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Economic Indicators: Nigeria vs. Tanzania
| Indicator | Nigeria | Tanzania |
|---|---|---|
| Interest Rates (Lending) | 26.25% (May 2024) | 6% (Jul 2024) |
| Exchange Rate (Local Currency per USD) | 1490 NGN/$ | 2703 (Aug 2024) |
| Inflation Rate (YoY) | 33.95 (May 2024) | 3% (Jul 2024) |
| Unemployment Rate | 5% | 8.9% (Dec 2022) |
| GDP Growth Rate | 2.85% (Dec 2023) | 4.9% (2023 est.) |
| Savings Rate | 6.28 (March 2024) | No Data Available |
Discussion:
- Interest Rates: Nigeria has a higher lending rate due to its significantly higher inflation and perceived risk.
- Exchange Rates: The Nigerian Naira (₦) is stronger against the US dollar compared to the Tanzanian Shilling (TZS).
- Inflation Rate: Nigeria faces a much higher inflation rate, impacting purchasing power and investment. Tanzania enjoys relatively low inflation.
- Unemployment Rate: While both face unemployment challenges, Tanzania’s official rate might underestimate the true issue.
- GDP Growth Rate: Tanzania’s GDP growth is slightly higher than Nigeria’s currently.
- Savings Rate: Data on savings rates in Tanzania is unavailable. Nigeria’s rate is lower than some developing countries.
Additional Points:
- Tanzania’s economy relies heavily on agriculture and tourism, while Nigeria’s is more diversified with oil playing a significant role.
- Nigeria’s larger population offers potential for future growth, but challenges like corruption and infrastructure limitations need to be addressed.
Related Currency Pairings
African Currencies
Asian Currencies
The Evolution of the Tanzanian Shilling (TZS)
The Tanzanian Shilling (TZS) has been the national currency of Tanzania since 1966, following the country’s independence from Great Britain. Its history reflects the nation’s complex political and economic landscape.
Early Years: Prior to the introduction of the Shilling, Tanzania used the East African shilling, a common currency used by several British colonies in East Africa. The Shilling was introduced as a means to assert economic independence and to better manage the country’s monetary affairs.
Economic Challenges and Devaluation: Tanzania has faced a number of economic challenges throughout its history, including political instability, poverty, and natural disasters. These factors have put pressure on the Shilling and contributed to its volatility. The Shilling has experienced periods of significant devaluation, especially during times of economic crisis.
Currency Board Arrangement: In 1982, Tanzania established a currency board arrangement, pegging the Shilling to the US dollar. This system provided stability and facilitated trade with the United States and other Western countries.
Recent Developments: In recent years, Tanzania has made efforts to diversify its economy and reduce its dependence on agriculture. The country has promoted tourism, mining, and manufacturing as key sectors of growth. While progress has been made, Tanzania still faces significant economic challenges, including poverty and inequality.