Rural Own Account 302994 292190 348806 467417 552039 585329 701224 820432 951702 1103974 Non-Residential 245218 260413 509560 706356 947093 1035628 1282108 1538914 1877475 2290520 Total 693422 703009 1032053 1440216 1849109 2011176 2467985 2940930 3538708 4260122 Other Works: Land Improvement 17013 74044 42408 110434 119416 125256 137170 149515 182409 222539 Roads & Bridges 30600 34259 35589 36920 39580 43239 51455 61797.5 75393 91979 Water Supply 117056 223668 400163 479828 629842 701791 827411 984619 1153974 1352457 Others 122010 121949 88023 181805 245349 271512 344820 413784 508954 626014 Total 286679 453920 566183 808987 1034187 1141798 1360856 1609716 1920729 2292989 Equipment: Transport Equipment 166000 219771 252439 293604 410919 629648 817913 956958 972933 1613525 Other Equipment 401000 374117 438122 552715 665348 1100867 1472259 1766711 1588599 2011057 Total 567000 593888 690561 846319 1076267 1730515 2290172 2723669 2561532 3624582 Fixed Capital Formation 1547101 1750817 2288797 3095522 3959563 4883489 6119013 7274314 8020970 10177693 Increase in Stocks 40643 44596 43387 57845 64405 74292 90728 106943 152252 164843 Total Capital Formation 1587744 1795413 2332184 3153367 4023968 4957781 6209741 7381257 8173221 10342536 Source: National Bureau of Statistics 27
CAPITAL FORMATION BY TYPE OF ASSETS At Constant 2001 Prices Table No. 6: Shs. Million 2002 2003 2004 2005 2006 2007 2008 2009 2010 %change Type Buildings: Residential 145986 141750 176418 185882 206555 230059 244363 260491 277683 6.6% Rural Own Account 270713 271724 283345 295766 314832 321112 339078 357405 376705 5.4% Non-Residential 252762 415860 460289 473808 491387 525622 557960 593111 630477 6.3% Total 669461 829334 920052 955456 1012774 1076793 1141401 1211008 1284866 6.1% Other Works: Land Improvement 68506 32988 46779 75517 111237 143282 151009 159013 167440 5.3% Roads & Bridges 32277 28289 22813 21178 23724 26018 27666 25875 23234-10.2% Water Supply 206945 311305 311908 359854 396306 439900 466694 496096 527350 6.3% Others 112833 68480 88285 130762 185891 242773 256940 271329 286523 5.6% Total 420561 441062 469785 587311 717158 851973 902309 952312 1004548 5.5% Equipment: Transport Equipment 186549 226955 262150 350639 386998 452401 484069 670407 855005 27.5% Other Equipment 393251 415201 448928 612469 776675 932009 1043851 1095078 1188541 8.5% Total 579800 642156 711078 963108 1163673 1384410 1527920 1765485 2043546 15.7% Fixed Capital Formation 1669822 1912552 2100915 2505875 2893605 3313177 3571629 3928805 4332960 10.3% Increase in Stocks 41439 42362 43284 41684 45015 45128 45237 53478 52877-1.1% Total Capital Formation 1711261 1954914 2144199 2547559 2938620 3358305 3616866 3982283 4385837 10.1% Source: National Bureau of Statistics 28
Table No. 7 Shs. million Sector 2002 2003 2004 2005 2006 2007 2008 2009 2010 Public Sector: Central Gov't 568022 753610 953157 1039910 1134578 1352763 1628172 1921243 2267067 Parastatals 59405 72745 119245 162413 141822 141570 148299 157197 166629 Institutions++ 72900 89624 120042 138362 141822 144659 152971 163067 173830 Total Public Sector: 700327 915979 1192444 1340685 1418222 1638992 1929442 2241507 2607525 Private Sector 1050490 1372817 1903078 2618878 3465267 4480021 5344872 5779463 7570168 Total Fixed Capital 1750817 2288796 3095522 3959563 4883489 6119013 7274314 8020970 10177693 Increase in Stocks 44596 43387 57845 64405 74292 90728 106943 152252 164843 Total Capital Formation 1795413 2332183 3153367 4023968 4957781 6209741 7381257 8173221 10342536 Source: National Bureau of Statistics ++ Includes non-profit making organisations CAPITAL FORMATION BY PUBLIC AND PRIVATE SECTORS At Current Prices 29
INDEX OF RETAIL PRICES OF GOODS CONSUMED BY MINIMUM WAGE EARNERS IN DAR ES SALAAM (2001=100) Table No. 8 ALL ITEMS FOOD YEAR INDEX % CHANGE INDEX % CHANGE 1982 2.7-3.2-1983 3.3 22.2 3.9 21.9 1984 3.9 18.2 4.2 7.7 1985 5.6 43.6 6.1 45.2 1986 8.0 42.9 9.2 50.8 1987 10.1 26.3 11.5 25.0 1988 13.1 29.7 15.1 31.3 1989 17.1 30.5 19.5 29.1 1990 22.5 31.6 24.7 26.7 1991 30.6 36.0 33.1 34.0 1992 32.7 7.0 41.6 25.7 1993 40.2 22.8 50.1 20.4 1994 60.5 30.4 68.9 37.5 1995 65.7 7.4 73.7 7.0 1996 78.8 19.8 85.0 15.3 1997 84.1 6.8 89.1 4.8 1998 89.8 6.8 94.8 6.4 1999 90.6 0.9 93.7-1.2 2000 92.2 1.7 91.8-2.0 2001 100.0 8.5 100.0 8.9 2002 103.8 3.8 104.0 4.0 2003 109.8 5.8 109.6 5.4 2004 116.8 6.4 117.1 6.8 2005 126.5 8.3 125.7 7.3 2006 141.1 11.5 138.6 10.3 2007 154.2 9.3 151.5 9.3 2008 180.9 17.3 174.6 15.2 2009 211.3 16.8 208.5 19.4 YEAR ALL ITEMS FOOD INDEX % CHANGE INDEX % CHANGE 2009 87.0 95.5 2010* 98.7 13.4 100.8 5.6 Source: National Bureau of Statistics *Starting 2010, the reference period for the NCPI has been changed from December, 2001 to September 2007, following the internationally recommended Classification of Individual 30
MINIMUM WAGE EARNERS IN DAR ES SALAAM (2001=100) Table No. 9 Beverages Electricity, Clothing Furniture Services Recreation OVERALL Year Food and Rent Kerosene and and and other Health and Transport Education Others PRICE Cigarettes and Water Footwear Household Household Services Entertain. INDEX Utensils Requirements 2004 First Quarter 118.2 123.9 111.9 122.6 113.0 108.4 102.3 117.2 103.7 100.7 110.1 100.3 116.4 Second Quarter 116.7 123.8 111.9 131.0 113.3 112.3 102.1 119.4 103.7 100.3 109.7 100.3 116.3 Third Quarter 114.9 122.5 111.9 139.3 111.6 113.9 102.1 120.6 103.7 101.4 109.9 108.3 116.0 Fourth Quarter 118.6 122.6 111.9 140.1 109.7 117.4 102.3 117.0 103.7 101.1 115.0 104.7 118.5 2005 First Quarter 124.1 120.3 113.6 149.0 107.5 119.2 109.3 110.2 108.2 103.4 118.0 112.8 123.3 Second Quarter 123.2 119.7 113.6 163.4 109.6 115.3 109.4 111.0 110.0 108.4 116.7 114.5 124.7 Third Quarter 125.7 119.9 113.6 165.9 108.9 114.5 110.2 113.8 111.7 110.4 105.3 119.9 126.8 Fourth Quarter 129.9 119.9 113.6 170.9 108.8 113.7 111.3 119.2 111.6 116.8 120.1 137.3 131.0 2006 First Quarter 135.2 130.2 129.9 179.6 107.7 114.4 108.4 119.8 117.6 133.0 98.0 149.7 137.0 Second Quarter 139.7 137.6 132.8 195.0 106.1 114.6 108.9 119.9 114.1 133.8 89.9 148.4 141.7 Third Quarter 137.4 148.6 134.3 199.1 106.8 116.3 110.0 117.8 112.9 134.5 91.2 129.0 140.9 Fourth Quarter 142.0 150.9 134.3 201.1 111.4 116.3 111.0 117.8 109.7 134.7 94.1 130.1 144.6 2007 First Quarter 150.0 156.6 146.1 203.1 117.0 122.7 112.9 117.7 110.3 135.6 99.7 125.9 150.8 Second Quarter 150.1 158.4 146.1 199.8 124.0 133.6 112.6 117.0 115.7 135.7 105.2 128.8 151.1 Third Quarter 148.3 159.3 146.1 217.1 124.2 133.5 123.7 110.6 118.1 156.2 107.3 130.4 153.6 Fourth Quarter 157.7 163.8 146.1 216.5 131.2 137.0 127.4 113.9 115.4 166.4 103.6 128.6 161.2 2008 First Quarter 167.2 169.9 195.1 252.7 143.5 154.7 122.2 126.1 103.4 166.5 96.5 129.9 172.5 Second Quarter 172.6 171.2 195.1 262.7 143.2 155.6 134.0 132.3 107.8 166.4 96.5 135.3 177.5 Third Quarter 173.1 178.0 203.5 283.5 136.2 163.4 146.7 136.1 112.1 187.4 102.2 141.3 182.2 Fourth Quarter 185.4 181.0 203.5 280.4 134.4 168.2 150.6 141.7 120.1 197.9 101.8 142.5 191.4 2009 First Quarter 198.3 200.2 206.6 267.8 142.7 171.8 168.6 152.3 121.7 219.0 109.0 147.3 202.0 Second Quarter 202.6 205.8 206.6 264.4 145.8 171.8 170.2 157.3 121.7 229.6 109.5 148.2 205.9 Third Quarter 210.3 216.1 206.6 284.2 156.3 174.9 170.7 171.4 126.7 230.1 112.6 147.3 214.1 Fourth Quarter 222.9 220.9 206.6 289.9 166.5 174.9 158.7 174.3 128.6 225.2 114.0 148.1 223.2 Foo d Alcoholic Clothing Electricity, Furniture Health Transport Communication Recreation Education Hotel and Others OVERALL Year and Drinks and and Household and Services and Restaurants PRICE Beverages Cigarettes Footwear and Water Household Entertain. INDEX Utensils 2010* 101.0 100.0 93.8 92.9 100.3 95.7 91.9 98.6 92.9 99.8 102.3 101.6 99.3 Source: National Bureau of Statistics *Starting 2010, the reference period for the NCPI has been changed from December, 2001 to September 2007, following the internationalil recommended Classification of individual Consumption by Purpose (COICOP). 31
COST OF LIVING INDEX OF GOODS AND SERVICES CONSUMED BY MIDDLE GRADE WAGE EARNERS IN DAR ES SALAAM (2001=100) Table No. 10 Months Year March June September December Average Change % 1988 10.3 11.4 11.5 13.3 11.6 33.3 1989 14.4 15.6 15.2 15.3 15.1 30.2 1990 17.4 18.3 19.3 21.1 19.0 25.8 1991 24.6 26.9 26.1 29.8 26.9 41.6 1992 30.1 31.3 32.9 34.8 32.3 20.1 1993 40.3 39.2 39.6 47.4 41.6 28.8 1994 49.9 56.3 54.5 62.5 55.8 34.1 First Quarter Second Third Fourth Quarter Quarter Quarter 1995 67.4 69.3 71.7 77.1 71.4 28.0 1996 84.5 85.5 80.9 81.1 83.0 16.2 1997 87.1 89.3 86.7 89.9 88.4 6.4 1998 95.5 92.6 89.6 92.8 92.6 4.9 1999 95.2 96.4 89.8 92.1 93.4 0.9 2000 92.5 96.3 93.3 100.8 95.7 2.5 2001 104.7 99.2 98.6 97.6 100.0 4.5 2002 103.1 103.0 103.7 104.2 103.5 3.5 2003 104.2 104.2 106.2 108.8 105.9 2.3 2004 112.5 113.6 115.1 117.3 114.6 8.2 2005 119.7 121.3 126.0 127.9 123.7 7.9 2006 131.5 135.2 135.6 137.9 135.0 9.2 2007 143.2 148.7 152.3 157.9 150.5 11.5 2008 166.5 171.4 175.7 180.8 173.6 15.3 2009 191.1 196.7 206.9 213.8 202.1 16.4 Second Third Fourth First Quarter Year Quarter Quarter Quarter Average %change 2009 85.3 87.8 91.5 93.2 89.5 2010* 96.0 99.4 100.3 94.3 97.5 9.0 Source: National Bureau of Statistics *Starting 2010, the reference period for the NCPI has been changed from December, 2001 to September 2007, following the internationally recommended Classification of Individual Consumption by Purpose (COICOP). 32
COST OF LIVING INDEX OF GOODS AND SERVICES CONSUMED BY MIDDLE GRADE WAGE EARNERS IN DAR ES SALAAM (2001=100) Table No. 11 Beverages Electricity Clothing Furniture Services Health Recreation OVERALL Year Food and Rent Kerosene and and and other Services and Transport Education Others PRICE Cigarettes and Water Footwear Household Household Entertain. INDEX Utensils Requirements 2004* First Quarter 113.5 120.1 111.9 126.0 105.3 103.5 111.0 104.5 105.5 102.7 103.3 116.5 112.5 Second Quarter 114.7 115.3 111.9 135.8 107.3 104.6 107.4 102.3 105.4 103.6 102.6 117.7 113.6 Third Quarter 116.9 103.3 111.9 147.1 106.5 104.2 109.7 101.3 105.1 107.7 102.8 123.2 115.1 Fourth Quarter 120.3 103.3 111.9 147.7 107.8 102.3 108.5 101.1 102.3 110.2 102.3 120.6 117.3 2005 First Quarter 123.3 104.1 111.9 152.3 104.3 107.8 103.4 105.5 109.4 113.1 105.6 120.6 119.7 Second Quarter 124.3 106.0 111.9 162.9 104.9 109.9 105.0 106.4 110.5 113.2 107.5 121.0 121.3 Third Quarter 130.5 109.1 126.7 165.7 105.4 112.1 107.2 107.9 119.2 115.7 109.1 122.7 126.0 Fourth Quarter 133.2 109.6 126.5 170.6 105.4 112.9 107.7 106.6 116.7 115.2 110.0 127.3 127.9 2006 First Quarter 134.5 114.0 129.9 178.7 109.1 126.9 108.4 110.9 118.7 127.6 115.3 123.8 131.5 Second Quarter 136.7 119.1 132.8 195.1 110.8 131.2 109.0 115.2 114.2 132.7 117.3 119.3 135.2 Third Quarter 134.3 126.8 134.3 204.8 110.2 135.3 110.5 118.0 113.4 137.1 116.7 108.5 135.6 Fourth Quarter 136.8 130.9 134.3 207.6 113.8 139.1 111.7 118.6 110.9 137.1 119.1 109.8 137.9 2007 First Quarter 142.5 133.3 146.1 215.7 118.8 144.2 113.6 117.3 114.4 140.0 143.4 106.4 143.2 Second Quarter 148.7 142.8 146.1 215.1 128.9 148.8 112.6 117.8 118.1 142.0 151.7 106.3 148.7 Third Quarter 149.4 144.2 146.1 227.2 134.0 148.6 120.2 114.7 119.3 157.4 157.8 106.1 152.3 Fourth Quarter 157.3 150.1 146.1 221.2 135.4 148.1 133.8 117.9 119.5 164.0 156.4 105.3 157.9 2008 First Quarter 166.4 160.2 195.1 259.4 122.7 163.5 130.5 125.9 124.2 161.4 168.4 103.9 166.5 Second Quarter 173.8 160.8 195.1 266.9 119.1 167.7 140.7 128.2 129.0 162.1 168.4 104.0 171.4 Third Quarter 174.0 165.5 197.9 286.6 120.3 172.9 157.8 132.2 129.5 176.7 182.7 106.9 175.7 Fourth Quarter 180.1 171.2 203.5 287.1 121.7 175.6 165.8 137.5 130.6 183.9 179.4 107.8 180.8 2009 First Quarter 194.7 183.2 206.6 275.9 125.7 178.4 168.5 155.5 132.1 192.1 183.1 109.4 191.1 Second Quarter 202.1 189.1 206.6 276.2 128.3 179.9 169.9 156.2 135.1 196.5 184.9 109.3 196.7 Third Quarter 214.8 195.8 227.8 295.3 134.3 179.6 172.9 170.3 131.5 195.1 203.3 114.4 206.9 Fourth Quarter 224.0 196.2 270.1 306.8 136.8 178.6 157.2 187.4 129.7 193.8 217.2 118.9 213.8 Foo d Alcoholic Clothing Electricity, Furniture Health Transport ommunicati Recreation Education Hotel and Others OVERALL Year and Drinks and and Household and Services and Restaurants PRICE Beverages Cigarettes Footwear and Water Household Entertain. INDEX Utensils 2010* First Quarter 96.8 95.1 90.4 88.4 96.8 100.0 99.5 99.7 87.6 100.0 102.0 95.5 96.0 Second Quarter 101.2 100.5 89.0 94.4 96.6 100.0 100.0 99.9 89.0 100.0 102.0 98.3 99.4 Third Quarter 101.2 100.6 94.7 99.7 99.3 100.0 100.0 99.9 93.0 100.0 100.1 97.6 100.3 Fourth Quarter 92.3 100.4 105.3 97.1 97.4 98.4 93.3 100.0 87.4 100.0 93.5 99.7 94.3 Source: National Bureau of Statistics *Starting 2010, the reference period for the NCPI has been changed from December, 2001 to September 2007, following the internationalil recommended Classification of individual Consumption by Purpose (COICOP). 33
COST OF LIVING INDEX OF GOODS AND SERVICES CONSUMED BY HIGH INCOME GROUP IN DAR ES SALAAM (2001=100) Table No. 12 Beverages Electricity Clothing Furniture Services Health Recreation OVERALL Year Food and Rent Kerosene and and and other Services and Transport Education Others PRICE Cigarettes and Water Footwear Household Household Entertain. INDEX Utensils Requirements 2004 March 111.3 112.0 118.0 127.6 112.4 104.2 111.3 101.6 107.2 107.2 107.5 103.4 110.7 June 114.2 112.0 118.0 134.6 110.2 109.9 108.7 106.2 107.1 111.4 107.3 105.4 113.5 September 114.6 112.0 118.0 149.2 108.4 113.7 106.9 111.6 107.1 114.7 107.7 104.4 115.4 December 117.7 112.0 118.0 149.6 109.6 115.3 109.2 112.9 112.3 118.7 108.3 101.0 118.0 2005 March 120.4 111.9 120.0 153.5 112.0 116.4 101.4 113.3 115.3 119.8 114.1 104.6 120.1 June 119.3 111.9 120.0 161.9 113.4 116.7 102.4 114.0 116.8 122.6 114.0 106.3 121.1 September 120.9 116.5 120.0 170.0 113.9 117.3 114.9 117.8 112.3 127.5 117.4 109.6 124.2 December 131.1 116.6 120.0 176.7 114.7 115.5 116.4 126.8 114.8 136.5 117.4 108.0 131.5 2006 March 141.1 118.2 120.0 182.7 120.2 119.4 112.8 122.8 106.1 135.2 114.3 112.3 135.4 June 144.1 124.0 123.3 188.8 119.8 122.6 113.8 122.4 105.3 136.2 115.1 108.3 137.6 September 141.5 137.2 125.0 200.5 123.9 125.7 115.8 122.7 108.0 140.0 115.4 93.5 139.0 December 145.2 142.3 125.0 204.7 127.7 127.0 121.9 122.5 107.0 147.0 119.2 93.0 143.4 2007 March 153.3 144.3 140.0 215.6 131.1 131.2 127.1 120.3 110.0 150.4 152.3 90.9 150.7 June 158.3 152.0 140.0 217.0 136.4 131.6 127.3 119.1 110.9 155.7 155.6 92.7 155.3 September 157.8 153.1 140.0 225.2 139.6 130.1 128.7 116.3 111.6 170.8 159.4 88.0 159.7 December 164.9 161.5 140.0 216.8 144.1 129.1 140.1 119.5 112.9 175.6 156.7 81.1 164.2 2008 March 177.3 172.0 160.0 253.9 135.2 130.2 142.4 125.8 124.5 178.7 185.1 79.3 174.6 June 184.2 171.4 173.3 260.0 135.3 133.8 146.7 128.2 129.5 181.5 185.1 86.1 179.1 September 191.6 182.0 180.0 270.7 128.8 140.5 155.8 131.3 131.8 217.1 188.9 91.1 192.6 December 198.3 192.3 186.7 301.4 130.9 149.4 164.2 135.8 135.4 214.2 190.9 91.8 198.0 2009 March 219.8 198.3 200.0 275.0 130.0 157.4 169.0 149.3 191.2 212.7 193.0 92.0 206.3 June 225.3 199.3 200.0 275.2 134.5 163.9 170.7 155.0 193.1 210.2 193.3 93.0 208.7 September 237.8 237.8 200.0 293.0 139.7 176.4 180.1 172.5 190.8 225.0 193.5 94.9 220.2 December 247.4 207.4 200.0 305.1 147.2 137.0 163.7 185.5 189.4 228.1 195.9 94.7 225.9 Foo d Alcoholic Clothing Electricity, Furniture Health Transport ommunicatiorecreation Education Hotel and Others OVERALL Year and Drinks and and Household and Services and Restaurants PRICE Beverages Cigarettes Footwear and Water Household Entertain. INDEX Utensils 2010* March 103.1 95.1 89.2 85.2 94.4 101.9 99.3 99.4 90.3 100.0 99.4 97.4 97.0 June 107.4 100.2 88.4 90.5 95.4 101.9 99.2 99.7 97.0 100.0 99.9 101.4 100.0 September 100.8 100.4 94.8 99.1 98.8 101.3 100.3 100.0 99.4 100.0 100.6 100.6 99.8 December 94.0 100.9 104.6 102.7 98.9 100.0 97.5 100.0 98.1 100.0 97.9 102.1 98.1 Source: National Bureau of Statistics *Starting 2010, the reference period for the NCPI has been changed from December, 2001 to September 2007, following the internationalil recommended Classification of individual Consumption by Purpose (COICOP). 34
COST OF LIVING INDEX FOR HIGH INCOME GROUP IN DAR ES SALAAM (2001=100) Table No. 13 Year Months Change Average March June Sept. December % 1989-13.2-18.2 15.1 43.8 1990-19.1-22.4 19.9 32.2 1991-25.4-28.9 26.1 31.0 1992-32.0-36.4 32.9 26.0 1993-37.1-46.8 40.2 22.4 1994-51.1-61.2 53.9 34.1 1995 61.6 59.1 62.6 67.3 62.6 16.1 1996 74.7 72.8 73.2 72.7 73.4 17.1 1997 77.4 75.7 77.1 78.7 77.2 5.2 1998 77.5 78.9 78.7 79.6 78.7 1.9 1999 82.8 82.2 85.0 92.1 83.6 6.3 2000 86.4 86.4 90.3 92.3 88.9 6.2 2001 110.3 100.6 96.6 92.3 100.0 12.5 2002 103.8 103.2 103.4 103.2 103.3 6.6 2003 106.9 108.0 107.9 108.1 107.7 4.2 2004 110.7 113.5 115.4 118.0 114.4 6.2 2005 120.1 121.1 124.2 131.5 124.2 8.6 2006 135.4 137.6 138.9 143.4 138.9 11.8 2007 150.7 155.3 157.5 163.5 157.3 13.3 2008 174.6 179.1 192.6 198.0 186.1 18.3 2009 206.3 208.7 220.2 225.9 215.3 15.7 Year First Second Third Fourth Quarter Quarter Quarter Quarter Average %Change 2009 87.7 88.7 93.6 96.0 91.5 2010* 97.0 100.0 99.8 98.1 98.7 7.9% Source: National Bureau of Statistics *Starting 2010, the reference period for the NCPI has been changed from December, 2001 to September 2007, following the internationally recommended Classification of Individual Consumption by Purpose (COICOP). 35
COST OF LIVING INDEX OF GOODS AND SERVICES CONSUMED BY URBAN DWELLERS IN TANZANIA MAINLAND (2001=100) Table No. 14 Beverages Electricity Clothing Furniture Household Health Recreation OVERALL Year Food and Rent Kerosene and and Operations Services and Transport Education Others PRICE Cigarettes Water Footwear Household Household Entertainment INDEX Utensils Operations 2004 First Quarter 122.8 111.7 107.7 113.2 89.1 95.5 101.6 95.7 91.4 99.7 108.6 92.0 113.9 Second Quarter 122.8 112.6 108.8 114.1 92.9 94.2 98.6 97.2 85.3 98.4 105.3 93.3 114.0 Third Quarter 121.3 111.1 113.7 122.0 91.3 94.7 100.7 94.2 87.0 103.6 106.1 93.8 114.2 Fourth Quarter 127.4 110.6 113.8 127.7 89.2 95.2 100.1 92.0 91.8 106.5 101.5 93.4 118.1 2005 First Quarter 127.9 113.3 118.7 128.8 90.9 96.3 102.1 92.1 93.4 107.2 90.0 93.3 118.7 Second Quarter 129.5 114.5 122.1 132.9 91.5 96.3 102.4 93.4 92.4 108.2 89.7 93.8 120.2 Third Quarter 128.8 116.3 129.5 135.5 93.3 96.2 102.4 97.2 91.9 110.4 89.9 93.5 120.7 Fourth Quarter 131.5 120.0 131.5 140.3 95.6 98.1 102.7 105.2 98.2 114.8 94.5 95.1 123.9 2006 First Quarter 138.6 119.7 128.8 138.2 98.1 100.8 101.0 107.6 98.0 115.3 90.2 102.0 127.9 Second Quarter 142.4 121.4 131.5 145.5 98.2 102.9 102.7 106.2 97.5 119.1 91.5 101.0 131.3 Third Quarter 133.3 127.7 134.5 151.7 99.7 105.9 105.0 107.3 98.3 122.7 94.4 101.6 127.8 Fourth Quarter 139.7 131.1 134.5 147.9 101.2 107.6 108.9 110.3 100.8 123.8 96.9 101.3 131.7 2007 First Quarter 147.3 133.6 136.0 149.1 104.5 111.4 111.6 109.9 105.3 125.9 100.6 101.8 137.0 Second Quarter 148.2 137.6 136.6 154.7 105.3 112.3 114.0 110.6 106.9 127.8 101.4 103.1 138.7 Third Quarter 147.0 138.0 137.5 158.3 105.2 112.4 114.3 110.9 108.5 129.9 102.8 102.0 138.5 Fourth Quarter 150.2 143.0 138.3 157.0 105.6 113.8 113.8 112.3 108.9 130.9 104.1 102.2 140.8 2008 First Quarter 163.4 146.8 138.9 161.6 105.3 116.6 115.1 113.6 110.0 132.9 106.2 103.4 149.2 Second Quarter 165.1 148.5 139.5 172.0 106.4 118.1 117.1 114.7 111.4 136.5 107.8 103.9 151.7 Third Quarter 164.5 149.7 141.6 179.2 106.4 120.1 116.8 117.4 114.5 141.0 110.8 104.2 152.8 Fourth Quarter 175.0 152.1 141.6 172.5 108.6 122.1 119.1 120.3 117.6 139.6 112.7 105.2 158.4 2009 First Quarter 193.5 154.8 156.4 164.5 109.7 124.8 120.7 122.3 121.4 137.7 116.9 106.9 168.7 Second Quarter 194.0 158.2 156.5 158.7 112.5 126.1 122.7 125.9 121.4 135.3 122.4 108.6 168.9 Third Quarter 193.6 165.7 159.4 168.9 115.7 128.0 123.0 126.1 124.6 140.3 122.4 108.3 170.6 Fourth Quarter 203.8 170.9 159.6 181.7 115.6 127.1 126.0 126.1 127.6 140.3 122.7 106.3 178.2 Foo d Alcoholic Clothing Electricity, Furniture Health Transport Communication Recreation Education Hotel and Others OVERALL and Drinks and and Household and Services and Restaurants PRICE Year Beverages Cigarettes Footwear and Water Household Entertain. INDEX Utensils 2010* First Quarter 100.4 99.7 95.9 92.4 96.5 99.7 101.0 98.8 95.7 102.6 100.7 97.1 98.9 Second Quarter 101.9 97.7 96.3 97.2 97.7 100.0 100.8 99.4 96.8 102.7 100.7 97.8 100.2 Third Quarter 99.9 99.8 98.8 98.9 99.3 100.1 100.4 99.7 98.6 100.8 101.2 100.0 99.8 Fourth Quarter 101.3 100.5 100.9 98.9 100.3 99.7 100.5 99.7 98.2 100.1 99.9 99.9 100.6 Source: National Bureau of Statistics *Starting 2010, the reference period for the NCPI has been changed from December, 2001 to September 2007, following the internationalil recommended Classification of individual Consumption by Purpose (COICOP). 36
COST OF LIVING INDEX OF GOODS AND SERVICES CONSUMED BY URBAN DWELLERS IN TANZANIA MAINLAND (2001=100) Table No. 15 Period Year First Second Third Forth Average Change Quarter Quarter Quarter Quarter % 1982 1.5 1.6 1.8 1.9 1.7 28.9 1983 1.9 2.1 2.2 2.4 2.2 27.1 1984 2.5 2.7 3.1 3.4 2.9 36.1 1985 3.6 3.7 3.9 4.4 3.9 33.3 1986 4.8 4.8 5.3 5.9 5.2 32.4 1987 6.3 6.3 6.7 7.6 6.7 29.9 1988 8.2 8.3 9.1 9.7 8.8 31.2 1989 10.5 11.3 11.8 12.5 11.5 30.4 1990 14.5 14.9 16.0 17.3 15.6 35.9 1991 18.8 19.8 20.4 21.7 20.2 28.8 1992 23.6 23.7 24.8 26.3 24.6 21.9 1993 28.4 30.0 30.2 33.1 30.5 24.0 1994 37.7 40.6 41.2 45.4 41.2 35.3 1995 50.8 51.5 52.5 55.3 52.5 27.4 1996 63.7 63.9 62.2 64.5 63.6 21.0 1997 73.3 74.6 72.8 74.5 73.8 16.1 1998 83.8 84.0 81.8 83.3 83.3 12.9 1999 91.2 90.9 87.8 89.2 89.8 7.8 2000 97.1 96.3 92.9 94.2 95.1 6.0 2001 102.2 101.4 97.6 98.9 100.0 5.1 2002 103.5 104.1 103.8 105.9 104.3 4.3 2003 108.5 109.9 109.1 112.0 109.9 5.3 2004 113.9 114.0 114.2 118.1 115.1 4.7 2005 118.7 120.2 120.7 123.9 120.9 5.0 2006 127.9 131.3 127.8 131.7 129.6 7.3 2007 137.0 138.7 138.5 140.8 138.7 7.0 2008 149.2 151.7 152.8 158.4 153.0 10.3 2009 168.7 168.9 170.6 178.2 171.6 12.1 Year First Second Third Fourth Quarter Quarter Quarter Quarter Average %Change 2009 93.1 93.2 94.2 98.3 94.7 2010* 98.9 100.2 99.8 100.6 99.9 5.5 Source: National Bureau of Statistics *Starting 2010, the reference period for the NCPI has been changed from December, 2001 to September 2007, following the internationally recommended Classification of Individual Consumption by Purpose (COICOP). 37
Percent TREND OF INFLATION - Tanzania Mainland At 2001 base year 25.0 20.0 21.0 15.0 16.1 12.9 12.1 10.0 10.3 5.0 7.8 6.0 5.1 4.3 5.3 4.7 5.0 7.3 7.0 5.5 0.0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Years 38
DIFFERENT INDICES OF GOODS AND SERVICES CONSUMED BY URBAN RESIDENTS IN TANZANIA MAINLAND (2001=100) Table No. 16 Index Index (%) Urban Urban Dwellers Dwellers Income Income Year Tanzania Tanzania Mainland Mainland Minimum Middle High Minimum Middle High 1982 2.7 2.1 1.9 1.7 21.8 25.9 25.9 27.6 1983 3.3 2.6 2.4 2.2 23.6 23.5 26.5 29.7 1984 3.9 3.3 2.8 2.9 17.5 28.6 16.3 35.4 1985 5.7 4.7 3.5 3.9 46.6 42.6 24.0 32.3 1986 8.1 6.5 5.0 5.2 41.3 37.7 41.9 32.6 1987 10.2 8.6 7.4 6.7 26.2 32.1 48.9 29.8 1988 13.2 11.4 10.5 8.8 29.5 32.9 42.0 31.8 1989 17.3 14.9 15.1 11.5 30.7 30.1 43.5 30.3 1990 22.7 18.7 19.9 15.7 31.5 25.6 32.2 35.8 1991 30.9 26.5 26.1 20.1 36.3 41.4 31.2 28.7 1992 38.2 31.8 32.9 24.5 23.5 20.0 25.9 21.8 1993 46.9 41.0 40.2 30.4 22.9 29.1 22.3 24.0 1994 61.2 55.0 54.0 41.2 30.4 34.1 34.1 35.5 1995 65.7 70.3 62.6 52.5 7.3 27.9 16.1 27.4 1996 78.8 81.7 73.4 63.6 19.9 16.3 17.1 21.0 1997 84.1 86.9 77.2 73.8 6.8 6.3 5.2 16.1 1998 89.8 91.2 78.7 83.3 6.8 5.0 1.9 12.9 1999 90.6 91.9 83.6 89.8 0.9 0.8 6.3 7.8 2000 92.2 94.2 88.9 95.1 1.7 2.5 6.3 6.0 2001 100.0 100.0 100.0 100.0 8.5 6.1 12.5 5.1 2002 103.8 103.5 103.3 104.3 3.8 3.5 3.3 4.3 2003 109.8 105.9 107.7 109.9 5.8 2.3 4.3 5.3 2004 116.8 114.6 114.4 115.1 6.4 8.2 6.2 4.7 2005 126.5 123.7 124.2 120.9 8.3 7.9 8.6 5.0 2006 141.1 135.0 138.9 129.6 11.5 9.2 11.8 7.3 2007 154.0 150.2 157.3 138.7 9.2 11.2 13.3 7.0 2008 180.9 173.6 186.1 153.0 17.5 15.5 18.3 10.3 2009 211.3 202.1 215.3 171.6 16.8 16.4 15.7 12.1 Index Index (%) Urban Urban Dwellers Dwellers Income Income Year Tanzania Tanzania Mainland Mainland Minimum Middle High Minimum Middle High 2009 87.0 89.5 91.5 94.7 2010 98.7 97.5 98.7 99.9 13.4 9.0 7.9 5.5 Source: National Bureau of Statistics *Starting 2010, the reference period for the NCPI has been changed from December, 2001 to September 2007, following the internationally recommended Classification of Individual Consumption by Purpose (COICOP). 39
CHAPTER 2 THE STATE OF THE WORLD ECONOMY AND INTERNATIONAL ECONOMIC CO-OPERATION THE STATE OF THE WORLD ECONOMY World Economic Growth 33. In 2010, the world economy started to recover from the aftermath of the global financial and economic crisis following the collapse of financial markets in the United States and the European countries. The pace of global economic growth increased to 5.0 percent compared to a contraction of 0.5 percent in 2009. The global economic recovery was a result of economic rescue strategies in which fiscal and monetary policies were pursued by the affected countries. The growth in the global economy went in tandem with economic growth of the Developed Countries whose growth recovered to 3.0 percent in 2010, compared to a contraction of 3.4 percent in 2009. 34. The output growth rate in Developing Countries increased by 7.3 percent in 2010 compared to 2.7 percent in 2009. This was attributed to increased investment and exports, rising commodity prices and influx of capital inflows. 35. The pace of economic growth for Developing Asian Countries notably China and India increased to 9.5 percent in 2010 from 7.2 percent in 2009. The increase was spurred by the robust export of goods which is the main base of these economies. Table 2.1: World Output 2003 2010 (Annual percentage change) Region 2003 2004 2005 2006 2007 2008 2009 2010 World Output 4.0 5.1 4.6 5.2 5.4 2.9-0.5 5.0 Developed Countries 2.0 3.4 2.7 3.0 2.7 0.2-3.4 3.0 Developing Countries 6.4 7.5 7.3 8.2 8.8 6.1 2.7 7.3 Developing Asia 8.1 8.6 9.5 10.4 11.4 7.7 7.2 9.5 Sub-Saharan Africa 4.2 5.6 6.0 6.4 7.2 5.6 2.8 5.0 Source: International Monetary Fund (IMF), April 2011 Trend in World Trade 36. In 2010, the growth rate of the world trade increased to 14.5 percent from a contraction of 12.3 percent in 2009, this was the largest increase since 1950. This was a result of rising commodity demand in Developed and Developing countries which 40
led to the expansion of world trade. Moreover, the strengthening of capital and money markets contributed to the growth of world trade. 37. The value of world merchandise exports amounted to USD 14.9 trillion in 2010 compared to USD 12.2 trillion in 2009, equivalent to 22.0 percent increase. The increase in the value of merchandise exports was attributed to rising commodity prices in the world market as well as the weakening of US dollar against other major currencies in the world. 38. Similarly, in African countries, the growth of merchandise exports increased from a contraction of 30.0 percent in 2009 to 28.0 percent in 2010. On the other hand, merchandise imports increased by 14.0 percent in 2010 compared to a contraction of 15.0 percent in 2009. As a result of favourable trade, African countries managed to record surplus trade balance valued at USD 37.0 billion in 2010 compared to a deficit trade balance of USD 15.5 billion in 2009. 41
Table 2.2: World Merchandise Trade by Region and Selected Economies 2010 (Billion USD and percentage) Value Exports Annual percentage change Value Imports Annual percentage change 2010 2005-10 2008 2009 2010 2010 2005-10 2008 2009 2010 World 14,855 6.0 15.0-23.0 22.0 15,050 7.0 16.0-23.0 21.0 North America 1,964 6.0 11.0-21.0 23.0 2,681 3.0 8.0-25.0 23.0 United States 1,278 7.0 12.0-18.0 21.0 1,968 3.0 7.0-26.0 23.0 Canada 387 1.0 9.0-31.0 22.0 402 4.0 7.0-21.0 22.0 Mexico 298 7.0 7.0-21.0 30.0 311 6.0 10.0-24.0 29.0 South and Central America 575 10.0 21.0-24.0 25.0 576 14.0 30.0-26.0 30.0 Brazil 202 11.0 23.0-23.0 32.0 191 20.0 44.0-27.0 43.0 Other South and Central America 373 9.0 20.0-25.0 22.0 385 12.0 25.0-25.0 24.0 Europe 5,626 5.0 12.0-22.0 12.0 5,841 5.0 13.0-25.0 13.0 European Union 5,147 5.0 11.0-22.0 12.0 5,337 5.0 12.0-25.0 12.0 Germany 1,269 5.0 9.0-23.0 13.0 1,067 7.0 12.0-22.0 15.0 France 521 2.0 10.0-21.0 7.0 606 4.0 13.0-22.0 8.0 Netherlands 572 7.0 16.0-22.0 15.0 517 7.0 18.0-24.0 17.0 United Kingdom 405 1.0 5.0-23.0 15.0 558 2.0 2.0-24.0 15.0 Italy 448 4.0 9.0-25.0 10.0 484 5.0 10.0-26.0 17.0 Commonwealth of Independent States (CIS) 588 11.0 35.0-36.0 30.0 414 14.0 32.0-33.0 24.0 Russian Federation 400 10.0 33.0-36.0 32.0 248 15.0 31.0-34.0 30.0 Africa 500 10.0 29.0-30.0 28.0 463 13.0 28.0-15.0 14.0 South Africa 82 10.0 16.0-24.0 33.0 94 9.0 14.0-27.0 29.0 Africa less South Africa 418 10.0 31.0-31.0 28.0 369 14.0 33.0-12.0 11.0 Oil exporters 277 9.0 34.0-38.0 31.0 138 14.0 39.0-9.0 4.0 Non oil exporters 141 12.0 24.0-14.0 21.0 231 13.0 29.0-14.0 15.0 Middle East 916 11.0 34.0-31.0 30.0 572 11.0 28.0-15.0 13.0 Asia 4,685 11.0 15.0-18.0 31.0 4,503 11.0 21.0-20.0 32.0 China 1,578 16.0 17.0-16.0 31.0 1,395 16.0 18.0-11.0 39.0 Japan 770 5.0 9.0-26.0 33.0 693 6.0 23.0-28.0 25.0 India 216 17.0 30.0-15.0 31.0 323 18.0 40.0-20.0 25.0 Newly industrialized economies 1,111 9.0 10.0-17.0 30.0 1,103 9.0 17.0-24.0 33.0 Memorandum Items Least Developed Countries (LDCs) 164 15.0 32.0-24.0 28.0 174 15.0 30.0-5.0 13.0 Source: World Trade Organisation (WTO) Report April 2011 42
Economic Development in Sub-Saharan Africa 39. In 2010, economic growth of Sub-Saharan Africa increased to 5.0 percent from 2.8 percent in 2009. The increase in growth was a result of both rising price and demand for agricultural commodities in Developed Countries. Further, this growth of Sub-Saharan Africa was attributed to high growth in oil exporting countries whose growth was 6.5 percent in 2010 compared to 4.8 percent in 2009. 40. The economic growth of middle-income countries in Sub-Saharan Africa recovered from a contraction of 1.7 percent in 2009 to 3.1 percent in 2010. Similarly, the economic growth of low-income countries in Sub-Saharan Africa increased from 4.7 percent in 2009 to 5.3 percent in 2010. On average, the economic growth of Sub- Saharan Africa shows signs of recovering to its normal growth path which were there before the onset of the global financial and economic crisis that weakened economic activities in 2009. 41. Further, in 2010, the pace of increasing consumer price in Sub-Saharan Africa slowed down to 7.5 percent from 10.5 percent in 2009, where the slowdown in the overall inflation was also reflected in the middle and low income countries. The oil exporting countries in Sub-Saharan Africa revealed different trend, whereas inflation increased to 12.4 percent in 2010 from 11.0 percent in 2009. 43
Table 2.3: Trend of Selected Macroeconomic indicators in some African Countries (2008 2010) Real GDP Consumer Prices Current Account Balance Annual growth Annual growth Percentage of GDP 2008 2009 2010 2008 2009 2010 2008 2009 2010 Sub-Saharan Africa 5.6 2.8 5.0 11.7 10.5 7.5 0.0-2.4-2.4 Oil Exporters 7.0 4.8 6.5 10.5 11.0 12.4 11.6 5.3 2.6 Nigeria 6.0 7.0 8.4 11.6 12.5 13.7 15.4 13.0 6.4 Angola 13.8 2.4 1.6 12.5 13.7 14.5 8.6-10.0-1.8 Equatorial Guinea 10.7 5.7-0.8 4.3 7.2 7.5 9.1-17.1-23.8 Gabon 2.3-1.4 5.7 5.3 1.9 0.6 23.7 7.9 11.8 Republic of Congo 5.6 7.5 9.1 6.0 4.3 5.0 1.2-8.9 2.7 Chad -0.4 0.3 5.1 8.3 10.1 1.0-0.1-22.1-21.3 Middle-Income 3.7-1.7 3.1 11.5 7.1 4.4-6.5-4.1-3.1 South Africa 3.6-1.7 2.8 11.5 7.1 4.3-7.1-4.1-2.8 Botswana 3.1-3.7 8.6 12.6 8.1 7.0 7.5-5.5-2.5 Mauritius 5.5 3.0 4.0 9.7 2.5 2.9-10.1-7.4-9.5 Namibia 4.3-0.8 4.4 10.4 8.8 4.5 2.7-0.7-1.1 Swaziland 3.1 1.2 2.0 13.1 7.5 4.5-11.1-16.8-20.6 Cape Verde 6.2 3.6 5.4 6.8 1.0 2.1-15.7-15.3-11.8 Low-Income 6.3 4.7 5.3 13.4 13.5 6.2-9.3-6.8-7.0 Ethiopia 11.2 10.0 8.0 25.3 36.4 2.8-5.6-5.0-4.3 Kenya 1.6 2.6 5.0 16.2 9.3 3.9-6.7-5.6-7.9 Ghana 8.4 4.7 5.7 16.5 19.3 10.7-10.8-4.0-7.2 Tanzania 7.3 6.7 6.5 8.4 11.8 10.5-11.1-10.2-8.6 Cameroon 2.6 2.0 3.0 5.3 3.0 1.3-0.8-3.7-3.9 Uganda 8.7 7.2 5.2 7.3 14.2 9.4-3.1-6.8-9.9 Cote d'ivoire 2.3 3.8 2.6 6.3 1.0 1.4 1.9 7.4 3.9 Source:-International Monetary Fund (IMF). 44
INTERNATIONAL ECONOMIC CO-OPERATION East African Community (EAC) 42. In December 2010, the Summit of Heads of State from East African Community met in Arusha and elected Burundi to be the Chair of the community for a period of one year. The Heads of State directed the Council of Ministers to carefully identify implementable priorities as per the existing budgetary constraints when preparing the East African Development Strategy. Further, the Summit directed all Ministers of Finance from member states to attend the pre-budget meeting for East African Community. 43. In line with the protocol for establishing the East African Community Common Market, the heads of State directed the Council of Ministers to finalize negotiations for the establishment of the Common Market so as to have in place institutional arrangement for facilitating its operation by 2011. With regard to the preparations of the East African Community Monetary Union, the Summit directed member states to fast track the process of attaining macroeconomic convergence, which is an important criterion for establishing common currency. 44. Further, the EAC Council of Ministers was directed to find better way of fasttracking implementation of regional projects, particularly those of energy generation. The Summit called for a long term energy master plan to the year 2050, which will indicate type and quantity of energy that should be produced by each member in the given timeframe. 45. Moreover, there has been incidence of piracy in the Indian Ocean that has extended further to the territorial waters of some EAC member states. This situation threatens peace and economic wellbeing of member states. Thus, the Heads of State called for coordinated measures to address the threat at national, regional and international levels. Africa Union and Economic Commission for Africa 46. Despite impressive economic performance shown by African countries in the past decade, unemployment remains high and rising. Thus, the Africa Union (AU) and the Economic Commission for Africa (ECA) at their 3rd Annual Joint Meeting held in March 2010 discussed means to achieve sustainable economic growth with the aim of reducing unemployment in Africa. This is because, unemployment not only weaken the efforts to reduce poverty, but also a basis for suppressing human resources, widening income inequality and fuels social unrest in the African countries. 45
47. As a means to address the challenge, African countries were urged to create employment opportunity, specifically for youth and other groups. Moreover, countries were advised to have appropriate policy interventions to generate highemployment economic growth that can fulfil the goal of reducing poverty. 48. Further, the meeting adopted Resolution No. 11 of ensuring food security in Africa within five years. The Resolution calls for African countries to have a set of concrete measures in agricultural investment and ensure sufficient resources are allocated in the budget in order to promote agricultural sector. Joint Permanent Commission (JPC) 49. The Joint Permanent Commissions between Tanzania and friendly countries sustained good relationship in 2010. Following the amicable relationship, the 4th Meeting of JPC between Tanzania and Algeria was held in Dar es Salaam in June 2010. The meeting was beneficial to Tanzania because an agreement to cancel USD 144.14 million Tanzanian debts was signed, a debt that Tanzania owed Algeria since 1970s and 1980s. Also, negotiations on the agreement on the avoidance of double taxation between the two countries are on-going. 50. Likewise, technical meetings between Tanzania and Brazil were held in June 2010, whereby a number of issues were discussed, including the provision of concessional terms in settling USD 237.0 million of debt Tanzania owed Brazil. 51. Furthermore, continued cooperation between Tanzania and Mozambique enabled the construction of Umoja Bridge that links the two countries and its inauguration was done in May 2010. The Umoja Bridge is located about 300 kilometres from Mtwara town. It is expected that, this bridge will enhance unity and cooperation between Tanzania and Mozambique, it will also provide great support in reducing poverty by improving investment, businesses, tourism, communication and other economic activities in the border areas. Southern Africa Development Community (SADC) 52. In 2010, the Southern Africa Development Community (SADC) participated in a tripartite conference to discuss infrastructure investment in the three regional communities, namely EAC, SADC and Common Market for Eastern and Southern Africa (COMESA) in Nairobi, Kenya. The conference was a special opportunity for 46
SADC to showcase regional infrastructure projects to international donor community, development partners, development finance institutions and private investors from around the world. This conference was largely set in the context of SADC 2010 Investment Promotion Programme in which priorities were identified in the infrastructure projects of transport corridors, water supply and sanitation, energy and communication. 53. SADC continues to implement its programs with a view to enhance cooperation and to fast track development. Some of those programs deal with the simplification of immigration procedures to easy movement of citizens from one country to another. Other programs relate to pharmaceuticals and control of communicable diseases; establishment of HIV/AIDS Fund; and the establishment of Development Fund. Also, SADC continues to implement joint programs in anti-money laundering, road transport and ports, promotion of tourism, agriculture and food security and gender development. African Peer Review Mechanism (APRM) 54. In 2010, the country team of African Peer Review Mechanism continued with its scheduled activities particularly in the areas of good governance, rule of law, promotion of participatory democracy and protection of human rights especially to vulnerable groups. The good governance report that was prepared in 2009 covering areas mentioned above continued to be rationalized in line with the current political, economic and social context, the work that will end in the financial year of 2010/11. 55. Moreover, a series of sensitization seminars on APRM process continued to be undertaken through a wide participation of stakeholders. About 320 face to face seminars were conducted in 2010. Similarly, about 6,600 fliers were distributed and other means of communication were used for sensitization including radio, TV and news papers. World Economic Forum (WEF) 56. In 2010, the World Economic Forum was held in Dar es Salaam for three days starting from 5th May 2010, to discuss challenges facing Africa Continent. The forum involved more than 1,000 participants from over 85 countries including heads of state, ministers, intellectuals, business people, among other delegates. The main theme of the forum was Rethinking Africa s Growth Strategy and the challenges brought about by the recent economic crisis. Also, the forum looked on recent global 47
changes and identified opportunities that could unlock the continent s growth potentials. 57. Moreover, the conference discussed challenges that higher education sector experiences and its importance in economic development, whereby issues such as low level of student registration and shortage of lecturers were noted. 48
CHAPTER 3 EXTERNAL SECTOR INTRODUCTION 58. In 2010, the trend of goods and services exported was satisfactory compared to 2009. The value of goods and services exported increased by 24.1 percent compared to a decrease of 7.7 percent in 2009. This was mainly attributed to increase in non-traditional goods particularly gold. On the other hand, the value of goods and services imported increased by 19.0 percent due to the increase in commodity prices in the world market. MERCHANDISE EXPORTS 59. The value of merchandise exports increased from USD 3,294.7 million in 2009 to USD 4,296.8 million in 2010, equivalent to an increase of 30.4 percent. Likewise, the value of traditional goods exports increased to USD 559.0 million in 2010 from USD 479.6 million in 2009, equivalent to an increase of 16.5. The value of non-traditional goods exports increase to USD 3,177.3 million from USD 2,376.1 million in 2009, equivalent to an increase of 33.7 percent. Traditional exports accounted for 13.1 percent of the overall merchandise exports, non-traditional goods was 73.9 percent and unrecorded trade was 13.0 percent. Gold continued to account for a large share of the overall non-traditional goods exports. Traditional exports 60. In 2010, the value of traditional exports increased to USD 559.0 million from USD 479.6 million in 2009, equivalent to an increase of 16.5 percent. This was attributed to increase in the volume and price of tobacco and cashewnuts exported. Those crops accounted for 41.6 and 17.3 percent of all traditional goods exported respectively. Likewise, in 2010 the average price of coffee, cotton, tea, tobacco, cashewnuts and cloves increased compared to 2009. However, the value of exports of coffee, cotton, tea and cloves decreased. 49
Coffee 61. The value of coffee exports decreased from USD 111.2 million in 2009 to USD 101.7 million in 2010, equivalent to the decrease of 8.6 percent. This was due to decrease in the volume of coffee exports. The volume of coffee exports was 35,600 tons compared to 56,000 tons in 2009, equivalent to a decrease of 36.4 percent. However, the average price of coffee in the world market in 2010 increased to USD 2,852.4 per ton from USD 1,984.6 per ton in 2009. Cotton 62. The value of cotton exports was decreased to USD 84.0 million in 2010 from 111.0 million in 2009, equivalent to a decrease of 24.3 percent. This was due to decrease in the volume of cotton exports resulting from a decrease in cotton production in the country. However, the average unit price of cotton in the world market increased by 11.2 percent from an average of USD 1,116.7 per ton in 2009 to USD 1,241.8 per ton in 2010. Tea 63. In 2010, the value of tea exports decreased to USD 36.4 million from USD 47.2 million in 2009, equivalent to a decrease of 22.8 percent. This was due to decrease in the volume of tea exports resulting from a decrease in tea production in the country. The volume of tea exports decreased to 18,700 tons from 30,600 tons in 2009, equivalent to a decrease of 39.0 percent. Likewise, the average unit price of tea in the world market increased from an average of USD 1,538.7 per ton in 2009 to USD 1,948.9 per ton in 2010. Tobacco 64. In 2010, the value of tobacco exports was USD 232.4 million compared to USD 127.4 million in 2009, equivalent to an increase of 82.4 percent. This was attributed to an increase in volume of tobacco exports from 33,800 tons in 2009 to 53,500 tons in 2010. In addition, the average unit price of tobacco in the world market was USD 4,339.3 per ton in 2010 compared to USD 3,764.0 per ton in 2009, equivalent to an increase of 15.3 percent. 50
Cashewnuts 65. The value of cashewnuts exports increased to USD 96.9 million in 2010 from USD 68.6 million in 2009, equivalent to an increase of 41.3 percent. This was due to increase in the volume of cashewnuts exports from 95,500 tons in 2009 to 125,000 tons in 2010. In addition, the average unit price of cashewnuts in the world market increased by 7.9 percent from USD 718.2 per ton in 2009 to USD 775.3 per ton in 2010. Cloves 66. In 2010, the value of cloves exports decreased to USD 7.6 million from USD 14.4 million in 2009, equivalent to a decrease of 47.0 percent. This was caused by the decrease in the volume of cloves exports from 4,800 tons in 2009 to 2,200 tons in 2010. However, the average unit price of cloves in the world market increased from USD 2,977.9 million per ton in 2009 to USD 3,449.6 million per ton in 2010, equivalent to an increase of 15.8 percent. Non-Traditional Exports 67. The value of non-traditional exports increased to USD 3,177.8 million in 2010 from USD 2,376.2 million in 2009, equivalent to an increase of 33.7 percent. This was due to the increase in mineral exports, particularly gold. Non-traditional exports accounted for 73.9 percent of the total merchandise exports compared to 72.1 percent in 2009. The increase in value of nontraditional exports was due to the increase in exports of manufactured goods (90.3 percent), minerals (22.7 percent) and other goods (20.5 percent). Minerals 68. In 2010, the value of mineral exports increased to USD 1,560.2 million from USD 1,271.4 million in 2009, equivalent to an increase of 22.7 percent. Gold accounted for 97.2 percent of all mineral exports. The value of gold exports increased from USD 1,229.5 million in 2009 to USD 1,516.6 million in 2010, equivalent to an increase of 23.4 percent. This was due to an increase in the volume of gold exports and unit price of gold in the world market. 51
However, diamond exports decreased to USD 10.1 million in 2010 from USD 15.5 million in 2009, equivalent to a decrease of 34.8 percent. In addition, the gold exports contributed 47.7 percent of all non-traditional goods. Manufactured Goods 69. In 2010, the value of exports of manufactured goods increased to USD 963.9 million from USD 506.5 million in 2009, equivalent to an increase of 90.3 percent. This was mainly attributed to the increase in exports from cotton and tobacco products. However, exports of sisal products decreased due to the decrease in demand of that product in the world. Exports of manufactured goods accounted for 30.3 percent of non-traditional goods in 2010, compared to 21.3 percent in 2009. Fish and Fish Products 70. In 2010, exports value of fish and fish products decreased to USD 141.0 million from USD 155.0 million in 2009, equivalent to a decrease of 9.0 percent. This was due to a decrease in demand of fish and fish products in the world market. Horticultural Products 71. The export value of horticultural products decreased by 6.6 percent from USD 33.3 million in 2009 to USD 31.1 million in 2010. Other goods exports 72. The export value of other goods was increased to USD 349.1 million in 2010 from USD 289.6 million in 2009, equivalent to an increase of 20.5 percent. In addition, the value of re-exports goods was USD 132.5 million in 2010 compared to USD 120.4 million in 2009. Likewise, the value of unrecorded goods exports was USD 560.4 million in 2010. 52
Table 3.1: Value (fob), Volume and Prices of Goods Exports (2006-2010) Goods exports 2006 2007 2008 2009r 2010p 2009-2010 (% change) Traditional goods (US$ million) Coffee Value (US$ million) 61.4 98.1 99.1 111.2 101.7-8.6 Volume ( 000 ton) 31.5 45.0 44.2 56.1 35.6-36.4 Price (US$ per ton) 1,953.1 2,177.6 2,203.4 1,984.6 2,852.4 43.7 Cotton Value (US$ million) 55.8 66.4 115.0 111.0 84.0-24.3 Volume ( 000 ton) 55.0 59.1 91.4 99.4 67.6-32.0 Price (US$ per ton) 1,014.2 1,123.8 1,257.8 1,116.7 1,241.8 11.2 Sisal Value (US$ million) 6.1 8.8 3.3 - - - Volume ( 000 ton) 8.0 9.5 2.7 - - Price (US$ per ton) 766.7 928.4 1,251.4 - - Tea Value (US$ million) 31.0 28.7 40.8 47.2 36.4-22.8 Volume ( 000 ton) 22.4 21.5 28.1 30.6 18.7-389.0 Price (US$ per ton) 1,384.9 1,334.8 1,511.2 1,538.7 1,948.9 26.7 Tobacco Value (US$ million) 65.2 87.8 176.4 127.4 232.4 82.4 Volume ( 000 ton) 25.0 37.9 35.6 33.8 53.5 58.2 Price (US$ per ton) 2,611.4 2,291.5 3,041.2 3,764.0 4,339.3 15.3 Cashewnuts Value (US$ million) 39.4 25.6 40.2 68.6 96.9 41.3 Volume ( 000 ton) 66.3 41.3 55.0 95.5 125.0 30.9 Price (US$ per ton) 594.4 621.1 730.1 718.2 775.3 7.9 Cloves Value (US$ million) 8.2 4.2 13.5 14.4 7.6-47.0 Volume ( 000 ton) 2.4 1.4 3.8 4.8 2.2-54.3 Price (US$ per ton) 3,346.2 2,968.3 3,577.5 2,977.9 3,449.6 15.8 Subtotal (Traditional exports) 267.1 319.7 507.3 479.8 559.0 16.5 Non -Traditional Exports (US$ million) Minerals 836.8 848.7 1,186.7 1,271.4 1,560.2 22.7 Gold 786.4 788.2 1,108.3 1,229.5 1,516.6 23.4 Diamond 22.2 26.0 20.3 15.5 10.1-34.8 Other minerals 28.3 34.4 58.1 26.4 33.5 26.9 Manufactured goods 195.8 309.8 741.8 506.5 963.9 90.3 Fish and fish products 145.9 163.6 184.7 155.0 141.0-9.0 Horticultural products 15.4 19.1 45.7 33.3 31.1-6.6 Re-exports 128.3 149.7 160.3 120.4 132.5 10.0 Other exports 154.0 213.7 285.5 289.6 349.1 20.5 Sub Total (Non Traditional exports) 1,476.2 1,704.5 2604.7 2,376.1 3,177.3 33.7 Unrecorded Trade 174.3 202.4 347.8 438.9 560.4 27.7 GRAND TOTAL 1,917.6 2,226.6 3,459.8 3,294.9 4,297.2 30.4 Source: Bank of Tanzania, and Ministry of Finance - Data not available 53
Service Receipts 73. In 2010, receipts from services increased to USD 2,091.5 million from USD 1,854.6 million in 2009, equivalent to an increase of 12.8 percent. This was due to the increase in receipts from transportation and tourism. Receipts from transportation services increased by 33.2 percent from USD 334.4 million in 2009 to USD 445.5 million in 2010. Likewise, receipts from tourism increased by 8.2 percent from USD 1,159.8 million in 2009 to USD 1,254.5 million in 2010. In addition, receipts from other services which include fees in legal, accountancy, consultancy and research increased by 8.6 percent, from USD 360.4 million in 2009 to USD 391.5 in 2010. However, receipts from communication services decreased by 19.6 percent in 2010. MERCHANDISE IMPORTS 74. In 2010, the value of goods imported (f.o.b) increased to USD 7,125.1 million from USD 5,834.1 million in 2009, equivalent to an increase of 22.1 percent, compared to a decrease of 16.8 percent in 2009. This was due to an increase in importation of intermediate goods particularly oil products and raw materials. Capital goods 75. In 2010, the import value of capital goods increased to USD 2,715.2 million from USD 2,539.2 million in 2009, equivalent to an increase of 6.9 percent. This was due to the increase in imports of transport and construction equipment. The importation of transport equipments increased by 20.4 percent from USD 748.5 million in 2009 to USD 901.1 million in 2010. Importation of building and construction equipment increased by 9.4 percent from USD 558.2 million in 2009 to USD 610.6 million in 2010. However, the imports value of plant and machinery decreased to USD 1,203.4 million in 2010 from USD 1,232.5 million in 2009, equivalent to a decrease of 2.4 percent. Intermediate Goods 76. The import value of intermediate goods increased from USD 1,890.3 million in 2009 to USD 2,700.8 million in 2010, equivalent to an increase of 54
42.9 percent. This was due to the increase in the value of oil and industrial raw material imports. The imports value of oil products was USD 1,983.8 million in 2010 compared to USD 1,323.0 million in 2009, equivalent to an increase of 49.9 percent. This increase was due to the rise in oil prices in the world market as well as volume imported. Further, the imports value of industrial raw materials increased to USD 602.0 million in 2010, compared to USD 472.1 million in 2009, equivalent to an increase of 27.5 percent. Furthermore, fertilizer imports increased by 20.8 percent compared to a decrease of 36.7 percent in 2009. Consumer Goods 77. In 2010, imports of consumer goods increased to USD 1,709.2 million from USD 1,404.6 million in 2009, equivalent to an increase of 21.7 percent. This was due to increase of imports of food and food stuffs, and other consumer goods. The value of imports of food and food stuffs was reached to USD 461.6 million in 2010 from USD 343.3 million in 2009, equivalent to an increase of 34.5 percent. The increase in import value of food and food stuffs was due to an increase in importation of cereal products particularly wheat. Likewise, the imports of other consumer goods including pharmaceuticals, plastic products and paper products increased by 17.5 percent from USD 1,061.3 million in 2009 to USD 1,247.5 million in 2010. SERVICES PAYMENTS 78. In 2010, services payment increased to USD 1,849.6 million from USD 1,709.1 million in 2009, equivalent to an increase of 8.2 percent. This was due to a rise in the costs of transportation services. Transport costs increased from USD 604.9 million in 2009 to USD 716.1 million in 2010, equivalent to an increase of 18.4 percent. TRENDS IN SELECTED REGIONAL AND BILATERAL TRADE 79. Tanzania continued to maintain good trade relationship with different countries in the world including countries from European, American, Asian, and African continents. In 2010, the value of goods exported to countries from 55
European continent increased to USD 1,151.1 million from USD 909.0 million in 2009, equivalent to an increase of 26.6 percent. This was due to the increase in exports to Switzerland and European Union (EU) countries. The value of goods exported to Switzerland increased by 46.7 percent to USD 685.9 million in 2010 while exports to EU countries increased by 5.5 percent to USD 464.0 million in 2010. The value of goods imported from European countries increased from USD 1,222.1 million in 2009 to USD 1,669.8 million in 2010, equivalent to 36.6 percent increase. In addition, balance on merchandise trade between Tanzania and European countries registered a deficit of USD 518.7 million in 2010 compared to a deficit of USD 313.1 million registered in 2009. 80. The value of goods exported to other East African Community (EAC) countries increased by 70.6 percent from USD 263.8 million in 2009 to USD 450.0 million in 2010. This was mainly attributed to increased exports to Kenya. The value of goods exported to Kenya increased by 67.6 percent to USD 297.3 million in 2010. In addition, goods exports to Kenya accounted for 66.1 percent, Rwanda 12.2 percent, Burundi 11.3 percent and Uganda contributed 10.4 percent of all goods exported to the Community. The value of goods imported from the EAC countries decreased to USD 285.2 million in 2010 from USD 310.5 million in 2009, equivalent to a decrease of 8.2 percent. Balance on merchandise trade between Tanzania and other EAC countries registered a surplus of USD 164.8 million in 2010 compared to a deficit of USD 46.7 million in 2009. 81. In 2010, the value of goods exported to Southern African Development Community (SADC) member countries increased by 67.0 percent to USD 625.1 million from USD 374.2 million in 2009. This was mainly attributed to increased exports to South Africa and Democratic Republic of Congo (DRC). Out of the total exports, 66.7 percent went to South Africa and 21.9 percent to DRC. The value of goods imported from SADC member countries increased by 12.9 percent to USD 827.7 million in 2010 from USD 733.2 million in 2009. This was due to the increase in imports from South Africa, Swaziland, Zambia and Mozambique. Balance on merchandise trade between Tanzania 56
and other SADC member countries registered a deficit of USD 202.6 million in 2010 compared to a deficit of 417.8 million in 2009. 82. In 2010, the value of goods exported to all African countries increased to USD 1,080.9 million from USD 638.6 million in 2009, equivalent to an increase of 69.3 percent. This was due to the increase in exports to South Africa, Kenya and DRC. In addition, the value of goods imported from Africa increased by 6.6 percent from USD 1,044.0 million in 2009 to USD 1,112.9 million in 2010. This was due to the increased value of goods imported from South Africa and Kenya. Balance on merchandise trade between Tanzania and all African Countries registered a deficit of USD 32.0 million in 2010 compared to a deficit of USD 464.2 million in 2009. 83. In 2010, the value of goods exported to Asian Continent including China, Japan, India, Hong Kong and United Arab Emirates increased by 29.0 percent to USD 1,200.2 million from USD 930.3 million in 2009. This was attributed to the increase in exports to China, India and Japan. Likewise, the value of goods imported from Asian continent increased to USD 4,158.1 million in 2010 from USD 3,282.5 million in 2009, equivalent to an increase of 26.7 percent. Balance on merchandise trade between Tanzania and Asian countries registered a deficit of USD 2,957.9 million in 2010 compared to a deficit of USD 2,352.2 million in 2009. 84. In 2010, the value of goods exported to American Continent increased to USD 51.0 million from USD 45.6 million in 2009, equivalent to an increase of 12.0 percent. This was due to the increase in exports to America. The value of goods imported from America decreased by 1.4 percent to USD 259.0 million in 2010 from USD 262.7 million in 2009. Moreover, the balance on merchandise trade between Tanzania and American continent registered a deficit of USD 208.0 million in 2010 compared to a deficit of USD 217.1 million registered in 2009. 57
Table 3.2: Balance of Trade between Tanzania and Regional Economic Grouping (USD million) Region/ Year 2003 2004 2005 2006 2007 2008 2009r 2010p European Continent (210.5) 176.7 3.9 (77.8) (515.2) (567.0) (313.1) (518.7) SADC (233.7) 213.4 (103.2) (284.8) (355.4) (510.2) (417.8) (202.6) EAC (35.6) (42.3) (64.0) (56.7) 66.5 110.7 (46.7) 164.8 Asian Continent - - - - (1,582.0) (2,212.8) (2,352.2) (2,957.9) American Continent - - - (174) (291.5) (313.7) (217.1) (208.0) Source: Bank of Tanzania and Ministry of Finance r = revised p = provisional 58
Table 3.3: Tanzania Export by Country/Region of Destination (USD million) COUNTRY/ REGION 2009-2010 (% 2005 2006 2007 2008r 2009r 2010p change) European Union (EU) 359.7 334.1 346.7 461.9 440.0 464.0 5.5 Other European Countries 259.9 421.6 454.2 533.3 469.0 687.1 46.5 TOTAL-European Continent 619.6 755.7 800.9 995.2 909.0 1,151.1 26.6 SOUTHERN AFRICAN DEVELOPMENT COMMUNITY (SADC) South Africa 275.4 268.9 176.1 232.5 170.9 416.8 143.9 Zambia 8.7 18.5 22.4 36.6 44.3 53.5 20.8 Swaziland 0.6 1.9 0.2 0.6 20.8 - - Zimbabwe 1.6 1.2 0.7 1.2 5.7 - - Mozambique 6.5 10.6 19.1 31.4 20.3 17.7 (12.8) Democratic Republic of Congo 12.6 18.3 58.9 124.0 79.9 137.1 71.6 Other SADC countries 16.9 21.7 23.7 17.1 32.3 - TOTAL- SADC 322.3 341.1 300.8 443.4 374.2 625.1 67.0 EAST AFRICAN COMMUNITY (EAC) Burundi - - 41.5 19.5 23.6 51.0 16.1 Kenya 76.3 97.2 101.1 235.0 177.4 297.3 67.6 Rwanda - - 11.2 20.6 15.1 55.0 264.2 Uganda 20.1 20.5 19.3 40.5 47.7 46.8 (1.9) TOTAL EAC 96.4 117.7 173.1 315.5 263.8 450 70.6 Other African Countries 34.7 29.9 72.8 96.1 0.6 5.8 866.7 TOTAL AFRICA 453.4 488.7 547.0 885.0 638.6 1,080.9 69.3 AMERICAN CONTINENT America 16.5 20.7 34.2 55.1 39.5 46.5 17.7 Canada 39.2 6.0 2.3 3.8 6.1 4.6 (254.6) Other American countries 3.7 1.1 6 5.4 - - TOTAL- AMERICA 59.4 27.8 42.5 64.2 45.6 51.0 12.0 ASIA China - - 141.3 223.5 363.9 634.2 74.3 India 63.2 63.8 77.3 171.8 183.8 218.5 18.9 Japan 68.7 82.0 57.1 136.9 164.7 209.7 27.3 United Arab Emirates 33.7 47.3 88.4 65.4 66.8 55.3 (17.2) Hong Kong 9.6 7.6 14.1 13.4 85.6 12.6 (85.2) Singapore 18.7 4.4 4.0 11.0 6.4 13.5 110.9 Other Asian Countries 133.8 123.1 65.1 52.4 59.1 56.4 (4.6) TOTAL- ASIA 327.7 328.2 447.3 674.4 930.3 1,200.2 29.0 OTHER COUNTRIES 242.4 317.2 388.9 989.9 771.1 813.4 5.5 GRAND TOTAL 1,702.5 1,917.6 2,226.6 3,578.8 3,294.6 4,296.7 30.4 Source: Bank of Tanzania and Ministry of Finance r = revised p = provisional 59
Table No.3.4: Tanzania Import by Country/Region of Origin (Value in Million USD) COUNTRY/ REGION 2006 2007 2008r 2009r 2010p 2009-2010 (% Change) European Union (EU) 744.4 1,061.6 1,280.8 1,076.6 1,111.4 3.2 Other European Country 74.7 181.7 153.8 145.5 558.4 283.8 TOTAL-European Continent 819.1 1,243.3 1,434.6 1,222.1 1,669.8 36.6 SOUTHERN AFRICAN DEVELOPMENT COMMUNITY (SADC) South Africa 569.6 585.8 791.0 672.8 745.5 10.8 Zimbabwe 1.3 1.8 27.6 0.6 1.1 83.3 Zambia 11.6 18.5 27.6 23.3 29.8 27.9 Mozambique 17.2 16.9 18.2 9.0 18.5 105.6 Democratic Republic of Congo 0.2 0.6 19.6 1.2 1.1 (8.3) Swaziland 16.8 20.1 76.5 26.3 31.7 20.5 Other SADC Countries 9.2 12.4 19.2 - - - TOTAL SADC 625.9 656.2 979.7 733.2 827.7 12.9 EAST AFRICAN COMMUNITY (EAC) Burundi - 0.02 0.4 0.3 0.6 100 Kenya 169.1 100.1 197.9 298.3 265.9 (10.9) Rwanda - 0.01 0.1 0.02 1.4 6900.0 Uganda 5.3 6.4 6.4 11.9 17.3 45.4 TOTAL EAC 174.4 106.5 204.8 310.5 285.2 (8.2) Other African Countries 62.9 60.2 71.9 0.3 0.03 (90.0) TOTAL-AFRICA 863.2 822.8 1,256.4 1,044.0 1,112.9 6.6 AMERICAN CONTINENT America 123.1 187.1 200.4 136.0 150.6 10.7 Canada 37.5 35.6 57.1 35.2 36.4 3.4 Other American Countries 41.2 111.2 120.3 91.4 72.0 (21.2) TOTAL-AMERICA 201.8 333.9 377.9 262.6 259.0 (1.4) ASIA Japan 257.5 261.8 711.8 413.6 548.8 32.7 United Arab Emirates 500.6 773.6 859.7 618.8 649.3 4.9 China 309.4 406 711.8 678.1 846.8 24.9 India 241.3 507 891.2 757.3 864.6 14.1 Hong Kong - 11.8 18.1 30.7 23.3 (24.1) Singapore 13.2 25.3 433.0 188.2 429.3 128.1 Other Asian Countries 653.3 475.1 398.4 595.8 721.3 21.1 TOTAL - ASIA 1,975.3 2460.6 4024.0 3,282.5 4083.4 24.4 OTHER COUNTRIES 4.7 0 80.5 22.9 0 - GRAND TOTAL 3,864.1 4,860.6 7012.3 5,834.1 7,125.1 22.1 Source: Bank of Tanzania and Ministry of Finance r = revised p = provisional BALANCE OF PAYMENTS Balance of Merchandise Trade 85. In 2010, the balance of merchandise trade registered a deficit of USD 2,828.3 million compared to a deficit of USD 2,539.3 million in 2009, 60
equivalent to an increase of 13.4 percent. The deficit was a result of high rate of imports relative to exports. Balance on Services 86. In 2010, balance on services registered a surplus of USD 242.0 million compared to the surplus of USD 145.6 million in 2009, equivalent to an increase of 66.2 percent. This was due to the increase in receipts from transit trade and tourism, following the recovery of global economy. Balance on Investments Receipts and Payments 87. In 2010, balance on investments receipts and payments which comprise of compensation to employees, investment income and interest payments increased by 27.6 percent to a deficit of USD 90.9 million from a deficit of USD 71.2 million in 2009. This was due to the increase in the compensation of non citizen employees. Balance on Current Transfers 88. The balance on current transfers which comprise money transfers, grants and debt relief recorded a surplus of USD 823.9 million in 2010 compared to the surplus of USD 696.9 million in 2009. This was due to increase in Development Partners support to the Government from USD 658.4 million in 2009 to USD 798.1 million in 2010. Balance on Current Accounts 89. In 2010, the balance on current account, which comprises balances on merchandize trade, service, investments receipts and payments as well as current transfers, registered a deficit of USD 2,677.2 million compared to a deficit of USD 2,465.2 million in 2009, equivalent to an increase of 8.6 percent. The deficit was a result of increase in the rate of imports. Balance on Capital Transfers 90. In 2010, the balance on capital transfers, that comprising investments grants and debt cancellation from international financial institutions and Development Partners increased by 25.1 percent to a surplus of 616.5 million 61
compared to the surplus of USD 492.8 million in 2009. The increase was mainly attributed to the increase in investments grants to the Government. Balance on Investment Payments 91. The balance on investment payments that comprise of Foreign Direct Investments and foreign loans registered a surplus of USD 1,587.8 million in 2010 compared to a surplus of USD 1,328.2 million in 2009. The increase was due to decrease in foreign resources owned by domestic commercial Banks from USD 333.8 million in 2009 to USD 75.2 million in 2010. Overall Balance of Payments 92. In 2010, the overall balance of payments had a surplus of USD 369.8 million, compared to a surplus of USD 366.2 million in 2009. Foreign Currency Reserves 93. In 2010, foreign reserves increased to USD 3,948.0 million from USD 3,552.5 million in 2009, equivalent to an increase of 11.1 percent. The foreign reserves for 2010 were equivalent to 5.3 months of imports of goods and nonfactor services compared to 5.7 months in 2009. EXCHANGE RATE 94. In 2010, the average value of the Tanzanian Shilling was shilling 1,432.3 per USD, compared to an average of shilling 1, 320.0 per USD in 2009, equivalent to a depreciation of 8.5 percent. However, this was lower when compared to the depreciation of 10.4 percent in 2009. Depreciation of the value of Tanzanian Shilling was due to the increase in demand for USD in the country as well as appreciation of USD against other international currencies. In addition, the value of USD as at end of December 2010 was, 1,453.5 shillings compared to 1,313.3 shillings as of end December 2009. 62
Table No. 17 VALUE OF TANZANIA'S FOREIGN TRADE Shs. million Type of Goods 2002 2003 2004 2005 2006 2007 2008 2009 2010 Exports 926892 1267322 1582111 1871265 2129250 2628866 3194929 3671935 5604496 Domestic Exports 853158 1178027 1437423 1726241 1967358 2413809 2992530 3568071 3921648 Re-exports 73734 89295 144688 148024 189374 215057 202399 103864 128913 Imports 1615037 2277176 2758953 3659962 5534418 7296763 8839274 8446721 11086891 Total Value of Foreign Trade 2541929 3544498 4341064 5534227 7691150 9925929 12034203 12118656 16691387 Balance of Merchandise Trad -688145-1009854 -1176842-1785697 -3377686-4667897 -5644345.1-4774785.4-5482395 Exchange Rate (Shs/US$) 966.7 1,038.40 1,089.4 1,122.7 1,251.9 1,232.8 1,196.3 1,320.3 1,409.3 Source: National Bureu of Statical, Bank of Tanzania and Tanzania Revenue Authority 63
Table No. 18 Commodity VOLUME AND VALUE OF DOMESTIC EXPORTS Quantity (Ton) Value (Shs. milion) Change(%) Change (%) 2006 2007 2008 2009 2010 2009/10 2006 2007 2008 2009 2010 2009/10 Coffee 38822 53685 46229 56079 35359-37% 92794 143255 122162 147427 162310 10.1 Cotton 46467 40743 54089 100361 74859-25% 56780 49807 95613 146752 133087-9.3 Sisal 9984 7101 13786 8198 9041 10% 9296 7438 18453 28490 11774-58.7 Tea 24803 30506 26654 19191 44254 131% 41682 48258 49615 45552 65479 43.7 Tobacco 37525 40743 45284 33839 69095 104% 129108 116893 208004 168057 178748 6.4 Cashewnuts 59180 14841 60468 99313 132675 34% 62663 33816 82025 94413 173572 83.8 Cloves 3033 3200 3805 4853 2566-47% 9964 10628 15991 19453 11265-42.1 Diamonds (Carats) 201782 149592 132477 158838 367849 132% 28023 23381 20891 24988 12410-50.3 Gold (Gms.) 44449460 67334000 32319880 34600000 33560000-3% 968026 672111 1115163 1420756 1336700-5.9 Source: National Bureau of Statistics and Tanzania Revenue Authority 64
VOLUME AND VALUE OF TRADITIONAL AND NON-TRADITIONAL EXPORTS Table No. 19 Quantity (Ton) Value (mill.us$) Change (%) Change (%) Commodity 2004 2005 2006 2007 2008 2009 2010 2009/10 2006 2007 2008 2009 2010 2009/10 Traditional Commodities: Coffee 38528 46100 38822 53685 44248 56079 35359 (37) 61.4 98.1 99.1 111.2 101.7-8.5 Cotton 47334 112900 46467 40743 86995 100361 74859 (25) 55.8 66.4 115.8 111.0 84.0-24.3 Sisal 11933 9300 9984 7101 2659 8198 9041 10 6.1 8.8 15.7 - - Tea 21716 21800 24803 30506 25898 19191 44254 131 31.0 28.7 42.5 47.2 36.4-22.9 Tobacco 29198 31100 37525 40743 35557 33839 69095 104 65.2 87.8 176.4 127.4 232.4 82.4 Cashewnuts 83192 62000 59180 14841 55011 99313 132675 34 39.4 25.6 44.3 68.6 96.9 41.3 Cloves 4363 3000 3033 3200 3774 4853 2566 (47) 8.2 4.2 13.5 14.4 7.6-47.2 Sub-Total 267.1 319.6 507.3 479.8 559.0 16.5 Non-Traditional Commodities: Petroleum Products 0.0 0.0 0.0 0.0 0.0 Minerals 836.8 848.7 1186.7 1271.4 1560.2 22.7 Manufactured Goods 195.8 309.8 741.8 506.5 963.9 90.3 Fish and Fish Products 145.9 163.6 184.7 155 141.0-9.0 Horticultural products 15.4 19.1 45.7 33.3 31.1-6.6 Re-exports 128.3 149.7 160.3 120.4 132.5 10.0 Other Exports 154 213.7 285.5 289.6 349.1 20.5 Sub-Total 1476.2 1704.6 2604.7 2376.2 3177.8 33.7 Unrecorded Goods 174.3 202.4 347.8 438.9 560.4 27.7 GRAND TOTAL 1917.6 2226.6 3459.8 3294.9 4297.2 30.4 Source: National Bureau of Statistics and Bank of Tanzania 65
3500 I: TRADITIONAL AND NON-TRADITIONAL EXPORTS (US$ Milion) 3000 2500 2000 1500 1000 500 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Traditional exports Non-traditional exports 66
IIB: COFFEE AND COTTON EXPORTS (Quantity - Tons '000) 120 100 80 60 40 20 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Coffee Cotton 67
IIIA: PERCENTAGE CONTRIBUTION OF EXPORTS 2010 Coffee 3.0% Cotton 2.4% Sisal 0.0% Tea 1.1% Tobacco 6.8% Cashewnuts 2.8% Others 10.2% Cloves 0.2% Manufactured goods 28.1% Minerals 45.5% 68
IIIB: PERCENTAGE CONTRIBUTION OF EXPORTS 2009 Others 11.4% Coffee 4.4% Cotton 4.4% Sisal 0.0% Tea 1.9% Tobacco 5.0% Cloves 0.6% Cashewnuts 2.7% Manufactured goods 19.9% Minerals 49.9% 69
EXPORT PRICES OF PRINCIPAL COMMODITIES Table No. 20 Shs/Ton* Change(%) Commodity 2002 2003 2004 2005 2006 2007 2008 2009 2010 2009/10 Coffee 926,170.00 1,107,030.00 1,380,191.00 1,812,959.00 2,390,242.65 2,668,414.00 2,642,540.03 2,628,933.60 4,069,398.56 54.8 Cotton 811,982.00 1,051,900.00 1,147,061.00 1,126,467.00 1,221,942.45 1,222,475.00 1,767,694.20 1,462,235.92 1,775,007.57 21.4 Sisal 491,650.00 533,190.00 624,068.00 879,366.00 931,089.74 1,047,444.00 946,323.40 3,475,212.63 1,302,328.74-62.5 Tea 1,166,030.00 1,233,010.00 1,495,671.00 1,322,780.00 1,680,522.52 1,581,921.00 1,861,434.85 2,373,682.87 2,501,896.79 5.4 Tobacco 1,993,530.00 2,101,200.00 2,109,220.00 2,938,727.00 3,440,586.28 2,869,021.00 4,593,309.31 4,966,396.20 2,586,995.98-47.9 Cashewnuts 596,730.00 618,290.00 890,338.00 874,903.00 1,058,854.34 2,278,459.00 1,356,503.95 950,656.39 1,284,307.59 35.1 Cloves 3,117,980.00 1,901,360.00 2,524,410.00 3,210,533.00 3,285,196.18 3,321,160.00 4,202,786.10 4,008,131.49 4,390,289.55 9.5 Diamonds (Carats) 114,719.00 29,421.00 128,582.00 129,576.00 138,878.00 156,300.00 157,692.03 15,731.87 33,737.83 114.5 Gold (Gms.) 7,409.00 8,679.00 11,316.00 24,223.00 21,778.00 9,982.00 34,503.93 41,062.31 39,830.15-3.0 Source: Custom Department, Tanzania Revenue Authority * Except for diamonds and gold, whose prices are quoted per carat and gram respectively 70
EXPORT PRICES OF PRINCIPAL COMMODITIES Table No. 21 US$/Ton* Change(%) Commodity 2002 2003 2004 2005 2006 2007 2008 2009 2010 2009/10 Coffee 970.00 1,080.00 1,284.78 1,611.71 1,931.89 2,164.58 2,203.36 1,991.16 3,317.61 66.6 Cotton 840.00 1,020.00 1,062.66 987.60 987.80 991.65 1,321.42 1,107.50 1,306.35 18.0 Sisal 510.00 520.00 578.23 784.95 751.20 849.67 1,251.37 2,632.14 924.09-64.9 Tea 1,220.00 1,200.00 1,386.07 1,174.31 1,358.71 1,283.23 1,575.27 1,797.84 1,069.38-40.5 Tobacco 2,090.00 2,050.00 2,078.91 2,598.07 2,779.48 2,327.31 3,041.22 3,761.57 1,869.70-50.3 Cashewnuts 620.00 600.00 830.61 751.61 855.02 1,848.25 730.09 720.03 944.69 31.2 Cloves 3,260.00 1,850.00 2,337.84 2,833.33 2,637.65 2,694.07 3,577.52 3,035.77 3,173.01 4.5 Diamonds (Carats) 119.98 28.65 119.20 115.40 110.90 126.79 133.37 1,191.54 2,746.65 130.5 Gold (Gms.) 7.70 8.45 10.47 2.30 17.40 8.10 1.78 6.22 4.52-27.4 Source: National Bureau of Statistics and Tanzania Revenue Authority * Except for diamonds and gold, whose prices are quoted per carat and gram respectively - Figures not available 71
US Dollars IIA: TREND OF COFFEE AND COTTON EXPORT PRICES (US$/Ton) 3500 3000 2500 2000 1500 1000 500 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Coffee Cotton 72
COMPOSITION OF IMPORTS Table No. 23 Consumer Intermediate Capital Year Goods Goods Goods Shs. Million Total 1986 8014 13058 18899 39971 1987 13180 23819 41948 78947 1988 29841 55284 43950 129075 1989 34779 60176 96804 191759 1990* 18783 116277 96223 231283 1991 62000 69710 139668 271378 1992 101641 94233 196791 392665 1993 194604 107481 229657 531742 1994 247076 128544 290638 666258 1995 201347 294224 275207 770778 1996 182340 267600 252501 702441 1997 301018 203418 198670 703106 1998 441025 155225 311244 907495 1999 503868 197271 360225 1061363 2000 401612 222399 444427 1068438 2001 468173 386317 648361 1502851 2002 499346 408872 697209 1605426 2003 654630 705729 846251 2206610 2004 917953 1024705 1029389 2972046 2005 934526 1447183 1337876 3719585 2006 1068323 1977275 1799472 4845070 2007 1399488 2479491 2195837 6074816 2008 1689789 3191039 3508181 8389009 2009 1854493 2495763 3352506 7702762 2010 2408494 3806237 3826531 10041262 Source: Bank of Tanzania * Commencing 1990, the value of imports is quoted at F.O.B. prices (previously quoted at C.I.F. prices) 73
BALANCE OF PAYMENTS Table No. 24 US $ milion 2002 2003 2004 2005 2006 2007 2008 2009 2010 Actual Actual Actual Actual Actual Actual Actual Actual Likely Outturn Goods Balance -531.7-717.4-1009.7-1321.8-1946.5-2634.0-3433.5-2539.5-2828.3 Exports (fob) 979.6 1216.1 1473.1 1675.8 1917.6 2226.6 3578.8 3294.6 4296.8 Imports (fob) 1511.3 1933.5 2482.8 2997.6 3864.1 4860.6 7012.3 5834.1 7125.1 Service balance 287.6 222.1 158.9 61.8 278.8 462.0 349.9 145.5 241.9 Receipts 920.1 947.8 1133.6 1269.2 1528.1 1875.7 1998.8 1854.6 2091.5 Payments 632.5 725.7 974.7 1207.3 1249.3 1413.7 1648.9 1709.1 1849.6 Income -88.9-149.1-119.1-104.1-94.8-123.1-121.6-71.2-90.9 Receipts 67.9 87.1 81.8 80.9 80.3 107.3 122.7 161.1 164.6 Payments 156.8 236.2 200.9 185.0 175.1 230.4 244.3 232.3 255.5 Current transfers 431.3 556.9 586.7 496.4 588.7 652.0 609.8 696.9 823.8 Inflows 494.3 619.9 651.7 563.9 654.6 724.0 689.0 765.3 902.8 Government 427.7 553.3 582.0 478.5 559.7 626.9 588.5 658.4 798.1 Other Sectors 66.6 66.6 69.7 85.4 94.9 97.1 100.5 106.9 104.7 Outflows 63.0 63.0 65.0 67.5 65.9 71.9 79.1 68.4 79.0 CURRENT ACCOUNT 98.3-87.5-383.2-867.6-1173.8-1643.1-2595.4-1768.3-1853.5 Capital Transfers 785.7 692.8 460.0 393.2 5183.5 911.7 537.0 492.8 616.5 Inflows 785.7 692.8 460.0 393.2 5183.5 911.7 537.0 492.8 616.5 Outflows 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Financial Account 255.4 61.2 275.6 807.6-4081.6 853.3 1621.0 1328.2 1587.8 Direct Investment 387.6 308.2 330.6 494.1 403.0 581.5 400.0 414.5 433.4 Portfolio Investment 2.2 2.7 2.4 2.5 2.6 2.8 2.9 3.0 3.2 Other Investment -134.4-249.7-57.4 311.0-4487.3 269.0 1218.1 910.7 1151.2 Errors and Omissions -806.8-277.4-146.3-555.4 532.6 282.7 585.4 313.4 18.8 OVERALL BALANCE 332.6 389.1 206.1-222.2 460.8 404.6 148.0 366.1 369.7 Financing -332.6-389.1-206.1 222.2-460.8-404.6-148.0-366.1-369.7 Source: Bank of Tanzania Starting 2006, exports includes unrecorded goods 74
1000.0 500.0 0.0-500.0-1000.0-1500.0-2000.0-2500.0-3000.0-3500.0-4000.0 TREND OF BALANCE OF PAYMENTS 2002 2003 2004 2005 2006 2007 2008 2009 2010 GOODS BALANCE CURRENT ACCOUNT OVERALL BALANCE 75
CHAPTER 4 GOVERNMENT FINANCE 95. The budget implementation for 2010/11 was in line with the National Development Vision 2025; National Strategy for Growth and Reduction of Poverty (NSGRP); Millennium Development Goals (MDGs); National Debt Strategy; public investment priorities as outlined in Plan and Budget Guidelines for 2010/11-2012/13; and Joint Assistant Strategy for Tanzania (JAST). Based on macroeconomic policy as well as the basis and objectives of the budget for 2010/11, the Government estimated the resource envelope of shilling 11,609,557 million consisting of domestic revenue, foreign grants and loans and spend the amount for recurrent and development expenditure. Out of this amount, shilling 6,003,590 million was estimated as domestic revenue; shilling 172,582 million from Local Government Authorities (LGAs) own sources; shilling 821,645 million from General Budget Support grants and loans; shilling 2,452,908 million from project grants and loans, including basket funds; shilling 1,331,212 million loans from domestic and foreign sources; shilling 797,620 million for rollover; and shilling 30,000 million from privatisation proceeds. Domestic Revenue 96. During July 2010 March 2011, domestic revenue including LGAs own resources amounted to shilling 4,256.3 billion, equivalent to 92 percent, compared to estimates of shilling 4,629.9 billion. Out of this amount, shilling 3,910.6 billion, equivalent to 91.9 percent of total revenue was from taxes, shilling 227.4 billion equivalent to 5.3 percent of total revenue was from nontaxes and shilling 118.2 equivalent to 2.8 percent was from LGAs own sources. In addition, during that period, tax revenue was 93 percent of the estimated shilling 4,216.1 billion while non tax revenue was 80 percent compared to estimates of shilling 284.3 billion. This was caused by power shortages, which has adverse effect on economic activities; hike in world oil prices; piracy threats in the Indian Ocean; decrease in fish in the lakes and 76
oceans and illegal fishing. Despite the decline in revenue against targets, there was an increase in domestic revenue collection by 21 percent compared to the corresponding period in 2009/10, and average monthly collections increased from shilling 390 billion in 2009/10 to shilling 473 billion in 2010/11. Reforms in Tax Systems 97. In 2010, the Government continued to expand tax base and strengthen the system of revenue collections so as to finance a larger share of the budget. In addition, the Government continued to review legal and regulatory framework governing tax exemptions with the view to reduce and control its administration. Further, Tanzania Revenue Authority continued to implement its Third Five Year Corporate Plan (2008/09 2012/13), which has been the basis for increased domestic revenue collection. Furthermore, the Government strengthened the collection and administration of non tax revenue with the aim of increasing its contribution to GDP. Grants and Loans 98. During the period of July 2010 March 2011, the Government continued to coordinate the implementation of Joint Assistant Strategy for Tanzania, strengthening relationship with Development Partners and international financial institutions in securing grants and concessional loans to complement Government efforts in implementation of MKUKUTA, in line with the Millennium Development Goals and the National Development Vision 2025. A total of shilling. 845,748 million was realised from General Budget Support (GBS) during July 2010 March 2011, which is equivalent to 103 percent of shilling 821,645 million budgeted. This was mainly due to the fluctuation of Tanzanian shilling against currencies of other countries contributing to GBS compared to initial projections. 99. Project grants and loans, including basket funds, amounted to shilling 1,427,604 million, which is 77 percent of estimates during July 2010 March 2011. The shortfall was primarily due to delays in reporting of D-Funds as well as untimely disbursements by some Development Partners. 77
100. The Government planned to borrow from domestic sources for financing development expenditure, whereby up to March 2011 a total of shilling 1,107,471 million was realised. Out of this amount, shilling 607,621 million was for rollover of maturing debts while shilling 499,850 million was utilised in financing various infrastructure projects. Non-Concessional Borrowing 101. In 2010/11, the Government planned to borrow USD 525 million from non-concessional sources. As of March 2011, the Government had concluded negotiations with HSBC Bank for a loan amounting to USD 192.7 million. This loan will be used in procurement of two power generators for Dar es Salaam and Mwanza. Out of that amount, USD 103 million is for power project at Ubungo Dar es Salaam. In addition, the Government had discussions with the Standard Bank for loan amounting USD 250 and the process of contracting that loan is ongoing. Likewise, discussions with other financial institutions are in progress to secure the loan balance amounting to USD 84 million consistent with the plan to raise USD 525 million from that source. Expenditure 102. During the period of July 2010 March 2011, the Government continued to align expenditure with resources. During that period, actual expenditure amounted to shilling 7,169,336 million, equivalent to 90 percent of the estimated shilling 8,009,917 million. Out of that amount, shilling 5,226,893 million was recurrent expenditure and shilling 1,942,443 million was development expenditure. 103. Payment for salary and wages for Government employees during July 2010 March 2011 amounted to shilling 1,749,096 million, equivalent to 79 percent of shilling 2,205,430 million budgeted in 2010/11. Out of this amount, shilling 569,962 million was for Ministries, Independent Departments and Agencies, shilling 52,928 million was for Regional Secretariats and shilling 78
1,126,206 million was for Local Government Authorities. In addition, shilling 443,987 million was paid as salaries for Government institutions. 104. During the period of July 2010 March 2011, expenditure on other charges for Ministries, Independent Departments and Agencies, Regional Secretariats and LGAs reached shilling 1,955,278 million, equivalent to 89 percent of the estimate during that period. In addition, development expenditure amounted to shilling 1,942,443 million consisting of locally financed of shilling 514,839 million, equivalent to 52 percent of the estimated shilling 1,000,537 million. Foreign financed development expenditure was shilling 1,427,604 million, equivalent to 77 percent compared to the estimates of shilling 1,839,681 million. Sectoral Allocation of Government Budget 105. During 2010/11, the Government continued to allocate resources to various sectors. For the 2010/11 budget, the Government allocated 6.0 percent of total resources to finance expenditure in education sector compared to 5.7 percent in 2009/10. The budget for secondary education as well as higher education continued to be the main contributors in the observed increase. The health sector budget increased to 5.5 percent of budgeted resources for 2010/11 from 5.2 percent in 2009/10. This reflects Government s continued efforts in financing health services. 106. Agriculture, forestry, fishing and hunting sector received 3.0 percent of budgeted resources for 2010/11. The budget for agriculture increased by 4 percent compared to the allocation in 2009/10, whereby large increases was contributed by allocation in agricultural activities. Likewise, the budget for mining, industries and construction continued to receive 0.4 percent of total resources in 2010/11 as it was in 2009/10. Notwithstanding the observed trend, the budget for mining sector increased by 24 percent compared to that of 2009/10. The budget for transport and communications sector indicated a large increase, whereby 10.1 percent of total resources was allocated to the sector compared to 8.9 percent allocated in 2009/10. Another sector which 79
indicated a large increase in allocation was other economic services, which received 7.7 percent of total budget compared to 7.2 percent in 2009/10. National Debt 107. As at December 2010, the national debt which comprises public debt and private debt had reached USD 11,380.2 million, equivalent to an increase of 6.1 percent compared to the corresponding period of year 2009/10. Out of which, USD 9,516.8 million was public debt and USD 1,863.4 was private debt. The increase in debt stock was attributed to accumulation of arrears particularly from non Paris club countries which have not yet provided the relief in accordance to Paris Club terms. In addition, the new contracted loans which attributed to the increase in the Government needs to finance infrastructure development projects resulted to the growth of National Debt. Likewise, out of USD 9,516 million which was public debt stock, USD 6,529.6 million was external debt and USD 2,986.9 million was domestic debt. 108. In implementing National Debt Strategy, the Government continued to closely monitor its debt by contracting loans mainly through concessional terms and analysing risks of contracting new loans. In addition, during the period of July-December 2010, the Government carried out Debt Sustainability Analysis which indicated that the national debt is sustainable in accordance to international debt indicators benchmarks. Table No. 4.1: Indicators for National Debt (Percentage) Ratio Present Value (PV) of Debt to GDP Present Value (PV) of Debt to Exports 2010 2013 2015 2020 2030 14.6 16.6 14.1 12.9 10.3 50 56.3 55.8 45.6 38.1 25 200 Present Value (PV) of Debt to Revenue 85.05 88.2 73.3 63.5 45.1 300 Debt Service to Exports 1.7 3.4 3.8 1.3 1.0 25 Debt Service to Revenue 2.5 5.3 6.1 2.2 1.8 35 Source: Ministry of Finance Threshold 80
External Debt 109. In December 2010, external debt stock was USD 8,363 million compared to USD 7,641.9 million at the end of December 2009, which is equivalent to an increase of 9 percent. Out of USD 8,363 million, USD 7,699.6 million was disbursed outstanding debt and USD 693.7 million was Interest arrears. The increase in debt stock was attributed to accumulation of arrears particularly from non Paris club countries which have not yet provided the relief in accordance to Paris Club terms. In addition, out of external debt stock, USD 6,529.6 million was public debt and USD 1,863.4 was private debt. Analysis of external debt by currency indicated that, large portion of debt was dominated by US Dollar, Euro and Yen which account for 37, 28 and 11 percent respectively. Figure No. 4.1: Disbursed Outstanding Debt by Currency at December 2010 Others 13% Yuan 3% GBP 8% Yen 11% USD 37% Euro 28% External Debt Stock by Creditor Category 110. The analysis of external debt stock by creditor category showed that, major creditors are multilateral organisations which accounted for 72 percent of total external debt. Bilateral creditors accounted for 25 percent and other creditors accounted for 3 percent of total external debt stock. The Government has been borrowing from major multilateral organisations which do not have stringent conditionalities. 81
Figure No. 4.2: External debt by Creditor Category as at December 2010 Bilaterals 25% Commercial/ other 3% Multilaterals 72% Domestic Debt Stock 111. As at December 2010, domestic debt stock was shilling 4,385.4 billion (or USD 2,986.9 million) compared to shilling 3,837.7 billion in December 2009, which is equivalent to an increase of 14.3 percent. This was due to the increase in the Government needs to finance infrastructure development projects and use of Treasury bills to mop up excess liquidity in the economy. Large share of domestic debt emanated from Treasury bond which is equivalent to 61.1 percent, treasury bills 38.7 percent and other debts 0.2 percent. 112. The analysis of domestic debt by holder category indicated that Commercial Banks were leading creditors holding larger proportional of the total domestic debt. As at December 2010, commercial banks were holding 48.8 percent of the domestic debt. This was contributed by the expansion of the banking sector and relatively low investment risk in Government securities compared to the private sector. Bank of Tanzania ranked second holding 30.0 percent of domestic debt, the social security funds 20.7 percent, and individuals and other entities holding 0.5 percent. 82
Public Debt Service 113. During the period of July 2010 - March 2011, the Government spent shilling 801,443 million in debt service payments. Out of which, shilling 71,193 million was for external debt service payments and shilling 730,250 was for domestic service payments. The principal payment of the external debt was shilling 26,610 million, where as interest payment was shilling 44,583 million. In addition, out of shillings 730,250 million paid to service the domestic debts, shilling 556,695 million was for matured government securities on rollover terms and shilling 173,555 million was for interest payment. 83
TRENDS IN GOVERNMENT FINANCE Table No. 25 Sh. milioni 2006/07 2007/08 2008/09 2009/10 2009/10 2010/11 2010/11 Actual Actual Actual Actual Budgeted Actual to March Likely Outturn June A. DOMESTIC REVENUE (incl. Revenues from LGAs) 2739022 3634581 4293075 4661540 6176172 4256288 5726253 A. DOMESTIC REVENUE 2739022 3634581 4293075 4661540 6003590 4138082 5553671 1. Tax Revenue 2529439 3359250 4043674 4427834 5638593 3910654 5266169 Import Duty and Excise Duty 765644 965498 1130860 1214626 1520194 1056823 1451404 Value Added Tax (VAT) 861050 1110951 1333789 1488452 1991653 1275766 1737990 Imports 431614 550289 641392 729040 999329 664609 899989 Domestic 429436 560661 692397 759412 992324 611158 838002 Income Tax 790877 1028902 1257861 1388778 1702338 1255840 1634733 Other Taxes 218581 382792 462544 499497 620912 449725 615715 Refunds Accounts -106713-128893 -141380-163519 -196504-127499 -173673 2. Non-Tax Revenue 209583 275331 249401 233707 364997 227427 287502 3. Revenues from LGAs 172582 118206 172582 B. TOTAL EXPENDITURE 4474680 5208996 6811827 8173749 10769612 7169336 9557706 1. Recurrent Expenditure 3137469 3398024 4681459 5562443 6950561 5226893 6316281 2. Development Expenditure 1337211 1810972 2130368 2611306 3819051 1942443 3241425 Local Funds 503291 567421 906023 1004530 1366143 514839 978425 Foreign Funds 833920 1243551 1224345 1606776 2452908 1427604 2263000 C. DEFICIT/SURPLUS (A-B) -1735658-1574415 -2518752-3512209 -4593440-2913048 -3831453 D. FINANCING 1735660 1574415 2518752 3512209 4593440 2913048 3831453 1. External Sources 1689337 2302805 2201485 2784944 3963440 2246742 3484933 Grants 971547 1573195 1257283 1405288 2020907 1287187 2050677 Basket support 47331 200628 151370 194071 256219 207684 246150 Import Support/OGL Loans 266946 365038 331315 558320 189837 173806 201806 Project Loans 433203 209342 488795 695597 807590 604674 692300 Concensional loans 731212 0 342000 Amortization (foregn) -29690-45399 -27278-68331 -42326-26610 -48000 2. Internal Sources 46323-728390 317267 727265 630000 666306 346520 Non-Bank Borrowing 212475-19795 1108-24754 0 0 0 Bank Borrowing 25533-316755 212567 593023 600000 760972 346520 Payment of arrears 714315 797620 556695 797620 Proceeds from privatisation 0 0 45000 9659 30000 0 0 Adjustment to Cash -60370-78308 275298 595034 0 385461 0 Amortization (local) 0-14648 0-723776 -797620-556695 -797620 Expenditure float -131315-298884 -216706-436236 0-480127 0 Source: Ministry of Finance 84
12000000 TRENDS IN GOVERNMENT FINANCE 10000000 8000000 6000000 4000000 2000000 0-2000000 -4000000-6000000 A. DOMESTIC REVENUE (incl. Revenues from LGAs) B. TOTAL EXPENDITURE C. DEFICIT/SURPLUS (A-B) 85
Table No. 26 CLASSIFICATION OF CENTRAL GOVERNMENT EXPENDITURE BY PURPOSE Shs. mill 2008/09 2009/10 2010/11* Recurrent Development Total Exp. Recurrent Development Total Exp. Recurrent Development Total Exp. 1.0 GENERAL PUBLIC SERVICES 1985848 516184 25221913 2895011 717801 3612812 3413018 973032 4386050 1.1 Executive and legislative organs, financial and fiscal affairs external affairs other than foreign aid 1,811,197 432,437 19264490 2,695,305 613,601 3308906 3,153,243 830,220 3983463 1.2 Foreign economic aid 10,179 0 89445 6,826 0 6826 7,261 0 7261 1.3 Fundamental research affairs and services 19,727 5,495 1311092 21,751 14,586 36337 22,934 42,731 65665 1.4 General services 141,296 70,470 4426489 163,031 79,588 242619 171,509 84,756 256265 1.5 General public services n.e.c. 3,448 7,782 130397 8,098 10,026 18124 58,071 15,325 73396 2.0 DEFENCE AFFAIRS AND SERVICES 331524 55879 3840174 393868 33650 427518 459665 145304 604970 2.1 Military and civil defence administration and operation 287,446 8,959 3,743,225 372,082 33,650 405,732 330,900 31,104 362,004 2.2 Foreign military aid 0 0 0 0 0 0 0 0 0 Defence-related applied research and experimental 2.3 development 242 46,920 47,162 360 0 360 213 114,200 114,413 2.4 Defence affairs n.e.c. 43,837 0 49,787 21,426 0 21,426 128,553 0 128,553 3.0 PUBLIC ORDER AND SAFETY 226497 35841 2158861 268311 63957 332267 329624 54987 384611 3.1 Police and fire protection 140,819 14,878 1,346,685 162,538 25,371 187,909 210,770 17,718 228,488 3.2 Law courts 49,298 8,812 413,046 52,882 18,433 71,315 57,114 7,661 64,775 3.3 Prison administration and operation 10,453 800 79,064 8,602 800 9,402 6,752 800 7,552 3.4 Public order and safety n.e.c. 25,927 11,350 320,065 44,289 19,353 63,642 54,988 28,809 83,796 4.0 EDUCATION AFFAIRS AND SERVICES 500915 105614 5286541 406638 135302 541939 552274 148316 700590 4.1 Pre-primary & primary education affairs & services 6,027 7,925 571,271 6,977 3,889 10,866 2,839 3,115 5,955 4.2 Secondary education affairs and services 145,276 26,879 1,138,879 2,306 550 2,856 1,732 14,680 16,412 4.3 Tertiary education affairs and services 302,705 45,570 2,968,629 338,445 113,112 451,557 483,532 113,213 596,745 4.4 Education services not definable by level 0 17,213 66,516 946 4,300 5,246 3,315 6,796 10,110 4.5 Subsidiary services to education 0 0 0 184 0 184 125 0 125 4.6 Education affairs and services n.e.c. 46,908 8,027 541,245 57,779 13,450 71,230 60,731 10,512 71,244 5.0 HEALTH AFFAIRS AND SERVICES 221093 187226 3728935 236500 255412 491912 246942 389483 636425 5.1 Hospitals affairs and services 34,573 146,037 1,291,535 36,466 190,201 226,667 31,005 304,103 335,108 5.2 Clinics, and medical, dental and paramedical practitioners 179,284 40,939 2,079,907 191,027 64,873 255,900 202,287 84,880 287,167 Public health affairs and services 5.3 0 250 160,519 0 338 338 0 500 500 5.4 Medicaments, protheses, medical equipment and appliances or other prescribed health-related products 3,513 0 46,978 5,398 0 5,398 8,878 0 8,878 5.5 Applied research and experimental development related to health and medical delivery system 0 0 0 0 0 0 0 0 0 5.6 health affairs and services n.e.c. 3,723 0 149,995 3,610 0 3,610 4,772 0 4,772 6.0 SOCIAL SECURITY AND WELFARE AFFAIRS AND SERVICES 70275 7928 843817 99366 13633 112999 95068 9396 104464 6.1 6.2 6.3 Social security affairs and services Welfare affairs and services Social security and welfare affairs n.e.c. 1,966 290 57,616 1,800 590 2,390 1,494 738 2,231 64,940 7,112 757,473 95,620 12,665 108,285 92,114 5,804 97,918 3,369 526 28,727 1,947 378 2,325 1,460 2,855 4,315 HOUSING AND COMMUNITY AMENITY AFFAIRS AND 7.0 SERVICES 20337 144471 2315415 26179 215862 242040 32621 223760 256381 7.1 Housing and community development 5,620 586 254,945 8,143 607 8,750 7,615 477 8,092 7.2 Water supply affairs and services 7,032 140,988 1,875,636 8,763 205,889 214,652 8,868 204,410 213,278 7.3 Sanitary affairs and services including pollution abatement and control 6,367 2,896 181,600 7,345 9,365 16,711 4,446 18,872 23,318 7.4 Street lightning affairs and services 0 0 0 0 0 0 0 0 0 7.5 Housing and community amenity affairs and services n.e.c. 1,318 0 3,234 1,928 0 1,928 11,693 0 11,693 8.0 RECREATIONAL, CULTURAL & RELIGIOUS AFFAIRS & SERVICES 9715 7926 17641 13434 8939 22373 19996 9218 29214 8.1 Recreational, cultural and religious affairs and services 9,715 7,926 17,641 13,434 8,939 22,373 19,996 9,218 29,214 This table continues on the next page 86
...Table No. 26 (continues) 2008/09* 2009/10* 2009/10* Recurrent Development Total Exp. Recurrent Development Total Exp. Recurrent Development Total Exp. 9.0 FUEL AND ENERGY AFFAIRS AND SERVICES 33127 116822 149948 32801 153547 186348 36735 166453 203188 9.1 Fuel affairs and services 33,127 116,822 149,948 32,801 153,547 186,348 36,735 166,453 203,188 9.2 Electricity and other energy sources 0 0 0 0 0 0 0 0 0 9.3 Fuel and energy affairs and services n.e.c. 0 0 0 0 0 0 0 0 0 10.0 AGRICULTURE, FORESTRY, FISHING AND HUNTING AFFAIRS AND SERVICES 177264 80511 257775 178486 161972 340457 192951 160312 353263 10.1 Agriculture affairs and services 127,232 55,631 182,863 122,722 117,640 240,362 142,217 129,681 271,897 10.2 Forestry affairs and services 11,681 6,481 18,163 14,754 12,399 27,153 16,420 5,473 21,893 10.3 Fishing and Hunting affairs and services 17,116 8,648 25,764 19,888 17,999 37,887 20,764 13,309 34,073 10.4 10.5 Agricultural research and experimental development n.e.c. 14,700 9,751 24,450 14,621 13,133 27,754 12,926 11,351 24,277 Agriculture, forestry, fishing and hunting affairs and services n.e.c. 6,535 0 6,535 6,501 800 7,301 624 498 1,122 11.0 MINING, MINERAL,MANUFACTURING AND CONSTRUCTION AFFAIRS AND SERVICES 7450 3729 11179 18627 20295 38923 27208 19394 46602 11.1 Mining and mineral resources affairs and services, other than fuel 5,544 1,537 7,081 13,590 16,095 29,685 21,121 15,580 36,701 11.2 Manufacturing affairs and services 192 392 584 497 1,200 1,697 434 814 1,247 11.3 Construction affairs and services 1,715 1,800 3,514 4,540 3,000 7,540 5,653 3,000 8,653 11.4 Mining, mineral,manufacturing & construction affairs & services n.e.c. 0 0 0 0 0 0 0 0 0 12.0 TRANSPORTATION AND COMMUNICATION AFFAIRS AND SERVICES 219957 219191 439148 280063 567736 847800 303075 870961 1174037 12.1 Road transport affairs and services 166,065 210,883 376,948 552 0 552 3,021 0 3,021 12.2 Water transport affairs and services 0 0 0 0 0 0 0 0 0 12.3 Railway affairs and services 0 0 0 0 0 0 0 0 0 12.4 Air transport affairs and services 0 0 0 0 0 0 0 0 0 12.5 Pipeline transport and other transport affairs and services 0 0 0 0 0 0 0 0 0 12.6 Transportation system affairs and services n.e.c. 40,914 3,850 44,764 257,226 539,668 796,894 280,240 854,967 1,135,206 12.7 Communication affairs and services 11,561 3,580 15,141 14,234 2,100 16,334 11,729 5,582 17,311 12.8 Transportation and communication affairs and services n.e.c. 1,417 878 2,295 8,051 25,968 34,019 8,086 10,413 18,499 13.0 OTHER ECONOMIC AFFAIRS AND SERVICES 224295 219400 443695 244652 441795 686446 251750 638170 889921 13.1 Distribution trade affairs and services including storage and warehouse; hotel and restaurant affairs and services 6,211 3,077 9,288 9,520 4,867 14,387 9,795 7,470 17,264 13.2 Tourism affairs and services 6,074 1,753 7,827 6,127 4,444 10,571 11,521 62 11,583 13.3 Multipurpose development project affairs and services 194,163 145,816 339,978 204,160 235,445 439,605 204,755 332,744 537,499 13.4 General economic & commercial affairs other than general labour affairs 9,338 13,337 22,675 10,837 2,275 13,112 12,052 2,388 14,440 13.5 General labour affairs and services 3,048 2,934 5,981 4,693 5,010 9,704 4,986 778 5,765 13.6 Other economic affairs and services n.e.c. 5,461 52,484 57,945 9,314 189,753 199,067 8,642 294,728 303,370 14.0 OTHERS 788840 4211 793051 1613418 12051 1625469 1829578 10265 1839843 14.1 9.1 Public Debt 693,748 0 693,748 1,528,094 0 1,528,094 1,757,093 0 1,757,093 14.2 9.2 Financial and Capital Subscription 94,218 4,211 98,429 84,483 12,051 96,534 71,922 10,265 82,187 14.3 9.3 Pension and Gratuities 875 0 875 842 0 842 562 0 562 GRAND TOTAL 4,817,137 1,704,934 45,508,092 2,368,047 1,357,396 3,725,443 7,790,507 3,819,051 11,609,558 Source: National Bureau of Statistics * Estimates 87
CHAPTER 5 MONEY AND FINANCIAL INSTITUTIONS Money Supply and Domestic Credit 114. In 2009/10, narrow money supply (M1) increased to shs. 4,134.7 billion from shs. 3,149.1 billion in 2008/09, equivalent to an increase of 31.3 percent. The broad money (M2) increased by 26.3 percent from shs. 5,772.5 billion in 2008/09 to shs. 7,288.1 billion in 2009/10. Likewise, extended broad money supply (M3) increased to shs. 9,801.8 billion in 2009/10 from shs. 7,834.1 billion in 2008/09, equivalent to an increase of 25.1 percent. The growth of money supply was attributed to an increase in net foreign assets of commercial banks and the increase in Government borrowing during the period under review. 115. By the end of December 2010, broad money supply (M2) grew by 21.8 percent, slightly higher than the target of 20.7 percent during the period. Similarly, extended broad money supply (M3) grew by 25.3 percent compared to the target of 23.5 percent. This trend was due to the increase in foreign currency deposits and appreciation of the US Dollar against Tanzanian shilling. 116. Domestic credit increased from shs. 4,771.7 billion in 2008/09 to shs. 6,124.1 billion in 2009/10, equivalent to an increase of 28.3 percent. By the end of December 2010, domestic credit increased to shs. 6,798.5 billion, equivalent to a growth of 32.8 percent as compared to shs. 5,120.2 billion recorded in December 2009. This was a result of an increase in credit to the private sector. Commercial Banks Credit to Various Economic Activities 117. By December 2010, commercial banks credit extended to private sector was shs. 6,029.4 billion compared to shs. 4,805.8 billion as of end December 2009, equivalent to an increase of 25.5 percent. The increase was above the target of 19.2 percent during that period owing to enhanced confidence by 88
commercial banks lending to the private sector following the global economic recovery. Credits were directed to various economic activities such as: personal loans (23.1 percent); business activities (17.6 percent); manufacturing (13.6 percent); agriculture (12.3 percent); and transportation and communication (9.0 percent). 118. In 2010, the value of Government securities issued was shs. 3,124.3 billion compared to shs. 2,746.5 billion in 2009, equivalent to an increase of 13.8 percent. Likewise, the value of treasury bonds issued in 2010 was shs. 714.0 billion compared to shs. 392.1 billion in 2009, equivalent to an increase of 82.1 percent. The large increase in treasury bonds issued in 2010 was due to increased credit demand by the Government for financing infrastructures projects. Deposits in Commercial Banks 119. In 2010, deposits in commercial banks increased to shs. 9,748.7 billion from shs. 7,852.7 billion in 2009, equivalent to an increase of 24.1 percent. Out of these, private sector contributed shs. 9,049.5 billion, equivalent to 92.8 percent of the total deposits; while the remaining percent was the contribution from the Central Government. The increase was due to improvement of bank services and introduction of new bank products. In addition, the ratio of foreign currency deposits to total deposits increased to 30.0 percent from 27.5 percent in 2009. The increase was due to appreciation of US Dollar against other major currencies. Trends in Interest Rates 120. The overall lending rate of commercial banks declined to 13.45 percent in December 2010 from 14.38 percent December 2009. The average lending rate on short-term loans (up to one year) decreased from 13.96 percent in December 2009 to 12.40 percent December 2010. Likewise, the overall time deposit rate declined from 6.36 percent in December 2009 to 5.11 percent December 2010. Similarly, the average time deposit rate (12 months) decreased to 7.09 percent in December 2010 from 8.99 December 2009. Due 89
to this trend, the interest rates spread (up to one year) broadened from 4.97 December 2009 to 5.31 percent in December 2010. Parastatal Pension Fund (PPF) 121. In 2010, members of Parastatal Pension Fund increased to 160,068 from 132,878 members in 2009, equivalent to an increase of 20.5 percent. The increase was attributed to continued efforts by the Fund to register new members from the private sector. Collections from members increased to shs. 146,943.6 million in 2010 from shs. 126,963.5 million in 2009, equivalent to an increase of 15.7 percent. In addition, the Fund paid members benefits worth shs. 63,527.8 million compared to shs. 47,191.25 million in 2009, equivalent to an increase of 34.6 percent. Benefits to members increased due to: an increase in minimum pensionable rate from shs. 21,000 to shs. 50,000 per month; pension increment to retired workers and increase in retired members by age and others by terminating their jobs. 122. The assets value of the Fund in 2010 increased by 17.1 percent to shs. 731,421.7 million from shs. 624,850 million in 2009. Likewise, the Fund s investments in Government securities increased from shs. 86,875.4 million in 2009 to shs. 117,100.95 million in 2010, equivalent to an increase of 34.8 percent. However, income from investment decreased by 10.5 percent from shs. 67,079.3 million in 2009 to shs. 60,047.8 million in 2010. This was a result of global financial crisis which affected interest rates structure of commercial banks, Government securities and new investments. Public Service Pension Fund (PSPF) 123. In 2009/10, members of Public Service Pension Fund were 298,046 compared to 285,329 in 2008/09, equivalent to an increase of 4.6 percent. The Fund s collection from investments decreased to shs. 400,164.4 million in 2009/10 from shs. 408,836.5 million in 2008/09, equivalent to a decrease of 2.1 percent. However, during that period, returns from investment income increased to shs. 63.6 billion from shs. 56.2 billion in 2008/09, equivalent to an increase of 13.2 percent. Up to June 2010, the value of the Fund was shs. 90
732,111 million compared to shs. 715,825.43 million in June 2009, equivalent to an increase of 2.3 percent. 124. In 2009/10, benefits paid to members increased to shs. 274.3 billion from shs. 142.4 billion in 2008/09, equivalent to an increase of 92.6 percent. This was attributed to the enhancement of civil servants salaries, leading to increased benefits paid to members and increase in number of retired workers. 125. In 2009/10, investment in Government securities decreased to shs. 7,584 million from shs. 141,516 million in 2008/09, equivalent to a decrease of 94.6 percent. This was due to a decrease in returns from interest rate paid in Government securities. National Social Security Fund (NSSF) 126. In 2009/10, National Social Security Fund registered 506,218 members compared to 475,993 members registered in 2008/09, equivalent to an increase of 6.35 percent. Contribution from members amounted to shs. 295,787.14 million in 2009/10 compared to shs. 253,343.47 million collected in 2008/09, equivalent to an increase of 16.8 percent. This increase was due to the registration of 89,255 new members and timely submission of member s contribution by 1,755 new employers. 127. In 2009/10, benefits paid to members amounted to shs. 111,651.15 million compared to shs. 84,638.22 million in 2008/09, equivalent to an increase of 31.9 percent. However, members who benefited from the Fund decreased to 138,999 in 2009/10 from 207,860 members in 2008/09. 128. Total value of investment increased from shs. 847,486.6 million in 2008/09 to shs. 1,029,206.2 million in 2009/10, equivalent to an increase of 21.4 percent. Likewise, the value of investment in Government securities increased from shs. 158,838.5 million in 2008/09 to shs. 185,316.8 million in 2009/10, equivalent to an increase of 16.7 percent. Further, the total investment income increased to shs. 73,920.0 million in 2009/10 from shs. 45,606.0 million in 2008/09, equivalent to an increase of 62.1 percent. The increase was attributed to the increase in various activities in capital 91
investments such as real estate, long term loan, fixed deposits and Government securities. 129. The value of net assets of the Fund increased to shs. 1,129,179.9 million in 2009/10 compared to shs. 921,192.8 million in 2008/09. In addition, the value of the total asset amounted to shs. 1,198,201.0 million in 2009/10 compared to shs. 969,835.0 million in 2008/09, equivalent to an increase of 23.6 percent. Government Employees Provident Fund (GEPF) 130. In 2009/10, members of Government Employees Provident Fund increased to 35,279 from 30,227 members in 2008/09, equivalent to an increase of 16.7 percent. In addition, the benefits offered to the members increased from shs. 1,575.7 million in 2008/09 to shs. 3,323.7 million in 2009/10, equivalent to an increase of 110.9 percent. 131. The total value of Funds investments increased from shs. 64,935.8 million in 2008/09 to shs. 81,673.5 million in 2009/10, equivalent to an increase of 25.8 percent. In addition, income earned from those investments increased to shs. 7,693.6 million in 2009/10 from shs. 5,475.1 million in 2008/09, equivalent to an increase of 40.0 percent. Table No. 5.1: GEPF Investments Portfolio Structure (Shs. Millions) Type of Investment 2005/06 2006/07 2007/08 2008/09 2009/10 % Change Treasury Bills 9,082.73 12,365.55 11,845.49 14,556.60 2,099.94-85.6% Treasury Bonds 7,183.13 10,974.80 16,727.45 21,787.89 31,230.34 43.3% Government Stocks 78.35 78.35 4.40 4.40 4.41 0.2% Fixed Deposits Equity/shares Corporate Bonds 4,915.00 10,030.00 15,790.00 20,040.00 37,864.90 88.9% 941.14 2,077.63 2,314.96 3,320.94 3,320.94 0.0% 1,000.00 1,000.00 800.00 1,600.00 1,400.00-12.5% Loans - 2,000.00 2,000.00 4,100.00 105.0% UTT 1,000.00 799.99 799.99 799.99 799.99 0.0% Real Estate - - - 826.00 853.00 3.3% 24,200.35 37,326.32 50,282.29 64,935.82 81,673.52 25.8% Total Source: Government Employees Provident Fund 92
Table No. 5.2: Income from Investments 2005/06 2009/2010 (Shs. Millions) % Portfolio 2005/06 2006/07 2007/08 2008/09 2009/10 Change Treasury Bills 968.70 994.41 1,702.55 1,064.88 812.30-23.7% Treasury Bonds 519.20 890.81 1,510.25 2,233.26 3,454.94 54.7% Government Stocks 13.70 13.70 15.42 1.28 1.28 Fixed deposits 437.50 717.49 1,337.17 1,591.56 2,525.21 58.7% Dividends/C. Gain 68.70 119.76 177.23 171.96 296.75 72.6% Corporate Bond 127.00 126.65 120.98 95.26 226.47 137.7% UTT - 233.47 - - - Loan Interest - - - 311.50 376.67 20.9% Rent - - - 5.40 - - Total 2,134.80 3,096.29 4,863.60 5,475.10 7,693.62 40.5% Source: Government Employees Provident Fund National Health Insurance Fund (NHIF) 132. The number of members of the National Health Insurance Fund increased to 373,326 in 2009/10 compared to 332,650 members in 2008/09, equivalent to an increase of 12.2 percent. This was due to an increase in new Government employees and amendment of the NHIF Act which incorporated other groups like students, religious and councils. Similarly, contribution from members increased from shs. 79,388.5 million in 2008/09 to shs. 96,618.8 million in 2009/10, equivalent to an increase of 21.7 percent. These contributions were due to increase in salaries of Government employees as well as members of the Fund. 133. By June 2010, the Fund registered 5,576 health facilities, compared to 4,493 in June 2009. Out of those, 4,652 facilities equivalent to 83.4 percent are Government owned; 658 facilities equivalent to 11.8 percent are faith based owned; and 266 facilities equivalent to 4.8 percent are privately owned. 134. In 2010, the Fund continued to offer several benefits such as: consultation and registration fees; out-patient care services; in-patient care services; surgical services and diagnostic tests. The Fund also provided dental 93
services; and optical services including eye reflection test and provision of reading glasses. 135. In 2009/10, the Fund paid benefits worth shs. 25,154.1 million out of the claimed amount of shs. 27,825.3 million, compared to shs. 16,359.0 million paid in 2008/09 out of the claimed amount of shs. 17,781.6 million, equivalent to an increase of 53.8 percent of the paid amount. This was a result of increase in number of members who use NHIF identity cards. 136. In 2009/10, investment income increased to shs. 17,115.7 million from shs. 16,359.0 million in 2008/09, equivalent to an increase of 4.6 percent. Income from other sources decreased from shs. 274.5 million in 2008/09 to shs. 205.6 million in 2009/10, equivalent to a decrease of 25.1 percent. Local Authorities Pensions Fund (LAPF) 137. In 2009/10, members of Local Authorities Pension Fund increased to 73,833 from 66,394 in 2008/09, equivalent to an increase of 11.2 percent. The Fund collection from members was shs. 54,235.9 million in 2009/10 compared to shs. 47,048.5 million collected in 2008/09, equivalent to an increase of 16.8 percent. This was attributed to increase in the registration of new members. Similarly, benefits paid to members in 2009/10 amounted shs. 22,507.9 million compared to shs. 14,892.4 million in 2008/09, equivalent to an increase of 51.1 percent. Further, in 2010, the Fund introduced two new benefits namely maternity benefits and funeral grants, hence making a total of six benefits offered by the Fund. 138. Total value of investment increased from shs. 209,698.4 million in 2008/09 to shs. 265,567.2 million in 2009/10, equivalent to an increase of 26.6 percent. The value of investments in Government securities increased from shs. 104,767.6 million in 2008/09 to shs. 133,487.0 million in 2009/10, equivalent to an increase of 27.4 percent. 139. In 2009/10, total investment income increased to shs. 26,648.9 million from shs. 20,911.7 million in 2008/09, equivalent to an increase of 27.4 94
percent. This was a result of increase in investments in equity, corporate bonds, real estate, long term loans and Government securities. Similarly, the value of net assets of the Fund was shs. 361,959.4 million in 2009/10 compared to shs. 271,478.8 million in 2008/09, equivalent to an increase of 33.3 percent. Tanzania Insurance Regulatory Authority (TIRA) 140. In 2010, total registered insurance companies were 25 compared to 24 companies in 2009. Out of those, 19 companies were registered to provide general insurance services only, 2 companies provides life insurance services only and 4 companies provides general insurance and life insurance services. In addition, the overall insurance market earnings in 2010 grew by 18.4 percent to shs. 283.2 billion compared to shs. 231.2 billion in 2009. General insurance services accounted for 89.3 percent of those market earnings while life insurance services contributed 10.7 percent. Table No. 5.3: Insurance Market Performance 2006 2010 General Insurance (Shs. Millions) 2006 2007 2008 2009 2010 105,268 135,891 164,497 209,559 252,947 Growth% 16% 22.5% 17.4% 21.5% 17.2% Overall Contribution (%) Life Insurance (Shs. Millions) 91.3% 88.2% 86.2% 90.6% 89.3% 10,014 18,149 26,338 21,678 30,273 Growth % 9.0% 44.8% 31.1% -21.5% 28.4% Overall Contribution (%) Total Earnings (Shs. Millions) 8.7% 11.8% 13.8% 9.4% 10.7% 115,282 154,040 190,835 231,237 283,220 Growth % 15.1% 25.2% 19.3% 17.5% 18.4% Source: Tanzania Insurance Regulatory Authority 141. Total assets value of insurance companies in 2010 increased to shs. 369.2 billion from shs. 320.6 billion in 2009, equivalent to an increase of 13.2 percent. On the other hand, total liabilities of insurance companies increased to shs. 248.2 billion in 2010 compared to shs. 219.0 billion in 2009. 95
Table No. 5.4: Assets Value and Liabilities of Insurance Companies 2006-2010 Assets and Liabilities 2006 2007 2008 2009 2010 Total Assets (Shs. Millions) 183,717 212,458 289,456 320,611 369,187 Growth (%) 28.00 13.53 26.60 9.72 13.16 Total Liabilities (Shs. Millions) 111,367 133,081 202,238 219,022 248,223 Growth (%) 12.00 16.32 34.20 7.66 11.76 Balance (Shs. Millions) 72,350 79,377 87,218 101,589 120,960 Growth (%) - 8.85 8.99 14.15 16.02 Source: Tanzania Insurance Regulatory Authority Dar es Salaam Stock Exchange (DSE) 142. In 2010, market capitalization at Dar es Salaam Stock Exchange decreased to shs. 4,895.5 billion from shs. 5,013.2 billion in 2009, equivalent to a decrease of 2.4 percent. The decrease was due to falling price of NMB, CRDB and Kenya Airways securities. However, during the period ending December 2010, a total of 190.4 million shares worth shs. 35.99 billion were traded in DSE compared to 121.1 million shares worth shs. 48.7 billion in December 2009, equivalent to a decrease of 26.1 percent in value of traded shares and 57.3 percent of total traded shares. Nevertheless, in the similar period, the stock market price index decreased from 1,239.93 in 2009 to 1,163.89 in 2010, equivalent to a decrease of 6.1 percent. 143. The value of listed Government bonds in 2010 at the DSE was shs. 1,615.79 billion compared to shs. 966.41 billion in 2009, equivalent to an increase of 67.2 percent. Nevertheless, the value of traded treasury bonds in Dar es Salaam Stock Exchange increased to shs. 205.8 billion in 2010 from shs. 139.4 billion in 2009, equivalent to an increase of 47.6 percent. This was a result of an increased awareness as well as motivation to the public regarding stock exchange markets, securities and investments. Likewise, in 2009/10, profits from trading activities of DSE increased to shs. 196.8 million from shs. 133.4 million in 2008/09, equivalent to an increase of 47.5 percent. 96
Table No. 5.5: Stock Exchange Market Performance in 2010 Market Criteria Total shares offered in the Market 2009 2010 % Change 6,981,012,160 6,981,012,160 0.0% Value of traded shares (Shs. Billion) 48,698.98 35,986.31-26.1% Value of all listed shares (Shs. Billion) 5,013.17 4,895.47-2.3% Number of traded shares 121,065,172 190,387,510 57.3% Number of deals 21,149 11,336-46.4% All share Index 1,239.9256 1,163.891-6.1% Tanzania Postal Bank 144. In 2010, the number of new customers who joined the Bank were 57,505 which made the total of 582,774 customers compared to 525,269 customers in 2009, equivalent to an increase of 10.9 percent. Similarly, customers deposits held by Tanzania Postal Bank increased to shs. 107,797 million from shs. 88,331 million in 2009, equivalent to an increase of 22.0 percent. This was due to deposits increase strategy of the bank including market expansion campaigns as well as improved services provision by using ATMs. 145. In 2010, the Bank continued to invest its assets in other commercial banks; Stocks and Government stocks; and private bonds. Up to December 2010, value of investments increased to shs. 112,464 million compared to shs. 86,572 million in December 2009, equivalent to an increase of 29.9 percent. Investments in treasury bonds increased to shs. 25,229 million in 2010 from shs. 21,229 million in 2009, equivalent to an increase of 19.8 percent. Total value of loans issued was shs. 64,790 million in 2010 compared to shs. 37,069 million in 2009, equivalent to an increase of 74.8 percent. However, the number of credit borrowers increased from 27,899 to 30,564 borrowers during 97
that period. The distribution of loans shows that large share were consumer loans (90.7 percent) as depicted in the table below. Table No. 5.6. Tanzania Postal Bank Loans Distribution (Shilling Million) Contributions 2009 2010 Type of Loans (%) Business loans 2,325.0 4,244.0 6.6 Consumer loans 33,204.0 58,757.0 90.7 Micro loans 1,143.0 1,534.0 2.4 Government Empowerment loans 397.0 255.0 0.4 Total 37,069.0 64,790.0 100.0 Source: Tanzania Postal Bank 146. In 2010, the gross income of the Bank from interests and other sources were shs. 20,122 million compared to shs. 17,887 million in 2009, equivalent to an increase of 12.5 percent. The increase was a result of credits growth created by the Bank. Similarly, Bank s profit before tax increased to shs. 955 million from shs. 897 million in 2009, equivalent to an increase of 6.5 percent. 98
Table No. 27 MONETARY SURVEY - TANZANIA MAINLAND Shs. million For the period ended June Change 2009-2010 2002 2003 2004 2005 2006 2007 2008 2009 2010 Amount % Base Money (M0)* 429384 473704 590441 734912 853959 1047221 2079537 2678959 3369300 690341 25.8% Narrow Money (M1) 815576 981148 1186063 1528833 1810429 2170664 2829944 3149153 4134700 985547 31.3% Time and Saving Deposits 517948 577636 670263 837675 1226999 1480065 2000773 2623306 3153400 530094 20.2% Broad Money (M2) 1333524 1558784 1856326 2366508 3037428 3650728 4830716 5772458 7288100 1515642 26.3% Foreign Currency Deposits 464366 647109 746609 899976 1368687 1666476 1781555 2061636 2513800 452164 21.9% Extended Broad Money (M3) 1797890 2205893 2602935 3266484 4406115 5317204 6612271 7834095 9801900 1967805 25.1% Net Foreign Assets 1293645 1871286 2134183 2279294 2914493 3383818 3628827 4196787 5265500 1068713 25.5% Net Domestic Assets 750102 334607 468752 987131 1491622 1936424 2983319 3669241 4536400 867159 23.6% Net Domestic Credit 684920 858203 1123588 1504012 2439087 2785793 3384781 4771737 6124100 1352363 28.3% Net Claims on Government 202879 199679 157607 284638 729393 449793-151058 61509 721300 659791 1072.7% Net Claims on non-government sector 482041 658524 965981 1219374 1709694 2336000 3535839 4710228 5402800 692572 14.7% Net other items 65181-523596 -654836-516881 -947466-849369 -401462-1102495 -1587700-485205 44.0% Source: Bank of Tanzania * Currency in circultion outside banks 99
Table No. 28 GROWTH OF MONEY SUPPLY AND DOMESTIC CREDIT - TANZANIA MAINLAND For the period ended June 2002 2003 2004 2005 2006 2007 2008 2009 2010 Base Money (M0)* 14.5% 10.3% 24.6% 24.5% 16.2% 22.6% 98.6% 28.8% 25.8% Narrow Money (M1) 18.0% 20.3% 20.9% 28.9% 18.4% 19.9% 67.7% 21.0% 31.3% Time and Saving Deposits 27.0% 11.5% 16.0% 25.0% 46.5% 20.6% 35.2% 31.1% 20.2% Broad Money (M2) 21.3% 16.9% 19.1% 27.5% 28.4% 20.2% 52.9% 24.7% 26.3% Foreign Currency Deposits 24.2% 39.4% 15.4% 20.5% 52.1% 21.8% 6.9% 17.5% 21.9% Extended Broad Money (M3) 22.1% 22.7% 18.0% 25.5% 34.9% 20.7% 38.5% 22.9% 25.1% Net Foreign Assets 29.2% 44.7% 14.0% 6.8% 27.9% 16.1% 7.2% 15.7% 25.5% Net Domestic Assets 59.1% -55.4% 40.1% 110.6% 51.1% 29.8% 54.1% 23.0% 23.6% Net Domestic Credit 5.8% 25.3% 30.9% 33.9% 62.2% 14.2% 21.5% 41.0% 28.3% Net Claims on Government -24.6% -1.6% -21.1% 80.6% 156.3% -38.3% -133.6% -140.7% 1072.7% Net Claims on non-government sector 27.4% 36.6% 46.7% 26.2% 40.2% 36.6% 51.4% 33.2% 14.7% Other items net -137.1% -903.3% 25.1% -21.1% 83.3% -10.4% -52.7% 174.6% 44.0% Source: Bank of Tanzania * Currency in circulation outside banks TRENDS OF EXCHANGE RATES OF THE TANZANIA SHILLING AGAINST THE US DOLLAR Table No. 29 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 Shs/US Dollar, end of period 888.0 946.9 1047.4 1107.3 1126.3 1258.5 1268.3 1180.9 1299.4 1379.4 Shs/US Dollar, average for the year 830.5 931.2 1003.4 1089.4 1122.7 1182.9 1267.2 1183.8 1313.5 1331.5 Nominal change, end of year (%) 4.1% 12.1% 7.8% 8.6% 3.1% 5.4% 7.1% -6.6% 11.0% 1.4% Source: Bank of Tanzania 100
COMMERCIAL BANKS LENDING BY ECONOMIC ACTIVITIES Table No. 30 Type of Activity For the period endend December (Shs. Million) Contribution Growth (%) 2007 2008 2009 2010 (%) Public Sector 0.0 0.0 0.0 0.0 - - Agricultural production 298,419.8 515,936.0 467,097.1 741,288.7 58.7 53.2 Fishing 18,180.1 17,227.6 15,660.1 35,363.7 125.8 2.5 Forest 6,800.2 7,183.3 18,058.5 19,219.9 6.4 1.4 Hunting 4,323.0 242.3 56.2 122.3 117.8 0.0 Financial intermediaries 92,269.3 122,001.1 105,843.7 123,314.9 16.5 8.9 Mining and Quarrying 41,480.8 37,727.8 18,926.3 44,545.4 135.4 3.2 Manufacturing 559,422.8 612,670.6 565,775.5 819,315.0 44.8 58.8 Building and Construction 104,102.5 142,992.8 148,713.4 192,777.8 29.6 13.8 Real estate 49,137.9 76,446.0 101,055.8 240,162.2 137.7 17.2 Leasing 890.5 11,906.3 3,438.7 13,031.4 279.0 0.9 Transport and Communication 208,556.8 320,600.6 457,407.2 543,724.5 18.9 39.0 Trade 511,317.6 737,105.8 926,626.3 1,060,807.5 14.5 76.1 Tourism 15,903.4 29,165.5 27,097.6 43,935.7 62.1 3.2 Hotels and Restaurants 112,782.0 150,978.4 187,204.6 297,162.0 58.7 21.3 Warehouses and Preservation 16,202.1 4,020.3 5,061.4 148.1-97.1 0.0 Electricity 117,059.9 183,487.0 193,609.6 153,626.0-20.7 11.0 Gas 12,466.0 20,938.2 37,097.1 135,680.9 265.7 9.7 Water 1,453.8 2,035.7 2,193.8 2,235.4 1.9 0.2 Education 33,309.1 42,927.7 70,921.5 70,849.7-0.1 5.1 Health 10,310.2 21,713.3 20,847.6 12,692.6-39.1 0.9 Other Services 253,069.7 390,654.2 369,979.3 86,207.3-76.7 6.2 Personal 508,818.3 928,510.5 1,063,142.9 1,393,170.7 31.0 100.0 Total 2,976,276.0 4,376,471.1 4,805,814.0 6,029,381.9 25.5 432.8 Government Securities 1,211,837.0 1,049,237.6 1,127,500.0 1,429,403.7 26.8 Source: Bank of Tanzania 101
Table No. 31 TREND OF COMMERCIAL BANKS DEPOSITS For the period ended June Shs. million Change 2009/10 Type of Deposit 2005 2006 2007 2008 2009 2010 Amount % Demand Deposits 793920 942660 1125533 1556902 1721150 2454300 733150 42.6 Time and Saving Deposits 508964 691508 864118 2000252 2622901 3153400 530499 20.2 Foreign Currency Deposits 899976 1353523 1666479 1780934 2037101 2513800 476699 23.4 Total 2202860.7 2987691.0 3656129.8 5338087.3 6381151.9 8121500.0 1740348 27.3 Table No. 32 Type AVERAGE NOMINAL INTEREST RATE For the period ended June End 2002 2003 2004 2005 2006 2007 2008 2009 2010 Dec. 2010 Discount rate 9.4 10.60 12.60 13.92 13.40 21.42 12.84 10.31 7.58 7.58 Deposit Rates Savings Deposits 3.5 2.50 2.40 2.62 2.50 2.63 2.79 2.69 2.82 2.41 Fixed Deposits 4 3.50 4.30 4.41 6.60 7.69 6.66 6.77 5.88 5.11 Lending Rates Short-term 14.8 16.40 15.70 16.06 15.80 13.95 13.93 14.57 13.92 12.4 Long and Medium term 16.8 13.50 14.10 15.38 14.53 15.68 16.64 15.23 14.73 12.48 Treasury Bills Rate 91 days 4.1 6.10 7.70 8.12 7.80 12.62 5.76 5.56 2.89 5.24 182 days 4.2 5.80 8.00 9.43 8.50 16.74 7.63 7.86 2.59 6.20 364 days 4.9 5.90 8.20 10.51 9.60 18.39 10.00 9.11 6.08 7.67 Source: Bank of Tazania 102
CHAPTER 6 HUMAN RESOURCES Population and Development 147. The population of Tanzania in 2010 was estimated at 43,187,823. Out of those, 21,935,400 were females, equivalent to 50.8 percent, while 21,252,423, equivalent to 49.2 percent were males. Tanzania mainland had an estimated population of 41,914,311, equivalent to 97.1 percent of the total population, while Tanzania Zanzibar had an estimated population of 1,273,512, equivalent to 2.9 percent of the total population. The population distribution showed that 31,809,808 people, equivalent to 73.7 percent of the total population live in rural areas, while 11,378,015 people equivalent to 26.3 percent live in urban areas. These estimates based on the population growth rate of 2.9 percent per annum of the Population and Housing Census of 2002. 148. The analysis of population of Tanzania in 2010 indicates that 44.4 percent of the total population compose of young people aged below 15 years. The population aged below five years were 7,798,254, equivalent to 18.1 percent of the total population. Out of them, 3,932,089 were males and females were 3,866,165. The population aged 5-14 years was 11,366,854, equivalent to 26.3 percent of the total population. Out of them, 5,700,541 were males and females were 5,666,403. Population aged 15 24 years was estimated at 8,580,351, equivalent to 19.9 percent of the total population. Out of them, 4,279,696 were females and 4,300,655 were males. Population aged 25 64 years was estimated at 14,080,929, equivalent to 32.6 percent of the total population. The population aged between 15 64 years, which constitute the active labour force population, was estimated at 22,661,280, equivalent to 52.5 percent of the total population. Out of them, 11,684,533 were females and 10,976,747 were males. Population aged 65 years and above was 1,361,435, equivalent to 3.2 percent of the total population, in which 718,299 were females and 643,136 were males. 103
Table No. 6.1: Population Distribution by Age Group Age Males Females Total Percent < 5 3,932,089 3,866,165 7,798,254 18.1% 5 14 5,700,451 5,666,403 11,366,854 26.3% 15-24 4,300,655 4,279,696 8,580,351 19.9% 25-64 6,676,092 7,404,837 14,080,929 32.6% 65+ 643,136 718,299 1,361,435 3.2% Grand Total 21,252,423 21,935,400 43,187,823 15-64 10,976,747 11,684,533 22,661,280 52.5% Source: National Bureau of Statistics 149. According to 2010 population estimates, Tanzania population density was 49 people per square kilometre. Population density in Tanzania Mainland and Tanzania Zanzibar was 47 people and 518 people per square kilometre, respectively. The population distribution shows that the region with the highest population density was Dar es Salaam with 2,238 people per square kilometre, followed by Mwanza with 181, Kilimanjaro with 123, and Mara with 84 people per square kilometre. The region with the lowest population density was Lindi, with 14 people per square kilometre followed by Ruvuma and Rukwa regions with 22 people per square kilometre each. In Tanzania Zanzibar, all regions had a higher population density, ranging from 132 to 2,101 people per square kilometre. 150. In 2010, the regional population distribution shows that Shinyanga continued to have higher population of 3,841,788 equivalent to 8.9 percent of the total population, followed by Mwanza 3,566,263 (8.3 percent) and Dar es Salaam 3,118,132 (7.2 percent). The higher population in Shinyanga was mainly due to high fertility rate of 7.3 children per woman. In 2010, Lindi region had a population of 923,607 people which was the lowest population in Tanzania Mainland. In Tanzania Zanzibar, the region with highest population was Mjini Magharibi (483,205), while the lowest population was Kusini Unguja (112,612). The lowest population in Lindi and Kusini Unguja regions was caused by emigration to other regions. 104
151. In 2010, live births estimated at 1,678,325, while deaths were estimated at 573,213. The crude birth rate was estimated at 38.1 children per 1,000 people, while the mortality rate was estimated at 13.5 per 1,000 people. The total fertility rate in Tanzania was estimated at 5.4 children per woman. The infant mortality rate was estimated at 51.0 per 1,000 live births, while under-five mortality rate was estimated at 81.0 per 1,000 live births. Labour Force and Employment 152. According to the Integrated Labour Force Survey (ILFS) of 2006, active labour force was estimated at 18.8 million people, whereby 9.7 million were females and 9.0 million were males. The Survey also revealed that 16.6 million people were employed and 2.2 million were unemployed, equivalent to 11.7 percent of the total labour force in the country. Out of the employed, 8.5 million were females and 8.0 million were males. The unemployed males were 967,847 and females were 1,226,545. Nevertheless, according to the Population and Housing Census of 2002, active labour force population (15 64 years) was projected at 22,661,280 people in 2010. Agriculture sector remained the leading employer, whereby more than 70 percent of the people employed were engaged in agriculture. 153. In 2010, Tanzania Employment Services Agency (TaESA) provided employment services to 6,645 customers. Out of them, males were 4,398, equivalent to 66.2 percent and females were 2,247, equivalent to 33.8 percent. Moreover, the Agency provided services to job seekers by improving their curriculum vitae and enhances their entrepreneur skills. TaESA also conducted trainings on job search and interviews techniques, labour market information and advice on issues relating to employment services. Likewise, in ensuring the standards and quality of employment services provision in Tanzania, TaESA managed to register 14 private agencies and recognized other 20 agencies. 105
REGIONAL DISTRIBUTION OF TANZANIA POPULATION (2005-2010) Table No. 33 Region 2005 2006 2007 2008 2009* 2010** Dodoma 1,786,073 1,896,786 1,951,071 2,004,544 2,058,630 2,111,764 Arusha 1,427,904 1,475,489 1,522,975 1,570,394 1,617,728 1,664,780 Kilimanjaro 1,435,847 1,503,014 1,535,975 1,569,212 1,602,530 1,635,870 Tanga 1,716,271 1,753,284 1,837,661 1,880,389 1,923,468 1,966,908 Morogoro 1,881,113 1,929,087 1,975,160 2,021,713 2,068,426 2,115,275 Pwani 944,145 968,637 991,586 1,014,968 1,038,654 1,062,574 Dar es Salaam 2,799,241 2,801,675 2,881,548 2,961,150 3,040,118 3,118,132 Lindi 816,815 851,764 869,522 887,434 905,480 923,607 Mtwara 1,176,112 1,220,248 1,246,089 1,271,912 1,297,751 1,323,568 Ruvuma 1,192,680 1,235,161 1,268,738 1,303,330 1,338,800 1,375,017 Iringa 1,553,392 1,617,696 1,649,200 1,679,828 1,709,225 1,737,382 Mbeya 2,201,206 2,346,388 2,423,635 2,502,258 2,581,792 2,662,156 Singida 1,150,367 1,222,810 1,258,545 1,294,584 1,330,931 1,367,481 Tabora 1,887,507 2,004,115 2,086,048 2,170,926 2,258,664 2,349,374 Rukwa 1,251,697 1,302,278 1,349,579 1,398,866 1,450,118 1,503,184 Kigoma 1,910,592 1,970,750 1,601,020 1,669,078 1,740,111 1,814,158 Shinyanga 3,060,176 3,277,784 3,411,023 3,549,342 3,692,941 3,841,787 Kagera 2,206,814 2,210,217 2,293,093 2,379,637 2,469,904 2,563,870 Mwanza 3,196,714 3,168,904 3,265,729 3,364,378 3,464,566 3,566,263 Mara 1,461,270 1,572,068 1,631,031 1,692,449 1,756,442 1,822,866 Manyara 1,141,376 1,198,051 1,241,994 1,288,280 1,337,015 1,388,295 Tanzania Mainland 36,197,312 37,526,206 38,291,222 39,474,672 40,683,294 41,914,311 Kaskazini Unguja 146,221 155,066 160,175 165,544 171,150 177,095 Kusini Unguja 99,678 103,191 105,456 107,811 110,183 112,612 Mjini Magharibi 441,446 461,759 447,716 459,502 471,341 483,205 Kaskazini Pemba 196,221 216,174 224,951 234,142 243,759 253,999 Kusini Pemba 186,651 207,348 216,479 226,055 236,072 246,601 Zanzibar 1,070,217 1,143,538 1,154,777 1,193,054 1,232,505 1,273,512 Tanzania 37,267,529 38,669,744 39,445,999 40,667,726 41,915,799 43,187,823 Source: Ministry Finance and Economic Affairs * Data from the Population Census 2002 ** Projections based on the Population Census - 2002 106
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CHAPTER 7 PRIVATE SECTOR DEVELOPMENT Investment in the Country 154. In 2010, a total of 509 projects worth shilling 7,092,618.68 million with employment potential of 43,640 were registered compared to 572 projects worth shilling 2,970,730.1 million with 56,615 employment opportunities in 2009. Out of the total registered projects, 438 were new while 71 projects were for rehabilitation and expansion. By ownership category, 242 projects were owned by domestic investors, 160 projects by foreign investors while the remaining 139 projects were joint ventures. 155. In 2010, the manufacturing sector attracted the largest number of investors with 183 projects worth shilling 705,299.14 million with employment potentials of 14,327 people was registered. Investment distribution in other sectors was as follows: Tourism sector 103 projects, worth shilling 417,083.94 million with employment potential of 5,452; Commercial buildings 92 projects, worth shilling 1,925,186.06 million with employment potential of 5,078; Transport sector 62 projects, worth shilling 436,513.14 million with employment potential of 7,197; Agriculture 23 projects, worth shilling 663,710.60 million with employment potential of 5,169; Human resources 8 projects, worth shilling 6,076.6 million with 412 employment potential; Services 19 projects, worth shilling 213,127.60 million with 4,717 employment potentials; Financial institutions 4 projects, worth 2,294.6 million with employment potential of 86; Economic infrastructure 1 project, worth shilling 6,076.00 million with 22 employment potential; Communication 5 projects, worth shilling 260,008.00 million with employment potential of 529; Broadcasting 4 projects, worth shilling 158,886.00 million with 463 employment potentials ; Computer 1 project, worth shilling 1,218.60 million with 43 employment potential and the Natural resources sector 1 project, worth shilling 4,494.00 with 100 employment potential. 108
The Regional Distribution of Projects 156. In 2010, Dar es Salaam was the largest recipient of investments projects with 321 registered projects followed by Arusha with 55 registered projects. In other regions the investment level was as follows: Coast 28; Mwanza 20; Tanga 12; Morogoro 11; Iringa 9; Kilimanjaro, Mbeya and Dodoma 6 projects each; Mara 5 projects, Shinyanga, Mtwara, Ruvuma and Lindi 4 projects each; Kigoma, Kagera and Manyara 3 projects each; Tabora and Singida 2 projects each and Rukwa which registered one project. 157. In 2010, a total of 11,098 applications were handled by Tanzania Investment Centres (TIC) compared to 12,703 applications in 2009. The description of various applications at TIC has been shown in table No. 7.1. Table No. 7.1: Services Provided by Tanzania Investment Centre. Service 2009 2010 Immigration: Grade A 327 276 Grade B 2,578 2,386 Employment 3,473 3,284 Company Registration 104 49 Business Licences 62 75 Land 2,191 1,677 Tax 3,968 3,351 Total 12,703 11,098 Source: Tanzania Investment Centre 158. In 2010, the value of Foreign Direct Investment was estimated to be USD 573.3 million, compared to USD 558.4 million in 2009, equivalent to an increase of 2.7 percent. 109
Table No. 7.2: Foreign Direct Investment 1995-2010 Year Value of FDI (In USD million) 1995 150.9 1996 148.6 1997 157.8 1998 172.2 1999 516.7 2000 463.4 2001 467.2 2002 387.6 2003 308.2 2004 330.6 2005 447.6 2006 616.6 2007 653.4 2008 744.0 2009 558.4 2010 573.3* Source: Bank of Tanzania *Estimates The Improvement of Business Environment 159. In 2010, the government approved Public Private Partnership Act and the National Public Private Partnership Policy. The objective of the new Act and Policy is to put in place the excellent legal framework to evaluate the involvement of private sector in project investments, and in partnership with the Public sector. Similarly, the Government through a number of reform programs such as Legal Sector Reform Program (LSRP), Public Sector Reform (PSRP), Public Finance Management Reform Program (PFMRP), Local Government Sector Reform (LGRP), and Business Environment Strengthening for Tanzania (BEST) maintained her efforts to lessen bureaucratic inconveniences as a way of economizing the time for doing business. On the other hand, Tanzania was ranked 131 st on ease of doing business out of 183 countries according to the World Bank report compared to the 127 th position in 2009. 160. In 2010, the Government officially approved the implementation of a program for Improvement of Enabling Environment for Investment and Business. The program has identified key responsibilities to be implemented in consonance with 10 indicators. These indicators are: Starting a Business, 110
Closing a Business, Dealing with Construction Permits, Registering Property, Employing workers, Paying Taxes, Trading across Borders, Getting Credit, Enforcing Contracts and Protecting Investors. Through this initiative, a number of successes have been identified such as: simplifying the verification of the business name via the BRELA website (www.brela-tz.org) without writing a letter as it used to be; the availability of a sample of Memorandum and Article of Association online to help minimize business registration costs; and the commencement of business registration in consonance with One Stop Centre dictum. 161. In improving the transport business environment, in 2010 the Government ratified an agreement to improve the transport system project in trunk roads. The objective of this agreement is to identify and trim down the permanent road blocks. Currently, an initiative to remove the temporary road blocks while preserving permanent blocks in weigh bridge stations has been done from Dar es Salaam to Rusumo where a total of 15 road blocks will remain unchanged. ECONOMIC EMPOWERMENT Mwananchi Empowerment Fund 162. As of end-december 2010, the government through Mwananchi Empowerment Fund extended soft loans amounting to shillings 4.6 billion to entrepreneurs compared to shillings 3.4 billion in 2009, equivalent to an increase of 35.3 percent. The loans were extended to 30 Savings and Credit Cooperatives (SACCOS) in Mtwara, Lindi, Manyara, Singida and Rukwa regions. Such loans enabled the entrepreneurs to acquire farm implements such as power tillers and thus expand their production units as well as improving their income. As of end - December 2010, a total of shillings 4.3 billion had been repaid, equivalent to 94 percent of the borrowed amount. 111
Access to Credit 163. Implementation of the Economic Empowerment and Employment Creation Program continued in 2010 through CRDB and NMB banks and 12 other accredited financial institutions. In 2010, loans amounting to shillings 47.14 billion were extended to 72,197 entrepreneurs. Out of these, 45,858 were men, equivalent to 64 percent while 26,339 were women equivalent to 36 percent. As of end December 2010, a total of shillings 36.1 billion equivalent to 76.6 percent of the borrowed amount had been repaid. 164. In 2010, the government through Small Entrepreneurs Loan Facility (SELF) project extended loans worth shillings 8.7 billion. Loan repayment during the same period totalled shillings 6.1 billion, equivalent to 70.1 percent of the borrowed amount. Beneficiaries of this Facility were 8,631 low income earners in urban and rural areas, out of which 5,092 were women, equivalent to 59 percent while 3,539 were men equivalent to 41 percent. 112
SECTOR D'SALAAM MWANZA MOROGORO ARUSHA K/NJARO TANGA MBEYA DODOMA S'NYANGA TABORA KIGOMA KAGERA RUKWA MTWARA LINDI RUVUMA COAST MARA SINGIDA Manyara TOTAL Table Na. 7.1 TANZANIA INVESTMENT CENTRE (TIC) THE REGIONAL DISTRIBUTION OF PROJECT IN 2010 Agriculture and Livestock 1 0 4 2 1 2 1 0 0 0 0 0 0 0 0 2 6 1 0 1 23 Natural Resources 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 1 Tourism 55 3 2 22 3 4 1 0 0 1 0 0 0 1 1 0 5 2 1 1 103 Manufacturing 104 15 5 16 2 4 2 2 3 0 1 2 1 2 2 1 15 1 0 0 183 Petroleum Products and Mining 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Construction 76 1 0 7 0 1 0 3 0 0 1 0 0 0 0 0 1 1 0 0 92 Transport 49 0 0 5 0 1 2 1 1 1 1 0 0 0 0 0 1 0 0 0 62 Services 17 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 19 Computer 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 Financial 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 4 Communication 5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 5 Human Resource 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 1 0 0 0 1 3 Energy 5 0 0 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 8 Economic Infrastructure 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 Broadcasting 3 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 4 TOTAL 321 20 11 55 6 12 6 6 4 2 3 3 1 4 4 4 28 5 2 3 509 Source: Tanzania Investment Centre (TIC) 113
Table No. 34: Sector TANZANIA INVESTMENT CENTRE (TIC): APPROVED PROJECTS IN 2010 Total number of approved projects New projects Old projects (expansion and rehabilitati on) Local projects Foreign projects Joint projects Total employm ent Total investment (Shs. million) Agriculture and Livestock 23 21 2 12 6 5 5169 663,710.6 Natural Resources 1 1 0 0 1 0 100 4,494.0 Tourism 103 84 19 66 22 15 5452 417,083.9 Manufacturing 183 162 21 68 76 39 14327 705,299.1 Petroleum Products and Mining 0 0 0 0 0 0 0 0.0 Construction 92 85 7 43 30 19 5078 1,925,186.1 Transport 62 44 18 37 13 12 7197 436,513.1 Services 19 19 0 4 10 5 4717 213,127.6 Computer 1 1 0 0 0 1 43 1,218.0 Financial 4 2 2 0 0 4 86 2,294.6 Communication 5 5 0 2 1 2 529 260,008.0 Energy 3 3 0 1 1 1 45 2,277,800.0 Human Resource 8 6 2 5 0 3 412 20,921.6 Economic Infrastructure 1 1 0 1 0 0 22 6,076.0 Broadcasting 4 4 0 3 0 1 463 158,886.0 TOTAL 509 438 71 242 160 107 43640 7,092,618.7 Source: Tanzania Investment Centre (TIC) 114
CHAPTER 8 CROSS CUTTING ISSUES HIV/AIDS 165. In 2010, the Government continued with the implementation of National Aids Control Program by providing trainings on treatment and care to people living with HIV and AIDS as well as counselling and HIV testing services. The Government continued to improve those services by ensuring that antiretroviral drugs are available in health care centers. In addition, during the period services were expanded from 110 councils in 2009 to 133 councils in 2010. The number of people living with HIV and AIDS and accessing antiretroviral drugs increased by 10.3 percent from 284,227 in 2009 to 313,384 in 2010. Out of those, children under 15 years were 28,309 and adults above 15 years were 285,075. 166. In 2010, the HIV counselling and testing centers increased by 24.5 percent from 1,743 in 2009 to 2,170 centers. Training was provided to 300 additional HIV/AIDS counsellors and thus making a total of 5,365 counsellors nationwide. As of end December 2010, a total of 8,890,207 people were counselled, tested for HIV/AIDS and availed the results. Environment 167. In 2010, the Government continued to implement policies, strategies, laws and environment management regulations (Cap. 191). In 2010, three regulations for the implementation of the Environment Management Act were formulated, making the Act to have a total of 15 regulations, compared to 12 formulated in 2009 out of the 29 required regulations. Furthermore, three environmental management guidelines were prepared. These include: Guideline for the Preparation of Environmental Management for Ministries, Government Agencies and Local Governments; Communications Towers Guideline; and Guidelines to deal with Climatic Change challenges. 115
168. In 2010, the Government continued to enforce investors in the country to undertake Environmental Impact Assessment (EIA) before executing their projects. In addition there was an increase of projects evaluated and certified from 160 projects in 2008/09 to 220 projects in 2009/10, equivalent to an increase of 37.5 percent. This was due to increased investors awareness on the need to fulfil the requirement of the Environment Management Act (Cap.191), which among other things requires the investors to adhere to EIA before and after investment. Up to December 2010, a total of 49 experts of EIA and 22 environmental inspectors were registered and gazetted. In addition, 12 EIA consulting companies EIA and 10 environmental inspectors companies were registered. 169. In 2010, the Government finalized the National Strategy for Waste Product Management. The strategy identifies the management of eight types of wastes emanating from different activities in urban areas; minerals; agriculture and livestock; health services; plastics; electrical appliances and electronics; petroleum products including crude oil; and industries. Furthermore, the Government finalized the agreement with the Government of the Republic of South Korea on the implementation of waste management project in Dar es Salaam, Mwanza and Arusha cities. Feasibility study on the implementation of the project has been done. The Government continued to enhance the awareness of the public on the importance of separating solid waste to manage environmental pollution. A total of 60 programs on the stakeholders responsibilities on managing waste products were aired through TBC, ITV and STAR TV. 170. In 2010, the Government continued to implement various projects and programmes to conserve biodiversity. The programmes include: Lake Tanganyika Conservation Progamme; through this programme the government directed the establishment of Beach Management Units in 10 villages in Kigoma and Rukwa regions aimed at promoting sustainable fishing and Lake Tanganyika valley conservation; The Kihansi Environment Conservation 116
Project, whereby the Government continued with the frog breeding project in Bronx and Toledo zoo in America, and by May 2010 there were more than 5,500 frogs in those zoo; Marine and Coastal Environment Management Project (MACEMP), whereby the Government facilitated the preparation and implementation of the action plans for effective management of the coastal environment in 14 councils; and Regional Program for the Sustainable Management of the Coastal zone of the Countries of Indian Ocean (ReCoMap), whereby a total of 16 projects managed by CSOs and NGOs have been sponsored. 171. In 2010, the Government continued to address the impact of climatic change by coordinating the implementation of the Kyoto Protocol which aims at reducing the production of carbon dioxide. Further, the Government approved three projects to reduce the green house gases. Those projects were: Hydropower generation projects at River Mwega (Mufindi) and Ruhudgi (Njombe); as well as electricity generation through the use of tree residues and rice husk at Mbeya cement factory. Those projects aimed at generating renewable energy and connecting to the national grid. Good Governance 172. In 2010, the Government continued with its desire to provide rights to the citizens by translating 14 laws from English language to Swahili. Likewise, the Commission for Human Rights and Good Governance continued with its efforts to promote, protect and maintaining human rights and good governance in the society. 173. In 2010, the Commission continued to handle people s complaints, whereby a total of 7,858 old and new complaints were handled. Out of those, 1,003 complaints were investigated and completed while 6,855 continued to be investigated compared to 1,746 complaints received in 2009, whereby 657 complains were investigated and completed. 117
174. In 2010, the Court of Appeal received 2,624 cases, out of which 627 cases were completed and 1,997 cases continued to be handled, compared to 18,805 cases in 2009 whereby 9,590 cases were completed. In addition, 62,154 cases were filed in the District and Resident Magistrate Courts. Out of those, 46,977 cases were heard and 15,177 cases were still in the process of being heard compared to 61,237 cases filed in 2009, whereby 42,725 cases were finalized. Likewise, in Primary Courts, a total of 218,767 cases were reported, whereby 167,228 were filed and 51,939 continued to be handled. 175. In 2010, the Government continued to implement the Second Phase of the National Anti-Corruption Strategy and Action Plan (NACSAP II). Towards the implementation of the strategy, the Prevention and Combating of Corruption Bureau (PCCB) received and investigated 870 cases, out of those 587 cases were filed to the court and 64 cases finalized compared to 884 cases investigated in 2009 whereby 463 were filed to court and 46 cases completed. 176. In 2010, the Government continued to conduct training on Good Governance, whereby 21 ethics committees and 32 public institutions were trained on good governance and management of National Anti-Corruption Strategy compared to 15 ministerial ethics committees and 25 public institutions. Gender 177. In 2010, a total of 40 participants from different sectors participated in the training on mainstreaming gender to plans, programs and budgets. Those participants included 11 members from Gender Committee of the Ministry of Community Development, Gender and Children, and 29 officers from different Ministries. This number of participants decreased from 175 in 2009 to 40 in 2010 due to budget constraint. 178. In 2010, the training on eradication of violence against women, children and albino was conducted. The training involved 40 heads of police posts, and 43 village leaders from Kigoma, Arusha, Dodoma, Tabora and 118
Manyara regions. In addition, the same training was conducted to 106 law enforcers in Rorya, Tarime, Bukombe and Kahama districts. Public Safety 179. In 2010, the public safety was generally peaceful despite the existence of sporadic crime and traffic offences. A total of 62,133 criminal offences were reported in all police stations in 2010 compared to 69,134 offences reported in 2009. The number of reported offences decreased by 7,001, equivalent to 10.1 percent decrease. 180. The road accidents reported in police stations in 2010 were 24,926 compared to 22,019 accidents in 2009, equivalent to an increase of 2,907 accidents or 13.2 percent increase. In addition, a total of 3,687 people died on road accidents while 22,064 people were injured in 2010 compared to 3,851 people died and 18,830 people injured in 2009. The number of people who died on road accidents decreased by 4.3 percent while the number of injured people increased by 17.2 percent. High rate of road accidents was due to: reckless driving; high speed by some drivers; poor infrastructure in some parts of the country; defective vehicles; negligence on road safety rules by some road users (pedestrians, motorcyclist and bicycles riders); and drunkenness. 181. As of end-december, 2010, the total number of refugees in the country was 109,286 compared to 273,782 refugees in 2009. Those refugees came from Burundi (47,350 refugees), Democratic Republic of Congo (60,186), Somalia (1,488) and other countries such as Rwanda, Uganda, Sudan, Ethiopia and Zimbabwe all with a total of 262 refugees. Further, in 2010, a total of 162,256 refugees were granted Tanzania citizenship and 1,092 returned to Burundi. 182. In 2010, a total of 628,795 foreigners entered Tanzania compared to 756,363 foreigners in 2009, equivalent to a decrease of 16.9 percent. In addition, 775,310 foreigners returned to their respective countries 119
compared to 755,004 foreigners in 2009, equivalent to an increase of 2.7 percent. In 2010, a total of 19,550 residence permits (visas) were granted to foreigners to undertake different economic activities in the country compared to 17, 650 visas granted in 2009, equivalent to an increase of 10.8 percent. 120
CHAPTER 9 REVIEW OF THE IMPLEMENTATION OF NATIONAL STRATEGY FOR GROWTH AND REDUCTION OF POVERTY (NSGRP) Introduction 183. The first phase of the implementation of National Strategy for Growth and Reduction of Poverty (NSGRP) ended in 2010. The Strategy was implemented for a period of five years from 2005/06 to 2009/10. During its implementation, various stakeholders including MDAs, Non-state actors, private sector and Development Partners participated effectively in the three identified clusters, which are: Growth and Reduction of Income Poverty, Improving Quality of Life and Social Well-being and Good Governance and Accountability. Achievements recorded during the period, challenges and lessons learned were critically analysed in the MKUKUTA Annual Implementation Report (MAIR 2009/10). In addition, following completion of MKUKUTA-I, the Government prepared MKUKUTA-II which was launched in October 2010.. The design of MKUKUTA- II was based on the challenges and lessons learned during the implementation of MKUKUTA-I in order to improve its implementation. The process of preparing MKUKUTA-II involved a wide range of stakeholders and will be implemented for a period of five years (2010/11 2014/15). Some of the ongoing MKUKUTA-II activities includes: preparations of MKUKUTA Implementation Guide and identifying sectoral Priority Programmes, preparations of MKUKUTA Monitoring Master Plan and the Communication Strategy. 184. As 2010 was the ending year for the implementation of MKUKUTA-I, the analysis of various MKUKUTA-I indicators were identified in the three clusters of MKUKUTA for the entire implementation period, as follows: Growth and Reduction of Income Poverty 185. Over the last four years (2006-2009) of MKUKUTA-I implementation, the Tanzanian economy recorded impressive performance despite the adverse impact emanating from soaring of oil prices in the world market, drought 121
experienced in many parts of the Country during 2005/06 and 2008/09, and unreliable power supply. The real GDP growth averaged 6.9 percent between 2005 and 2010 and thus was in line with MKUKUTA target of 6-8 percent by 2010. 186. Report of the Integrated Labour Force Survey (ILFS) of 2005/06 revealed that employment has been expanding by absorbing 40,000 workforces per annum, whereby about 760,000 people enters the labour market annually. The MKUKUTA target was to reduce unemployment rate from 12.9 percent in 2000/01 to 6.9 percent in 2010. The survey undertaken in 2006 revealed that 11 percent of the active labour force was unemployed. Unemployment was high in Dar es Salaam city whereby statistics shows that 31.4 percent of the active labour force in the city was unemployed. In other urban areas, unemployment rate was 16.3. Likewise, statistics shows that, unemployment rate was higher for women than men in urban areas. 187. The Household Budget Surveys (HBS) of 2000/01 and 2007 for Tanzania Mainland showed that Tanzanians who cannot meet basic needs decreased from 35.6 percent in 2000/01 to 33.4 percent in 2007. The incidence of poverty in rural areas decreased from 38.7 percent in 2000/01 to 37.4 in 2007. In Dar es Salaam city, the incidence of poverty decreased from 17.6 percent in 2000/01 to 16.2 percent in 2007and in other urban areas, the incidence of poverty decreased from 25.8 percent to 24.1 percent during the same period. Generally, the rate of poverty decreased by 2.2 percentage point between 2000/01 and 2007. 188. The Poverty and Human Development Report (PHDR) of 2009 showed that there is a close relationship between poverty, economic growth and income inequality. The analysis of the report also revealed that the good performance of the economy since 2000/01 has not been translated significantly into the reduction of income poverty. Increasing income inequality could have been one of the reasons, but income inequalities among Tanzanians have not changed. The analysis of HBS 2000/01 and 2007 122
indicated that income inequality measured by Gini coefficient remained at 35 percent. In Dar es Salaam city, income inequality decreased from 36 percent to 34 percent during the same period. Table 9.1: Trend in Poverty Indicators (Percentage) Indicators Survey Year Country Level DSM Other urban Rural Poverty 2000/01 35.6 17.6 25.8 38.7 Income Difference 0.35 0.36 0.36 0.33 Poverty 2007 33.4 16.2 24.1 37.4 Income Difference 0.35 0.34 0.35 0.33 Change (2000/01-2007) Source: PHDR 2009 2.2 1.4 1.7 1.3 Improving Quality of Life and Social Well-being 189. In the course of improving quality of life and social well-being, the most common applicable indicators are those related to education, health, and water. Information generated by the MKUKUTA Monitoring System indicates that there have been impressive performances in 2009/10 at all level of education including increased gross enrolment rate at pre-primary, primary, Secondary, Vocational and Higher education levels. Achievements were also recorded in maternal and child health as portrayed by the decline in maternal mortality rate as per the Demographic and Health Survey (DHS 2009/10) report. The Malaria Control Strategic Plan has also been successful since the percentage of households owning at least one bed net has increased from 56.3 percent in 2007/08 to 74.7 percent in 2009/10. The number of HIV positive women receiving ARVs and preventing mother to child transmission and the number of people with advanced HIV Infection receiving ARV increased. The proportion of population with access to clean and safe water in both rural and urban areas also increased. The trend of some social indicators is as indicated in table below. 123
Table 9.2 Status of quality of life and social well-being indicators Indicators 2005/06 2010 2010 Baseline Actual Target Under 5 mortality 1000 live births 112 81 79 Infant mortality per 1000 live births 68 51 50 Maternal mortality 578 454 265 HIV prevalence amongst 15-24 years old 7.4% 5.7% 5% Net Primary school enrolment 96.1% 95.4% 99% Primary school dropout rate 2.6% Primary pupil/teacher ratio 56:1 51:1 45:1 Proportion of under fives wasted 21.9% 21% Proportion of under fives moderately stunted (height 21.9% 35% 20 for age) Source: MAIR 2009/10 Good Governance and Accountability 190. During the period of MKUKUTA-I implementation, there have been improvement in the management of Government revenues and expenditure.. The Government in collaboration with other stakeholders continued to enhance accountability in its institutions with specific focus on the LGAs. The Decentralization by Devolution policy has enabled the availability of financial resources in LGAs and therefore improved accountability in expenditures. Currently, LGAs are required to post budget reports which include revenues and actual expenditures on easily accessible public notice boards. 191. In 2009/10, the Government initiated the National Identity processing system by establishing the National Identity Authority. The Authority is vested with the task of coordinating the system that will eventually issue national ID to all residents. Public education campaigns are going on to create awareness to the citizens about the importance of the National Identity. 192. In order to create gender balance in administrative and leadership posts, women in decision making posts increased from 26 percent in 2005 to 31percent in 2010. The number of women in decision making posts between 124
2005 and 2010 increased as follows: Judges-13 to 34; Ministers - 4 to 7; Permanent Secretaries- 7 to 9; Regional Administrative Secretaries- 4 to 10; District Commissioners- 20 to 25; Council Directors- 14 to 35; and Directors in Ministries and Agencies- 19 to 133. 193. In 2009/10, the Government continued to improve land use management in many aspects. A total of 21,160 plots were surveyed under Business and Property Formalization Programme. Out of the surveyed plots, 17,526 plots were registered in computerized systems in order to issue land title deeds of which, 8,109 title deeds were prepared. Land titling is crucial for dispute resolution, accessing various resources such as credit and enhancing government revenue collection. 194. The number of LGAs with unqualified reports increased from 53 councils in 2005/06 to 77 in 2008/09. The observed improvement is attributed to enhanced human resources capacity, particularly accountant professionals, as well as increased use of IFMS and Plan-Rep tools. 195. In an effort to strengthen the fight against corruption, a total of 755 new corruption cases were filed in the court of laws between 2005 and 2010. Out of those, the Government won 155 cases and recovered shillings 28,827,667,374. Further, the government has filed 19 grand corruption cases since 2005. As a way to speed up court case hearing, various initiatives have been undertaken by the Government, including: appointment of more judges, resident magistrates, primary court magistrates, state attorneys, and law secretaries. For instance, the number of judges in the court of appeal increased from 8 judges in 2005 to 21 judges in 2010, and the number of judges in the high court increased from 24 judges in 2005to 68 judges in 2010. 125
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CHAPTER 10 EXPANDING FINANCIAL SERVICES TO THE UNBANKED COMMUNITY Introduction 196. The objective of financial inclusion is to ensure timely delivery of financial services to disadvantaged sections of the community at affordable cost. This encompasses the two dimensions of financial inclusion as per United Nations definition of 2006. Firstly, financial inclusion refers to a customer having access to a range of formal financial services, from simple ones like credit and savings to more complex ones like insurance and pensions. Secondly, financial inclusion implies that customers have access to more than one provider of financial services so that clients have access to a variety of competitive options. We are taking this aspect of financial inclusion an issue for discussion because; various studies lead us to believe that a well functioning financial system is linked to faster and equitable socio-economic growth. Background 197. Poverty in Africa is a predominantly rural phenomenon, although the urban poor are now perhaps the fastest growing segment of the poor as urbanization has picked up speed without matching growth in job opportunities. Agriculture, informal sector activities and small and medium scale enterprise together present the largest source of livelihood to the majority of our citizens and indeed to the majority of the poor. The growth of these sectors in turn, as widely documented in various studies, and has been constrained by poor access to credit and other financial services. For example, the 2010 Study done by the Overseas Development Initiative (ODI) stated that financial services enables households to invest in activities that are likely to contribute to higher future income and, therefore, to growth. The Study which was conducted in Kenya and Tanzania showed that there is link between access to financial services and household investment in education or a 127
business, which can contribute to economic growth. For example, the reason given for borrowing was to invest in education and business in Kenya and Tanzania respectively. In addition, while semi-formal and informal financial services are important and accessible, households in Kenya are more likely to use formal financial services for investment than in Tanzania. 198. Alliance for Financial Inclusion Report of 2009 stated that over half of the world's adult population, which is about 2.5 billion people lacks access to formal financial services. About 90 per cent of the 'unbanked' community live in developing countries. The report further states that Greater financial inclusion mechanisms can bring these people into the financial system so that they have the opportunity to access financial services ranging from savings, payments and transfer to credit and insurance. This initiative will have positive effects on economic growth, financial stability and social cohesion. 199. Further, the World Bank estimates that across Sub Saharan Africa, only 20 percent of households have accounts with financial institutions compared to about 90 percent in advanced countries. Furthermore, in small firms, only 15 percent of new investments are financed through loans from the bank compared to 30 percent in large firms, limiting their capacity to expand. Many enterprises in Africa complain more about lack of bank loan and limited insurance services than other regions of the world. In Sub Saharan Africa, one branch is catering for the banking needs of more than 50,000 people compared to less than 4,000 people in advanced countries. 200. However, these averages mask great disparities across countries in Africa. According to FinScope Africa Brief of 2010, the proportion of the unbanked population in East Africa is highest in Uganda (62 percent), Rwanda 56 percent, Tanzania 52 percent and Kenya only 32 percent. The proportions not served by any financial institution formal or informal is more than 40 percent in most Sub Saharan Africa. The proportion of the population served 128
by the informal financial sector in a large number of those countries exceeds that served by the banking sector. 201. Over the last two decades, the financial landscape in Sub Saharan Africa has changed rapidly, with the banking system now offering a wider range of services at a greater scale and across a wider area. A number of factors have been responsible to these developments, out of those, three key reasons include: i) Financial sector reforms, which have reduced barriers to entry, improved the capacity of financial institutions to mobilize savings, and promoted greater competition; ii) Technological innovations, which have extended affordable and convenient financial services, particularly to rural populations; and iii) The growth of specialized microfinance institutions, which have used innovative techniques such as group lending to deliver financial services to the poor. 202. Though the financial system in Sub Saharan Africa has shown tremendous growth in volume and complexity during the last few decades, there are challenges that sizeable segment of the population, particularly the vulnerable groups, such as low income groups, continue to remain excluded from even the most basic opportunities and services provided by the financial sector. The reasons may vary from country to country and hence the strategy to address this situation could also vary. However, financial inclusion to the low income earners can improve their standards of life and ultimately contribute to economic growth. Financial Sector in Tanzania 203. The financial sector in Tanzania has undergone substantial structural change since the liberalization of the sector in 1991. The financial landscape is comprised of mainly banks, pension funds, insurance companies, and other financial intermediaries. However, the sector is dominated by banking 129
institutions which account for 75 percent of the total assets of the financial system, followed by pension funds whose assets account for 21 percent and the insurance sector with 2.0 percent of the total assets, while the remaining financial intermediaries hold 2 percent. The figure below indicates composition of the financial system in terms of asset ownership. Figure No. 10.1: Financial Sector Asset-Based Composition June 2010 204. Financial sector assets have expanded rapidly in the past decade from a total of shilling 1,637 billion at end of December 2001 to shilling 10,040 billion in December 2009. The growth was attributed to increase in private sector deposits in the banking system. 205. Despite the rapid growth in financial assets, the financial system depth remains small and access to finance is limited for both urban and rural population. According to Fin-Scope Survey which was conducted in 2009, the proportion of adult population who use banks and other formal financial institutions was 12.4 percent only representing about two million adults (mostly urban) out of the estimated twenty million adults. Efforts to improve financial literacy in order to enhance financial inclusion and consumer protection are part of the Second Generation of Financial Sector Reforms. The financial literacy programme aims at empowering more individuals to make 130