Tanzania Prezi

8/12/2019 Tanzania Prezi

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Tanzania: A tale of assisted reform


2/43

Agenda

Brief economic history

Real sector

Prices

Fiscal Sector

External sector

Monetary Sector

Summary and the way forward


3/43

Background and Brief economichistory

Low lows and high highs


4/43

Snapshot of Tanzania


5/43

Contrary to popular belief

Kilimanjaro is predominately found in Tanzania.


6/43

8185 Declines

in foreign aidNyerere Resigns

8691 Partialliberization andinitial round ofreforms

91 SecondPoorest Country inthe world

9195 Stallingeconomicreforms

96presentDeeper reformsand efforts

65 Arushadeclarationadopted

Impasse with IMF

Large inflows offoreign aid

Independence, up untilthe Arusha declaration

59 Tanganyikaindependene

63 Zanzibarindependence

64 Tanzania


7/43

Real Sector

High highs following major reform


8/43

On the rise

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

Percentage(%)

Tanzania real GDP per capita growth

Economicrecoveryprogramme

PrivatizationAgenda;fiscal andfinancialsector reforms

Miningactadopted

Fall inforeignassistance

IMF

/WBERP

Debt relief


9/43

Not too shabby across the board

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

Percentage(%)

GDP growth

Tanzania Sub-Saharan Africa Emerging and developing countries Advanced economies World


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Fairly stable

0%

1%

2%

3%

4%

5%

6%

0

50

100

150

200

250

300

350

400

450

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Percentage(%)

US$

Real GDP per capita and growth

Real GDP per capita (LHS) Real GDP per capita growth (RHS)


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Contraction of 1, Expansion of 2

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

ProportionofrealGDP

(%)

GDP by sector

Primary Sector Secondary sector Tertiary sector


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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

ProportionofrealGDP(%)

GDP by economic activity

Agriculture, hunting, and forestry Mining and quarrying Manufacturing

Construction Trade and repairs Transport

Real estate and business services Public administration Other


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Driven by consumption?

0

2

4

6

8

10

12

14

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

GDP(US$)

Billions

GDP by expenditure

Household consumption Government consumption Investment


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Consumption declines steadily, asinvestment rises

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

ProportionofrealGDP(%)

Consumption/GDP and Investment/GDP

Household consumption Government consumption Investment


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Where is this investment from?

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Proportion(%)

Public and private sector investment distribution

Private sector

Public sector (central government,

parastatals, and institutions)


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Fiscal sector

How much is too much?


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More taxes.

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

82%

84%

86%

88%

90%

92%

94%

96%

98%

100%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

US$

Billions

Percentage(%)

Domestic revenue

Tax Revenue Non-tax Revenue Domestic Revenue


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Is there a development agenda?

0

1

2

3

4

5

6

7

8

9

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

US$

Billions

Percentage(%)

Total expenditure

Recurrent expenditure Development expenditure Total expenditure


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-40%

-20%

0%

20%

40%

60%

80%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Percentage(%)

Fiscal balance, shares of GDP

Domestic Revenue Total expenditure Overall deficit


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Continued reliance on the outside

0%

5%

10%

15%

20%

25%

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

1965

1966

1967

1968

1969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Percentage(%)

US$

Billions

Official donor assitance and ODA/GDP

Offical donor assistance,ODA (LHS) ODA/GDP (RHS)

Liquidity

management


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A legacy of debt

0%

20%

40%

60%

80%

100%

120%

140%

160%

0

1

2

3

4

5

6

7

8

9

10

2002 2003 2004 2005 2006 2007 2008 2009 2010

Percentage(%)

US$

Billions

Public debt measures

National debt External debt National Debt/GDP External Debt/GDP Total Public debt/GDP


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What a relief


23/43

Prices - Inside and Outside

Prices


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0%

5%

10%

15%

20%

25%

30%

35%

40%

0

500

1000

1500

2000

2500

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Percentage(%

)

T.Sh/US$

Nominal and real exchange rate, and CPI inflation

Nominal exchange rate (LHS) Real exchange rate (LHS) CPI Inflation (RHS)

Trade andexchange ratereforms

Bank of TanzaniaAct amendment


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Up, up, and away?

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Percentage(%

yoy,bas

e=2005)

CPI Inflation

Tanzania Advanced Economies Emerging and Developing Countries Sub-Saharan Africa World


26/43

Nipped in the bud

0%

5%

10%

15%

20%

25%

Percentage(%,yoy)

CPI inflation

CPI Inflation


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0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Percentage

(%,yoy)

CPI Inflation breakdown

Food Inflation Rate Energy Inflation Rate Core Inflation CPI Inflation Average CPI


28/43

External sector

Steady, steady, import


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Ever-more reliance on importedgoods

-8

-6

-4

-2

0

2

4

6

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

US$

Billions

Trade balance

Imports of services

Imports of goods fob

Exports of services

Exports of goods fob

Net Exports


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Breakdown of imports and exports

0%10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Proportions of goods imports

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Proportions of service exports

Other

Computer, communications

and other services

Insurance and financial

services

Travel services

Transport services 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Proportions of service imports

0%10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Goods exports

Other

Ores and metals

Manufactured

Fuel

Food

Agricultural raw materials


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Deterioration of the current account

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Percentage(%)

Current account balance items (% of GDP)

Balance on income

Balance on Services

Balance on Goods

Current Acccount Balance


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Steady balance

-6

-4

-2

0

2

4

6

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

US$

Billions

Balance of Payments

Financial Account

Capital Account

Current Account

Overall balance


33/43

Foreign reserves rising

0

1

2

3

4

5

6

7

8

9

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Months

US$

Billions

Reserves, and reserves in months of imports

Total Reserves (LHS) Total reserves in months of imports (RHS)


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FDI on the rise

0%

2%

4%

6%

8%

10%

12%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Percentage(%)

Foreign direct investment (% of GDP)


35/43

Monetary sector and Prices

Money, money, everywhere


36/43

Up, up, and away?

0%

5%

10%

15%

20%

25%

2008

Jan

2008

Mar

2008

May

2008

Jul

2008

Sep

2008

Nov

2009

Jan

2009

Feb

2009

Apr

2009

Jun

2009

Aug

2009

Oct

2009

Dec

2010

Feb

2010

Apr

2010

Jun

2010

Aug

2010

Oct

2010

Dec

2011

Feb

2011

Apr

2011

Jun

2011

Aug

2011

Oct

2011

Dec

2012

Feb

2012

Apr

2012

Jun

0

200

400

600

800

1000

1200

1400

1600

1800

T.Sh/US$

CPI inflation, nominal interest, and exchange rates

Nominal exchange rate CPI Inflation Nominal interest rate


37/43

Is inflation driven by Money growth?

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Percentage(%)

Broad Money growth and inflation

M3 growth (LHS) CPI Inflation (RHS)


38/43

Money on the rise

0

2000

4000

6000

8000

10000

12000

14000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

T.Shillings

Billions

Money Supply

M3

M2

M1


39/43

Government claims rising, whileforeign assets, net, declining

-800%

-600%

-400%

-200%

0%

200%

400%

600%

800%

1000%

1200%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Central bank assets and liabilities

NFA growth (LHS) M3 growth (RHS) NCG growth (RHS)


40/43

Are there real returns?

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

Percentage(%)

CPI inflation, real, and nominal interest rates

CPI Inflation Real interest rate Nominal interest rate


41/43

Summary: Lots of potential

Confidence, post-reformation

High GDP per capita, and it appears to be growingpersistently

Deterioration of the trade balance, yet some stability inthe current account

Legacy of debt

Inflation curtailed, and holding steady


42/43

The way forward

Sustain momentum, in the midst of global economicslowdown

Public finances should be balanced with increasedpublic investment

Real transformation, through poverty reduction strategies

Continued private sector development

Long term viewfocus on reducing reliance on foreignassistance.


43/43

There is hope.

Though, is it sustainable?

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