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Economy

Tanzania seems to have considerably progressed in economic terms – looking at the average annual growth of 6 to 7% of their GDP during the last 15 years. Especially telecommunications, financial services, retail trade, mining, tourism, construction and the manufacturing sector grew. This growth, however, is not broad-based: while the GDP increased, also the size of the population did. That is why the absolute number of poor people stagnated, although the poverty rate has decreased.

Agriculture remains the mainstay of the economy, contributing over 30% of GDP and providing employment to around two thirds of the population.

Media outlets face precarious economic situation

While the overall economic situation has a positive outlook, the media sector faces an increasingly unsustainable economic situation and thus, mirroring a global trend. The government does little to promote sustainability and independence of media outlets. Some of its scarce actions is to waive Value Added Tax (VAT) for newspapers and television cameras. However, community media remains exempted from those tax breaks, leaving them with even more difficulties to operate correctly.

Private media are on their own while the public broadcaster, in theory, receives financial support through the Ministry of Information. The staff salaries for TBC are directly paid by the Ministry, and further budget can be requested annually . The Ministry, however, usually reduces the proposed budget drastically and, by doing so, inhibits the operations of the media. Sometimes the government even fails to provide the already reduced funding. This leaves the broadcasters vulnerable and prone to submit to commercial interests.

Challenges in advertising market

The advertising market remains critically important for media funding. For example, advertisement revenue covers around 85% of the operational costs of newspapers.

The government has a considerable control over the advertising market: according to numbers from the International Monetary Fund (IMF), it constitutes about 60% of the advertising revenue in Tanzania. Many editors and reporters criticize the government in-transparent distribution of this amount – thereby given state-owned media a special treatment and discriminating against private newspapers, especially if they are believed to lean towards the opposition. For instance, the former critical newspaper MwanaHalisi was excluded completely from government advertisements. Still, the paper survived based on its large readership and circulation, and could continue its work even without government ads. The next step was harsher: the government simply banned MwanaHalisi for two years in July 2012, and did the same again in 2017. In the end, the High Court quashed the ban of the Ministry, so that the publication continues.

As advertising clients, mobile telecommunication companies and breweries are second and third largest after the State, but the government subtlety influences how even those commercial companies spend their advertising budget – by means of trade-offs for creating more or less favorable business environments in those sectors through regulatory agencies or laws.

Government advertising dropped with Media Services Act 2016

Since President John Magufuli assumed office in 2015, the amount of government advertising has dropped. The Media Services Act of 2016 restricts the placement of government advertisement, which did not automatically reduce political leverage. As commercial media outlets started to look for alternative funding to replace state advertising, they found wealthy politicians and businesspeople more than willing to compensate. This, of course questions and challenges the editorial independence to no lesser extent. At the same time, legacy media outlets now need to compete with online platforms to get a share of the already declining advertising market, contributing to additional financial challenges for them.

 

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