In the first quarter of 2016, Tanzania’s GDP grew at a rate of 5.5%, reaching TZS11.8tn, compared to TZS11.1tn in Q1 2015, Tanzania’s National Bureau of Statistics (NBS) reports.
Meanwhile, the Bank of Tanzania (BOT) forecasts, in its latest State of the Economy report, that in 2016 the country will achieve its goal of 7.2% annual GDP growth thanks to favorable economic activity.
Tanzania GDP Growth Q1 2016
NBS notes that in Q1 2016, the Financial and Insurance services recorded the highest growth rate of (13.5%) followed by Information and Communication (13.4%) and Public Administration (10.2%).
Financial and insurance services in Tanzania registered a growth rate of 13.5% in Q1 2016, reaching TZS522b, compared to TZS460bin Q1 2015.
The growth was attributed to an increase in deposits and credit, as well as insurance services.
Tanzania’s information and communication sector recorded a growth rate of 13.4% in Q1 2016, reaching TZS522b, compared to TZS461b in Q1 2015.
NBS attributes the growth to an increase in airtime used by mobile phone customers and the expansion of broadcasting and internet services in the country.
Public administration grew by 10.2% in Q1 2016, reaching TZS701b in the first quarter of 2016, compared to TZS636b in the first quarter of 2015 due to an increase in government spending.
Agriculture, mining, real estate and education activities also significantly contributed to the quarterly growth of Tanzania’s GDP.
Tanzania’s agriculture sector registered a growth rate of 2.7% in Q1 2016, reaching TZS2.8tn, compared to TZS2.7tn in Q1 2015.
The increase in growth rate was attributed to favorable rainfall for agricultural production in most production areas during the period.
Tanzania’s mining sector grew at a rate of 6.5% in Q1 2016, reaching TZS360b, compared to TZS338b in Q1 2015 thanks to an increase in the production of diamond, tanzanite, salt and natural gas.
Tanzania’s real estate sector recorded a growth rate of 2.6% in Q1 2016, reaching TZS476b, compared to TZS464b in Q1 2015 thanks to an increase in the demand of rented housing.
Tanzania 2016 GDP Growth Forecast
In its recent report titled “State of the Economy of Tanzania”, BOT bases its GDP forecast on various economic indicators that imply further strengthening of the Tanzanian economy. These include:
i) Increased electricity production, which rose by 14.5% in H1 2016 reaching 3454.2m kWh compared to 3016.7m kWh in H1 2015.
This is largely due to the government’s efforts in using energy and natural gas for electricity generation, and will help increase the production of the manufacturing sector which in turn will contribute to the growth of the GDP.
ii) Increased cement production, which rose by 7% in Q1 2016 reaching 7.3m t compared to 6.8m t in Q1 2015 largely thanks to the Dangote new cement factory.
The cement production is expected to further increase in 2016 to meet the demand for cement from major projects in Tanzania.
iii) Imports of raw materials, which rose by 19.4% in H1 2016 reaching USD520.2m compared to USD430m in H1 2015.
This is expected to contribute to industrial production in Tanzania and hence GDP growth.
iv) Sales of industrial products abroad, which grew by 15.6% in H1 2016 reaching USD728.5m compared to around USD620m in H1 2015.
v) Other factors expected to contribute to Tanzania’s GDP growth in 2016 include improved tax collection and increased amount of loans to the private sector by commercial banks.
vi) Large industrial projects and improved infrastructure will also add to the GDP growth in 2016, BOT concludes.
Tanzania’s annual GDP growth rate averaged 7% over the past 5 years, making it one of the 20 fastest growing economies in the world and beating the Sub-Saharan Africa average GDP growth rate of 4.4% during the same period.
Tanzania’s GDP (at current market prices) was USD 44.5bn in 2015 versus USD 31.4bn in 2010 (+41%).