If the government of Tanzania destroys foreign investment in agriculture as in the Silverdale Farm case, behaves like Mugabe and throws foreign investors out of the country from the agricultural sector to support the corrupt conduct of well connected men like Benjamin Mengi-ignoring the rule of law, then investment will suffer-
Agriculture`s contribution to GDP declines
By The guardian reporter
17th September 2012
The growth of the agricultural sector, which is often touted as the country's economic backbone, has been lagging behind other sectors during the past decade.
Sectors which have outpaced agriculture's growth rate include services, manufacturing and construction, the 2011 Poverty and Human Development Report (PHDR) released last May has revealed.
The PHDR presents a consolidated review of progress towards the goals and targets set under the National Strategy for Growth and Reduction of Poverty (MKUKUTA).
Using the nationally agreed indicators for MKUKUTA I as the framework for the analysis and covering the period from 2001 to 2011, the report says the contribution of the agricultural sector to GDP has declined from 29 per cent in 2001 to 24 per cent in 2010.
“The growth rate of the agricultural sector averaged 4.3 per cent over the period 2000-2010, well below the MKUKUTA target of 10 per cent by 2010. However, the sector continues to employ around three-quarters of the labour force,” it stated.
Regarding poverty and inequality, the report said the most recent national data available on household income poverty rates are from the 2007 Household Budget Survey (HBS), which were reported in the 2009 PHDR.
It said the 2007 poverty estimates indicated that the economy’s significant growth since 2000/01 had not translated into significant reductions in income poverty.
“The Gini Coefficient, a measure of income inequality, remained unchanged at 0.35 between 2001 and 2007. With no new data, it is not possible to report on the current distribution of income,” it explained.
It said further that since 2007, growth had more or less continued at the same pace, except with a slight dip as a result of the global financial crisis.
The report said based on past trends and with a slight slowdown in the growth rate, it was likely that the poverty reduction target under MKUKUTA I was not met and the country was off-track in meeting the Millennium Development Goals target of poverty reduction by 2015.
With respect to national food security, the report says the country has been self-sufficient in food production since 2005, with a peak in 2007 of 112 per cent. But it warned that food shortages continue to be experienced in some regions, pointing out that most recent data indicate around 23 per cent of all households in rural mainland Tanzania were food-insecure.
Regarding macroeconomic stability, it said generally it had been maintained but added that inflationary pressures had intensified over the last three years, with the inflation rate exceeding 10 per in 2008 and 2009.
It said the high inflation rate is largely explained by food inflation, rising oil prices and the impact of power shortages.
According to the report, domestic revenue collection as a percentage of GDP increased steadily from 10.9 per cent in 2000/01 to 16.0 per cent in 2008/09, but declined slightly to 15.3 percent in 2009/10, falling below the MKUKUTA I target of 16.4 per cent.
“This shortfall in domestic revenue collection has necessitated a short-term increase in the fiscal deficit, but the government is acting to improve the taxpayer environment and identify additional tax and non-tax revenue sources to further strengthen national finances.
“The external debt-to-GDP ratio has fallen considerably since 2000. Exports have increased but with limited diversification."
It explained further that credit to the private sector has increased from an average of less than 6 per cent of GDP in 2002 to 17 per cent of GDP in 2009, and interest rate spread between the lending and deposit rate had declined from 15.3 percent in 2001 to 12.3 per cent in 2009.
On education the report said literacy rates had improved marginally for women since 2004/05 (from 67 per cent to 72 per cent) but less for men (from 80 per cent to 82 per cent).
It revealed further that life expectancy had increased from 51 years in 2002 to 58 years in 2010 (57 years for men and 59 years for women), a trend that was closely associated with falling child mortality.
Under-five mortality has substantially declined over the last decade from 147 deaths per 1,000 births in 1999 to 81 deaths per 1,000 births in 2010, only marginally missing the MKUKUTA target of 79 for 2010.
“The gains in child survival are largely due to improvements in Tanzania’s health system. There have been notable advances in malaria prevention, diagnosis and treatment,” said the report.
SOURCE: THE GUARDIAN