TANZANIA: TANZANIA is experiencing a transformative economic surge, driven by new infrastructure projects and strategic investments that are positioning the country as a burgeoning hub for regional commerce and innovation.
The nation’s economy has rebounded strongly, with a growth rate of 5.1 per cent in 2023, up from 4.7 per cent in 2022, according to the Minister of State in the President’s Office for Planning and Investment, Professor Kitila Mkumbo.
Presenting the state of the economy in Parliament in June, Prof Mkumbo highlighted that the Gross Domestic Product (GDP) reached 148.39976tri/-, up from 141.24719tri/- in 2022.
He attributed the growth to various government initiatives, including measures to mitigate the economic impact of the Ukraine-Russia war, as well as significant investments in energy, water, health, education and transportation infrastructure.
Additionally, increased mineral production, particularly in gold and coal and a rise in private sector loans have also fuelled economic activities.
Despite this progress, the GDP growth rate of 5.1 per cent fell slightly short of the annual target of 5.2 per cent due to challenges such as rising production costs, climate change effects on agriculture and damage to infrastructure, including bridges and roads.
Furthermore, aggressive monetary policies by developed countries to combat inflation have led to higher borrowing costs from international financial markets, impacting production activities.
Looking ahead, Tanzania’s economy is projected to grow by 5.6 per cent this year, with a long-term potential of around 6.0 per cent.
This optimistic outlook is supported by an improving business environment and ongoing structural reforms.
Enhanced investment in the agriculture sector, which employs three-quarters of the population, is expected to further reduce poverty in the medium term.
Tourism, now surpassing pre-pandemic levels, is another key driver of growth. According to Bank of Tanzania (BoT) data, tourism earnings reached 2.999 billion US dollars for the year ending July 2023, up from 1.95 billion US dollars in the same period of 2022.
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Inflation remained stable at 3.10 per cent in June, supported by tight monetary policies and stable food and energy prices. However, the Tanzanian shilling depreciated by 8 per cent in 2023 due to foreign exchange shortages.
The fiscal deficit slightly decreased from 3.6 per cent of GDP in 2021/22 to 3.5 per cent in 2022/23, managed through expenditure controls and financed by both external and domestic borrowing.
Tanzania’s recent economic growth aligns closely with the objectives outlined in the Third Five-Year Development Plan (FYDP III) and the ruling party’s CCM 2020-2025 election manifesto.
The FYDP III, running from 2021 to 2026, aims to transform Tanzania into a middle-income country through strategic investments in infrastructure, industry and human capital.
Key projects under this plan include expanding the Standard Gauge Railway (SGR), modernising ports, airports, road networks and investing in energy and water infrastructure.
Similarly, the ruling party’s election manifesto emphasises sustainable economic development through initiatives that support the Five-Year Plan’s goals.
This includes prioritising economic growth, increasing agricultural productivity, advancing industrialisation and enhancing social services such as health and education.
Recent economic data, including the 5.1 per cent GDP growth in 2023, reflect progress towards these goals.
The growth results from strategic government investments, increased mineral production and a more active private sector, all in line with the FYDP III and the ruling party’s vision.
Despite challenges like rising production costs and climate change, Tanzania’s economic policies remain focused on achieving the targets set forth in the development plan and manifesto, aiming for sustained growth and development.
Transformative investments in infrastructure are driving Tanzania’s economic growth.
Projects such as the standard gauge railway are expected to link neighbouring landlinked countries like Rwanda, Burundi and the Democratic Republic of Congo with the port of Dar es Salaam.
Additionally, several major infrastructure projects are underway these include Julius Nyerere Hydropower Project (JNHPP): Located along the Rufiji River.
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This project is expected to generate 2,115 MW of electricity to address the energy deficit and support industrialisation efforts.
Financed domestically, the 2.9 billion US dollars project is in its final stages, with three turbines already generating 662 MW.
The other flagship project is the Kigongo-Busisi Bridge: Also known as the Mwanza Gulf Bridge, this 3.2-kilometre bridge, named after fifth phase President the late John Magufuli, is expected to be the longest bridge in Eastern and Central Africa and the sixth longest in Africa. It links Kigongo in Mwanza Region to Busisi in Geita Region, with an estimated cost of 716.3bn/-.
East African Crude Oil Pipeline Project (EACOP) is another notable project being implemented by the government.
A joint venture with Uganda, this project will transport oil from Uganda’s Lake Albert oilfields to the port of Tanga in Tanzania, where it will be exported to global markets.
These investments are set to enhance trade, improve connectivity and boost business opportunities, further solidifying Tanzania’s position as a key player in regional economic growth.
Source: allafrica.com
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Air Tanzania Banned From EU Airspace Due to Safety Concerns
Several airports have since locked Air Tanzania, dealing a severe blow to the Tanzanian national carrier that must now work overtime to regain its certification or go the wet lease way
The European Commission has announced the inclusion of Air Tanzania on the EU Air Safety List, effectively banning the airline from operating in European airspace.
The decision, made public on December 16, 2024, is based on safety concerns identified by the European Union Aviation Safety Agency (EASA), which also led to the denial of Air Tanzania’s application for a Third Country Operator (TCO) authorisation.
The Commission did not go into the specifics of the safety infringement but industry experts suggest it is possible that the airline could have flown its Airbus A220 well past its scheduled major checks, thus violating the airworthiness directives.
“The decision to include Air Tanzania in the EU Air Safety List underscores our unwavering commitment to ensuring the highest safety standards for passengers in Europe and worldwide,” said Apostolos Tzitzikostas, EU Commissioner for Sustainable Transport and Tourism.
“We strongly urge Air Tanzania to take swift and decisive action to address these safety issues. I have offered the Commission’s assistance to the Tanzanian authorities in enhancing Air Tanzania’s safety performance and achieving full compliance with international aviation standards.”
Air Tanzania has a mixed fleet of modern aircraft types including Boeing 787s, 737 Max jets, and Airbus A220s.
It has been flying the B787 Dreamliner to European destinations like Frankfurt in Germany and Athens in Greece and was looking to add London to its growing list with the A220.
But the ban not only scuppers the London dream but also has seen immediate ripple effect, with several airports – including regional like Kigali and continental – locking out Air Tanzania.
Tanzania operates KLM alongside the national carrier.
The European Commission said Air Tanzania may be permitted to exercise traffic rights by using wet-leased aircraft of an air carrier which is not subject to an operating ban, provided that the relevant safety standards are complied with.
A wet lease is where an airline pays to use an aircraft with a crew, fuel, and insurance all provided by the leasing company at a fee.
Two more to the list
The EU Air Safety List, maintained to ensure passenger safety, is updated periodically based on recommendations from the EU Air Safety Committee.
The latest revision, which followed a meeting of aviation safety experts in Brussels from November 19 to 21, 2024, now includes 129 airlines.
Of these, 100 are certified in 15 states where aviation oversight is deemed insufficient, and 29 are individual airlines with significant safety deficiencies.
Alongside Air Tanzania, other banned carriers include Air Zimbabwe (Zimbabwe), Avior Airlines (Venezuela), and Iran Aseman Airlines (Iran).
Commenting on the broader implications of the list, Tzitzikostas stated, “Our priority remains the safety of every traveler who relies on air transport. We urge all affected airlines to take these bans seriously and work collaboratively with international bodies to resolve the identified issues.”
In a positive development, Pakistan International Airlines (PIA) has been cleared to resume operations in the EU following a four-year suspension. The ban, which began in 2020, was lifted after substantial improvements in safety performance and oversight by PIA and the Pakistan Civil Aviation Authority (PCAA).
“Since the TCO Authorisation was suspended, PIA and PCAA have made remarkable progress in enhancing safety standards,” noted Tzitzikostas. “This demonstrates that safety issues can be resolved through determination and cooperation.”
Another Pakistani airline, Airblue Limited, has also received EASA’s TCO authorisation.
Decisions to include or exclude airlines from the EU Air Safety List are based on rigorous evaluations of international safety standards, particularly those established by the International Civil Aviation Organization (ICAO).
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The process involves thorough review and consultation among EU Member State aviation safety experts, with oversight from the European Commission and support from EASA.
“Where an airline currently on the list believes it complies with the required safety standards, it can request a reassessment,” explained Tzitzikostas. “Our goal is not to penalize but to ensure safety compliance globally.”
Airlines listed on the EU Air Safety List face significant challenges to their international operations, as the bans highlight shortcomings in safety oversight by their home regulatory authorities.
For Air Tanzania, this inclusion signals an urgent need for reform within Tanzania’s aviation sector to address these deficiencies and align with global standards.
The path forward will require immediate and sustained efforts to rectify safety concerns and regain access to one of the world’s most critical aviation markets.
Source: allafrica.com
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