Tanzania suffers an environmental shock.

Tanzania has been turning in some impressive macroeconomic statistics in recent years-and it appears that this trend will continue for the foreseeable future.

For example, in terms of GDP growth, Tanzania has posted rates of over 6.0 percent for every year from 2001 through 2005. The International Monetary Fund (IMF) says GDP gained 6.9 percent in 2005 and will gain 5.8 percent in 2006-revised downward from 7.2 percent because of the drought in East Africa.

As well, from 2001 through 2005, per capita income has increased over 6.0 percent per year every year. Using IMF statistics, per capita income was initially expected to increase 7.2 percent in 2006-but that is also likely to be revised downward.

While these numbers are impressive, the gains come from a tiny base. Tanzania is one of the world's poorest countries.

Notwithstanding that dismal fact, the current government does deserve credit for getting the country's financial house in order and initiating a series of beneficial reforms including privatization and infrastructure projects.

According to a report carried by The East African (Nairobi) on March 14, 2006, Tanzania's battle with inflation may experience a setback because the East African drought is so severe. The drought has pushed up food prices in the country, and the result is that inflation could rise to 6 percent during the second half of 2006.

The East African cited a review of Tanzania's economy by the Standard Bank of South Africa as its source.

The Standard Bank, in turn, said that there were "indications" that Tanzania's recently installed...

To continue reading

Request your trial