A model of African development
TANZANIA'S SOUND FINANCIAL POLICIES AND LONG-TERM ECONOMIC GROWTH HAVE ENSURED THE COUNTRY IS HELD IN HIGH ESTEEM BY INVESTORS THE WORLD OVER. WITH A MAJOR PROGRAM OF PRIVATIZATION UNDERWAY AND INVESTMENT-FRIENDLY BANKING REFORMS IN THE PIPELINE, TANZANIA IS SET TO BUILD ON ITS ENCOURAGING GDP GROWTH OF RECENT YEARS

DAR ES SALAAM port: an historic East African gateway.

Although Tanzania is famed for two of the continent’s most evocative sights–the snow-capped peak of Mount Kilimanjaro and the vast plains of the Serengeti National Park–it is for an entirely different reason that the East African republic is now aiming to catch the attention of the outside world.
Tanzania is in the midst of an ambitious program aimed at stimulating its economy and bringing about a much-needed improvement in the standard of living of its 32 million inhabitants. It is hoped that the successful implementation of the program will act as a model for the rest of Africa to follow.

President Benjamin Mkapa’s government, which has been in power since the country’s first multi-party elections in 1995, has won praise from the IMF for its efforts to restructure the economy and make Tanzania a more
attractive destination for foreign investment.
According to the IMF, the republic is one of just five African countries which are expected to continue attracting investment and long-term economic growth because of sound macro-economic and structural policies.
The Mkapa administration has notched some significant successes since its re-election in October 2000. Inflation has fallen to a 25-year low of 5%, real economic growth is averaging close to 5% a year, while the current account deficit in the balance of payments is being brought under control.

The government has also introduced a raft of reforms designed to dismantle previous economic controls and to improve the investment climate. Measures such as the redrafting of tax codes, the introduction of a floating exchange rate, the licensing of foreign banks and the creation of an investment center to cut red tape have all been pushed through in recent years.
In order to encourage more active participation by the private sector, the government has divested itself of close to 90% of the 400 or so state-owned enterprises and some of the largest and most important enterprises in the sectors of water, electricity and transportation are next up to be privatized.
The administration received a major boost with the news last November that the IMF and the World Bank offered the country $3 billion in debt relief, a move which will almost half the country’s external debt. In response the government has earmarked the money freed-up by debt relief for anti-poverty programs in education, health and infrastructure.

FREDERICK TIUWAYE SUMAYE Prime Minister

Obstacles still remain, however, if ordinary Tanzanians are to feel the benefit of economic reforms. In order to achieve higher growth figures needed to alleviate poverty, further foreign investment must be attracted. Some 80% of Tanzania’s overwhelmingly rural population are employed in agriculture, while the sector accounts for some 60% of the country’s GDP. As a result the development of the related agrobusiness sector is seen by many experts as the key to future growth. “We want to enliven the environment for private sector products in order to develop and introduce new and appropriate technology which can improve the productivity of livestock and land,” says Minister for Water and Livestock Edward Lowassa.

JAKAYA M. KILWETE Minister of Foreign Affairs and International Cooperation

Tourism, mineral exploitation and manufacturing are other areas that Prime Minister Frederick Tiuwaye Sumaye sees as viable and attractive opportunities for potential investors, especially given the country’s advantageous geographic position. “This country is well placed strategically,” he explains. “ We have a long ocean coastline and a lot of land-locked countries behind us so there is huge potential here,” says Mr. Sumaye.
Another of Tanzania’s attractions is its enviable track record of political stability and the role it plays in promoting peace in what has often been a troubled region. Tanzania enjoys good relations with the U.S. and the government believes that stronger economic ties between the two countries will be of vital importance in helping it to achieve its aim of sustainable growth. As Minister of Foreign Affairs Jakaya M. Kilwete confirms, “the relationship between Tanzania and the U.S. is now better than ever.”