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Tanzania Economic Update Addressing the Impact of COVID-19

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Tanzania Economic Update Addressing the Impact of COVID-19 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized THE WORLD BANK GROUP AFRICA REGION MACROECONOMICS, TRADE AND INVESTMENT GLOBAL PRACTICE JUNE 2020 ISSUE 14 http://www.worldbank.org/tanzania/economicupdate With a Special Section on the Role ofICT With aSpecial SectionontheRole IMPACT OFCOVID-19 IMPACT ADDRESSING THE TANZANIA ECONOMIC UPDATE J UNE 2020, 14TH EDITION The World Bank Group Macroeconomics, Trade and Investment Global Practice, Africa Region PAGE ii TANZANIA ECONOMIC UPDATE J UNE 2020, 14TH EDITION The World Bank Group Macroeconomics, Trade and Investment Global Practice, Africa Region Table of Contents Abbreviations and Acronyms .................................................................iv Acknowledgements .................................................................................vi Executive Summary ................................................................................. 1 Part One: The State of the Economy ..................................................... 8 1.1 The Economy Before COVID-19 ...........................................................................................9 1.2 COVID-19 Impact and the Medium-Term Outlook ........................................................ 19 Part Two: The Potential Of The Digital Economy ............................... 26 2.1 Introduction ...........................................................................................................................37 2.2 Tanzania’s Digital Economy ................................................................................................39 2.3 The Digital Economy as an Engine of Growth ................................................................55 2.4 Recommendations ...............................................................................................................60 Statistical Annexes ................................................................................ 62 References .............................................................................................. 79 PAGE i TANZANIA ECONOMIC UPDATE J UNE 2020, 14TH EDITION The World Bank Group Macroeconomics, Trade and Investment Global Practice, Africa Region Boxes Box 1: Out of Africa? How the Pandemic is Affecting Tourism in Tanzania ...................................................................21 Box 2: Building Confidence: The Role of Information in the Response to COVID-19 ...................................................30 Box 3: How Digital Technologies are Part of the Armory for Coronavirus Response .................................................. 51 Figures Figure 1: Economic Growth, Tanzania and Comparators, 2013–18 ....................................................................................9 Figure 2: Inflation, 2018-20, Percent ..........................................................................................................................................10 Figure 3: Current Account Deficit, 2016–19, Percent .............................................................................................................11 Figure 4: Growth in Exports and Imports, 2016–19, Percent ..............................................................................................11 Figure 5: Official Gross Reserves and Foreign Inflows, 2016-19, US$ ...............................................................................11 Figure 6: Nominal Exchange Rate, 2019–20, Percent ........................................................................................................ 12 Figure 7: Real Effective Exchange Rate, 2019–20, Percent ................................................................................................. 12 Figure 8: Lending Rates, 2019, Percent .....................................................................................................................................13 Figure 9: Growth in M3 and Private Sector Credit, 2019, Percent .....................................................................................13 Figure 10: Public Debt, 2016-19, Percent ..................................................................................................................................15 Figure 11: New Firms Registering for Business, 2014–18 .....................................................................................................16 Figure 12: Tanzania Poverty Trend Based on Tanzanian Poverty-Growth Elasticity, 2011-18 .................................... 18 Figure 13: Tanzania Poverty Trend Simulation Using Average African Poverty-to-Growth Elasticity, 2011-18 .................18 Figure 14: Household Consumption Growth 2011 -2018 by Welfare Percentile (Growth Incidence Curve) ........ 18 Figure 15: Energy and Metal Prices, 2018-20 .........................................................................................................................23 Figure 16: Real GDP Growth Forecast ......................................................................................................................................26 Figure 17: Number of Poor People in Tanzania, 2004-22, Millions ...................................................................................28 Figure 18: Possible Sources of Recovery in 2021, Contribution to GDP Growth ..........................................................35 Figure 19: Digital Economy Framework ...................................................................................................................................40 Figure 20: Google Has Edge Points in Kenya and Uganda .................................................................................................42 Figure 21: Facebook Has CDNs in Zambia, Rwanda, Burundi, Uganda, and Kenya ....................................................42 Figure 22: 3G Coverage ................................................................................................................................................................47 Figure 23: 4G Coverage ................................................................................................................................................................47 Figure 24: Mobile Communications Market Shares, 2019 .................................................................................................48 Figure 25: Smart Phone Ownership, Between Urban and Rural Areas, and Between Men and Women, By Income Quintile, 2017 ......................................................................................................................................50 Figure 26: Mobile Phone Ownership, by Age Group, and Reasons for not Owning a Phone, 2017, Percent .......50 PAGE ii TANZANIA ECONOMIC UPDATE J UNE 2020, 14TH EDITION The World Bank Group Macroeconomics, Trade and Investment Global Practice, Africa Region Figure 27: Trade per Capita Digitally Delivered, US$, 2017 ................................................................................................59 Tables Table 1: Official Quarterly Real GDP, January-September, 2018-19, Percent ...................................................................10 Table 2: Trade Balance, 2017-19 ................................................................................................................................................. 12 Table 3: Fiscal Accounts, 2018/19-2019/20, Percent Of GDP ............................................................................................14 Table 4: Medium-Term Outlook, Annual Percent Change Unless Otherwise Indicated ............................................22 Table 5: Number Of People Working In The Sector, 2018 ...................................................................................................27 Table 6: Poverty Headcount In Selected Urban Areas, 2018-20, Percent .......................................................................29 Table 7: Possible Actions To Protect Livelihoods ....................................................................................................................33 Table 8: Components In Assessment Of The Digital Economy ........................................................................................38 Table 9: Weighted Prices For Internet Bandwidth, 2019 Q2, Us$ .....................................................................................41 Table 10: International Internet Bandwidth By Country (Mbit/S), 2015-19....................................................................41 Table 11: Population Within Reach Of Fiber Transmission Networks Compared, Percent .........................................43 Table 12: Mobile Data Basket Prices Charged By Dominant Operators, 2019 Q4, Us$ ..............................................45 Table 13: Population Coverage In 2019, Percent ....................................................................................................................46 Table 14: Internet Users And Mobile Communications Subscribers, 2015-19 ..............................................................46 Table 15: Voice Traffic, 2014–19 .................................................................................................................................................46 Table 16: Coverage Estimates Based On Cell Locations ......................................................................................................47
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