B Nyamboge Mwema Nyawangwe – Art in Tanzania internship
As is well known, COVID-19 is a global pandemic affecting the world today. Tanzania is among the many countries that have been affected in various ways, with one of the major areas being the economic sector. From April to May 2020, there was a massive rise in COVID-19 cases, which led to lockdowns, including the shutdown of various public places, such as schools. The average has decreased since last year, and people are no longer quarantined; despite this, the new president has ordered more research and investigation into COVID-19, and measures to prevent its spread are still being taken. Despite Tanzanian borders remaining open, the government and individuals continue to take measures to protect against the spread of COVID-19. Some of these measures include those set by the WHO, such as wearing face masks, maintaining social distancing in public places, and washing hands or using hand sanitisers.
Given that most Tanzanians are economically disadvantaged and can’t afford basic means of protection, such as hand sanitisers and face masks, this person is forced to stay home to avoid crowds. Hence, many people have failed to keep up with their daily jobs. The problem primarily affects rural individuals who are self-employed; therefore, when they are not working, no income is generated, and consequently, expenses are reduced, which in turn reduces overall revenues. Some companies have also been forced to reduce workers’ wages and expel some workers to keep up with the financial flows.
Despite the rate of COVID-19 gradually falling, other countries are still highly affected by the disease, which is likely contributing to its impact on Tanzania and in the future. Several key areas of the economy have demonstrated this impact.
In Public Financing/ Government.
The government is facing and will continue to face problems in public budgeting and social services delivery to its people due to increased demand for public expenditure, mainly in procuring tools needed for COVID-19, such as sanitisers, medical equipment, etc. Government revenues are expected to fall due to the variety of cash flows obtained from direct and indirect taxes, levies, and fees. As is known, with the COVID-19 pandemic, many companies reduced their workforce, and as a result, the wages of some workers were reduced due to factors beyond their control.
In the tourism sector,
One of the significant sources of government income in Tanzania is tourism. As a result, there are far fewer tourists visiting the country due to restrictions imposed by other countries, and hence demand has declined significantly. The government has estimated that this year, only a few tourists will likely visit Tanzania for the holidays, which is about a quarter of the usual rate. Places like Zanzibar have been significantly affected, as their economy heavily relies on tourism. The chain that links the places tourists visit and stay, such as hotels, to the people working there and the suppliers of products or services, has been frozen due to a lack of tourists.
Trade
Tanzania mostly depends on exported products, with very few manufactured within the country. Global trade chains are disrupted, and some factories have been shut down; most products are running out, resulting in a lack of products to sell, and a decline in money circulation. Most countries have closed, and products cannot be exported or imported for some time. This has also led to a rise in the prices of some products, causing some people to be unable to afford them, which leaves these products unsold, especially those that are not essential or luxurious. The export and import of products have been generally affected by the shutdown of some factories, which has impacted the economy.
banks and financial institutions;
These are among the major contributors to the economy that have been highly affected by COVID-19. There has been a reduction in bank deposits due to various factors, which have caused a slowdown in income generation. Foreign financial flows have declined due to a decrease in money transactions from other countries resulting from the lockdown, leading to a shortage of foreign currency. Additionally, there has been a deterioration in customer-bank relationships, as it has been challenging to establish common ground due to operational challenges.
Conclusively;
As for Tanzania, as long as COVID-19 persists, its impact on the economy will remain valid, both within the country and outside, and continue to affect the significant sectors of the economy, causing a decline in the general income gained by individuals and the government as a whole. Such hard times require tough decisions on the best measures to undertake to maintain the economy and avoid a great depression.
Already, some measures have been taken to help overcome the economic challenges generated by COVID-19. For example, banks and financial institutions follow the Bank of Tanzania’s policies by issuing relief packages to their customers, especially small and medium-sized enterprises. These packages include payment holidays ranging from 3 to 6 months and restrict loans to extend repayment periods.
