Safety last
JF-Expert Member
- Mar 24, 2011
- 4,235
- 1,405
Acheni kuwatukana watanzania eti uchumi umekuwa!mnacopy madata kwenye imf mnasema umekuwa wakati watu siku zote wanaishi kama wagonjwa!
Hongera JK kwa kututoa katika Umaskini duniani! ila bado ....
- Thread starter Mdondoaji
- Start date
Mkuu sasa huu umekuwa ubishi na sii kuelimishana..
GDP per capita ni PPP basis ukigawa kwa idadi ya wananchi wake hii haina maana kabisa ya mtu mmoja anazalisha kiasi gani. Kwa mfano kesho Zanzibar ikijitenga na ina population ya mathlan mil1 wakiuza bililioni 10 wao watakuwa ranked juu ya Tanzania bara hata kama tunauza billioni 100 kwa sababu population yetu ni mil 40. Naukifuata hivyo Bermuda wana GDP per capita kubwa kuliko Marekani, UK, Germany, Japan, Canada yaani nchi zote za G20 hakuna..
1. Sasa pengine mimi ndio nashindwa kukuelewa, labda tutumie mfano huu wa Bermuda, wewe unataka kunambia kitu gani?
2. Ama Guinea Bissau ambayo ni ranked juu ya Libya na South Africa!
- Thread starter
- #124
Mkuu,
GDP per capital income is an economic indicator of individual wealth in the country. Be it institutional wealth, individual house hold wealth etc. Umetolea mfano Zanzibar but upo mfano hai kama nchi za Qatar, Lienchestein, ni vijinchi viduchu ambavyo zinakuwa considered by most economist as most wealthiest nations in the world. Now haimaanishi Qatar, au Liencheinstein hakuna ambao hawana mafanikio au maskini bali wapo mfano hivi karibuni tumeona watu wakiandamana Qatar kudai maslahi yaboreshwe na uhuru wa maoni nk. But economic wise hizo ni indicator za kuonyesha purchasing power of an average economic unit in the country.
Tanzania tukirudi our per capital income is $1,400 per year haimaanishi sisi tunaweza sote kuwa na hela hiyo la hasha bali economic indicator inaonyesha per capital income ya mtanzania ni $1,400. Kuna watu Tanzania wanapata zaidi ya hiyo na wengine wanapata chini ya hiyo. Kuwa ranked juu ya kunaonyesha purchasing power of an individual Tanzanian inaongezeka but hakumaanishi kila mtu anapata hivyo. Chukulia mfano wabunge wetu wanapata milioni 12 kila mwezi, wakurugenzi kwenye mashirika makubwa hupata around milioni 15-11 kwa mwezi. Hizo ni sawa na milioni 144 kwa mwaka or milioni 180 ambapo tukizibadilisha kwa mwaka ni sawa $105,633. Sasa utaona kuna tofauti kubwa ya mapato nchini kwetu.
Mfano wa Qatar kuwa na per capital income kunadetermine an average purchasing power of an economic unit mkuu na sio lazima ikawa sawa na actual fact kwasababu data zinazotumika zimetokana na total economic productivity of the country. Sasa inategemeana na vp uchumi wa upo kama unamilikiwa na watu wachache kama Tanzania basi kuna watu mabilionea wengine wengi kapuku au maskini. Kama uchumi upo diversify (umetawaliwa na middle income earners) kama Marekani, Canada, Australia, UK , France, UAE, Suadi Arabia, Malalysia, Singapore then tunajua on average income wengi pato lao limeongezeka. Hata hivyo GDP per capital inasaidia kutoa mwangazo wa maendeleo ya nchi mkuu kwani vile vile inaangalia uzalishaji wa nchi whether kutokea sekta ya madini, maliasili, huduma, utalii nk.
Kupanda ranking ya GDP per capital ni kitu kizuri kwani kunaonyesha kwanza:-
a. GDP growth ya nchi.
b. Increase in purchasing power of economic unit.
c. Development indicator.
d. International Political Power (especially in areas such as IMF, World Bank, UN).
e. Visa exemption criteria mfano UK, US, Canada, Ireland, France, kuna benchmark criteria for foreigners who come from countries regarded as high income countries wanapewa exemptions fulani na criteria yao wanatumia per capital income.
f. Attractions of Foreign direct investment ambao wanaangalia individual purchasing power as a benchmark to look for opportunities to invest.
etc.
Ni hayo mkuu leo niko busy sana sitaweza kuwa najibu kila mara nilikuwapo!!!!
ropam
Senior Member
- Aug 11, 2010
- 173
- 35
GDP per capital is a measure to console leaders that they are making progress...but never a true measure of how much they have eliminated poverty and improved the living standard of the citizen, hicho kipimo cha kujumlisha mamilion ya mafisadi na business monopoly kama bakhresa then wanawagawanya wananchi kwenye hilo pesa zao ndo unakuta...bakhresa ka-cover wananchi laki 3 wanaoishi kwa umasikini wa kutupwa na wenyewe wanaonekana wanaishi kwa dola 1400 kwa mwaka!.
Mkuu hicho kipimo kikitoa tarakimu kwamba Tanzania ni Nchi masikini duniani unakubali????
Na hicho kikisema tume-improve unakataa? wapi na wapi?
Hakuna anayesema kwamba kipimo hicho ni sahihi 100% kuna critics kwa kipimo utakacholeta hapa duniani that academic nature...
Tunachosema ni kuwa kutumia kipimo hichi uchumi wetu JK ameupandisha..we have to acknowledge
ropam
Senior Member
- Aug 11, 2010
- 173
- 35
kuna watu humu ndani mnaongea tone za government people xactly...eti hata "newyork haikujengwa kwa siku moja", mmerithiswa matakataka yote ya hii govt....mnaudhi, kuna saa huwa nawish historia zingefutwa.....b'se to the majority of tanzanians, history of the past is limiting them rather than benefiting them! ebu tuwazeni kwa pace na speed ya karne ya 21...tukianza kuwaza kwa speed ya karne ya 19 wakati newyork inajengwa ni dalili za kutokujua dunia ya leo imetoka wapi, ipo wapi na inaelekea wapi!
FaizaFoxy
Platinum Member
- Apr 13, 2011
- 99,744
- 122,037
Hivi kwa fikra zako walioweka hizo takwimu hawayajui hayo? unanchekesha!
FaizaFoxy
Platinum Member
- Apr 13, 2011
- 99,744
- 122,037
Uchumi wa Tanzania umepanda na hakuna shaka kwa hilo lakini bado tuna gap kubwa ya kufanya vizuri zaidi, Kikwete amesema in 10 years atajitahidi angalau tuwe na GDP ya $3,000 which is a good target by any scales, na muelekeo mpaka sasa ni mzuri.
Imany John
JF-Expert Member
- Jul 30, 2011
- 2,931
- 1,170
Untold version about the tumbling
shilling BY RICHARD MGAMBA Tanzania is ranked third in gold production with export reaching $1.5 billion last year, but
ironically its shilling is rapidly losing value So where are the gold billions? How the weak shilling weakens your living With Central Banks Governor stating clearly
that the Bank of Tanzania wont intervene to
save the ailing Shilling, only Gods miracles
cane save the local currency from a further
plunge amid the escalating fear of a double-
deep global economic recession resulting from the worsening Eurozone crisis. When the Shilling depreciated alarmingly in
July last year, local analysts as well as officials
at the Bank of Tanzania (BoT) quickly
attributed the trend to the Greece debt crisis.
Locally, they linked it to the election fever
ahead of the 2010 general elections. During that period, the value of the Shilling
against the US dollar jumped from Sh1,380 to a
record high of Sh1,570, causing panic as the
countrys economy depends heavily more on
imports than on exports. By mid this week, nearly 14 months since the
Shilling first tumbled, it was trading at Sh1,680
against the US dollar, according to statistics
gathered from various Bureau De Changes in the
city. Analysts predict that if intervention isnt done to
save the ailing shilling by the end of the year, it
will be trading at Sh1,750 against the US dollar. Though Athens is thousands of kilometres away
from Dar es Salaam, local economists claimed that
whatever was happening in Greece would also
affect the performance of the Tanzanian economy
and therefore cause the depreciation of the
Shilling against major international currencies. The election fever, it was claimed , was another
key factor that caused the rapid depreciation of
the Shilling against major foreign currencies,
mainly the US dollar because many investors,
especially local Asians were at that period buying
more dollars and keeping them owing to fear of the outcome of the elections. Those wanting the public to buy the Greece debt
crisis factor claimed that since EU was focusing
its forces in rescuing one of its partners, it would
be paying less attention, in terms of aid to
Tanzania. Tanzania receives close to US Dollar one
billion in aid from various European donors annually. This week, however, based on data at the
Ministry of Finance, it emerged that the amount of
promised aid that didnt reach the exchequers
coffer in 2010/2011 was very minimal. This
situation wouldnt trigger the rapid fall of the
Shilling against foreign currencies as witnessed during the past 11 months. However, for the 2011/12 budget, The Guardian
on Sunday has reliably established that most of
the development partners have not yet released
their budget support, which is estimated at about
$1 billion, a move that might have also
contributed to the free fall of the shilling in the past few months, since the budget was passed in
June, this year. The countrys elections ended, the Greece debt
crisis was averted by European countries but the
Shilling continued with its abysmal performance
against the major foreign currencies; and nearly
one year later its trading is at historical Sh1,680
against the US dollar. If the Shilling didnt suffer heavily from the global
financial meltdown experienced between 2008
and 2009, why would it depreciate so much just
because of the Greece debt crisis? The answers to this question remains a mystery. But, again if it was the election fever that
contributed to its abysmal performance, why
nearly a year after the votes, the Shilling is still
nose-diving at an alarming pace. The answer to this question, too, remains
unconvincing to many, except to the Central Bank
officials and some local economists. This week again, the local economic gurus said
the latest depreciation of the Shilling was due
mainly to the ongoing crisis at the Eurozone,
which many international economists warn that
could become another deadly credit crunch in a
few months. But whats really causing the tumbling of the
Shilling against major international currencies? While the decline of the Shilling is good for the
exporters to make a killing to the importers its
the worst situation, and its burden will always
be shifted to the ordinary consumers by
increasing prices of all imported goods to cushion
the loss resulting from its depreciation. Inflation and exchange rate depreciation are
closely related over the long term, but can vary
widely over the short term. For example, if a
country expands the money supply, lets say it
prints money faster than the economy itself is
growing, the currency would be worthless both inside and outside the nation, causing both
inflation and a devaluation. Exchange rates take into account not only current
inflation, but anticipated increases. Devaluation
can also lead to inflation by forcing up the price
locals would pay for imported goods. In mathematical terms if in January last year a
barrel of oil was costing $75, it means a local oil
dealer needed Sh103,500 to buy that barrel, but
today, he or she will require Sh126,000 or extra
Sh22,500 to purchase the same amount of crude
oil. Who pays the extra cost? It is all of us, who buy
fuel for our vehicles to cruise on the roads, as
well as those who pay for public transport and
millions of kerosene users in Tanzania who
depend on it for energy. If the Shilling factor was added to other global
factors behind the surging fuel prices, including
the unrest in Libya, and the Middle East, the
Eurozone crisis and slight decline in demand
caused by weaker demand in the United States,
and the impact of financial strain, particularly among developed countries, which slowed
down demand in China and India, projections
downside risks have materialised. Oil demand this year is set at 87.99 million barrels
per day (bpd) down from the previous estimate
of 88.14 million bpd, the Organisation of
Petroleum Exporting Countries (OPEC) said in its
latest monthly report. For 2012, demand is
forecast to average 89.26 million bpd, down from an estimated 89.44 million bpd in August. At the domestic market, its pinch to all
Tanzanians who at the end of the day bear the
brunt of surging oil prices caused by among
other things, the weakening Shilling. The recent oil crisis at the local market caused by
the strike by local oil dealers was just a drop in
the ocean, meaning there are many more worse
things to come than the country has already
witnessed. The same trend is reflected in all other imported
goods and raw materials, which are purchased
using foreign currencies, mainly the US dollar. But as BoT remains a watcher, letting the market
forces and the so-called economic fundamentals
take charge, the prices of imported second hand
cars, medicine, petrol and spare parts have shot
up as the full impact of a depreciating Shilling
begins to hit consumers pockets. Prices of imported second hand cars have surged
by 42 percent between January and September,
this year, with the main factor behind the surge
being the weakening Shilling against the US
dollar. At the local hospitals, no one would be spared as
the cost of imported medicines has also shot up
by an average of 18 percent, thanks to the
weaker Shilling. As the Shilling continues to depreciate, so does
the purchasing power of millions of consumers,
whose power to buy is dented by the
skyrocketing retails prices at the local market. However, to the Nile Perch processor and
exporter based in Mwanza city and cotton
exporter on the southern shores of Lake Victoria,
its a blessing in disguise because the weaker
Shilling means more profits to the exporter. For instance, if a kilogramme of cotton was
trading at $.90 cents in January, last year. When
the local exporter receives his payments from a
buyer in Europe, he pocketed a total of Sh1,242,
but today, at same price, he or she would earn
Sh1,512 - a 21 percent increase in earnings. However, it might not be the right time for the
Nile Perch exporter to celebrate because the
European Union, which consumes about 80
percent of the Perch fillets from the lake, is
battling the so-called Eurozone crisis. What also puzzles many is that fact that at the
time when gold price per ounce is surging
dramatically reaching $1,300 per ounce, with
total export for gold and other minerals estimated
this year to reach about $2 billion. According to the data released by the Central
Bank of Tanzania, the total value of exports of
goods and services in the year ending October
2010 increased by 15.7 percent, hitting $5.5
billion, with gold alone earning about $1.5 billion.
However a big chunk of this money especially in mining industry doesnt return to the country. According to the details gathered by the
Guardian on Sunday, if export dollars were fully
wired back to the country, the Tanzanian shilling
would have been one of the strongest in the
region in terms of exchange rate value against
major foreign currency. No intervention Perhaps the most appalling thing is that everyone
responsible seems to be comfortable with the
current pathetic performance of the Shilling
against major currencies. While last week Kenyas President Mwai Kibaki
held a crucial meeting to discuss measures to
save the dying shilling, in Tanzania, no one seems
to be in a hurry to rescue the economy, thanks to
the fragile economy. This week, the Central Bank Governor Professor
Benno Ndulu stated clearly the BoT would not
intervene by releasing more dollars to ease the
current shortage; instead it would only deal with
economic fundamentals. More dollars in homes than banks When I did an exclusive interview with the
governor in September 2009 he told me that the
amount of US dollar held in our homes was two
times what was in the banking circulation. Tanzanian residents hold not less than $1.5
billion in their homes, while commercial banks
hold another $600 to $700 million, he told me. Tanzanias foreign reserves stand at $3.6 billion
by mid this year, up from $2.4 billion about four
years ago. Since then nothing has changed much but the
value of the Shilling has suffered much during
that period. In 2009, September, the dollar was
trading at Sh1320, but 24 months later, the
Shilling has tumbled by 27 percent. More Shillings, less dollars in the domestic
market But, this week, we have been told that as the
Shilling hit the 17-year record low against the
major international currencies, theres a big
shortage of the US dollar caused mainly by the
importers demand. To put things into perspective, the demand for US
dollars and other major foreign currencies is
higher than the supply at the local market -
meaning that the price of buying these currencies
known as exchange rates will go up as importers
struggle to get enough dollars to import goods. Just within fifteen months, the Shilling has
tumbled by 14.3 percent against the US dollar,
according to the latest statistics gathered by The
Guardian on Sunday, this week. The countrys foreign exchange was liberalised,
especially in the 1990s, but as strong regulatory
measures are still lacking anyone can buy any
amount of US dollars and other major foreign
currencies without a stumbling block. Foreign exchange, the business of trading the
worlds currencies, comprises a huge, busy
market that is never officially closed, not even for
major holidays. The average daily turnover in
April 2007 was $3.2 trillion, according to the
Bank of International Settlements (BIS), the central bank of central banks. Dollarised economy? Today in Tanzania you can travel with millions of
dollars in your suitcase without any barrier,
something that couldnt happen in countries like
South Africa, which controls 33 percent of
Africas economy. While in South Africa one is
never allowed to purchase things in US dollars in Tanzania prices of many goods and services are
pegged to the US dollar. Yet the BoT is quiet about
this situation. Our economy has already been
dollarised. The funniest thing is that in Tanzania, according
to the BoT governor, the law allows a Tanzanian
resident to hold foreign currency and also pay in
foreign currency. The law allows one also to hold a bank account
denominated in foreign currency, a major change
enacted in 1992 and it has remained the same.
You may quote prices in foreign currency but
you cant force anybody to pay in that currency. But, if lets say that willingly you go ahead and
pay in US dollars, you are neither breaking the
law nor the one accepting your payment, the
BoT governor told me, in September in 2009, one
year after the global financial crunch. According to him, when the Shilling was
depreciating every year, people found the use of
foreign currency, and especially the dollar, as a
way of protecting their wealth so that it didn't
lose value when the local currency lost value. As a result today, when you look at all the money
in this country as we measure it in broad terms,
says the governor, a third of the money supply is
actually held in foreign currency, and mainly in
bank accounts. Liberalization at our peril The country might have fully liberalised its
financial sector in 1992 to match with major
economic reforms that saw Tanzania shifting
from socialism to the so-called free market
economy. But some financial analysts say we
gave too much without having a control on the foreign exchange market. We are not liberalized more than South Africa
but still South Africans have strong regulations
that govern the foreign exchange market when
you have a situation where prices are pegged to
the dollar or people pay their bills in dollars, it
becomes a disaster to your economy, a chief executive officer of one of the leading
commercial banks told me this week. According to the CEO, who declined to be named
citing the sensitivity of the matter, the foreign
exchange market in Tanzania operates under the
jungle rule - a situation that also contributes to
weaken the Shilling. 2010 election fever The ailing shilling dates back to mid last year,
when suddenly, it lost its value against the US
dollar at an alarming pace. For instance in 2010, just a few weeks before the
launch of official campaigns of the general
election, there was a dramatic and sudden
depreciation of the Shilling against the major
international currencies. Three things might have caused this situation.
One was capital flight, which is a situation
whereby more often, local banks and companies
rush to sell local currency holdings after seeing
looming foreign exchange crisis. The intention is
to buy more foreign currencies and wire them abroad, pending the calmness of the local
currency market. Second was the printing of more money to
cushion the election expenses, whereby in last
years alone, for instance, the ruling party had a
budget of $50 million (Sh80 billion), but managed
to raise only half of the money from various
fundraising campaigns that also involved the use of mobile phones to raise money. The BoT has
repeatedly strongly denied this claim. Speculators game The third factor was speculators mainly major
local banks and biggest private money traders.
Speculators can be the large banks own trading
departments, hedge funds or other institutional
investors. Speculators mainly use Spot Rates, which is the
amount of currency on sale for now, and
Forward Contracts an agreement to sell one
currency for a given amount of another
sometime in the future. For example, if the Tanzanian Shilling is now
trading at Sh1680 per dollar and people believe it
to be overvalued; a firm may only commit to
paying Sh1,780 per dollar a year from now. According to financial experts, if speculators
believe a currency to be overvalued, they sell the
currency both spot and forward, which can
precipitate a crisis. Selling spot can create an excess of supply now -
they hope more than the government can buy
back. By selling the currency forward (if a
forward market exists) at the fixed price, they
stand to gain enormous profit if the peg breaks
and its value drops. With little chance of a currency gaining strength, there is very little risk,
unless the central bank dramatically raises rates. It was the masters of hedge funds that the
Hungarian-born philanthropist George Soros did
when he made more than $1 billion of his fortune
by attacking the Pound Sterling and the Italian lira
in 1992, just before they dropped out of the
European Monetary System. Artificial shortage? One major oil dealer in the country with a
turnover of about $80 million told The Guardian
on Sunday that speculators mainly major
commercial banks are to blame for creating
artificial shortage of US dollars in the market for
their advantage. We are aware about how three major banks
have been creating artificial shortage of dollars in
the domestic market so that they can make huge
profit we have informed the BoT officials but no
any intervention has been done to arrest the
situation, the oil dealer who didnt want to be named told this paper. Some players blame the BoT tendency to let the
market decide as the biggest problem that causes
the sharp depreciation of the Shilling against the
dollar, as greedy dealers use the loopholes to
create artificial shortage. What this means is that the government simply
let the market determine the currencys value,
expending no resources to prop up its value. This
is mainly meant to allow the local currency rather
than the real economy to absorb economic
shocks. While this staves off sudden collapses a broken peg the nations imports and exports
become subject to the often volatile swings of
the currency markets. The financial experts call this process a Free
Float, which is highly adopted by the BoT. There
are about other three methods apart from Free
Float, which the government can use to rescue
our weakening and dying Shilling. These
methods include Dirty Float, by which government intervention is decided on a case-
by-case basis often as a way of smoothing out
otherwise desirable movements in the currency. How to save the ailing Shilling While many developed nations profess to be free
marketers, they will sometimes intervene to
change their exchange rate. For example, the US
and Japanese central banks have coordinated
actions to change the dollar-yen exchange rate,
while the UK shadowed the Deutschmark for several years in the 1980s, wrote Sara Silver of
the Columbia University, in her paper Foreign
Exchange Crises The second alternative to the Bank of Tanzania is
Crawling Pegs and Trading Bands whereby the
pegged exchange rate moves slowly but in line
with inflation. This can work well if inflation is
mild and the exchange rate is relatively constant.
Chile, Colombia, Ecuador and Israel have all maintained crawling bands. The third alternative is Currency Board a legal
framework ensuring that local currency is
always backed by reserves of dollars or another
strong currency, in effect, making the two
currencies substitutes. In monetary terms, this prevents the government
from printing money to finance government
operations. The scheme is used by countries that
want to maintain their own currency out of pride
but actually subject themselves to the monetary
policies of another nation. In Argentina, for instance, a currency board was
credited with reining in the hyperinflation of the
late 1980s. The system collapsed in 2001, when
the federal government could neither control nor
cover spending by provincial governments.
Ecuador, Panama and El Salvador all use the US dollar as their currency. According to Atiya Hussain, an expert on
currency market from Columbia University, just
because many governments adopted free-
floating currencies after the Bretton Woods
system broke down doesnt mean they will sit
by and watch their currencies become too strong or too weak. An overly strong currency makes that countrys
exports relatively more expensive and, therefore,
uncompetitive in the global marketplace a
development that an export-dependent economy
cannot afford to leave unchecked for too long. An overly weak currency, meanwhile, is often
seen as something to avoid because of political
reasons such as nationalism. Inflationary
pressures within a country may also be
exacerbated by a weak currency that, by making
imports more expensive, imports inflation, writes Hussain Hussain further writes: Intervention is a
powerful weapon, wrenching currencies out of
whatever range they had been trading in. Often,
monetary authorities are happy to confirm that
they to, as the local Shilling continues to weaken further. SOURCE: GUARDIAN ON SUNDAY
shilling BY RICHARD MGAMBA Tanzania is ranked third in gold production with export reaching $1.5 billion last year, but
ironically its shilling is rapidly losing value So where are the gold billions? How the weak shilling weakens your living With Central Banks Governor stating clearly
that the Bank of Tanzania wont intervene to
save the ailing Shilling, only Gods miracles
cane save the local currency from a further
plunge amid the escalating fear of a double-
deep global economic recession resulting from the worsening Eurozone crisis. When the Shilling depreciated alarmingly in
July last year, local analysts as well as officials
at the Bank of Tanzania (BoT) quickly
attributed the trend to the Greece debt crisis.
Locally, they linked it to the election fever
ahead of the 2010 general elections. During that period, the value of the Shilling
against the US dollar jumped from Sh1,380 to a
record high of Sh1,570, causing panic as the
countrys economy depends heavily more on
imports than on exports. By mid this week, nearly 14 months since the
Shilling first tumbled, it was trading at Sh1,680
against the US dollar, according to statistics
gathered from various Bureau De Changes in the
city. Analysts predict that if intervention isnt done to
save the ailing shilling by the end of the year, it
will be trading at Sh1,750 against the US dollar. Though Athens is thousands of kilometres away
from Dar es Salaam, local economists claimed that
whatever was happening in Greece would also
affect the performance of the Tanzanian economy
and therefore cause the depreciation of the
Shilling against major international currencies. The election fever, it was claimed , was another
key factor that caused the rapid depreciation of
the Shilling against major foreign currencies,
mainly the US dollar because many investors,
especially local Asians were at that period buying
more dollars and keeping them owing to fear of the outcome of the elections. Those wanting the public to buy the Greece debt
crisis factor claimed that since EU was focusing
its forces in rescuing one of its partners, it would
be paying less attention, in terms of aid to
Tanzania. Tanzania receives close to US Dollar one
billion in aid from various European donors annually. This week, however, based on data at the
Ministry of Finance, it emerged that the amount of
promised aid that didnt reach the exchequers
coffer in 2010/2011 was very minimal. This
situation wouldnt trigger the rapid fall of the
Shilling against foreign currencies as witnessed during the past 11 months. However, for the 2011/12 budget, The Guardian
on Sunday has reliably established that most of
the development partners have not yet released
their budget support, which is estimated at about
$1 billion, a move that might have also
contributed to the free fall of the shilling in the past few months, since the budget was passed in
June, this year. The countrys elections ended, the Greece debt
crisis was averted by European countries but the
Shilling continued with its abysmal performance
against the major foreign currencies; and nearly
one year later its trading is at historical Sh1,680
against the US dollar. If the Shilling didnt suffer heavily from the global
financial meltdown experienced between 2008
and 2009, why would it depreciate so much just
because of the Greece debt crisis? The answers to this question remains a mystery. But, again if it was the election fever that
contributed to its abysmal performance, why
nearly a year after the votes, the Shilling is still
nose-diving at an alarming pace. The answer to this question, too, remains
unconvincing to many, except to the Central Bank
officials and some local economists. This week again, the local economic gurus said
the latest depreciation of the Shilling was due
mainly to the ongoing crisis at the Eurozone,
which many international economists warn that
could become another deadly credit crunch in a
few months. But whats really causing the tumbling of the
Shilling against major international currencies? While the decline of the Shilling is good for the
exporters to make a killing to the importers its
the worst situation, and its burden will always
be shifted to the ordinary consumers by
increasing prices of all imported goods to cushion
the loss resulting from its depreciation. Inflation and exchange rate depreciation are
closely related over the long term, but can vary
widely over the short term. For example, if a
country expands the money supply, lets say it
prints money faster than the economy itself is
growing, the currency would be worthless both inside and outside the nation, causing both
inflation and a devaluation. Exchange rates take into account not only current
inflation, but anticipated increases. Devaluation
can also lead to inflation by forcing up the price
locals would pay for imported goods. In mathematical terms if in January last year a
barrel of oil was costing $75, it means a local oil
dealer needed Sh103,500 to buy that barrel, but
today, he or she will require Sh126,000 or extra
Sh22,500 to purchase the same amount of crude
oil. Who pays the extra cost? It is all of us, who buy
fuel for our vehicles to cruise on the roads, as
well as those who pay for public transport and
millions of kerosene users in Tanzania who
depend on it for energy. If the Shilling factor was added to other global
factors behind the surging fuel prices, including
the unrest in Libya, and the Middle East, the
Eurozone crisis and slight decline in demand
caused by weaker demand in the United States,
and the impact of financial strain, particularly among developed countries, which slowed
down demand in China and India, projections
downside risks have materialised. Oil demand this year is set at 87.99 million barrels
per day (bpd) down from the previous estimate
of 88.14 million bpd, the Organisation of
Petroleum Exporting Countries (OPEC) said in its
latest monthly report. For 2012, demand is
forecast to average 89.26 million bpd, down from an estimated 89.44 million bpd in August. At the domestic market, its pinch to all
Tanzanians who at the end of the day bear the
brunt of surging oil prices caused by among
other things, the weakening Shilling. The recent oil crisis at the local market caused by
the strike by local oil dealers was just a drop in
the ocean, meaning there are many more worse
things to come than the country has already
witnessed. The same trend is reflected in all other imported
goods and raw materials, which are purchased
using foreign currencies, mainly the US dollar. But as BoT remains a watcher, letting the market
forces and the so-called economic fundamentals
take charge, the prices of imported second hand
cars, medicine, petrol and spare parts have shot
up as the full impact of a depreciating Shilling
begins to hit consumers pockets. Prices of imported second hand cars have surged
by 42 percent between January and September,
this year, with the main factor behind the surge
being the weakening Shilling against the US
dollar. At the local hospitals, no one would be spared as
the cost of imported medicines has also shot up
by an average of 18 percent, thanks to the
weaker Shilling. As the Shilling continues to depreciate, so does
the purchasing power of millions of consumers,
whose power to buy is dented by the
skyrocketing retails prices at the local market. However, to the Nile Perch processor and
exporter based in Mwanza city and cotton
exporter on the southern shores of Lake Victoria,
its a blessing in disguise because the weaker
Shilling means more profits to the exporter. For instance, if a kilogramme of cotton was
trading at $.90 cents in January, last year. When
the local exporter receives his payments from a
buyer in Europe, he pocketed a total of Sh1,242,
but today, at same price, he or she would earn
Sh1,512 - a 21 percent increase in earnings. However, it might not be the right time for the
Nile Perch exporter to celebrate because the
European Union, which consumes about 80
percent of the Perch fillets from the lake, is
battling the so-called Eurozone crisis. What also puzzles many is that fact that at the
time when gold price per ounce is surging
dramatically reaching $1,300 per ounce, with
total export for gold and other minerals estimated
this year to reach about $2 billion. According to the data released by the Central
Bank of Tanzania, the total value of exports of
goods and services in the year ending October
2010 increased by 15.7 percent, hitting $5.5
billion, with gold alone earning about $1.5 billion.
However a big chunk of this money especially in mining industry doesnt return to the country. According to the details gathered by the
Guardian on Sunday, if export dollars were fully
wired back to the country, the Tanzanian shilling
would have been one of the strongest in the
region in terms of exchange rate value against
major foreign currency. No intervention Perhaps the most appalling thing is that everyone
responsible seems to be comfortable with the
current pathetic performance of the Shilling
against major currencies. While last week Kenyas President Mwai Kibaki
held a crucial meeting to discuss measures to
save the dying shilling, in Tanzania, no one seems
to be in a hurry to rescue the economy, thanks to
the fragile economy. This week, the Central Bank Governor Professor
Benno Ndulu stated clearly the BoT would not
intervene by releasing more dollars to ease the
current shortage; instead it would only deal with
economic fundamentals. More dollars in homes than banks When I did an exclusive interview with the
governor in September 2009 he told me that the
amount of US dollar held in our homes was two
times what was in the banking circulation. Tanzanian residents hold not less than $1.5
billion in their homes, while commercial banks
hold another $600 to $700 million, he told me. Tanzanias foreign reserves stand at $3.6 billion
by mid this year, up from $2.4 billion about four
years ago. Since then nothing has changed much but the
value of the Shilling has suffered much during
that period. In 2009, September, the dollar was
trading at Sh1320, but 24 months later, the
Shilling has tumbled by 27 percent. More Shillings, less dollars in the domestic
market But, this week, we have been told that as the
Shilling hit the 17-year record low against the
major international currencies, theres a big
shortage of the US dollar caused mainly by the
importers demand. To put things into perspective, the demand for US
dollars and other major foreign currencies is
higher than the supply at the local market -
meaning that the price of buying these currencies
known as exchange rates will go up as importers
struggle to get enough dollars to import goods. Just within fifteen months, the Shilling has
tumbled by 14.3 percent against the US dollar,
according to the latest statistics gathered by The
Guardian on Sunday, this week. The countrys foreign exchange was liberalised,
especially in the 1990s, but as strong regulatory
measures are still lacking anyone can buy any
amount of US dollars and other major foreign
currencies without a stumbling block. Foreign exchange, the business of trading the
worlds currencies, comprises a huge, busy
market that is never officially closed, not even for
major holidays. The average daily turnover in
April 2007 was $3.2 trillion, according to the
Bank of International Settlements (BIS), the central bank of central banks. Dollarised economy? Today in Tanzania you can travel with millions of
dollars in your suitcase without any barrier,
something that couldnt happen in countries like
South Africa, which controls 33 percent of
Africas economy. While in South Africa one is
never allowed to purchase things in US dollars in Tanzania prices of many goods and services are
pegged to the US dollar. Yet the BoT is quiet about
this situation. Our economy has already been
dollarised. The funniest thing is that in Tanzania, according
to the BoT governor, the law allows a Tanzanian
resident to hold foreign currency and also pay in
foreign currency. The law allows one also to hold a bank account
denominated in foreign currency, a major change
enacted in 1992 and it has remained the same.
You may quote prices in foreign currency but
you cant force anybody to pay in that currency. But, if lets say that willingly you go ahead and
pay in US dollars, you are neither breaking the
law nor the one accepting your payment, the
BoT governor told me, in September in 2009, one
year after the global financial crunch. According to him, when the Shilling was
depreciating every year, people found the use of
foreign currency, and especially the dollar, as a
way of protecting their wealth so that it didn't
lose value when the local currency lost value. As a result today, when you look at all the money
in this country as we measure it in broad terms,
says the governor, a third of the money supply is
actually held in foreign currency, and mainly in
bank accounts. Liberalization at our peril The country might have fully liberalised its
financial sector in 1992 to match with major
economic reforms that saw Tanzania shifting
from socialism to the so-called free market
economy. But some financial analysts say we
gave too much without having a control on the foreign exchange market. We are not liberalized more than South Africa
but still South Africans have strong regulations
that govern the foreign exchange market when
you have a situation where prices are pegged to
the dollar or people pay their bills in dollars, it
becomes a disaster to your economy, a chief executive officer of one of the leading
commercial banks told me this week. According to the CEO, who declined to be named
citing the sensitivity of the matter, the foreign
exchange market in Tanzania operates under the
jungle rule - a situation that also contributes to
weaken the Shilling. 2010 election fever The ailing shilling dates back to mid last year,
when suddenly, it lost its value against the US
dollar at an alarming pace. For instance in 2010, just a few weeks before the
launch of official campaigns of the general
election, there was a dramatic and sudden
depreciation of the Shilling against the major
international currencies. Three things might have caused this situation.
One was capital flight, which is a situation
whereby more often, local banks and companies
rush to sell local currency holdings after seeing
looming foreign exchange crisis. The intention is
to buy more foreign currencies and wire them abroad, pending the calmness of the local
currency market. Second was the printing of more money to
cushion the election expenses, whereby in last
years alone, for instance, the ruling party had a
budget of $50 million (Sh80 billion), but managed
to raise only half of the money from various
fundraising campaigns that also involved the use of mobile phones to raise money. The BoT has
repeatedly strongly denied this claim. Speculators game The third factor was speculators mainly major
local banks and biggest private money traders.
Speculators can be the large banks own trading
departments, hedge funds or other institutional
investors. Speculators mainly use Spot Rates, which is the
amount of currency on sale for now, and
Forward Contracts an agreement to sell one
currency for a given amount of another
sometime in the future. For example, if the Tanzanian Shilling is now
trading at Sh1680 per dollar and people believe it
to be overvalued; a firm may only commit to
paying Sh1,780 per dollar a year from now. According to financial experts, if speculators
believe a currency to be overvalued, they sell the
currency both spot and forward, which can
precipitate a crisis. Selling spot can create an excess of supply now -
they hope more than the government can buy
back. By selling the currency forward (if a
forward market exists) at the fixed price, they
stand to gain enormous profit if the peg breaks
and its value drops. With little chance of a currency gaining strength, there is very little risk,
unless the central bank dramatically raises rates. It was the masters of hedge funds that the
Hungarian-born philanthropist George Soros did
when he made more than $1 billion of his fortune
by attacking the Pound Sterling and the Italian lira
in 1992, just before they dropped out of the
European Monetary System. Artificial shortage? One major oil dealer in the country with a
turnover of about $80 million told The Guardian
on Sunday that speculators mainly major
commercial banks are to blame for creating
artificial shortage of US dollars in the market for
their advantage. We are aware about how three major banks
have been creating artificial shortage of dollars in
the domestic market so that they can make huge
profit we have informed the BoT officials but no
any intervention has been done to arrest the
situation, the oil dealer who didnt want to be named told this paper. Some players blame the BoT tendency to let the
market decide as the biggest problem that causes
the sharp depreciation of the Shilling against the
dollar, as greedy dealers use the loopholes to
create artificial shortage. What this means is that the government simply
let the market determine the currencys value,
expending no resources to prop up its value. This
is mainly meant to allow the local currency rather
than the real economy to absorb economic
shocks. While this staves off sudden collapses a broken peg the nations imports and exports
become subject to the often volatile swings of
the currency markets. The financial experts call this process a Free
Float, which is highly adopted by the BoT. There
are about other three methods apart from Free
Float, which the government can use to rescue
our weakening and dying Shilling. These
methods include Dirty Float, by which government intervention is decided on a case-
by-case basis often as a way of smoothing out
otherwise desirable movements in the currency. How to save the ailing Shilling While many developed nations profess to be free
marketers, they will sometimes intervene to
change their exchange rate. For example, the US
and Japanese central banks have coordinated
actions to change the dollar-yen exchange rate,
while the UK shadowed the Deutschmark for several years in the 1980s, wrote Sara Silver of
the Columbia University, in her paper Foreign
Exchange Crises The second alternative to the Bank of Tanzania is
Crawling Pegs and Trading Bands whereby the
pegged exchange rate moves slowly but in line
with inflation. This can work well if inflation is
mild and the exchange rate is relatively constant.
Chile, Colombia, Ecuador and Israel have all maintained crawling bands. The third alternative is Currency Board a legal
framework ensuring that local currency is
always backed by reserves of dollars or another
strong currency, in effect, making the two
currencies substitutes. In monetary terms, this prevents the government
from printing money to finance government
operations. The scheme is used by countries that
want to maintain their own currency out of pride
but actually subject themselves to the monetary
policies of another nation. In Argentina, for instance, a currency board was
credited with reining in the hyperinflation of the
late 1980s. The system collapsed in 2001, when
the federal government could neither control nor
cover spending by provincial governments.
Ecuador, Panama and El Salvador all use the US dollar as their currency. According to Atiya Hussain, an expert on
currency market from Columbia University, just
because many governments adopted free-
floating currencies after the Bretton Woods
system broke down doesnt mean they will sit
by and watch their currencies become too strong or too weak. An overly strong currency makes that countrys
exports relatively more expensive and, therefore,
uncompetitive in the global marketplace a
development that an export-dependent economy
cannot afford to leave unchecked for too long. An overly weak currency, meanwhile, is often
seen as something to avoid because of political
reasons such as nationalism. Inflationary
pressures within a country may also be
exacerbated by a weak currency that, by making
imports more expensive, imports inflation, writes Hussain Hussain further writes: Intervention is a
powerful weapon, wrenching currencies out of
whatever range they had been trading in. Often,
monetary authorities are happy to confirm that
they to, as the local Shilling continues to weaken further. SOURCE: GUARDIAN ON SUNDAY
Zion Daughter
JF-Expert Member
- Jul 9, 2009
- 8,921
- 4,238
Per capita income imeongezeka lakn haina uwiano na mfumuko wa bei ya bidhaa.Gap kati ya maskini wengi na tajiri wachache ni kubwa balaa.
Mphamvu
JF-Expert Member
- Jan 28, 2011
- 10,702
- 3,310
i am nothing to do na hayo majiidiipii, ninachokumbuka wakati wa ruksa ugali ulikuwa wa uhakika nyumbani pamoja na hyo nini sijui kuwa ndogo, sasa hv familia nyingi zinapiga pasi ndefu kama za livapuli, i mean mchana kunapita kukavu. aaaagh!
Ngambo Ngali
JF-Expert Member
- Apr 17, 2009
- 3,517
- 1,363
Tunapiga mark time Huku tunarudi nyuma
- Thread starter
- #135
Tatizo la watanzania mtu akifanya vizuri hatukubali ukweli tunatafuta pa kuponda mwe ndio maana hatuendelei. Kama nilivyosema katika post yangu ya mwanzo kabisa unequal distribution of income ipo kwenye kila nchi. Wakati wewe unasema Tanzania unaishi kwa mlo mmoja mbona kuna watu wanaishi vizuri tu Tanzania niambie hawa pesa wanaipata wapi? Kuna wanaendesha magari mpaka ya thamani ya $300,000 hawa wamepata wapi njia za kuboresha maisha yao?
Problems kwenye shillingi ya Tanzania zinategemeana na miundo mbinu ya nchi. Ningelikuwa mie Gavana ningelimshinikiza Rais awaambie makampuni ya madini yawe yamekuwa registered nchini na walipe wafanyakazi wao in Tshs na sio US dollar, Kuzuia ulipaji wa dollar katika majengo, ada za shule nk, kumhamasisha kutatua tatizo la umeme nchini na kuwahamasisha mabenki na serikali kutoa mikopo nafuu kwa wafanyabiashara wakati, wakulima na viwanda nchini.
Serikali ikifanya hilo itapunguza demand for foreign currencies na kuongeza supply ya local currencies. Pumping more money in foreign currency market sio ushauri mzuri kwani in a cash economy kama ya kwetu pesa hizo zitastabilize shillingi kwa muda mfupi na tatizo litarudi pale au kuwa baya zaidi. Piga marufuku utumiaji wa foreign currency nchini kutapunguza pressure kwenye Shilling ya Tanzania.
Wakuu inabidi tuwe na tabia ya kusifu mafanikio na sio kubeza na kudharau kila kitu tutachekwa na kamwe hatutaendelea!!!!