Tanzania needs enough investment in irrigation farming and infrastructure as means to control the current two-digit inflation that has rendered many people unable to pay for basic requirements of life, a leading economist has said.
Dr Bohela Lunogelo (pictured), Executive Director in Economic and Social Research Foundation (ESRF), told The Guardian recently that inflation, caused by internal and external factors, can be controlled by investing in irrigation and infrastructure.
According to the latest report from the National Bureau of Statistics (NBS) the rate of inflation was 18 percent in May down from 19 percent recorded in March.
Speaking in his office in Dar es Salaam, Lunegelo said the country depends on rain-fed agriculture because of inadequate investment in irrigation, pointing out that in every cycle of five years of production there are two of crop failure, two of surplus and one of profit The economist said Tanzania’s agriculture is growing at 4.2 percent only while the rate of population growth is 3 percent, noting that this is not a healthy situation for the country’s development.
On investing in infrastructure for controlling inflation, Lunogelo said: “Good infrastructure will help us add value to our produce by facilitating its transportation at low cost compared to the current situation.”
According to the economist, production exceeds by 10 per cent the country’s food requirement but poor transport infrastructure limits the capacity of distributing it to areas where it is needed.
The research economist said the government agency that deals with food security in the country should be strengthened. “The agency does not operate smoothly for lack of funds…the government should support to ensure food security.
Lunogelo also criticised existing system of food crops business dominated by middlemen that virtually excludes producers from reaching retailers. He said the arrangement contributed to inflations as the latter often increased the price.
Selling food through middlemen is undermining the farmers as they sell it at low price, he said, suggesting that the farmers can be empowered through SACCOS in their villages.
He called for cooperation in food matters among East Africa Community (EAC) countries so that inflation can be controlled to effectively, recommending that they should invest more in the agricultural sector.
The economist said the price of fuel is an external factor that contributes to inflation because oil is bought at high cost, which in turn leads to high production costs.
He said the country should localise food crops production areas… near the consumer to keep down transportation costs and also keeping down food prices.
He said: “For example, Dar es Salaam consumes food produced in Mbeya, Rukwa and Iringa regions. “But if the foodstuffs consumed in the city were produced in Morogoro we will cut off the high transportation cost and it will be a way of rationalise our scarce foreign currency,” he elaborated.
He said by not buying local material the country creates unemployment and this in turn renders people unable to cope with the situation.
However, Lunogelo said some of the existing situations like increasing of living cost are natural phenomena which can not be avoided as time goes on. “What’s important is to increase people’s purchasing power.”
At the beginning of 2005 the inflation rate Tanzania was 4.5 per cent up from 2.7 percent in 1995, when the economy grow rate at 6.7 per cent in 2005.