Tanzania Essay ⋆ Business Essay Examples ⋆ EssayEmpire

Tanzania, known for its natural wonders, from Mt. Kilimanjaro to the Serengeti, borders the Indian Ocean between Kenya and Mozambique. Its land mass, including the islands of Mafia, Pemba, and Zanzibar, totals 550,557 sq. mi., which makes it the largest east African nation. It also borders war-torn Burundi, Democratic Republic of Congo, and Rwanda, and still hosts over 500,000 of their refugees. It is a diverse country, with over 120 ethnic tribes, and nearly equal representation on the mainland of those practicing Christianity, Islam, and indigenous beliefs.

Tanzania achieved independence from Britain in the early 1960s. Dar es Salaam is the capital and the largest city, and a major seaport for the Tanzania mainland and its landlocked neighbors, although Dodoma, located in the center of Tanzania, has been designated the legislative capital. Kiswahili is the official national language, while English is the official language of commerce, administration, and higher education. The currency, the Tanzanian shilling, had an exchange rate of 1,255 TZS to one U.S. dollar in 2007.

Tanzania has tremendous potential for robust economic growth because of its stability in an unstable region, 885 miles of coastline, and a wealth of resources, including hydropower, tin, phosphates, iron ore, coal, diamonds, gemstones, gold, natural gas, nickel, and wildlife. Its 2006 real Gross Domestic Product (GDP) of $11.98 billion grew at a rate of 6.2 percent, compared to 5.5 percent for Africa and 5.4 percent for the rest of the world. The inflation rate of 7.3 percent (2006) also compared favorably to Africa’s 9.5 percent. Although only 4 percent of the land is suitable for farming, the economy depends heavily on agriculture, which accounts for 45 percent of GDP, provides 85 percent of exports, and employs 80 percent of the workforce. Agricultural products include coffee, sisal, tea, cotton, pyrethrum, cashew nuts, tobacco, cloves, corn, wheat, grains, cassava, fruits, vegetables, and livestock.

Accounting for less than 10 percent of GDP, Tanzania’s industrial sector is one of the smallest in Africa and is hindered by poor infrastructure in water and electricity supply systems. The main industrial activities (90 percent) are dominated by small and medium-sized enterprises specializing in food processing, including dairy products, meat packing, preserving fruits and vegetables, textile and apparel production, leather tanning, and plastics. A few larger factories (10 percent) manufacture cement, rolled steel, corrugated iron, aluminum sheets, cigarettes, beer and bottling beverages, fruit juices, and mineral water. In general, Tanzania’s manufacturing sector targets primarily the domestic market with limited exports of manufactured goods.

The largest service industry is tourism because of the country’s concentration of wild animals and spectacular and diverse landscape, including the islands with their beaches, and the highlands, which include Mt. Kilimanjaro, Africa’s highest mountain. Tanzania features famous national parks, game reserves, and the Olduvai Gorge, where the Leakeys discovered footprints estimated to be over 3 million years old.

Unfortunately, an unattractive investment climate has discouraged foreign investment. Inadequate infrastructure investment is mirrored in human capital investment. Although 85 percent of children are enrolled in primary education, 20 percent drop out before finishing and barely 5 percent complete secondary school. Life expectancy is 51.45 years, while the median age is only 17.8 years. The 2005 human immunodeficiency virus (HIV)/acquired immunodeficiency syndrome (AIDS) adult prevalence rate was 6.5 percent compared to 6.1 percent for the rest of Africa. Malaria accounts for 30 percent of the national burden of disease and loss of productivity in Tanzania, and is the number one killer among children in Tanzania. The result has made Tanzania among the poorest countries in the world, with approximately 36 percent of the 38 million people below the poverty line, and a per capita income of $319.

Significant measures were taken in 1986 to liberalize the Tanzanian economy along market lines and move away from its socialist past, rehabilitate the infrastructure, and encourage both foreign and domestic private investment, with assistance from the World Bank, the International Monetary Fund (IMF), and bilateral donors.

These measures included a comprehensive package of policies that reduced the budget deficit and improved monetary control, substantially depreciated the overvalued exchange rate, liberalized the trade regime, removed most price controls, eased restrictions on the marketing of food crops, freed interest rates, and initiated a restructuring of the financial sector. Continuing these initiatives while reducing external debt (Tanzania has an external debt of $7.9 billion, which amounts to 72 percent of GDP) and dependency on donors are goals designed to achieve the country’s potential.

Bibliography:

Mark Blackden et al., Gender and Economic Growth in Tanzania: Creating Opportunities for Women (World Bank, 2007);
Samuel M. Jonathan, Developing an Entrepreneurial Economy: How Tanzania Can Create Five Million Jobs in Five Years (Moshi University College of Cooperative and Business Studies, 2006);
Tidiane Kinda and Josef L. Loening, Small Enterprise Growth and the Rural Investment Climate Evidence from Tanzania (World Bank, 2008);
Stein Kristiansen, “Social Networks and Business Success: The Role of Subculture in an African Context,” American Journal of Economics and Sociology (v.63/5, 2004);
Robert J. Utz, Sustaining and Sharing Economic Growth in Tanzania (World Bank, 2008).

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