Z’bar economy grows 4 times

Zanzibar economy has expanded over four times under President Amani Abeid Karume, with the generation of wealth increasing from Sh189.5 billion eight years ago to nearly Sh739 billion, The Citizen can report.

However, official figures obtained by this paper show, that despite the impressive gross domestic (GDP) performance, a majority of the Islanders are still poor, with 16 per cent of the rural dwellers living below the food poverty line.

The government says that had it not been for the global recession, the size of the

Life expectancy jumped to nearly 60 years in 2008, from 56 years in 2003
economy would stand at more than Sh1 trillion when the current administration relinquishes power in October.

It, however, acknowledges that the economic growth has not redressed inequality and poverty.

“During 2008, the GDP at current prices reached Sh738.7 billion compared to Sh586.4 billion in 2007. These figures indicate tremendous improvement of the economy,” the minister of State (Finance and Economic Affairs), Dr Mwinyihaji Makame Mwadini, told The Citizen in a recent interview.

He said that unless specific measures are taken to reduce inequality, growth could even bring negative effects to the poor.
Zanzibar’s GDP was Sh189.5 billion a year before President Karume assumed power but surged to Sh255.6 billion during 2000-2004 and reached nearly Sh400 billion in 2005.

The per capita income which averaged $157 during 1990- 1999 and $276 during 2000-2004 went up to $327 at the end of 2005. Dr Mwadini said Zanzibar Human Development Report for 2009, whose findings are yet to be made public, show a huge improvement in human development indicators such as life expectancy that jumped to nearly 60 years in 2008 from 56.2 years in 2003.

He said the private sector’s involvement in health services, education, water provision and child welfare boosted efforts to improve the people’s quality of life.

The authorities say efforts to further expand the economy and implement pro-poor growth policies were recently frustrated by the power crisis that has seen Zanzibar in darkness for almost three months now.

Business leaders and ordinary people who spoke to The Citizen want a permanent solution to power blues to be the top priority of the next administration.

Members of the Zanzibar Association of Tourism Investors (Zati) say the Karume regime has shown how improving business environment can tremendously boost economic growth and help improve the people’s welfare.

A commercial farmer, Ahmed Saleh, says the expansion of the economy has been possible because of the huge investments the government put in infrastructure development.

Renco Zanzibar Ltd official, Mr Paulo Chiaro, said President Karume’s would be remembered for facilitating progress in business through modernising the port, rehabilitating the airport, investing in water projects and reducing red tape.

“I am from Pemba and putting politics aside, I think this government has done a good job in the area of building roads,’ Mr Saleh told this reporter at his Grande Farm, which is also an eco-tourism project, in Kitumba.

Zati chairman Simai Mohammed commends the outgoing government for listening to the private sector views on how to remove investment bottlenecks.

He noted that beside energy crisis, the economy’s growth trend has also been adversely affected by the drought that hit East Africa. He said investments by both the government and the private sector in renewable energy sources is must if Zanzibar is to ease its demand.

“Zanzibar has what it takes to become a highly competitive modern economy if politicians can play their roles right. I am optimistic the economy can grow tremendously if the next government sustains current efforts to improve the business environment and set right development priorities,” a trader who declined mention of his name in this report said.

“We expect the next regime will be more transparent, especially in the area of earnings from tourism and how the money is spent,” a hotel owner who also preferred anonymity said. He pointed out that the persistent power blues were hurting the image of Zanzibar as an exotic tourist destination.

Tourism, which is the mainstay of the economy, is a Sh163 billion industry that employs over 10,000 people and is an indirect source of income for another 40,000 Zanzibaris.
Available figures put the Isles population at 1,072,000 in 2005, of which 678,938 live in Unguja while some 377,000 live in Pemba.

Dr Mwadini said tourism now account for 80 per cent of government revenue and contributes about 22 per cent of GDP. Its growth has averaged 9-10 per cent in recent years but like other sectors of the economy, it has been impaired by the global recession.