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Tanzania Inflation Reaches6.8% In December 2015 Due To Higher Growth And Demand

According to The National Bureau of Statistics of Tanzania (NBS) the Annual Headline Inflation Rate for the month of December 2015 rose to 6.8% from 6.6% in November, 2015.
TZ INFLATION DEC 2015
The National Consumer Price Index (NCPI) which measures the change over time in the cost of a fixed basket of 224 goods and services purchased by a representative sample of households in Tanzania on monthly basis, increased from 150.92 in Dec, 2014 to 161.24 in Dec, 2015. According to the NBS, it follows higher rates of demand from households and international markets which drove the Tanzanian GDP to grow 6.3% in the Q3-2015 thanks to higher activity in construction, transport and mining sectors. Food and Non Alcoholic Beverages Inflation Rate for the Month of Dec 2015 has decreased to 11.1% from 11.2% recorded in Nov, 2015, however, food annual inflation has stabilized at 10.9% in the same period. The 12 months index change for non-food products for the month of Dec, 2015 has increased to 1.8% from 1.2% recorded in Dec, 2015. The Annual Inflation Rate which excludes food and energy for the month of Dec, 2015 has increased to 2.4% from 2.3% recorded in Nov, 2015.

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Posted by on January 20, 2016 in Business News, Tanzania News

 

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African Cities Become Next Frontier For Business

African cities are the next big markets for investors thanks to the rising consumer spending and massive infrastructure investments.

According to a new report by the Economist Intelligence Unit, eight of the world’s 20 fastest growing economies will be African.
Tanzania not in the list.

“A recent survey conducted by The Economist Group of 217 global companies based in 45 countries revealed that expansion in Africa is a priority for two thirds of them within the next decade,” notes the report released last week.

The report notes that although Africa’s growth story has revolved around commodities, Africa’s growth is now becoming more diverse because of the “peace dividend” being realised after years of armed conflict and military rule that has given way to democracy.
rapid urbanisation

There is also rapid urbanisation as half of all Africans are under 20 and are rapidly moving to cities. According to the Habitat, more than 40 per cent of Africans now live in urban areas.

Other growth drivers include improved governance because of greater accountability that comes hand-in-hand with democracy, and the slow strengthening of institutions; growing trade that is replacing aid, thanks to the growing trade relations with China.They also include the rise of technology exemplified by the rise in the number of mobile subscribers in Africa that exceeded the 0.5 billion mark in 2010, allowing companies greater access to consumers.

The infrastructure investment largely by Chinese companies is improving the state of roads, airports, and railway lines, fixing critical infrastructure component that is attracting foreign investors and sparking more domestic investment.
highetst potential

MasterCard African Cities Growth Index 2013 indicates that Accra, Lusaka and Luanda, the capital cities of Ghana, Zambia and Angola respectively, as the Sub-Saharan African cities that have the highest potential for growth over the next five years.

The index was developed in the final quarter of last year and analysed 19 cities across Sub-Saharan Africa ranking them according to their growth potential between last year and 2017.

“Growing urbanisation, combined with the fact that the center of global economic gravity is shifting to dynamic emerging markets such as those found in Africa, means that the continent’s cities will play a much bigger role in driving the economic growth of their respective countries,” said Michael Miebach, president, MasterCard Middle East and Africa.

Among the 25 cities that the Economist Intelligence Unit’s report identifies as being the growth frontiers include Cape Town, Durban, Johannesburg, Nairobi, Tunis, Dakar, Cairo, Tripoli, Addis Ababa and Casablanca among others.

And as for Dar ES Salaam. Let us hope for the best. I would love to see it on the list.

 

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Money-Savers That Turn Into Money-Wasters

Frugal living has become the mantra for people  since the rise of costs of living and Great recession started,  although some of people have been wisely frugal for their whole lives. However,  all money-saving tips are not equal. Sure, taking your lunch to work is a quick ways to save about Tshs. 5,000 to Tshs. 10,000  every weekday, but some other  methods for saving your pennies could end up costing you more than you  realize.

Skimping or Cheating on  Insurance
Before you cancel your insurance policy, you need to think  hard about the consequences. A damaged third part insured vehicle or a damaged home could cost a  lot more than the money you save on your insurance premiums. Raising your  deductible through a bank could be a better way to save, but make sure you can really pay that  deductible without incurring costly debt and bank charges. 
Buying  Things Just Because They’re on Sale
Frugal shoppers live for sales  and discount coupons, but don’t get so caught up in the sale that you end up  buying things you don’t need. Stock up on items you really use when they’re on  sale, but never buy something you wouldn’t purchase if it wasn’t on sale. You’ll  end up with a houseful of unwanted items and then may not have the money  available for something you really need. Ladies you know what I mean, we ran to buy discounted shoes and clothes that we do not even need.
Driving Extra for a  Discount
Sometimes you can’t see the forest because of the trees. If  you are focused so much on saving a few shillings per litre of gas, using a  coupon at a distant store or finding a better price at a store 20 miles away  defeats the purpose. Don’t forget to calculate how much you are spending on the  extra gas needed to get there. You’re also adding miles to your possibly  overworked car. A friend of mine drive all the way to town from Mikocheni to buy Us dollars for her DSTV bill because she claims DSTV exchange rates are bad, by a 5 shilling per dollar, you are driving to town to save TShs.400/- for a Usd 80 monthly DSTV bill. Not so clever!
Skipping  Car Maintenance
Car maintenance is one expense many people like to  skip, but the lack of routine maintenance can end up costing thousands of shillings in car repairs. You may even have to replace your damaged  car.
Not Funding Your  Retirement Account
If you’re scrimping and living from paycheck to  paycheck, the idea of skimming money off that check for a far-off retirement can  be daunting. We all know the Social Security fund  saga going on in our country.
Think about this: if you put away a few shillings everymonth for  years, those shillings will eventually turn into thousands. Plus, you may be  reducing your tax burden by using pre-tax shillings for the social security contribution (Employee’s share of contribution). If you  have an employer who’s matching your contributions you are throwing money away  by not at least saving the maximum match amount.Employer might convice you to get more by avoiding NSSF he is saving while you are losing his part of contribution.

 

Buying Cheap  Items

Cheap clothes, cheap shoes, cheap hardware items and cheap  electronics are all readily available, but if you find yourself replacing them  often you may end up spending more money than if you had bought a good quality  item in the first place. Your better choice is to look for good quality items on  sale. Chinese items are playing a big part into this category! selling good looking bad quality items at a lower price!

 
Living Cash Poor
If you try to  save money by keeping only a small amount of cash in your wallet, you may end up  wasting money on ATMs. If you go to your bank and avoid ATM fees, that’s fine,  but many people end up spending around Tshs. 5000 every few days to pull out Tshs. 50,000 out of  their accounts.
Buying the  Wrong Groceries
While bulk grocery shopping can seem like a great  bargain, if you end up throwing away tomatoes that’s gone bad, you’ve  simply wasted money and food. Some people skip buying expensive fruits and  vegetables, but they could pay for that later on because they’ll need extra  vitamins and possibly have health issues.
The Bottom  Line While saving money on small things can add up to big benefits,  make sure the initial savings won’t result in unforeseen consequences in the  long run.
MF
 
 

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IMF expects the world economy to expand 3.5% in 2012

IMF says it expects the world economy to expand 3.5%  in 2012 down slightly from its previous estimate of 3.6% in April. In a quarterly update to its World Economic Outlook issued Monday, the IMF also cut its  forecast to 3.9% in 2013, from 4.1% three months ago.

The Fund cut its US growth  forecast to 2% this year from its previous estimate in April of 2.1% and kept  Eurozone performance in 2012 unchanged at a contraction of 0.3% and down from a  growth of 0.9% in 2013 to 0.7%. For 2013, it expects US growth of 2.3%, down from 2.4%.

An already sluggish global recovery shows signs of further weakness,  mainly because of continuing financial problems in Europe and  slower-than-expected growth in emerging economies, the IMF said in a regular  update to its World Economic Outlook (WEO).

Two other IMF reports were also released July 16. The update to theGlobal  Financial Stability Report (GFSR)  said that risks to financial stability increased in the second quarter of 2012  because of the continued slow global recovery and fears about the quality of  bank assets in Europe.

An update to the IMF’sFiscal  Monitor said that fiscal  adjustment in both advanced and emerging economies is proceeding as expected.

The latest World  Economic Outlookprojects that  the global economy will grow 3.5% this year, down 0.1%age points  from the April forecast, and 3.9% in 2012, 0.2%age points lower  (see table).

“More worrisome than these revisions to the baseline forecast is the increase in  downside risks,” said Olivier Blanchard, the IMF chief economist and director of  the IMF’s Research Department, which prepares the WEO. The IMF emphasised that the relatively minor setback to the global outlook under  its baseline projections is based on three important assumptions:

  • that there will be enough policy action for financial conditions in the  so-called euro area periphery, which includes Greece and Spain, to ease  gradually through 2013;
  • that US fiscal policy does not tighten sharply in 2013; and
  • that steps by some major emerging markets to stimulate growth gain traction.

The IMF said the most immediate risk to the global recovery is that delayed or  insufficient policy action will further escalate the euro area crisis. “Simply  put, the Eurozone periphery countries have to succeed,” said Blanchard.

The report  cited agreements at the June 28 eurozone summit as a step in the right  direction. It said the summit actions should help break the “adverse links  between sovereigns and banks and create a banking union. ”

But the recent  deterioration in sovereign debt markets demonstrates that timely implementation  of these measures, together with further progress on banking and fiscal unions,  must be a priority.

The WEO update also cited the possibility that growth in the United States would  stall because of excessive fiscal tightening caused by political gridlock. “In  the extreme, if policymakers fail to reach consensus on extending some temporary  tax cuts and reversing deep automatic spending cuts,” the US economy could  face a steep decline of more than 4% of GDP in its fiscal deficit in  2013.

That so-called fiscal cliff would cause a severe decline in US growth,  with “significant spillovers to the rest of the world.” Moreover, if the United  States does not act promptly to raise its federal debt ceiling, there will be  increased risk of financial market disruption and loss in consumer and business  confidence.

Growth has slowed in a number of major emerging economies, especially Brazil,  China, and India. This was due both to a weaker external environment and a sharp  deceleration in domestic demand in response to capacity constraints and policy  tightening.

Overall, though, emerging markets have weathered the crisis well. In contrast to the broad trends in the rest of the world, growth in the Middle  East and North Africa will be stronger, as key oil exporters continue to boost  oil production and drive up domestic demand, while activity in Libya rebounds  after the 2011 unrest. Sub-Saharan Africa, which has been insulated from  external financial shocks, is also expected to enjoy relatively robust growth in  2012–13.

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Europe’s bad debts ‘will bite in 2013’‏

Bad debts in the eurozone are a “ticking time bomb” for the continent’s   economy, with the worst effects expected to be felt next year, a report has   warned.

Bad debts in the eurozone are a “ticking time bomb” for the continent’s economy, with the worst effects expected to be felt next year, a report has warned.<br />

Consumer lending is due to contract by 6.6pc, Ernst & Young said, which would represent the fastest pace of lending contraction on record for the eurozone
Banks’ balance sheets will contract by a record margin in 2012, further   constraining the supply of credit to businesses and consumers, according to   Ernst & Young, but the “real impact” of Europe’s debt crisis will not   arrive until 2013.
The accountancy firm said banks will shrink their balance sheets by €1.6   trillion (£1.3 trillion) this year as the result of asset disposals and a   contraction in their lending activity – a sharper decline than during the   financial ­crisis.
As a result, it predicted that corporate lending will contract by 4.8pc in   2012, while consumer loans will fall by 6.6pc, which would represent the   fastest pace of lending contraction on record for the eurozone.
However, next year looks even more “bleak” as the fallout from bad debts is   felt across Europe, Ernst & Young’s Eurozone Financial Services Forecast   said.
“Non-performing loans” – a debt that is either in or close to default – in the   eurozone will peak at 6.5pc of all outstanding loans next year, a record   high for the common currency, according to the accountancy company.
Ernst & Young’s Andy Baldwin said: “While the ­effect of … a combination   of the det­eriorating economy and the recurrent crises of confidence in the   market … on bank balance sheets in 2012 is worrying, the real impact will   not be seen until 2013, when [loan defaults] will hit harder than many are   expecting.” Marie Dixon, an economic adviser to Ernst & Young, added: “Non-performing   loans are a ticking time bomb for the eurozone economy.” She said leniency from lenders to defaulting debtors is “masking the true   extent of their non-performing portfolios.
As the economy continues to   worsen, a larger portion of these loans will be pushed into [default]   status, forcing banks to realise their losses and constricting further   lending. “Larger firms will be able to draw down their cash balances or access   alternative sources of funding, but smaller firms will struggle.” Meanwhile, France will post a smaller growth in 2012 and 2013 than earlier   expected, Finance Minister Pierre Moscovici said.
Growth in 2012 is now expected to reach just 0.4pc or less this year rather   than 0.5pc, while in 2013, “an expansion within 1pc to 1.3pc … appears   more credible” than the earlier forecast of 1.7pc, he said in an interview   published on the Figaro newspaper’s website.
While Tanzania is under stiff budget debate, we should also focuss on the risks that we will face due to euro debt crisis, Our Economy depends more on exports of agricultural crops, the demand for such commodities will fall,leading to cancellation of orders by our trading partners hence falling of the stock prices. Farmers will be forced to sell at a loss and not be able to pay back their debts!
The eurozone crisis also will mean increase in funding costs and hence tighter Leanding Conditions. we all know our budget depends more on Donor funding and debts!
The list goes on and on. Let us have your views on How the Euro debt crisis will affect developing Countries like Tanzania.
 
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Posted by on July 3, 2012 in International News

 

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Mongolia Flooded With Millionaires from Minerals

 

 

Mongolian Tughrik banknotes

Mongolian Tughrik banknotes

 

 

 

 

 

 

Sitting in his traditional tent, Khaidav, a retired teacher, dreams of the  wooden house he will build after one million tughrik ($760) lands in his bank account this summer.
More than a million Mongolians like Khaidav, who goes by one name,  will become tughrik millionaires as they sell shares in Tavan Tolgoi – the world’s third-biggest coking coal deposit which is helping fuel the country’s resources boom – to the government.
Mongolia, a resource-rich country of 3m people with a per capita  gross domestic product of less than $5,000, has introduced policies to  share its growing mineral wealth with its citizens.

One measure involved spreading 20 per cent of the shares in Tavan Tolgoi  among the entire population. Until recently, people were unable to cash  in because the planned public listing of the mine has been delayed.
But in May, ahead of parliamentary elections slated for next week,  the government offered citizens a choice: sell their stake back to the  state for one million tugrik or keep the shares and wait for the public  listing.

More than half of the country opted for the cash, handing the  government a bill of roughly $1bn, or a tenth of the country’s GDP.  However, many Mongolian elites criticise the handouts as premature  because the mine, which is barely developed, has yet to produce the  revenues that are expected.
Politicians have defended the buyback programme, saying they are just giving Mongolians a chance to participate in the mineral wealth.
“That was our biggest election campaign [promise] in 2008, and we  fulfilled it,” said Chimed Saikhanbileg, a candidate for the Democratic  party. “Every citizen in Mongolia now owns 1,072 shares of Tavan Tolgoi, the equivalent of one million tugrik.”
The Democratic party will next week face off against the Mongolian  People’s party in parliamentary elections that will determine who  governs the country for the next four years.

The two centre-left parties who are campaigning on similar platforms, including using mining  revenues to benefit ordinary citizens, have ruled together in a  coalition for most of the past four years.

Tavan Tolgoi was supposed to set the standard for how the country  would handle its mineral resources. Instead, it has become a cautionary  tale, as the project has been delayed by politics in Ulan Bator and by  geopolitical wrangling between China, Russia and other countries that  want to play a part in its development.
The listing has also been delayed by uncertain global markets and the slow progress producing a new Mongolian securities law that will create the legal framework necessary for the three-city listing.
Mongolia is trying to wean itself off of the handout culture that  flourished in previous elections, in which campaigns competed for who  could promise the most cash to voters. After passage of a new election  law, candidates are now barred from making election promises about money or employment.

Tavan Tolgoi is a good example of how election promises can lead to  mismanagement. As the government buys the Tavan Tolgoi shares back, it  will resell some to Mongolian companies for the same price to reduce its bill.
“The 2008 campaigns were about who will give more cash. It cost us  quite dear in the last four years because there was no money to  implement this,” says Oyun Sanjaasuren, head of the Civil Will Green  party, which opposes cash handouts.

“Tavan Tolgoi is quite a big,  complicated equation, with a lot of unknowns still, like how do we deal  with geopolitics, neighbours, and strategic investors.”
Other critics say the buyback scheme is taking badly needed cash away from the mine, which is very short of cash, mainly because it still  produces only a small fraction – 4m tonnes a year – of its potential  output.

 
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Posted by on June 21, 2012 in International News

 

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Fund managers give up on prospect for global growth‏

Fears of a global economic slowdown have come  sharply back into focus, and expectations of decisive action by policy makers  have grown, according to the BofA Merrill Lynch Survey of Fund  Managers for June.

A net 11% of the global panel believes that the  global economy will deteriorate in the coming 12 months – the weakest reading  since      December 2011.

Last month, a net 15% believed the economy  would strengthen and the negative swing of 26%age points is the biggest since  July-August 2011 as the sovereign crisis built. The outlook for  corporate profits has suffered a similarly negative swing. A net 19% of the  panel believes that corporate profits will fall in the coming 12 months. Last  month, a net 1% predicted improving corporate profits.

Investors have adopted aggressively “risk off” positions. Average cash balances are at their highest level since the depth of  the credit crisis in January 2009 at 5.3% of portfolios, up from  4.7% in May. The Risk & Liquidity Composite Indicator fell to 30 points, versus  an average of 40.

 

Asset allocators have moved to a net underweight position in  global equities and increased bond allocations. Support for policy stimulus has grown. The  majority of the panel now believes that global monetary policy is “too  restrictive.” A net 6% take that view, the highest since December 2008. A net 15% said policy was “too stimulative” in May. The proportion of global  investors saying global fiscal policy is “too restrictive” has continued to rise  to a net 28% from a net 23% in May. “Investors have taken extreme ‘risk off’ positions and equities are oversold, but we have yet to see full capitulation.

Low allocations in      Europe are in line  with perceptions of growing risk levels in the Eurozone,” said Gary  Baker, head of European Equities strategy at BofA  Merrill Lynch Global Research. “Hopes expressed last month of a policy  response have now become expectations. Markets are keenly anticipating decisive  action from key policy meetings in June,” said Michael Hartnett,  chief Global Equity strategist at BofA Merrill Lynch Global  Research.

Global equity under-valuations match  all-time low
Global equities are at their most undervalued  since August 2011. A net 48% of the global panel believes global  equities are undervalued, matching the lowest level since the survey began.The  reading is up from a net 35% in May and a net 22% in April. At the same time, a  net 83% of the panel says that bonds are overvalued – also an all-time high and  up from a net 74% a month ago.The view is even more concentrated in  Europe. A net 45% of the global panel sees  Europe as the most undervalued region – an all-time high reading and  up from 27% in May. Asset allocators moved out of global equities  with a net 4% underweight the asset class, compared with a net 16% overweight  equities last month. They reduced their underweight position in bonds to a net  23%, down from a net 33% in May.Global investors have reached their closest  position to being equal weight equities and bonds since November 2011. Fears resurge of Chinese hard landing
Last month’s growing optimism about China’s  economy has halted in June’s survey. The panel is equally split about whether  China’s economy will get stronger or weaker in the year ahead; last month, a net  10% predicted it would strengthen. Significantly, 16% of respondents now believe  China’s economy faces a “hard landing” – up from 9% in May. Broadly, sentiment towards emerging markets has  softened. A net 17% of global asset allocators are overweight Global Emerging  Market equities – down from a net 34% in May.Commodities have also lost favor.  A net 8% of the panel is underweight the asset class, the lowest reading since  February 2009. Allocation by global asset allocators to U.S.  equities improved with a net 31% overweight U.S. stocks, up five%age points  month-on-month. In contrast, domestic investors have turned bearish. A net 36%  of U.S. respondents to the Regional Survey expect the U.S. economy to  deteriorate in the coming 12 months.
 

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