TDar’s 1 Trillion Shilling Revamp: World Bank Loan Spurs Growth, Sparks Citizen Debt Concerns in Tanzania.

By Adonis Byemelwa

In a groundbreaking stride towards reshaping Dar es Salaam's landscape, the Tanzanian government has recently finalized a momentous loan agreement, securing a colossal sum of approximately 1 trillion Tanzanian Shillings from the prestigious World Bank, as unveiled by the Ministry of Finance.

This funding is dedicated to the second phase of the Dar es Salaam Metropolitan Development Project (DMDP 2), scheduled for a six-year implementation starting the 2024/25 fiscal year. The ambitious project targets the enhancement of 250 kilometers of roads across all five municipalities, promising a significant makeover for various areas.

Building on the success of the initial phase, which covered 207 kilometers in three districts, the second phase places a primary focus on upgrading both road infrastructure and markets. The Urban and Rural Roads Agency (Tarura) in Dar es Salaam has pinpointed crucial roads in each municipality for improvement.

Ubungo District, for instance, is set to see the construction of 36.11 kilometers, including major roads such as Msumi (9.83 km) and Goba Wakorea (7.76 km), contributing to the overall 150.74 kilometers planned for this phase.

In Kinondoni Municipality, approximately 20.34 kilometers are earmarked for improvement, with pivotal roads like Nakalekwa - Bwawani and Tegeta Polisi - Silver- Binti Matola enhancing connectivity.

Temeke District's plan involves the improvement of 29.8 kilometers, with significant projects like Banana Kitunda- Kivule -Msongola and Barakuda- Changombe -Majichumvi.

The initiative in Ilala Municipality, covering 32.09 kilometers, targets key roads like Kilimahewa - Toangoma and Kipati, contributing to the overall transformation of the area.

In Kigamboni Municipality, focusing on 32.4 kilometers, roads like MC Full Shangwe and Gofingo-Shangwe are set for improvement, ensuring a comprehensive impact on Kigamboni's road network.

Finance Minister Dr. Mwigulu Nchemba underlined the government's commitment to strategic borrowing for essential projects. He emphasized that the country's capacity to repay justifies the increased debt levels, with funds directed toward crucial initiatives like the ongoing construction of the modern railway (SGR) and empowering the Tanzania Agricultural Development Bank (TADB).

While concerns about rising debt levels persist, the government assures that strategic borrowing for crucial projects will drive economic growth. Public sentiment reflects optimism, citing anticipated improvements in transportation, economic activities, and a positive impact on daily lives.

This forward-looking approach positions Tanzania to embark on the second phase of the Dar es Salaam Metropolitan Development Project, ushering in a new era of infrastructure development and economic prosperity for the region. The government's strategic borrowing aligns with its vision for a robust and interconnected urban landscape.

As Sub-Saharan Africa emerges from 2023 with cautious optimism, analysts forecast signs of modest recovery and resilience in the region's macroeconomic landscape. Projections indicate a stable median GDP growth rate of 3.3%, signaling a recovery phase across most nations.

The Eastern Africa bloc, despite grappling with security challenges in Sudan and a resurgence of piracy in Somalia, leads with an impressive regional growth average of 6.5%. However, this growth is accompanied by significant fiscal pressures, primarily driven by escalating sovereign debts, posing a substantial challenge to sustained economic stability.

Tanzania stands out with a positive macroeconomic outlook for 2024, reflecting ongoing political and economic reforms under President Samia Suluhu's administration. The African Development Bank anticipates a substantial uptick in real GDP growth, reaching 6.3% in 2024.

Key investments in infrastructure projects, particularly in the liquid petroleum gas (LPG) sector and pipeline projects, contribute significantly to this growth. Tanzania's vast natural gas reserves, estimated at over 57 trillion cubic feet, position the development of LPG infrastructure as a crucial step to enhance energy security and foster economic growth.

The East African Crude Oil Pipeline (EACOP), co-developed with Uganda, is a major undertaking expected to cost $5 billion. Despite facing cost escalation due to factors like increased input prices, the pipeline represents a critical investment in commercializing oil resources and is poised to have substantial economic impacts for Tanzania and the region.

However, as Tanzania forges ahead on a positive trajectory in 2024 with its strategic investments and economic reforms, a nuanced reality persists for the common people. Despite the ambitious infrastructure projects and economic growth, many Tanzanians express concerns about their day-to-day lives.

Criticisms arise regarding the financial burden on citizens due to numerous levies imposed on money transactions. The discourse intensifies as members of the ruling CCM party lavish praise on the President for revitalizing infrastructure in Dar es Salaam, often overlooking the fact that these accomplishments are fueled by loans.

 This borrowing, while propelling development, raises anxieties among citizens about the potential long-term repercussions, with concerns that future generations may bear a hefty financial burden.

Ordinary citizens argue that true development should prioritize the well-being of the people, emphasizing a people-centered approach rather than solely focusing on infrastructure.

 Amid remarkable infrastructure projects, many Tanzanians grapple with economic challenges, such as the staggering cost of basic goods like sugar, reaching almost Tanzanian Sh5,000 (about $1.99) per kilogram.

This stark reality highlights the intricate socio-economic dynamics alongside monumental developments. Notably, Tanzania's national debt has surged by Tsh12 trillion ($4.71 billion), a 17% increase, totaling Tsh87.47 trillion ($34.3 billion) as of December 2023. Finance Minister Mwigulu Nchemba assures that the debt is sustainable, citing a debt-to-GDP ratio of 31.8%, well below the 55% capacity, emphasizing the country's commitment to fiscal responsibility for both the present and future.