Economy of Tanzania
Currency | Tanzanian shilling (TSh) |
---|---|
1 July – 30 June | |
Trade organisations | AU, AfCFTA (signed), EAC, SADC, WTO |
Country group |
|
Statistics | |
Population | 61,741,120 (2022)[3] |
GDP | |
GDP rank | |
GDP growth |
|
GDP per capita | |
GDP per capita rank | |
GDP by sector |
|
3.9% (2020 est.)[8] | |
12% (2014)[9] | |
Population below poverty line | |
40.5 medium (2017)[12] | |
Labour force | |
Labour force by occupation | Agriculture: 50% months of imports; 2013)[19] |
. |
The economy of Tanzania is a lower-middle income economy[23][24] that is overwhelmingly dependent on agriculture.[25] Tanzania's economy has been transitioning from a planned economy to a market economy since 1985. Although total GDP has increased since these reforms began, GDP per capita dropped sharply at first, and only exceeded the pre-transition figure in around 2007.[26]
Following the rebasing of the economy in 2014, the GDP increased by a third to $41.33 billion.[27]
In 2020, the real GDP of Tanzania grew by 4.8% reaching US$64.4 billion versus US$60.8 billion in 2019. This growth made it the 2nd largest economy in East Africa after Kenya, and the 7th largest in Sub-Saharan Africa.[28]
It has sustained relatively high economic growth compared to global trends, as is characteristic of African nations. According to World Bank data, the last 5 years have seen the slowest growth since 2000. The medium-term outlook is so far positive, with growth projected at 6 percent in 2020/21, which is supported by large infrastructure spending.[29][30]
The World Bank (WB) expects the economic growth of Tanzania to slow to 2.5% in 2020[31] due to the COVID-19 pandemic which has affected the labor market, the production capacity, and productivity. Tourism has halted, and exports of manufacturing and agricultural goods slumped.
On 7 September 2021, the IMF approved US$567.25 million in emergency financial assistance to support Tanzania’s efforts in responding to the COVID-19 pandemic[32] by addressing the urgent health, humanitarian, and economic costs.
The IMF projects a GDP growth for Tanzania of +4.0% and +5.1% in 2021 and 2022,[33] and 6.0% in 2026.
According to the World Bank, the GDP of Tanzania expanded by 4.6% in 2022, up from 4.3% in 2021.
The value of Tanzania's GDP at current prices reached USD 75.5 billion in 2022.[34]
The World Bank projects Tanzania's GDP growth to reach 5.1% in 2023.
History
Significant measures have been taken to
Current GDP per capita of Tanzania grew more than 40 percent between 1998 and 2007.
Tanzania also embarked on a major restructuring of state-owned enterprises. The program has so far divested 335 out of some 425 parastatal entities. Overall, real economic growth has averaged about 4 percent a year, much better than the previous 20 years, but not enough to improve the lives of average Tanzanians. Also, the economy remains overwhelmingly
Macro-economic trend
This is a chart of trend of gross domestic product of Tanzania at market prices estimated by the International Monetary Fund with figures in millions of shillings.[37][38]
Year | Gross Domestic Product | US Dollar Exchange |
---|---|---|
1980 | 45,749 | 8/21 |
1985 | 115,006 | 17/87 |
1990 | 830,693 | 195/04 |
1995 | 3,020,501 | 536/40 |
2000 | 7,267,133 | 800/43 |
2005 | 13,713,477 | 1,127/10 |
2010 | – | 1,515/10 |
Mean wages were $0.52 per man-hour in 2009.[citation needed] The economy saw continuous real GDP growth of at least 5% since 2007.
The following table shows the main economic indicators in 1980–2023. Inflation below 5% is in green.[39]
Year | GDP (in billion US$ PPP) |
GDP per capita (in US$ PPP) |
GDP
(in billion US$ nominal) |
GDP growth (real) |
Inflation rate (in Percent) |
Government debt (in % of GDP) |
---|---|---|---|---|---|---|
1980 | 10.5 | 580 | 10.9 | 3.3% | 30.2% | n/a |
1981 | 11.5 | 619 | 13.0 | 0.5% | 25.7% | n/a |
1982 | 12.3 | 641 | 14.9 | 0.6% | 28.9% | n/a |
1983 | 13.1 | 661 | 15.3 | 2.4% | 27.1% | n/a |
1984 | 14.0 | 687 | 13.9 | 3.4% | 36.1% | n/a |
1985 | 15.1 | 719 | 12.6 | 4.6% | 33.3% | n/a |
1986 | 16.4 | 759 | 15.9 | 6.6% | 32.4% | n/a |
1987 | 17.8 | 799 | 7.8 | 5.9% | 29.9% | n/a |
1988 | 19.3 | 838 | 7.5 | 4.4% | 31.2% | n/a |
1989 | 20.8 | 877 | 6.4 | 3.8% | 25.8% | n/a |
1990 | 23.1 | 943 | 5.2 | 7.0% | 36.4% | n/a |
1991 | 24.4 | 962 | 6.0 | 2.1% | 25.2% | n/a |
1992 | 25.1 | 957 | 5.6 | 0.6% | 20.7% | n/a |
1993 | 26.0 | 958 | 5.2 | 1.2% | 26.1% | n/a |
1994 | 27.0 | 963 | 5.5 | 1.6% | 37.9% | n/a |
1995 | 28.5 | 989 | 6.4 | 3.6% | 26.8% | n/a |
1996 | 30.3 | 1,025 | 7.9 | 4.5% | 21.0% | n/a |
1997 | 32.0 | 1,054 | 9.3 | 3.5% | 16.1% | n/a |
1998 | 33.5 | 1,081 | 11.5 | 3.7% | 12.8% | n/a |
1999 | 35.6 | 1,122 | 11.8 | 4.8% | 7.9% | n/a |
2000 | 38.2 | 1,175 | 12.4 | 4.9% | 6.0% | n/a |
2001 | 41.4 | 1,241 | 12.6 | 6.0% | 5.1% | 50.2% |
2002 | 45.1 | 1,314 | 13.1 | 6.9% | 4.6% | 47.0% |
2003 | 49.2 | 1,393 | 14.2 | 6.4% | 4.4% | 44.3% |
2004 | 54.4 | 1,499 | 15.6 | 7.2% | 4.1% | 44.6% |
2005 | 60.3 | 1,614 | 17.2 | 6.5% | 4.4% | 46.8% |
2006 | 65.0 | 1,693 | 18.9 | 4.7% | 7.3% | 32.8% |
2007 | 72.4 | 1,833 | 21.8 | 8.5% | 7.0% | 21.6% |
2008 | 77.9 | 1,918 | 27.8 | 5.6% | 10.3% | 21.5% |
2009 | 82.7 | 1,977 | 29.0 | 5.4% | 12.1% | 24.4% |
2010 | 89.0 | 2,067 | 31.5 | 6.4% | 7.2% | 27.3% |
2011 | 98.0 | 2,210 | 34.1 | 7.9% | 12.7% | 27.8% |
2012 | 101.9 | 2,216 | 39.7 | 5.1% | 16.0% | 29.2% |
2013 | 103.3 | 2,224 | 45.7 | 7.2% | 7.9% | 30.9% |
2014 | 108.8 | 2,243 | 50.0 | 7.0% | 6.1% | 33.8% |
2015 | 117.3 | 2,348 | 47.4 | 6.2% | 5.6% | 39.2% |
2016 | 127.6 | 2,479 | 49.8 | 6.9% | 5.2% | 39.8% |
2017 | 134.1 | 2,528 | 53.2 | 6.8% | 5.3% | 40.7% |
2018 | 146.9 | 2,687 | 54.7 | 7.0% | 3.5% | 40.5% |
2019 | 160.0 | 2,841 | 60.7 | 7.0% | 3.4% | 39.1% |
2020 | 169.9 | 2,930 | 65.5 | 4.8% | 3.3% | 39.8% |
2021 | 186.3 | 3,120 | 69.9 | 4.9% | 3.7% | 42.1% |
2022 | 208.8 | 3,394 | 77.1 | 4.7% | 4.4% | 42.3% |
2023 | 227.7 | 3,595 | 84.0 | 5.2% | 4.0% | 42.6% |
Agriculture
The Tanzanian economy is heavily based on agriculture, which accounts for 28.7 percent of gross domestic product,
This strong dependence on agriculture, makes Tanzania's economy highly vulnerable to weather shocks and fluctuating commodity prices. 76% of Tanzania's population subsist thanks to agriculture and, due to the lack of knowledge and infrastructure to develop and implement some kind of agricultural technology, any droughts, floods, or temperature shocks can severely damage the living standards of those people and create huge increases in unemployment, hunger, and malnutrition rates, as well as, in really severe case, mortality rates due to starvation.[44]
Tanzania produced in 2018:
- 5.9 million tons of maize;
- 5 million tons of cassava (12th largest producer in the world);
- 3.8 million tons of sweet potato (4th largest producer in the world, second only to China, Malawi and Nigeria);
- 3.4 million tons of banana (10th largest producer in the world, 13th adding plantain production);
- 3 million tons of rice;
- 3 million tons of sugarcane;
- 1.7 million tons of potato;
- 1.2 million tons of beans(6th largest producer in the world);
- 940 thousand tons of peanut (7th largest producer in the world);
- 930 thousand tons of sunflower seed (12th largest producer in the world);
- 808 thousand tons of sorghum;
- 561 thousand tons of sesame seed(5th largest producer in the world, losing only to Sudan, Myanmar, India and Nigeria);
- 546 thousand tons of coconut (11th largest producer in the world);
- 454 thousand tons of mango (including mangosteen and guava);
- 389 thousand tons of pineapple;
- 373 thousand tons of orange;
- 356 thousand tons of tomato;
- 238 thousand tons of cotton;
- 171 thousand tons of cashew nuts(6th largest producer in the world);
In addition to smaller productions of other agricultural products, like tobacco (107 thousand tons, 8th largest producer in the world), coffee (55 thousand tons), tea (36 thousand tons) and sisal (33 thousand tons).[45]
Industry
Industries are a major and growing component of the Tanzanian economy, contributing 22.2 percent of GDP in 2013.[17]: page 37 This component includes mining and quarrying, manufacturing, electricity and natural gas, water supply, and construction.[17]: page 37
Mining
Mining contributed 3.3 percent of GDP in 2013.
Minerals
Other minerals exploited in Tanzania include;
- Pozzolana
- Salt
- Gypsum
- Kaolinite
- Silver ore
- Copper
- Phosphate
- Tanzanite
- Tin
- Graphite
- Bauxite.[17]: pages 70–71
Modern gold mining in Tanzania started in the German colonial period, beginning with gold discoveries near Lake Victoria in 1894. The first gold mine in what was then Tanganyika, the Sekenke Gold Mine, began operation in 1909, and gold mining in Tanzania experienced a boom between 1930 and World War II. By 1967, gold production in the country had dropped to insignificance but was revived in the mid-1970s, when the gold price rose once more. In the late 1990s, foreign mining companies started investing in the exploration and development of gold deposits in Tanzania, leading to the opening of a number of new mines, like the Golden Pride mine, which opened in 1999 as the first modern gold mine in the country, or the Buzwagi mine, which opened in 2009.[48][49]
Nickel reserves amounting to 290,000 tonnes were discovered in October 2012 by Ngwena Company Limited, a subsidiary of the Australian mining company
Chinese firms have been showing major interest in Tanzania's mineral deposits; an announcement was made in late 2011 of a plan by the
In November 2012, the Tanzanian government announced investigations into allegations that mining investors in the country were harassing and on some occasions, killing residents around mining sites.[52]
Electricity
The government-owned
Natural gas
According to PFC Energy, 25 to 30 trillion cubic feet of recoverable natural gas resources have been discovered in Tanzania since 2010.[47] The value of natural gas actually produced in 2013 was US$52.2 million, a 42.7 percent increase over 2012.[17]: page 73
Commercial production of gas from the Songo Songo Island field in the Indian Ocean commenced in 2004, thirty years after it was discovered there.[61][62] Over 35 billion cubic feet of gas was produced from this field in 2013,[17]: page 72 with proven, probable, and possible reserves totalling 1.1 trillion cubic feet.[62] The gas is transported by pipeline to Dar es Salaam.[61] As of 27 August 2014, TANESCO owed the operator of this field, Orca Exploration Group Inc., US$50.4 million, down from US$63.8 million two months earlier.[63]
A newer natural gas field in Mnazi Bay in 2013 produced about one-seventh of the amount produced near Songo Songo Island[17]: page 73 but has proven, probable, and possible reserves of 2.2 trillion cubic feet.[62] Virtually all of that gas is being used for electricity generation in Mtwara.[61]
The Indian Ocean, off the coast of Mozambique and Tanzania, is proving to be a rich hunting ground for natural gas exploration. According to US Geological Survey estimates, the combined gas reserves of Mozambique and Tanzania could be as high as 250 trillion cubic feet. In Mozambique alone, proven gas reserves have increased dramatically from a mere 4.6 trillion cubic feet in 2013 to 98.8 trillion cubic feet as of mid-2015. Given continued offshore discoveries and the size of discoveries to date, continued growth in proven gas reserves is likely to continue into the foreseeable future.[64][65]
New exploration on more frontier blocks, however, will likely be slowed as oil and gas prices fall[66] and companies apply increasing caution to investing in frontier markets with nascent industries, poor infrastructure and long lead times.[67]
As of 2015, national management of the sale of natural gas has been moved to the Natural Gas Revenue Fund.[68]
External trade and investment
Tanzania's history of political stability has encouraged foreign direct investment. The government has committed itself to improve the investment climate including redrawing tax codes, floating the exchange rate, licensing foreign banks, and creating an investment promotion centre to cut red tape. Its economy is currently being managed according to the Tanzania Mini-Tiger Plan. Tanzania has mineral resources and a largely untapped tourism sector, which might make it a viable market for foreign investment.
The stock
Zanzibar
The Government of Zanzibar has been more aggressive than its mainland counterpart in instituting economic reforms and has legalized foreign exchange bureaus on the islands. This has loosened up the economy and dramatically increased the availability of consumer commodities. Furthermore, with external funding, the government plans to make the port of Zanzibar a free
Literature
- ISBN 0-19-828315-6.
See also
- Tanzania and the World Bank
- List of regions of Tanzania by GDP
- List of companies of Tanzania
- Tanzania Zanzibar International Register of Shipping
- Taxation in Tanzania
- Child labour in Tanzania
- Microfinance in Tanzania
- Poverty in Tanzania
- Economy of Africa
- United Nations Economic Commission for Africa
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Notes
External links
- Economy of Tanzania at Curlie
- Confederation of Tanzanian Industries Archived 28 July 2021 at the Wayback Machine
- Tanzania latest trade data on ITC Trade Map
Government ministries, agencies and sites