Last week, AP published a story quoting a report by United Nation’s Food and Agriculture Organization (FAO) citing Tanzania as one of 22 countries “particularly vulnerable” and “threatened” by current global food crisis.

This comes after the Minister of Finance Mustapha Mkulo was recently quoted by Bloomberg News saying that “Tanzania’s ability to meet domestic consumption needs may shield it from the type of food shortages and hunger affecting other parts of the developing world“.

Already, the food prices have caused the annual inflation to shoot to an almost double digit figure of 9.7% in April 2008.

Other “particularly vulnerable” countries are: Burundi,  Tajikistan, Sierra Leone, Zimbabwe, Ethiopia, Zambia, Central African Republic, Mozambique, Tanzania, Guinea-Bissau, Madagascar, Malawi, Cambodia, North Korea, Rwanda, Botswana,  Kenya.

The countries that are “particularly affected”, where the situation is much more dire, are Eritrea, Niger, Comoros, Haiti and Liberia.

The high rising cost of food has led to increased hunger, protests and riots in some countries. “High oil prices, growing demand, flawed trade policies, panic buying and speculation have sent food prices soaring worldwide. Food riots have occurred in Haiti, Egypt and Somalia this year”, AP says.

While there are a some analysts who still believe the jury is still out on the contribution of biofuel industry to the current global food crisis (they believe this emerging industry is being scapegoated), IFAD’s (International Fund for Agricultural Development) presentation at the recently concluded UN’s 16th Session of the Commission on Sustainable Development, stated that biofuels “appear to exert direct influence on the feedstock market” and that there are “statistically significant inter-linkages between” biofuels and agricultural commodities. These commodities such as maize, cassava, oilseeds and palm oil, predominantly used as food, and are now grown as feedstock for generating biofuel such as ethanol, particularly in Brazil and United States.

Other mentioned long term causes of the global food crisis are weather-related production shortfalls; gradual reduction in the level of stocks, mainly cereals since the mid-1990s; while on the supply side, change in consumption patterns from starchy foods towards more meat and diary in the last few decades, particularly in countries like India and China, have intensified demands for animal feed grains competing with food for human consumption. 

Ironically, rising food prices can bring a windful and a blessing to those farmers and economies with surplus food to sell to those in need.






By the end of the third quarter (last week of September), the Tanzanian Shilling had modestly strengthened against the USD.  The strengthening was due to large increase of forex in the market, aggressive tightening of liquidity by Bank of Tanzania and the recent global weakening of the USD against other major currencies. 

Last week, the Shilling was trading at 1,230/= against the USD compared to 1,281/= at the end of the first quarter. By today, the currency had dropped further to 1,190/=. Dealers predict the Tsh. to further appreciate in the next few months as conditions continue to persist.


Large donor inflows in the month of July were also partly responsible for the appreciation. The foreign exchange reserves grew to 2.3 billion USD over the last few years, according to Deputy Governor of Bank of Tanzania, Prof. Beno Ndulu and IMF statistics.

The central bank is reported to be aggressively fighting the inflation (currently at 7.8%, above the 5% desired by the IMF) by selling foreign currency, hence increasing its supply while reducing Tsh in the circulation.

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