the african

By Justin Damian

THE global economy is slowly rebounding from the worst of the recession but the recovery remains too anaemic to create enough jobs to replace those lost so far, a new United Nations report says 
The updated 2010 World Economic Situation and Prospects, released by the UN Department for Economic and Social Affairs (DESA), finds that world gross product started to grow again in the early months of this year after it contracted by 2 per cent last year amid the most severe international recession since World War Two.
The report predicts that the global economy will grow by 3 per cent this year and then by another 3.1 per cent next year, thanks in part to fiscal stimulus packages and expansionary monetary policies introduced by governments worldwide.
Household consumption and business investment are both showing tentative signs of revival and international trade is also on the increase again, although still below its pre-crisis peak.
But the pace of the recovery remains subdued and “far from sufficient to recuperate the job losses and close the output gap created” during the recession, according to the report’s authors.
“There’s good news and there’s bad news,” Rob Vos, Director of Development Policy Analysis in DESA, told reporters as he presented the report. “The good news is that the crisis in the real economy has abated and we see continued recovery, but at the same time it’s weak and uneven.
“The bad news is that there’s continued downside risks to this outlook which may lead us to mediocre growth prospects for the coming years,” he added.
The report notes that the global economy still contains important weaknesses, with credit flows to non-financial sectors remaining relatively weak, especially in some wealthier industrialized nations. The public finances of some developed countries, such as Greece, Portugal, Spain and Ireland, have also deteriorated.
“Facing elevated unemployment rates, soaring public debt, and limited credit flows, growth prospects for most developed economies remain lack luster, unable to provide sufficient impetus to the global economy,” the report states.
The world’s developed economies are expected to collectively grow by only 1.9 per cent this year and 2.1 per cent in 2011, with countries in the so-called Euro zone struggling most of all.

-Outlines frugality measures
-To issue USD 500M Eurobond

By Shermarx Ngahemera

The government is adamant on the provisional budget of 11.1trn/- despite of having an obvious deficit of more than 3trn/- the African has learnt.
Minister for Finance and Economic Affairs, Mustafa Mkulo is confident that based on the existing plans the budget is tenable and urged people to be restive as everything was under control.
He said getting the money to plug the deficit was feasible as the country’s credit rating was high based on good past performance record in loan repayment.
Mkulo outlined austerity measures and fund raising campaigns to meet the anticipated budget gap.
He said the government would borrow locally more than 1trn/-and the Stanbic Financial Group has already indicated cash outlay of USD 250M as loan to the government and other financiers are lining up for the loan while traditional donors some like Ireland are having a rethink of their boycott in the General Budget Support (GBS).
On top of the local loans the government plans to borrow externally through the issue of the Eurobond worth USD 500M resuscitating the 2008 initiative that was left due to the global financial crunch; a three man task force has been established to proceed with the financial quest abroad.
Mkulo dismissed the criticisms on his plans especially the local borrowing and issue of the Eurobond since are expensive sources but he said it was the right strategy to get the money on time and implement the development projects that have synergies for job creation and value addition on the economy.
“The money will be used to finance development projects that include roads, railways, bridges, irrigation infrastructure, ports water and electricity that have the propensity to stem off poverty and increase economic growth without disturbing the macro economic and fiscal fundamentals,” he said.
He observed that even the International Monetary Fund (IMF) supports the moves since they have the ability to generate repayment money.
Critics argue that extensive local borrowing would deny private establishments the necessary finance to their activities as most banks prefer the less risky government bonds and bills to the private loans.
The World Bank (WB) Country Director for Burundi, Uganda and Tanzania, John McIntire queried Tanzania’s intention to borrow expensively in external money markets when the WB was around and offers cheaper rates.
He said effective next financial year the government is going to insist on realizing the value for money whereby foreign expensive but less durable furniture have been banned, while rigorous measures to monitor the payroll shall be instituted to avoid ghost workers, and house allowances are going to be scheduled and not based on the salary, and LUKU meters for prepaid electricity shall be established at government offices to avoid accumulated bills.

By Justin Damian

THE Ambassador of State of Palestine to Tanzania Nasri Abu Jaish said on Monday in Dar es Salaam that it is now the high time for United Nation Security Council to take action against Israel occupation and killing of innocent people in Gaza and West bank.

The Ambassador Jaish statement came barely a few days after a convoy of seven ships carrying thousands of tons of food, medicines and other humanitarian aid with 700 people from 52 different countries blocked by Israel forces to reach the aids to Gaza.

“Gaza faces for more than five years a reinforced and tough siege from Israel. This unjust Israel siege puts a population 1.5 million in a huge prison and deprive them food, water, medical treatment, fresh items and other necessities for life,” he said.

He said such inhuman situation has touched free souls all over the world which pushed them to organize and send a humanitarian convoy for solidarity with the Palestnian people to deliver help to the blockage Palestinians in Gaza.

“The convoy was made of 7 big ships loaded with thousands of tons of food, medicines, and with it were 700 participants from 52 countries, from all continents, raising their flags on the ships, amongst them a big number of members from European Parliament and previous ministers.

Unexpectedly, the racist terarist regime of Israel under Prime Minister Benjamin Netanyahu has forbidden this humanitarian assistance to reach people in Gaza. And before the reach of this fleet to the Gaza port, and still in international waters, Israel Military fleet attacked the convoy and killed 16 participants and injured more than 60 persons.

Most of them are from Turkey, the rest of the participants were taken and jailed in a prison already before hand an Azdud Port in Israel,” he elaborated.

Ambassador Jaish noted that despite all the kind of inhuman acts that Israel forces are committing in Gaza and West bank the security council has turn a blind eye and let further aggregation and killing of innocent people including women and children and destruction of houses and properties.

“Security Council has done nothing, condemning alone is useless as Israel does not care, it is time for security council to take action on the ground against Israel, we request all peace loving people in the world including Tanzanians to raise the voice against Israel brutality,” he added.     

By Yonas Abiye

The Government last week revealed the latest economic projection for the country showing some improvement and increases that would surpass what was expected earlier The African has learnt.
 As Tanzania has been embarking toward economic growth amid a slow recovery of global economic slowdown, this latest figure has a slight difference to earlier projections forecasted by Bank of Tanzania and the statement issued by President Jakaya Kikwete at an interview to Corporate Tanzania.
According to the Ministry of Finance, the country’s economy expanded by 6 percent in 2009, exceeding a forecast for 5.0 - 5.5 percent growth, and expected to grow by 7 percent this year.
Finance Minister Mustafa Mkulo gave the figures to a parliamentary Committee on Finance and Economic Affairs late on Friday.
The 6 percent economic expansion in 2009 was down from the growth of 7.4 percent in 2008.
However, the latest figure has significant difference with what Bank of Tanzania (BoT) issued two weeks ago.
BoT Governor Prof Benno Ndulu was quoted as saying “Last year our GDP growth was 6 per cent, but in 2010, we forecast 6.5 per cent and above”.
For the Governor, the real GDP growth is expected to increase to 6.4 per cent in 2010 and 7.1 per cent in 2011 as investment, trade and tourism pick up slowly.
The current-account deficit is forecasted to fall to 6.6 percent of GDP in 2010 and 5.9 per cent in 2011 because of strong exports and decent economic growth, partly financed by rising foreign direct investment, particularly in the mining sector.
The new current-account data show that the deficit narrowed in 2009 attributable  to contracted imports since the country is using its Songo Songo gas for power generation and the lower oil prices experienced almost the whole of last year.
Like its neighbours, Tanzania's economy was hurt by the fallout from the financial crisis hitting demand for exports and tourism in late 2008 and the early part of 2009.
Meanwhile, President Jakaya Kikwete said last month in a review that the 5.5% projection for this year was far less than his government’s original projection because the country was doing better then.
“In the first four years, we were at 7.4% of the average growth rate. Our target for last year was 7.8% and this year we would have been looking at getting to 8%. But because of the economic slowdown we had to revise our growth figure down to 5.5% this year while by 2010 we would be moving back toward 7% and 8% growth rate. So it’s a major reversal of our projection but that is the reality.”
 Tanzania's year-on-year inflation rate stood at 9.4 percent in April, down from an average annual rate of 12.1 percent in 2009 and 10.3 percent in 2008.
“Of course, the financial sector was not very much affected because our financial system was not deeply attached to international system. We were lucky in that regard. But in the advent of the crisis, the Central Bank introduced stringent monitoring systems, mechanisms for the financial and banking sectors, which somehow saved us,” Kikwete said.
Tanzania had also been suffering from a prolonged drought that weighed on agricultural output especially food crops in late 2008 but improved rains in 2009 have since boosted harvests. However, increased output from gold mines in Africa's third-largest producer also helped economic growth accelerate in the second half of 2009.
Analysts say continued gains in these sectors, along with the economic stimulus package drives have led to higher government spending ahead of a presidential election in October, that would help to sustain growth rates in 2010.
Tanzania's previous forecast for 2010 growth was 5.7 percent, Mkulo said, adding that growth rates should pick up to 7.1 percent in 2011, 7.4 in 2012 and 7.8 in 2013.
The minister also said Tanzania's inflation rate should slow to 8 percent in June 2010, missing an earlier 6 percent forecast because of higher food and fuel prices but the country expects better harvests.
Meanwhile, the Rwandan Finance Ministerm, John Rwangombwa similarly indicated on Monday that Rwanda’s economy will probably grow by 7 percent this year as the government steps up subsidies to farmers and construction expands.
Economic growth may accelerate further to 8 percent in 2011 after reaching 6 percent in 2009, Rwangonbwa said in an interview on Monday in Abidjan, the commercial Ivory Cost capital.
Rwanda began paying subsidies to farmers to buy fertilizer and seeds in 2007, with those getting financial support farming 40 percent of the country’s arable land. The government aims to increase that to half of Rwanda’s farmland, Rwangombwa said, without giving a timeframe. Agriculture will probably expand 8 percent this year, he said.
“We think this kind of growth in the economy can be sustained,” Rwangombwa said, adding  agriculture has big potential”.