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DJ Tanzania Inflation Rate Soars Over Food Shortage

The Financial
December 18th, 2011

Tanzania's annual inflation rate soared to 19.2% in November from 17.9% the previous month, propelled by steep food and fuel prices, the state-run National Bureau of Statistics said late Friday. From London Stock Exchange Home Page .

According to NBS, the East African nation's inflation rate has been rising since late last year, hitting a 15-year high in November, mainly due to inadequate food supply occasioned by drought. With the inflation rate soaring for the thirteenth straight month in November, fears are rife that the East African nation could be plunged in unrest, according to political analysts.

The Tanzanian government is facing an ultimatum from the opposition to fix the economy and address soaring commodity prices or face North Africa-like protests.

Tanzania, Africa's third largest gold producer is also grappling with acute power shortages, blamed in lower water levels at its main hydro power stations. Power shortages have compelled the state power utility, Tanzania Electricity Supply Co. to embark on nation-wide rationing as it seeks to balance demand and supply.

The country was hit by several months of drought late last year and earlier this year, affecting water levels at its hydro power stations and hitting its rain-fed agriculture.

Africa Barrick Gold, the country's largest gold producer has been compelled to acquire backup diesel-fired thermal power plants for its four gold mines in the country due to the unreliable power supply.

The gold-mining company said last week that it would not be able to meet its 2011 gold production target due to power outages.

Other gold mining companies operating in Tanzania include South Africa-based Anglogold Ashanti Ltd. and Australia's Resolute Ltd.

 

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