RAPID growing transport sector has led others to drive growth high in the second quarter of this year but the largest contribution came from the agricultural sector.
The transport sector recorded 30.6 per cent growth in the second quarter up from 9.4 per cent in the first quarter to drive growth of the second quarter to 7.9 per cent which has put the nation firmly on course to meet the 2016 growth targets of 7.2 per cent.
According to Central Bank Governor, Prof Benno Ndulu, growth in the transport sector was boosted by an increased railway transportation after upgrading of the railway infrastructure and fleet modernisation in the Tanzania Railway Limited (TRL).
Growth in the transport sector was also due to a significant increase of transit cargo volume from Dar es Salaam port to neighbouring landlocked countries of Zambia, Burundi, Rwanda, Malawi, and Uganda contrary to widespread speculations that transit cargo had declined.
He said transit cargo volume to Rwanda had increased by 17.5 per cent, and Uganda by 22.3 per cent, Malawi (14 per cent), Burundi (4.8 per cent) and Zambia (3.7 per cent).
Other key drivers included mining which posted 20.5 per cent growth in the second quarter compared to 11.2 per cent in the first quarter, communication which grew 12.6 per cent in the second quarter up from 11.8 per cent in the first quarter and finance and insurance sector which had grown by 12.5 per cent in the second quarter from 10 per cent in the last quarter.
However, it is the agricultural sector which accounted the most in the growth despite not being among the fastest growing sectors. The sector which employs about 70 per cent of the population, registered 3.2 per cent growth in the second quarter up from negative growth of 1.9 per cent in the first quarter. Agriculture is the backbone of the economy contributing about quarter of the economy.
It accounts for about one fifth of the foreign exchange earnings and supports the livelihoods of more than two thirds of the population. Analysts say the growth levels of the second quarter have bridged the gap created after weak growth of 5.8 per cent in the first quarter and put the nation firmly on course to meet growth targets of 7.2 per cent for 2016.
They project that more growth will be supported by the construction sector on the back of huge infrastructure projects expected to begin this year including construction of the standard gauge railway line, Uganda oil pipeline and ports expansion. Exports of main cash crops like cashew, cotton and coffee as well as tourism receipts will also add to the equation of more growth, they say.
The National Bureau of Statistics announced recently that the economy had expanded 7.9 per cent in the second quarter of 2016 compared to 5.8 per cent during the same time last year driven by mining, manufacturing and energy sectors.
Other important driver is mining and gas sector which grew to 13.7 per cent on the back of significant increase in gas production, a slight rise in gold prices and opening of mining sites of some major mining companies.
Tanzania is the fourth-largest gold exporter in Africa after Ghana, Mali, and South Africa. The bullion is the main source of foreign exchange and contributes close to three per cent of the national economic output.
According to Prof Ndulu, the growth in the second quarter half was also driven by growth in tourism, currently leading in foreign exchange earnings, and increased exports from the manufacturing sector.
He said the number of tourists who visited the country in January to June period reached 1,137,442 compared to 1,075,541 of corresponding period last year which is equivalent to 5.8 per cent increase.
There was 12.6 per cent increase in exports from the manufacturing sector to maintain its position as the second largest foreign exchange earner after tourism.
Gold exports had also boosted growth in the first half after price recovery in the global market and increase in volume export, he said adding that it brought in the country 1.384bn/- compared to 1.2bn obtained in the similar period last year which is equivalent to 7.0 per cent increase.
Source: Daily News

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