Estudios Económicos
Tanzania, United Republic of

Tanzania, United Republic of

Population 59.7 million
GDP 1,177 US$
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major macro economic indicators

  2020 2021 2022 (e) 2023 (f)
GDP growth (%) 4.8 4.9 4.8 5.2
Inflation (yearly average, %) 3.3 3.7 4.3 4.6
Budget balance (% GDP) -1.9 -3.9 -2.8 -3.3
Current account balance (% GDP) -1.8 -1.9 -4.5 -4.3
Public debt (% GDP) 38.0 39.7 42.2 42.1

(e): Estimate (f): Forecast *Fiscal year from 1st July 2022 - 30th June. 2023 data: FY22-23 **Grants included


  • Mining wealth (gold, copper)
  • Gas potential thanks to offshore reserves discovered in 2010
  • Tourism assets (national parks, coastline)
  • Regional cooperation strategy, accelerated integration into the East African Community (EAC)
  • International support in the form of concessional loans
  • Development of monetary policy instruments


  • High dependence on gold prices
  • Vulnerability of agriculture (29% of GDP and 60% of employment and households) to climatic conditions
  • Inadequate infrastructure, particularly in the electricity and transport sectors
  • Inconsistent industrial policy and poor business environment (administrative delays, corruption, lack of transparency in regulations)
  • Religious tensions between the Zanzibar archipelago and the mainland
  • Low level of human capital, enduring high poverty


Robust growth supported by numerous infrastructure projects

Growth accelerated in 2023, underpinned by rising exports and private investment on back of an improved business climate. Growth is set to continue in 2024, driven mainly by public and private investment in numerous infrastructure projects, one of the most important of which is the construction of the 1,443 km East African Oil Pipeline (EACOP) between Uganda and Tanzania. Construction of the EACOP, linking Uganda's oilfields to the Tanzanian port of Tanga, is scheduled to begin in mid-2024 and run until 2027. Other projects in the pipeline include energy projects, namely the construction of a hydroelectric power station, and rail projects with the development of cross-border railroads, notably the 651 km Tanzania-Burundi corridor for which financing for Phase II was approved by the African Development Bank in December 2023. Robust growth will also come from increased gold production and exports, supported by an expected rise in world prices and improved productivity in the mines (technological advances such as machine automation). The tourism sector will also drive economic activity. Inflation is expected to remain below the 5% target set by the Central Bank of Tanzania (CBT), which is likely to keep its key interest rate at a relatively low level (5%), thereby supporting private consumer spending and investment.

Ongoing efforts to reduce twin deficits

The budget deficit is expected to fall below 3% in fiscal year 2024, which is the target set by the East African Community (EAC), thanks to robust growth and fiscal consolidation. On that score, public revenues are expected to grow due to a broadening of the tax base in line with the IMF's USD 1.05 billion programme for 2022-2025 which aims to improve not only the business climate, but also tax compliance (administrative capacity-building through digitisation). However, budget spending will remain high, while state-financed infrastructure projects, with or without private participation, are multiplying, notably EACOP, roads, railroads, ports and energy infrastructures. In addition, the large public sector wage bill and high cost of debt servicing (3% of GDP) will continue to weigh heavily. In addition, local elections in 2024 and the Presidential election in 2025 should keep social spending levels up this year. The public deficit will be 60%-financed by domestic loans, the Central Bank of Tanzania and external loans. The risk of over-indebtedness remains limited as 85% of the external share of public consists of concessional loans, granted by multilateral (66%) and bilateral (19%) partners. Furthermore, the domestic portion is held mainly by commercial banks and pension funds.
The current account deficit will continue to shrink in 2024 thanks to rising gold exports and a rebound in the tourism sector. The surplus on the balance of services should be substantiated and will be driven by robust tourism. However, the trade balance is likely to remain in deficit due to a rise in the import bill, driven by increased requirements for capital goods for infrastructure projects. The primary income account (mainly investment income) will remain marginally in deficit due to the repatriation of profits by foreign companies. This will be partly offset by a surplus on the secondary income account, fuelled mainly by expatriate remittances. The current account deficit will be easily financed by loans (both concessional and non-concessional), foreign direct investment, aid and project loans (around 2% of GDP in 2023-2024). Disbursements under the IMF programme, together with a reduction in the BCT's interventions on the foreign exchange market owing to its monetary policy aimed at exchange stability and inflation control that is now focused on the interest rate will help maintain a stable level of foreign exchange reserves at four months of import cover.


Gradual improvement in the political climate

Re-elected in October 2020 for a second five-year term after garnering almost 85% of the vote in a high-tension election, John Magufuli died in March 2021. As a result, Vice-President Samia Suluhu Hassan was sworn in as President to complete Magufuli's term until 2025. While opposition parties were heavily repressed under former President Magufuli, the political climate seems to be gradually easing due to progress made by the current government. In January 2023, President Hassan lifted the ban on political rallies for opposition parties that was imposed in 2016 and paved the way for opposition figures to return to the country. Furthermore, in March 2023, under pressure from opponents, the President promised to relaunch the constitutional revision process that aims to reduce Presidential powers, create an independent electoral commission and authorise legal challenges to Presidential election results. However, no timetable has been set for the reforms and it seems unlikely that any such reforms will materialise before the 2025 elections. Furthermore, a possible change to the Constitution could reawaken latent tensions linked to Zanzibar's status and the archipelago's desire for independence.
On the external front, efforts to position the country as a crossroads for regional trade (oil pipeline project with Uganda, strengthening the country's integration into the EAC, etc.) could fortify ties with neighbouring countries. Bilateral relations are also being strengthened, notably with the United Arab Emirates, where the operation of part of the port of Dar es Salaam has been entrusted to the UAE group DP World for a period of 30 years (contract signed in October 2023). DP World has announced an immediate USD 250 million investment programme to modernise and expand the current ageing and regularly saturated facilities. The agreement was strongly criticised by the Tanzanian opposition, which denounced the growing influence of the United Arab Emirates in East Africa, and an "abandonment of sovereignty".


Last updated: April 2024

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