DAR ES SALAAM (Reuters) - Tanzania’s economic growth rate remained below levels targetted by the government in the second quarter, with slumps in the mining and electricity sectors offsetting a strong performance by transport and communications.
Growth slowed to 6.9 percent in the second quarter of 2012 versus a 7 percent expansion in the same period a year ago, the statistics bureau said on Wednesday.
The National Bureau of Statistics said in a report that the mining sector was a drag on economic growth, slowing to 1.2 percent from 5.6 percent following the temporary closure of a mine owned by Africa’s biggest gold miner AngloGold Ashanti.
Tanzania, east Africa’s second-largest economy, has said it would target average economic growth of 8-10 percent annually over the next five years to revamp the agriculture, infrastructure and industrial sectors.
However, the country’s heavy reliance on hydropower coupled with frequent power shortages during dry seasons make that unlikely.
“The slow growth rate has been attributed to the temporary closure of Geita Gold Mine due to major maintenance of the plant,” the state-run National Bureau of Statistics (NBS) said in its quarterly review.
Output in Africa’s fourth-largest gold producer fell to 9.819 tonnes of the precious metal in the second quarter of 2012 compared to 10.405 tonnes a year ago.
Mining is the biggest foreign exchange earner in Tanzania, but the country’s economy also depends on agriculture, tourism, manufacturing, financial services, transport and communications.
“The growth rate of electricity was 5.6 percent in the second quarter of 2012 compared to 10.3 percent in the similar quarter of 2011,” the report said.
Tanzania, like neighbouring Uganda and Kenya, frequently suffers from blackouts, with the International Monetary Fund (IMF) warning on Tuesday the country needs to limit power outages if it wants to maintain buoyant growth this year and next.
The IMF, which re-affirmed its predictions that the Tanzanian economy will grow between 6.5 percent and 7 percent in 2012, said growth is projected to “remain buoyant” in 2013.
The statistics office said growth was particularly boosted by the transport and communication sector, which saw the fastest growth at 15.2 percent, though that was still down on the 16.6 percent recorded in the same period a year ago.
The agricultural sector grew by 5.2 percent in April-June 2012 from 5.9 percent a year earlier and the financial services sector grew by 14.1 percent compared with 10.0 percent growth in the previous year.
“The performance was attributed to an increase in levels of deposits and lending by commercial banks,” the report said.
Construction activity grew at 4.3 percent in the second quarter of 2012 compared with 4.9 percent a year ago, while manufacturing grew 8.2 percent from 8.5 percent previously.