Business
Tanzania Likely to Grow at Seven Percent in 2014
… While Targeted Safety Net Cash Transfers Could Help Reduce Extreme Poverty
DAR ES SALAAM – Tanzania’s economy is likely to grow at approximately seven percent annually for the next two years, with inflation stabilizing at around five percent largely due to falling food prices and tight monetary policies.
The current account deficit should remain equivalent to a value of 13 -15 percent of GDP, unless there are significant changes in global commodity prices and in the demand for Tanzanian products, according to the World Bank’s latest Tanzania Economic Update released today: ‘Raising the Game: Can Tanzania Eradicate Extreme Poverty,’
The World Bank report says that, as in the recent past, Tanzania’s economic growth is driven by a number of industries predominantly located in cities, in the communication, transportation, construction, and retail trade sectors. The report argues for increasing productivity in agriculture and creating more good jobs off the farm. But it also highlights that such strategies are not enough to get everyone out of poverty. Global experience shows that even when agriculture productivity increases, the poorest families tend to be left behind.“This underscores the importance of highly targeted safety net programs to support the most vulnerable,” says Philippe Dongier, the World Bank’s Country Director for Tanzania, Uganda and Burundi.
The latest Economic Update highlights the success of conditional cash transfer programs around the world, including in a pilot program implemented by the Tanzania Social Action Fund (TASAF) which is showing promising results in addressing the needs of the poorest households. Parents who receive the small monthly transfers spend the money on extra food and on education and health of their children.
The country’s latest Household Budget Survey shows that 12 million Tanzanians are still trapped in poverty today. At least 4.2 million of these constitute the ‘extreme poor’ for whom life means constantly choosing between difficult options, such as keeping the eldest child in school or pulling her out of class permanently to help grow more food on the family farm.
Without access to targeted safety nets, most extreme poor households in Tanzania depend on their relatives or use other social ties to survive in times of hardship. As the Economic Update puts it, “the families of vulnerable Tanzanians are themselves often very poor and thus cannot always provide support.”
“The experience with TASAF has shown that people can do a lot with just a little extra money and that they tend to spend their money wisely. Some spend it on their children’s immediate wellbeing, while others save to invest or to cushion themselves in the face of future hardships,” said Dongier.
“Safety nets in Tanzania currently amount to only one percent of total public expenditure, which is equivalent to less than 0.3 percent of GDP. This is insufficient to urgently address vulnerability among the extreme poor,” says Jacques Morisset, the Bank’s Lead economist for Tanzania, Uganda and Burundi and author of the latest report. “While investments in infrastructure, agriculture, education and health are essential for inclusive growth, well-targeted cash transfer programs can improve the living conditions of extremely poor households,” adds Morisset.
The Tanzania Economic Update is a biannual publication which reports on the state of the country’s economy.
The Central Bank of Nigeria (CBN) has increased the Monetary Policy Rate (MPR) from 27.25% to 27.50%, marking a 25-basis-point hike.
The announcement was made on Tuesday by the CBN Governor, Yemi Cardoso, following the Monetary Policy Committee’s (MPC) final meeting for the year at the apex bank’s headquarters in Abuja.
Governor Cardoso stated that the decision to raise the MPR, which serves as Nigeria’s benchmark interest rate, was unanimously agreed upon by the committee.
He explained that the adjustment is part of efforts to address prevailing economic challenges while ensuring stability in the financial system.
Other key monetary policy parameters remain unchanged. The Cash Reserve Ratio (CRR) stays at 50% for Deposit Money Banks and 16% for Merchant Banks.
Similarly, the Liquidity Ratio (LR) was maintained at 30%, with the Asymmetric Corridor retained at +500/-100 basis points around the MPR.
More to follow……….
In a blitz of honour, the Pan-Africa Conglomerate, Dangote Industries Limited (DIL), and its subsidiaries Dangote Cement Plc and Dangote Refinery and Petrochemicals stole the show at the Nigeria Employers Consultative Association (NECA) during its 2024 annual night of recognitions.
Biztellers reports that they carted away excellence awards bestowed by the private sector employers’ body, in Lagos, over the weekend.
Specifically, the Dangote Group was recognised under the Visible Impact Award for Resilience & Entrepreneurship; Dangote Cement won the Sectoral Excellence Award in the Chemical and Non-Metallic Products category, while the 650,000bpd capacity world’s largest single train refinery, Dangote Refinery won the Groundbreaking Investment award.
Basking in the euphoria of the recognitions, DIL’s Vice-President, Oil and Gas, Devakumar Edwin, described them as reflecting the values of the Dangote Group and its subsidiaries as top employers of labour showing resilience in the face of tough business operating environment.
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According to him, the award would only spur the management of Dangote to continue in the trajectory of the fine best global best practices in business with more investments in the task of rejuvenating the nation’s economy.
In the same vein, Minister of Industry, Trade and Investments, Dr. Jumoke Oduwole and her counterpart in Aviation and Aerospace Development, Mr. Festus Keyamo (SAN) were recipients of the “Visible Impact in Public Service Award.”
This year’s awards, dubbed “Defying the Odds”, NECA said, was geared towards promoting and encouraging best practices in Corporate Performance, People Management and Industrial Relations practices amongst employers in Nigeria.
This, it explained, was in a bid to celebrate outstanding contributions of enterprise to national development, noting that the award provided a platform for celebrating the resilience, doggedness and outstanding performance of employers in Nigeria.
In his welcome address, President of NECA, Dr. Ifeanyi Eric Okoye, noted that the award ceremony was to celebrate the excellence, resilience, innovation and unwavering commitment demonstrated by businesses across the various sectors of the Nigerian economy in 2024.
He said the Awards’ theme, “Defying the Odds,” reflected the indomitable spirit of the Nigerian enterprises that had consistently risen to the challenges posed by the dynamic and demanding local and global economic landscape.
Said he, “This annual ceremony is a testament to remarkable progress made by organisations that share our vision of a thriving private sector as the bedrock of national development. Over the years, the NECA’s Excellence Award has become a hallmark of prestige highlighting organisations that exemplify best practices in corporate governance, industrial relations and environmental sustainability.
“Our honours tonight do not only serve as a beacon of hope, and a reminder that in the face of adversities excellence is achievable, it is also an opportunity to increase visibility by highlighting their achievements and innovations to a wider audience.
“As we celebrate tonight, let us not only celebrate the achievements of the award recipients; let also celebrate all businesses here present and those that have left in the past few years and recommit ourselves to fostering innovation, inclusivity and resilience in all that we do. Together we can build a future where Nigerian enterprises thrive as global leaders.”
In the same vein, the Director General of NECA, Mr. Adewale-Smatt Oyerinde, explained that the awards were a statement that, irrespective of the challenges the private sector employers have been facing “since January till now, there is time for all of us to sit down and just breathe and celebrate the resilience, doggedness, innovations your businesses were able to bring on-board and their contributions to national development”.
Oyerinde stated further: “So, we are gathered this evening to celebrate your businesses, contribution and support to NECA. We have broken away from the traditional issues of labour and employment that you know us with and are now dealing with all fundamental issues that affect your businesses either now or in the future like Environmental, Social and Governance in sustainability issues.
“We are also deepening our collaboration with CIPE moving into the realms of ethics with emphasis on doing business correctly. We are also deepening our engagements with the International Labour Organisation (ILO) in the context of responsible business conduct for our members to operate responsibly within the context of the law.
“This strengthens our hands to advocate against unfavourable business regulations that see businesses as cash cows rather than agents of national development.”
Lagos State Governor, Mr. Babajide Sanwo-Olu, represented by Head of Service, Lagos State, Mr. Shuaheeb Agoro, commended the NECA for its remarkable legacy of championing enterprise, competitiveness, responsible business practices and industrial harmony describing the award as another remarkable way of motivating employers in the private sector.
Sanwo-Olu said, “This year’s theme could not to be more apt as it speaks to the determination that Nigerian employers have continued to demonstrate in overcoming challenges to sustain businesses, create jobs and drive national development. This resilience is a reflection of enduring entrepreneurial spirit that defines our great nation.”
The governor pointed out that the award inspires the culture of best practices in corporate governance, industrial relations, environmental sustainability and responsible business conduct.”
Nigeria’s Gross Domestic Product (GDP) grew by 3.46% year-on-year in the third quarter of 2024, marking a strong performance compared to the 2.54% growth recorded during the same period in 2023 and 3.19% in Q2 2024, according to the latest data from the National Bureau of Statistics (NBS).
The growth was largely fueled by the services sector, which expanded by 5.19% and contributed 53.58% to the overall GDP.
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“The performance of the GDP in the third quarter of 2024 was driven mainly by the services sector,” the NBS stated in its report.
Key areas in this sector, including financial institutions, telecommunications, and trade, played significant roles in the economy’s growth.
The agriculture sector, while still positive, showed a slight slowdown, growing by 1.14%, compared to 1.30% in Q3 2023.
The industrial sector, however, posted a notable recovery, increasing by 2.18%, a marked improvement from the 0.46% recorded in the same quarter of 2023.
In nominal terms, Nigeria’s GDP at basic price for Q3 2024 reached N71.13 trillion, a substantial 17.26% increase from the N60.66 trillion recorded in Q3 2023.
“This performance is higher when compared to the third quarter of 2023, which recorded an aggregate GDP of N60,658,600.37 million, indicating a year-on-year nominal growth of 17.26%,” the NBS added.
The non-oil sector also showed strong performance, growing by 3.37% in real terms during Q3 2024, outperforming the 2.75% growth seen in the same quarter of 2023 and exceeding the 2.80% growth recorded in Q2 2024.
“The sector was driven in the third quarter of 2024 mainly by financial and insurance (financial institutions); information and communication (telecommunications); agriculture (crop production); transportation and storage (road transport); trade; and construction, accounting for positive GDP growth,” the NBS explained.
Despite the growth in the non-oil sector, its share of the total GDP decreased slightly to 94.43%, compared to 94.52% in Q3 2023, though it remained higher than 94.30% in Q2 2024.
The oil sector, in contrast, recorded a 5.17% year-on-year growth in Q3 2024, reversing the -0.85% decline seen in the same period in 2023.
However, growth slowed from the 10.15% recorded in Q2 2024. The NBS reported that Nigeria’s oil production averaged 1.47 million barrels per day (mbpd) during the third quarter, a slight increase from 1.45 mbpd in Q3 2023 and 1.41 mbpd in Q2 2024.
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