Introduction to the Economy of Tanzania With an average real GDP growth rate of +5.5% over the decade 2012-2021, Tanzania is among the fastest-growing economies in Africa and the world. During the same period, the average global GDP growth rate was +2.3% and the GDP growth rate in Sub-Saharan Africa was +2.7%. The Tanzanian economy even maintained a positive economic growth in 2020 of +2% while most of the economies were in a recession due to the impact of the COVID-19 pandemic.
However, Tanzania’s GDP growth rate has been slowing down in recent years, from a peak of 7.9% in 2011. In April 2021, Tanzania’s new president Samia Suluhu Hassan gave her first speech to the parliament, mentioning the priorities of the Sixth Phase Government in the next five years to reach a GDP growth rate of at least 8% yearly.
The Tanzanian Economy in 2023, 2024, and Beyond According to the World Bank (WB), the GDP of Tanzania expanded by 4.6% in 2022, up from 4.3% in 2021, and is expected to rise to 5.1% in 2023. The value of Tanzania’s GDP at current prices reached USD 75.5 billion in 2022. The GDP per capita rose by 1.4% in 2022 and the international poverty rate dropped marginally by 0.3% points. Led by the services and industry sectors, the recovery remained broad-based as all subsectors surpassed their pre-pandemic production levels by Q3 2022.
This is consistent with high-frequency indicators including cement production, electricity generation, and tourist arrivals, all of which grew substantially in 2022. The WB projects Tanzania’s GDP growth to reach 5.1% in 2023–about 2.2% per capita–as investment increases and external terms of trade improve. An improving business climate and the implementation of structural reforms are expected to boost annual GDP growth to 5.6% in 2024, 6.0% in 2025, and 6.4% in 2026. Similarly, according to the International Monetary Fund (IMF) World Economic Outlook of October 2023, the real GDP growth of Tanzania in 2022 was 4.7% % in 2022, and it is projected to be 5.2% in 2023, and 6.1% and 7.0% in 2024 and 2025 respectively.
On the same line, the Central Bank of Tanzania (BOT), in its Monetary Policy Committee Meeting Statement, issued in February 2024, estimates that the country’s economy reached a 5% growth in 2023. It also forecasts an economic growth of 5.5% in 2024. For its part, the African Development Bank (AfDB) in its African Economic Outlook Report 2024,) projects that Tanzania’s real GDP growth will reach 5.7% in 2024 and 6% in 2025, driven by agriculture, manufacturing, and tourism and supported by public investments and reforms to improve the business environment.
Tanzania Key Economic Sectors According to the data from the Bank of Tanzania, in 2021 Agriculture (agriculture, forestry, and fishing) accounted for 27% of the country’s GDP, Industry and Construction for 31%, and Services for 42%. The main sectors of the Tanzanian economy in terms of their contribution to the GDP are Construction which accounts for 16%, Crops (14%), Manufacturing (9%), Wholesale and retail trade; repairs (9%), Transport (8%), Livestock (8%), and Mining and Quarrying (5%).
However, in the quarter ending September 2022, Mining and Quarrying reached 9.8% of the country’s GDP. Another major sector of Tanzania’s economy is tourism whose contribution to GDP fell from 10.6% in 2019 to 5.3% in 2020 due to the impact of the Covid-19 pandemic and climbed to 5.7% in 2021. Tanzania Inflation In 2022 (January to December) the average annual headline inflation in Tanzania was 4.3%. In 2021 it was 3.7% and 3.3% in 2020.
Inflation trended downward in 2023, reaching 3.3% in September 2023 from 3.6 percent in June 2023, associated with declining food prices. In Zanzibar, inflation was 7.5%, up from 6.5% in June 2023, mainly driven by food prices. Despite the recent increase in oil prices, BOT projects inflation to remain within the range set in the 3rd Tanzania Five-Year Development Plan (FYDP III) between 3.0% and 5.0% over the medium term.
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