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| Tanzanian president Samia Suluhu Hassan. Photo | Courtesy |
Tanzania is currently grappling with a triple threat of resource shortages, sending shockwaves through the nation’s economy and daily life.
Sugar prices have been skyrocketing for months, forcing the
government to intervene and stabilize costs.
Adverse weather conditions hampered sugar production in
2023, leading to a shortfall and price hikes from an average of Tsh 2,700 to
Tsh 4,500 per kilogram.
The Tanzania Sugar Board stepped in to regulate prices,
aiming for a more affordable range of Tsh 2,800-3,200.
Adding to the woes, Tanzanians are facing crippling power
cuts due to reduced generation capacity. Inadequate water levels in dams and
lack of infrastructure repairs are blamed for the crisis.
The public discontent over frequent outages forced President
Samia Suluhu to dissolve the Tanzania Electric Supply Company board of
directors. Unfortunately,power rationing remains a harsh reality for businesses
and households.
Further compounding the problems is a severe dollar shortage
that is impacting oil marketing companies. These companies struggle to access
dollars through official channels, forcing them to resort to the black market
or pay hefty premiums to commercial banks.
The Tanzania Association of Oil Marketing Companies reported
facing premiums of up to Tsh 200 per dollar and even resorting to purchases on
the black market at Tsh 2,800. This unsustainable situation threatens to leave
the country facing fuel scarcity.
“Generally, there is inadequate US dollar supply in the
formal market. Even when OMCs are lucky to get US dollars from commercial
banks, they do not buy US dollars at the BOT rates displayed on the commercial
bank forex boards. OMCs purchase dollars at a premium i.e. when they place
orders for forex with the commercial banks, they are given BOT rates plus a
premium of up to Tsh 200 per US dollar,” lamented the Association.
These resource crises come mere months after President
Suluhu criticized Kenya for lacking forex to stabilize its petroleum industry.
The irony is not lost on many, as Tanzania now faces similar
challenges, highlighting the interconnectedness and vulnerabilities of the
region.
The Oil Marketing Companies have urged the government for
urgent intervention to address the dollar shortage and prevent a fuel crisis.