Zakia H Meghji
Minister of Finance Tanzania
When Zakia Meghji was named finance minister by Tanzanian president Jakaya Kikwete in early January last year, she became the first woman in east Africa to assume such a post.
Formerly minister of tourism and natural resources, Ms Meghji does not have obvious academic credentials for the job; rather it is the clout she wields in the ruling party that many observers predicted would prove invaluable to drive economic reforms forward.
As tourism minister, she showed an eagerness to engage with the private sector. Under her stewardship, tourism became one of Tanzania’s strongest sectors, accounting for 16% of GDP and bringing in close to $1bn in foreign exchange. When she cancelled timber export licenses for a number of logging firms, she was nicknamed the Iron Lady for resisting industry pressure.
But Ms Meghji’s first year in the finance ministry has not been easy. The high oil price has forced the minister to roll back liberalisation of the country’s petroleum sector, aimed at easing pump prices for consumers.
Meanwhile, drought has caused water levels in the country’s main hydroelectric dams to fall, leading to cuts in electricity generation. This has prompted the state-run Tanzania Electric Supply Company (Tanesco) to introduce power rationing, which Ms Meghji admits is taking its toll on economic activity.
However, she has shown a skilled hand at managing the economy, pursuing the targeted 6%-8% GDP growth needed to cut poverty but without compromising macroeconomic stability. With 39% of the country’s budget financed by donors, keeping inflation at 4%-4.5% is quite an achievement.
She has pressed ahead with private sector development, unusually challenging given Tanzania’s fresh memories of its socialist past. One measure has been to cut the corporate tax on companies that list.
Together with the private sector, the World Bank, the IMF and others, Ms Meghji has mapped out a $1bn investment plan for Tanesco, running from the current fiscal year to 2010. She acknowledges inadequate investment in the state-run utilities has led to the current situation.
So far, however, the minister has been spared another downward revision to the country’s GDP growth projections. The country’s 2006 GDP growth estimate was revised in June because of drought and power shortages to 5.9% from an earlier 7.3%. Better still, she expects growth to rebound back to more than 7% next year.
