By Timo Shihepo
Windhoek - Tanzania has been outperforming its Southern Africa Development Community (SADC) regional counterparts in terms of economic growth since last year.
According to latest information from SADC Secretariat, World Bank and Tanzania finance and planning minister, the country has also the best economic growth within the East African Community (EAC) recording growth of 7.1% in 2017.
It means that Tanzania is the only SADC country to meet the regional real Growth Domestic Product (GDP) target of 7%.
In contrast, the largest economy in the region, South Africa grew by 1.3% while Namibia’s economy grew by a mere 0.7%. Zimbabwe’s economy grew from 0.7% in 2016 to 2.8% in 2017 thanks to a rebound in agriculture, but saw inflation accelerating to 7% by December.
Following Tanzania but still far below were Botswana (4.5%) and Zambia (4.1%).
After failing to meet regional fiscal deficit target in 2016, Tanzania is one of the only five countries to meet the regional fiscal deficit target of 3% in 2017.
Other countries were Botswana, Democratic Republic of Congo (DRC), Madagascar, Seychelles and Tanzania.
Fiscal deficit is the difference between the government's expenses and its revenues (excluding the money it's borrowed).
Despite other SADC countries struggling with growth, the World Bank has forecasted the Tanzania economy to grow by 6.8 in 2018 as inflation eases. In contrast, the region’s largest economy, South Africa is only expected to record a 1.1 per cent growth in 2018 from 0.8 per cent in 2017.
Tanzania’s economic growth is being driven by a tightening trade deficit, with a drop in imports outweighing a decline in exports. Public investment, particularly with on-going implementation of larger infrastructure projects, is expected to boost growth in 2018 and beyond.
“However, uncertainty in the Tanzania business environment, combined with stalling private-sector credit growth, could hinder private-sector investment,” an African Development Bank (AFD) report says.
Growth in Tanzania is being recorded at time when the region is facing economic difficulties.
In 2017, the region’s economic growth averaged at a mere 1.9% with several countries suffering in setback in real per capita growth. The 2017 fiscal deficit of the region was recoded at 4.8% of the gross domestic product, compared to a deficit of 4.6 GDP in 2016.
In 2017, weakening currencies and impact of weather-related factors of 2015/16 continued to impact inflation. Provisional figures indicate that the region recorded an average inflation rate of 10.7% in 2017 compared to an average of 11.1 % in 2016.
Public debt also continues to rise for SADC countries. The region is estimated to have recorded a public debt of 51.2% of GDP in 2017 compared to an average of 48.1% of GDP in 2016. However, all member states except for Angola, Mozambique, Seychelles and Zimbabwe met the regional target of public debt of 60% of GDP.
United Nations Economic Commission for Africa has urged SADC to improve infrastructure development as it will help to facilitate intra-regional trade, export product diversification and competitiveness in the SADC economies, by creating large efficient markets and lowering production costs.