World Bank Warns Tanzania Against Relying on Chinese Investment
The World Bank has warned Tanzania against becoming over-reliant on Chinese investment as the country seeks to continue its economic growth.
Ties between Tanzania and China only appear to be growing stronger as investment from the Asian powerhouse continues to roll in. However, global financial experts have warned of a slowdown in the Chinese economy and the effects it could have on African nations in debt to Beijing.
A word of caution to Tanzania
China is one of Tanzania’s biggest trading partners and a major source of development funds. The East African country is hungry for foreign investment as it looks to establish its own economic stability and lift itself out of widespread poverty.
Tanzania is still in ‘phase 1’ of an economic blueprint set out in 2011 but the country has ambitions to be in a very different position come 2020. A senior government official recently assured Tanzania would get its fair share of a $20 billion fund set up by China to help African nations industrialise.
However, the World Bank has urged Tanzania not to rely solely on funds sourced from China or neglect investing in areas that could make the country more self-sufficient.
Knock-down effects on Tanzania
The World Bank says China’s faltering economy could have a serious knock-down effect on Tanzania and other countries over-reliant on funds from Beijing. More specifically, if the Chinese economy suffers at a faster rate than forecast, direct and indirect investments into Tanzania will be compromised.
Experts have encouraged Tanzania to invest more into infrastructure and human resources, as a means of creating jobs within the country. World Bank Senior Advisor Emmanuel Mungunasi says Tanzania needs to improve its overall business environment in areas Chinese investment doesn’t reach.
“Further development of the private sector will be key to accessing the needed resources including financing and creating more employment opportunities which are critical for poverty reduction,” he said, following a report from the World Bank.