As a Canadian born, BC raised Finance and Economics student, I (Tyler) have become fairly well acquainted with the economic climate of Canada. Ask me about Tanzanian economics, however, and I’ve got nothing for you. In order to be well informed and aware of our surroundings we wanted to cover a few areas of context that will help guide our research going forward. The first of which, is the Tanzanian Economy.
I recognize that not everyone gets excited about numbers, but lets give this a shot. Here are 5 things that I found interesting about the Tanzanian economy.
1. Coffee might cost $75 a cup soon
What I mean by that is that Tanzania has been facing some pretty intense inflation over that past few years, inflation meaning the weakening of their money. Put simply, the $5 Starbucks coffee that you buy today will cost more next year for the same coffee.
Tanzania’s inflation rate hit 19.8% at the end of 2011. If this inflation kept up for 15 years your $5 Starbucks coffee would cost you $75.13. Fortunately, however, the Tanzanian economic practices have brought that number into the single digits in recent years. Rest assured you’ll still get your caffeine fix in the foreseeable future.
2. Tanzanians save more money than our American neighbours.
Tanzanian people are strong savers, saving nearly 25% of their income. To put this in perspective, our American neighbours haven’t saved that much since 1966.
3. Tanzania is the 17th fastest growing economy in the world (but still the 42nd poorest per person)
By the standards of the American central intelligence agency there are 230 countries in the world. Of these 230 countries Tanzania is placed as the 17th fastest growing based on their Gross Domestic Product growth rate. This sounds like great news but even though the country is growing faster than most, it is the 189th richest country in the world per person.
4. Tanzania has more farmers than Chilliwack.
I’m from a small town called Chilliwack in BC. If the sheer quantity of pickup trucks in Chilliwack doesn’t tip you off, the perpetual smell of spreading manure will certainly let any traveller know that there is an excess of farmers in Chilliwack. Surprisingly so, there are more farmers in Tanzania than Chilliwack. Four out of five people work in agriculture in Tanzania. At 80% of the total employment in Tanzania the Agriculture industry is the lifeblood of the working class but in spite of the huge population of farmers, government spending on agriculture was only 7% of their overall spending.
5. People are buying houses on credit cards (I mean, pretty much)
Over the past several years the Bank of Canada has been keeping the prime interbank interest rate at record low – it was even lowered last year to 0.5%. This means that buying a house is cheaper than we have seen ever in this century. Tanzania on the other hand has a slightly different prime rate. At thirty times our Canadian rate, the bank of Tanzania has set a 15.2% prime rate. After the bank takes their cut an average local who wants to buy a house will be paying over 17%. Just imagine putting a couple hundred thousand on your credit card.