The Economy of Tanzanian in 2022 and Beyond
With an average real GDP growth rate of 6.3% over the past decade (2010-2019), Tanzania is among the fastest-growing economies in Africa and in the world.
However, the GDP growth rate has been slowing down in recent years, from a peak of 7.9% in 2011.
The IMF estimates a GDP growth for Tanzania of +5.1% in 2022, and 6.0% in 2026.
According to the Bank of Tanzania (BOT) and the International Monetary Fund (IMF), the real GDP of Tanzania grew by 4.9% in 2021 reaching USD 70.28 billion. The real GDP of Tanzania was USD 64.4 billion in 2020 and USD 60.8 billion in 2019.
In its Africa’s Macroeconomic Performance and Outlook – January 2023, the African Development Bank (AfDB) estimates that the GDP of Tanzania will have grown by +4.6% in 2022, and projects it will grow by +5.1% in 2023, and by +6.1% in 2024.
Similarly, the World Bank (WB) forecasts in its Global Economic Prospects Report – January 2023 that the GDP of Tanzania will expand by +5.6% in 2023, and by +6.1% in 2024.
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.
Tanzania’s Gross National Income (GNI)
Tanzania’s GNI per capita rose by 6.1% during the ten-year period 2010–2019, from USD 720 to USD 1,080.
In 2019, Tanzania became a middle-income country with a GNI per capita of USD 1,080, against an average of USD 1,550 in Sub-Saharan Africa.
Tanzania Key Economic Sectors
According to the economic data included in the National Data of Tanzania Mainland of 2013-2019 by the National Bureau of Statistics, at current market prices, Services made the highest shares of GDP (40.0%) followed by Industry and Construction (31.1%) and Agriculture, Forestry and Fishing (28.9%)
Notable sectors of the Tanzanian economy are tourism, mining, construction, agriculture, and manufacturing.
In November 2020, President Magufuli announced that in the next five years its government will put great emphasis on key economic sectors, especially agriculture, livestock, fisheries, industry, mining, trade, and tourism.
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.
It remained well within the range set in the 3rd Tanzania Five-Year Development Plan (FYDP III) between 3.0% and 5.0% over the medium term.
Tanzania Exchange Rates
On 18th January 2022, the average market exchange rates (source bot.go.tz) for the Tanzanian shilling (TZS) against major currencies provided were: USD/TZS 2,297.9, GBP/TZS 3136.7, EUR/TZS 2621.5007, RMB/TZS 361.9.
A year earlier, on 26th January 2021, the average market exchange rates (source xe.com) for the Tanzanian shilling (TZS) against major currencies provided were: USD/TZS 2,319.1, GBP/TZS 3,168.9, EUR/TZS 2,814.8, RMB/TZS 358.3.
Tanzania Balance of Trade
Tanzania is a net importer with a negative balance of trade of USD -3,095.9 million in the year ended November 2019 (latest BOT data).
The value of exports of goods and services amounted to USD 8,839.9 million in the year ended November 2020, lower than USD 9,460.8 million in the year ended November 2019, due to a decline in services receipts (mainly tourism affected by Covid-19).
In 2018, Tanzania’s top exports were gold (USD 892 m), tobacco (USD 333 m), raw copper (USD 231 m), refined copper (USD 150 m), and other furniture (USD 147 m), exporting mostly to Rwanda, Kenya, the DRC, Zambia, and Uganda.
The top imports of Tanzania were refined petroleum (USD 1.77 b), palm oil (USD 280 m), packaged medicaments (USD 220 ), cars (USD 191 m), and wheat (USD 182 m), imported mostly from China, India, UAE, Saudi Arabia, and South Africa.
Tanzania National Debt
As of December 2019, Tanzania’s total national debt amounts to USD 28.6 billion with external debt accounting for 78% of the total and domestic debt with 22%.
Tanzania’s external debt amounted to USD 22.4 billion (40% of GDP) in December 2019 representing a 6% YoY increase (2018: USD 21.06 billion).
Tanzania’s domestic debt amounted to USD 6.3 billion (11% of GDP) in December 2019 representing a 1% YoY decrease (2017: USD 6.2 billion).
The Tanzanian Central Government is the largest borrower holding 78% of the country’s external debt, followed by the private sector (21%), and public corporations (0.4%).
The funds were allocated mostly to the transport and telecommunications sectors (27%), followed by social welfare and education (17%), and energy and mining (15%).
Tanzania Foreign Direct Investment (FDI)
Foreign Direct Investment (FDI) inflows to Tanzania reached USD 4.144 billion in the period March-November 2021. This is 300% more than the USD 1.013 billion in FDIs in 2020.
Investments were drawn mostly to the mining sector, the oil and gas industry, and the primary agricultural products sector (coffee, cashew nuts, and tobacco).
The top five providers of FDI in Tanzania are South Africa, the UK, Kenya, Canada, and China.
In the WB Doing Business Report of 2020, Tanzania ranked 141st among 190 countries and ranked 4th in the East African Community (EAC) for the ease of doing business. The country is currently implementing the “Blueprint for Regulatory Reforms to Improve the Business Environment in Tanzania” and aims to raise its score to at least 100.
Last Updated: 1st February 2023
Sources: African Development Bank (AfDB), Bank of Tanzania (BoT), Foreign Service Institute of the US Department of State, International Monetary Fund (IMF), United Nations Conference on Trade and Development (UNCTAD), Tanzania National Bureau of Statistics, World Bank (WB).