INTERVIEW-Tanzania's Kikwete worries how long crisis will last
12 Mar 2009 00:38:19 GMT Source: Reuters
* Tanzania president says export markets have disappeared * Two mining projects have been shelved * Country looks to Asia for new markets By Lesley Wroughton DAR ES SALAAM, March 12 (Reuters) - Tanzania's economy has been hurt by the global financial crisis with its traditional export markets disappearing and two mining projects being shelved, President Jakaya Kikwete said. "Our biggest fear is fear of the unknown ... the crisis has just started. How far will it go?" Kikwete said in an interview late on Wednesday. "We're praying this crisis does not continue for too long because if it continues for too long it is really going to hurt us." Kikwete said U.S.-based Century Aluminum Co <CENX.O> had informed him that it was postponing plans for a $3.5 billion smelter in Tanzania, and Canadian miner Xstrata Plc <XTA.L> had halted plans for a $165 million nickel mining and extraction plant in the northwest of Tanzania. Tanzania's cotton exporters are finding it hard to sell their products and some are threatened with bankruptcy. Prices for coffee, tanzanite and diamonds have tumbled. Kikwete said to combat the crisis, Tanzania was looking for new markets in Asia, including Thailand, Vietnam and China. The crisis has spread across Africa. Lower global commodity prices and a slump in demand is affecting countries from South Africa to Botswana, Zambia, Democratic Republic of Congo, Ghana and Nigeria. IMF HELP The International Monetary Fund said this week that the impact on Africa would be severe, depressing economic growth, straining budgets and increasing the threat of social unrest. The crisis struck just as Africa was getting into its stride with fewer civil wars, growth rates of around 6 to 7 percent and more democracies. Kikwete said he hoped advanced economies, where the crisis originated, would quickly turn their economies around with the trillions of dollars for bailouts and stimulus packages. "If that is not enough, it terrifies us," Kikwete said, referring to the more than $700 billion bailout the United States approved recently. This compares with some $100 billion a year in aid to the world's poorest countries. "We appreciate the efforts that are being undertaken so we are praying that they succeed," he said. "If the situation normalises then our worries about markets, about commodities disappear, tourist numbers will bounce back, investments will begin to flow again, so this is all that we need," he added. He said it was no time to chastise advanced economies while they wrestled with recession. "We need to evaluate what do we do under these circumstances," he said. Earlier on Wednesday, Kikwete criticised the same advanced economies for not honouring their promises made in 2005 to increase aid substantially to Africa, saying Africa would need help to cope with the crisis that was not of its own making. Kikwete said more African countries would need help from the IMF. This week at a conference in Tanzania's capital, the IMF sought to make amends with a region that has complained its strict loan conditions have hurt, not helped. The conference agreed to a new partnership between the IMF and Africa, which Kikwete said was a "completely new beginning" in relations with the Washington-based institution. "We have brought a new paradigm in our relations and at least we can sit down and talk about our relationship, which to me is a big thing," he said. (For full Reuters Africa coverage and to have your say on the top issues, visit: http://africa.reuters.com/ ) (Reporting by Lesley Wroughton; editing by Elizabeth Piper)
Hassan Mzee Makame harvests clove buds from his tree on Pemba island, about 60 km (37 miles) off Tanzania's mainland, in this September 30, 2005 file photo. Zanzibar once enjoyed a ...
