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Zanzibar's Real Income Rises as Industrial Sector Expands



Zanzibar, the archipelago off the coast of Tanzania, experienced a significant increase in its real income in 2022, thanks to the expansive growth of its industrial sector. The Gross Domestic Product (GDP) at constant prices rose from 3,275 billion Tanzanian shillings in 2021 to 3,498 billion Tanzanian shillings in 2022, representing an average growth rate of 9.3 percent. The Minister of State in the President's Office, Finance and Planning, Dr. Saada Mkuya Salum, announced this positive development during a session of the House of Representatives. She highlighted that the National Population and Housing Census conducted in August 2022 estimated the population of Zanzibar to be approximately 1,889,773. As a result of the increased real income, the per capita income of Zanzibaris grew to 1,235 US dollars (equivalent to over 2,860,000 Tanzanian shillings) in 2022, compared to 1,171 US dollars (about 2,700,000 Tanzanian shillings) in the previous year. Despite global economic slowdowns caused by the Russia-Ukraine war, Zanzibar managed to achieve impressive economic growth. Minister Mkuya attributed this positive trend to the prudent measures and guidance of Zanzibar's President, Dr. Hussein Mwinyi, particularly the emphasis on intensifying the economy through the implementation of the Blue Economy Policy. During the presentation of the 2022 State of the Economy and Implementation of the 2022/2023 Development Plan, Dr. Mkuya highlighted that Zanzibar's GDP at market prices increased to 5,400 billion Tanzanian shillings in 2022 from 4,633 billion Tanzanian shillings in the previous year. The industrial sector played a crucial role in driving this economic growth, with its growth rate nearly doubling to 9.3 percent in 2022, compared to 5.1 percent in 2021. The notable growth within various sub-sectors contributed to this achievement. Specifically, the sub-sectors that experienced substantial growth were electricity and gas (22.3 percent), construction (10.2 percent), quarrying and sand mining (9.1 percent), and industrial production (8.1 percent). In addition to the industrial sector's expansion, the influx of tourists also had a positive impact on the country's income. The number of tourist arrivals increased from 394,185 visitors in 2021 to 548,503 in 2022, boosting the overall revenue. Minister Mkuya also credited the rise in agricultural exports as a contributing factor to the GDP growth. Zanzibar earned 118 billion Tanzanian shillings from clove sales in 2022, compared to 115 billion Tanzanian shillings in the previous year. Furthermore, revenues from seaweed increased from 11.9 billion Tanzanian shillings to 16 billion Tanzanian shillings during the same period. However, the country experienced a surge in inflation, reaching 5.1 percent in 2022 compared to an average of 1.7 percent in 2021. The increase in food and non-food prices was identified as the main driver of this inflation. Food prices rose by an average of six percent in 2022, significantly higher than the previous year's average of 0.6 percent. Similarly, non-food item prices increased at a rate of 4.5 percent in 2022, up from 2.5 percent in 2021. Despite these inflationary pressures, Minister Mkuya emphasized that the government's interventions prevented even higher inflation. The government decided to waive certain levies and inject 21.5 billion Tanzanian shillings in subsidies for petroleum products to mitigate price increases in the domestic market. Regarding employment, which plays a significant role in the production sector, the minister reported a three percent increase in new jobs during the 2021/2022 fiscal year. A total of 68,632 new jobs were created, compared to 66,656 jobs in the previous year. Government jobs accounted for 37,189 positions, while public corporations and the private sector contributed 6,887 and 24,556 jobs, respectively. Zanzibar's economic growth and expanding industrial sector, coupled with increased tourist arrivals and agricultural exports, signify positive developments for the archipelago's economy. The government's interventions to control inflation and stimulate employment also demonstrate a commitment to sustaining and enhancing these economic gains in the future.

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