Dar es Salaam, Tanzania — MININGREVIEW.COM — 20 January 2010 – A steep contraction in the Tanzanian mining sector in the first three months of 2009 cut the country’s overall real economic expansion rate for last year to 5.6% from 7.1% in 2008.
Revealing this in a statement released here, the National Bureau of Statistics said that, like other countries in the world, Tanzania’s economy “’ which was underpinned by mining, agriculture and tourism “’ had been affected by the global economic downturn.
It confirmed that mining and quarrying had recorded a decline in growth rate of 40.3% in the first quarter of 2009, compared to a 0.3% drop in the first quarter of 2008.
“The decrease was due to the collapse of the Geita gold mine underground infrastructure, and the fall of world diamond prices which had negative effect in diamond production,” said the bureau.
Reuters reports that the report was the first for the east African nation whose economy is ranked the second largest in the region after Kenya. Economic analysts said there were no surprises in the data.
“The GDP growth trend in the first quarter of 2009 is well in line with the prevailing situation at that time because the mining sector did not perform very well,” University of Dar es Salaam economics professor Humphrey Moshi told Reuters. “We expect subsequent data will show that the economy continued to shrink in the second quarter of 2009, because of the second round of effects from the global financial crisis,” he added.
“Tanzania’s economy will continue to shrink because there are very few people who are producing,” said Tanzania Chamber of Commerce, Industry and Agriculture president Aloyce Mwamanga. “Tanzania’s economy is too dependent on foreign markets and foreign aid. We need to skip that and look inwards,” he stated.