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Mwajabe Kizigina     Email : kizigina@nifahamishe.com     
Should Tanzania worry about the credit crunch
             
As the world’s two big economies shove and shovel, gathering all the think tanks they can afford to pay in order to rescue the on going economic tsunami caused by the so called credit crunch, the rest of the world including sub- Saharan Africa sits oat the edge of there chairs with eyes wide open and dropping jaws waiting to hear who’s been hit next by the economic tsunami named the credit crunch.

The credit crunch has not only shaken the world’s strongest economies, it has sent one of America’s biggest banks crashing i.e Fredie and Leyman,AIG and not forgetting Northern rock in the UK, this is just to mention a few there are many more straggling to cope with the situation,i.e Bradford and bingely.All these are live outcomes of what the credit crunch can do to not only a strong economy but a well established one too.

With this enormous damage to the economy we have seen the mortgage market crash causing the once blooming house business to fall apart. This has led to the re-structuring of some policies in the financial system and a lot of finger pointing as to who should be blamed. One of these is the British government giving the go ahead of the merger between Lloyds Tsb and Halifax Bank of Scotland an act which was once stopped on the fear of having a big monopoly on banking in the high street.

On the other side of the Atlantic the Americans are putting pen to paper to enable the house of representatives to vote in favour of some $700 million which has been called the biggest bail out in history since the great depprision,and yet economic experts think this is not the answer to the problem, surely it will get worse before it gets better.

In the midst of all this confusion my mind can’t stop thinking of the sub Saharan countries, some of which have been enjoying sustainable economic growth due to political stability. Improved infrastructure, foreign investment and booming trade with Asia-Particularly TANZANIA.

Despite of the stable growth of our economy over recent years we still run a deficit budget which is mainly financed by the same countries hit by the credit crunch, this will be a big blow to our next budget.

We still depend on loans and grants to develope various parts of our infrastructure another very important sector of our economy that can not be left to stagnate because it may cost us foreign investment.

We may have a very minute housing market or rather non existent one but our big partners in trade –Asia have one which if hit will in the long run affect the selling of our commodities in their markets. Other worries are within our regional trade with countries like South Africa ,where we export most of our cement and other members of SADDCC.


Whereas there is still debate on weather we should worry about the crunch or not, we must not be complecant,our biggest worry should be to protect our growing economy. We can only do so if we have not only a strong financial system but a well organised.
Our neighbours in Kenya have already echoed their cries , they are feeling the effects of the credit crunch through rising prices of essential commodities including food surely we will not be left out lets hope and pray that when the crunch waves come storming our system in place will be able to weather the storm.


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