Debt burden can persist with gas economy, experts warn

A ship prospecting for natural gas in Tanzania’s waters. PHOTO|FILE

By Ludger Kasumuni The Citizen Reporter


IN SUMMARY

He also said that although Tanzania’s economy has been growing at the average rate of seven per cent for the past three years, growth has not been inclusive as the rich have benefited more than the poor.



Dar es Salaam. There is no guarantee that the gas economy would lessen Tanzania’s debt burden because it is not the only solution to the country’s economic woes, according to experts.

This comes amid much anticipation by Tanzania that with gas finds, it would easily attain the middle income status as envisaged in its Vision 2025.

Presenting a paper at the University of Dar es Salaam on Monday, the International Monetary Fund (IMF) deputy director for Africa, Dr Roger Nord, said on the contrary Tanzania could find itself increasing volume of debts with more exploitation of natural resources when the sector is not well managed.

“The challenge in depending much on natural resources is that they are volatile. Another challenge is that without improved infrastructure economic growth can never be sustained,” he said.

In his presentation titled; “Africa opportunities and challenges,” Prof Nord said that for African countries, including Tanzania to attain inclusive and sustainable growth, they must be well manage to shift the economy from being agrarian-based to industrialisation.

He also said that although Tanzania’s economy has been growing at the average rate of seven per cent for the past three years, growth has not been inclusive as the rich have benefited more than the poor.

Prof Amon Mbele of Economics Department at UDSM supported the argument adding that there is widening of the resource gap as shown by increased debt burden despite existing natural resources. “We are staking everything on gas as if it is a single cure of economic problems. But we might end up without tangible benefits,” he said.

According to him, the case in point is inability to attain most of Millennium Goals with exemption of goal No. 2.

He also said that the cherished economic growth rate of seven per cent has merely reduced poverty at the rate of 0.5 per cent annually. “This means that 6.5 per cent of economic growth rate in the country has been lost without helping the poor,” he said.