How to build a stronger and more inclusive financial sector in Tanzania

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COMMENT

Africa is an incredibly large and diverse continent, and if there is one thing that is instantly recognisable, it’s the fact that the economy varies so much from location to location. Africa is home to some of the wealthiest countries on the face of the earth, yet on the polar opposite side of the spectrum it is also home to some of the most impoverished countries. Tanzania is a very beautiful country, yet sadly its economy is lacking. Tanzania is home to over 50 million individuals, and it is a democratic republic that has seen very conservative growth in its economy over the years. In fact, over the last 10 years, the economy has grown by around 7 per cent. Despite this growth, this is sadly not reflected in its economy and many people living in the country still live in poverty. In actual fact, just under 1 in 2 people live underneath the extreme poverty threshold with average incomes coming in at the equivalent of just $1.90. So, with nearly 1 in 2 people living in extreme poverty, and with the economy growing far slower than people had hoped, what can be done to build a stronger and more inclusive financial sector in Tanzania? Well, let’s take a look.

Investing in infrastructure

Infrastructure - First and foremost, a great deal of people believes that investing in infrastructure will be one of the keys to building a more inclusive and stronger financial sector in Tanzania. A number of studies carried out over the years have found very strong evidence to suggest that investing in infrastructure could yield growth in the economy for a variety of reasons. To begin with, land values will increase, plus more manual labour jobs will be provided for the local community. Investing in the construction sector for example, will help create jobs. In total, experts predict that investing in infrastructure in Tanzania could help boost employment by as much as 80% which would be a huge plus.

Travel links - Investing in travel links is also important because currently there is very little funding in terms of road, air, or rail travel. Needless to say, with so little in the way of travel options, the fewer people that can enter the country, and indeed, navigate their way around the towns and cities, the less money can be pumped into the economy, especially in terms of tourism. Africa is a very popular tourist destination, yet Tanzania is often overlooked because of the impracticalities I.E travelling around the country.

Farming and Agriculture - Finally, the mainstay of Tanzania’s economy is farming. Just to give an idea of how reliant on farming Tanzania’s economy is, close to 70% of the country’s manual labour force is involved in the farming industry. If this trend is to continue, more funds simply must be pumped into the country’s farming and agriculture sector. For example, irrigation should ideally be improved upon. On top of spending more, experts also have spoken on the fact that saving money will also help to boost the economy. Cutting transport expenses and general farming expenses is also worth considering as this will enable Tanzania to become a great deal more competitive in regional and domestic markets.

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