Tanzania in Turmoil: Dwindling Dollars, Sugar Shortage, and Power Outages Unleash Crisis
Tanzania is currently experiencing reported resource crises.
The East African country has been facing challenges related to scarcities in sugar, electricity, and foreign currency supply.
On Valentine’s Day, while millions globally were commemorating love, a group of Tanzanians in Mwanza stood in line to purchase sugar.
According to local media, there has been a prolonged increase in the price of sugar, prompting government intervention to stabilize prices. The Citizen stated that President Samia Suluhu’s administration acknowledged that the country fell short of its sugar production target in 2023 due to unfavorable weather conditions.
As of January 2024, the cost of one kilogram of sugar increased from an average of Tsh 2,700 to Tsh 4,500. In response, the Tanzania Sugar Board intervened to control prices, specifying that citizens should be able to buy the commodity within the range of Tsh 2,800 to Tsh 3,200.
In addition to the sugar crises, Tanzanians are also facing challenges related to a shortage of electricity.
President Suluhu dissolved the board of directors of the Tanzania Electric Supply Company in response to a power rationing crisis that led to public dissatisfaction due to the rising frequency of power outages.
The shortage of power was attributed to a decrease in electricity generation due to insufficient water levels in dams and the absence of maintenance on the electricity infrastructure.
In terms of the scarcity of dollars, Tanzanians are grappling with a persistent foreign exchange shortage that is impacting oil marketing firms. It is reported that these companies are turning to the black market or offering unofficial premiums to commercial banks to acquire the necessary dollars.
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The United States dollar stands as the most robust global currency and is predominantly employed in international trade for both exports and imports.
On February 8, 2024, the Tanzania Association of Oil Marketing Companies sent a letter to the Permanent Secretary of the Tanzanian Ministry of Energy, seeking a meeting to discuss the scarcity of dollars in the country.
“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.
The OMCs were also found to be buying dollars from the black market at around 2,800 by desperate members using “all means possible to keep the country wet to the extent that they fall prey to these predatory practices.”
Failure to do this, the Association revealed Tanzania would soon run out of fuel.
“For the above reasons, our members this month will be selling petroleum products at a huge loss. This is unsustainable for an industry that has been accumulating losses over the past year. On behalf of our members, we request for an urgent meeting with you and some of our Board members at your earliest opportunity,” concluded the Association.
These crises come months after President Samia Suluhu mocked Kenya for lacking forex to stabilize the petroleum industry.
Weeks later, Tanzania was facing the same problems President Suluhu had mocked in Kenya.
Tanzania in Turmoil: Dwindling Dollars, Sugar Shortage, and Power Outages Unleash Crisis
