Zanzibar’s economy is expected to grow 6.8% this year, up from 5.1% in 2021, said the archipelago’s second vice president.
In his budget speech on Wednesday, Vice President Hemed Suleiman Abdulla said that the increased growth rate in the islands was due to the global decline in Covid-19 infections.
He also listed them the support of financial packages from the International Monetary Fund (IMF) and the Bank of Tanzania (BoT) to boost the economy of the archipelago last year.
The IMF granted a low-interest loan of $100 million while the BOT made a loan it is a “special loan”. IMF money continued to stimulate the water, education, health and tourism sectors.
Vice President Abdulla said the growth forecast will depend in part on the arrival of international tourists to the archipelago, as the Ukrainian – Russian war will end soon.
“The expansion will be the result of the increase in tourists, which is expected to reach 450,213 this year as the Ukrainian-Russian conflict ends soon.”
Receipts from exports in the islands have increased by 138 percent from Tsh 65.7 billion ($28,134,317) in 2020 to Tsh 155.6 billion ($66,631,654). last year due to an export surge of cloves and seaweed.
Lease of islands to the riches of the world was also mentioned recently by the VP to contribute to the witness and forecast upward trend of economic growth.< /p>
Tue The government received $15 million in upfront leasing fees for the 10 islands, recently.
However, inflation is difficult to contain due to higher fuel prices around the world, the VP said, adding that the Inflation rate hovered around 2.9 percent last February, which was slightly higher than the previous 2.8 percent.
Efforts being made to control food-related inflation , recently included cutting import tariffs by almost half from $600 a ton to just $350 on sugar, rice and flour, but to no avail.
Other reasons behind the expansion to the archipelago’s economy include the State House’s strict labeling of government officials as responsible for the use of public funds; the booming construction industry and the decision of other international airlines such as Air France, Azuri Air, Edelweiss, Global Airways and Eurowings to stop in Zanzibar.