Tanzania's Electric Trains Generate 15.7 Billion in Four Months.
Tanzania's Recently introduced Electric Trains are boosting the Transport Sector Fortune's for the East African Country.
The Tanzania Railway Corporation (TRC) has transported 645,421 passengers between Dar es Salaam, Morogoro and Dodoma in the four months since Standard Gauge Railway (SGR) operations began on June 14, 2024.
This has generated TZS 15.7 billion in revenue. The government announced yesterday that investments in the SGR are paying off.
Minister for Transport Prof Makame Mbarawa said during the 17th Annual Joint Transport Sector Review Meeting that this period indicates the ministry's commitment to sustainability and project viability.
He praised the achievement as an important indicator of the project's sustainability and dispelled common beliefs that only cargo trains can be profitable.
Looking to the future, the minister outlined the government's plans for expanding the SGR network to Mwanza and Kigoma.
These sections, once completed, are expected to further enhance Tanzania's trade with its regional neighbors.
"The government is progressing with the implementation of the remaining SGR sections to Mwanza and Kigoma so that, upon completion, TRC starts transporting cargo to neighboring states," Prof Mbarawa said.
The SGR train operating between Dar es Salaam, Morogoro, and Dodoma has reduced travel times to three hours, saving passengers seven hours compared to previous options.
Other lots are at various stages of construction, with implementation progress ranging from 60-99% complete as of September 2024.
In Other News, The Bank of Tanzania (BoT) reported that private sector foreign currency deposits increased by Sh39.75 trillion (around 20% of GDP) by the end of August 2024, a 30% rise from the previous year.
The BoT attributed this increase to businesses hedging against foreign exchange risks after facing a foreign currency liquidity shortage in 2022-2023 and speculating on exchange rates.
The ratio of foreign currency deposits to broad money (M3) rose from 22.8% in September 2023 to 25.2% in September 2024, indicating a rise in financial dollarization that reduces the effectiveness of monetary policy.
Finance Minister Mwigulu Nchemba issued a directive in June 2024 aimed at curbing widespread US dollar use within Tanzania's domestic economy.
Tanzania's degree of financial dollarisation, measured by the ratio of foreign public and private deposits to total deposits, increased over the past year according to the BoT and national assembly reports.
Economists offer differing views on the implications - Prof Humphrey Moshi highlights risks of currency mismatch destabilizing the local economy if misused, while Dr Daniel Ndaki views dollarization as a shield against exchange risks and economic volatility for businesses dealing in foreign currencies.
With members like Saudi Arabia, BRICS is promoting local currency trade among members to reduce US dollar dependence.
The strong dollar has made production and import costs soar globally, forcing major economies like China to trade in their own currencies.