Dodoma. Tanzania cemented its middle income status last year by raising its per capita Gross Domestic Product (GDP) to $1,090, the Ministry of Finance and Planning said in Parliament on Thursday, June 13, 2019.
Presenting a statement of the state of the national economy in Parliament, Finance and Planning Minister, Dr Phillip Mpango, said the per capital GDP grew by 4.4 per cent in 2018, from $1,044 in 2017.
“The amount is equivalent to a per capital GDP of Sh2,458,496 in 2018, up from Sh2,327,395 in 2017,” Dr Mpango told the House in a statement that preceded the unveiling of the national budget for the financial year 2019/20.
Tanzania officially joined a group of lower Middle Income Countries (MIC) in 2017 when its per capita GDP crossed the $1,000 mark.
The World Bank Gross defines MICs as those countries whose National Incomes (GNIs) have crossed the $1,006 mark.
The GNI measures all income of a country's residents and businesses, regardless of where it's produced whereas the GDP measures the income of anyone within a country's boundaries irrespective of who produces it.
Lower MICs are those with GNI per capita of between $1,006 and $3,955 while and upper MICs are those with a GNI per capita between $3,956 and $12,235.
According to Dr Mpango, Tanzania’s economy grew by 7.0 per cent last year, being the second fastest in East Africa after that of Rwanda.
Rwanda’s economy grew at a rate of 8.6 per cent while economies of Kenya and Uganda grew by 6.3 and 6.1 per cent respectively.
Fastest growing sectors
According to Dr Mpango, Tanzania’s economic growth was largely aided by five sectors. The sectors and their growth rates in brackets included: Arts and Entertainment (13.7 per cent), Construction (12.9 per cent), Transport and Logistics (11.8 per cent), Professional undertakings, Science and Vocational Activities (9.9 per cent) as well as Information and Communication (9.1 per cent).
Agriculture, which commanded a 28.2 per cent share of the overall economy in 2018, grew by 5.3 per cent.
The government, said Dr Mpango, was able to meet almost all of its macroeconomic targets in 2018, with inflation going 40-year low at 3.5 per cent.
The low inflation rate was largely on account of bumper harvest last season. A total of 15.9 million tonnes of food crops were harvested last season against the country’s requirement of 13.3 million tonnes.
“This suggests that we were food sufficient by 124 per cent,” said Dr Mpango.
The country had a total of $4.4 billion in foreign exchange reserves as of April 2019. This, Dr Mpango said, was enough to cater for the country’s import cover for a period of 4.0 months.
Dr Mpango told the House that the Shilling remained stable, exchanging at an average of Sh2,300.9 against the United States Dollar during the year ending April 2019.
That was a slight drop from an average of Sh2,270.3 during the year ending April 2018.
“The stability of the local currency was largely on account of proper management of the monetary policy, a sound management of revenue and expenditure of public money and the use of natural gas in electricity generation which substituted the need for oil-powered generators,” he said.