WB warns Tanzania over 'Gold risk'
World Bank in it's latest report on the country's economy, said it's over reliance on gold exports and its rising oil imports are exposing the economy to global economic shocks more than ever before.
World bank has warned Africa's fourth largest gold producer Tanzania to address the risks in it's over reliance on gold exports.
Gold, Tanzania's biggest foreign exchange earner, accounted for 59.1 percent of the country's total non-traditional exports last year.
World Bank in it's latest report on the country’s economy, said it's over reliance on gold exports and its rising oil imports are exposing the economy to global economic shocks more than ever before.
The report added that these risks have become more visible over the past few years with successive financial and fiscal crises in developed countries, as well as increased volatility in world commodity prices.
A sudden decline in the world gold prices would have a dramatic impact on the total value of Tanzanian exports. A decline in gold prices of 30 per cent would reduce this value by almost 15 per cent,” states the report.
Similarly, with crude oil making up a third of the country’s imports, an increase in the price of this commodity could be destabilising, the report says.
It also states that the inability to maximise benefits associated with openness to international trade is detrimental to Tanzania’s economy.
The report advises the country to diversify its exports and ensure that imports are accessible and cheaper.
“The priority of the country should be to reduce transport costs to facilitate trade with the rest of the world.
Since approximately 90 per cent of Tanzania’s international transactions transit through the Dar es Salaam port, improvement of this facility should be prioritised by policy makers,” the report states.
Large-scale gold mines have invested around $3 billion in Tanzania over the past decade, according to government estimates.
Tanzania plans to increase the contribution of the mining sector to gross domestic product to 10 percent by 2025 from 3.8 percent last year
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