Tanzania needs to borrow the ‘two self promoting virtuous circles of growth’ page from countries that have successfully carried out the paradigm if she wants to win the ongoing economic transition.
A statement issued by the World Bank in Dar es Salaam yesterday ahead of today’s launch of the first Tanzania Economic Update said lessons from Malaysia, Chile or Mauritius on the creation of the “two self promoting virtuous circles of growth” would be pertinent to her transformation.
The first circle of growth, according to the statement involves better education and skill improvement capable of leading to higher labour productivity, it said.
This would translate to job creation, new income and new investment in human capital, it added.
It said the second circle involves support to small and dynamic firms to make them become more competitive while generating higher revenues.
It said that the additional revenue would then be reinvested for business development and innovation.
Beyond fiscal prudence, the statement said, the World Bank’s Economic Update argues that Tanzania should get inspired by the success of other emerging countries.
Besides those areas, the round table discussion will focus on what other options are available for the government during this period of transition.
Over the past decade, Tanzania has continued to grow at close to 7 percent per annum, the performance considered to be one of the best in the world.
Looking forward, another boost to the GDP is expected to come from exploitation of new gas fields in the southern part of the country, it said adding that the prospects, if well managed, will be bright.
But timing is an issue, the statement said, adding that fiscal expansion, which is the main engine of growth, has been exhausted after three years of intensive stimulus. Gas revenues will only materialise in 5 to 7 years, it added.
The World Bank said in the course of transition, Tanzanian policymakers will have to find alternative channels to promote growth.
The population will continue to expand by around 3 percent annually almost a million youth will look for new jobs or livelihoods every year, including secondary school leavers whose number will explode by 30 percent per year, it said. It noted that these challenges will have to be met with a sense of urgency.
THE World Bank (WB) will today launch the first Tanzania’s economic update at a roundtable discussion that will be held in Dar es Salaam.
According to the statement invited guests will include government officials, diplomatic officials, private sector operators and civil society organisation.
It said discussants will include eminent economists, such as the Bank of Tanzania (BoT) Governor Prof Benno Ndulu, seasoned businessmen, parliamentarians and political party leaders.
The Tanzania Economic Update is a national and bi-annual publication of the World Bank.
The roundtable has the dual purpose of launching the inaugural publication.