On 22nd April 2021, Tanzania’s new president Samia Suluhu Hassan gave her first speech to the parliament, unveiling the economic sector and strategy that the Sixth Phase Government will prioritize and pursue in the next five years.
We provide below a summary of the most important issues covered concerning business, investments, and economic growth, and the strategy and initiatives that will be implemented by President Suluhu’s administration.
Despite the gains made, the pace of economic growth is still small and more efforts are needed to boost the economy and fight poverty in the country.
Tanzania has also been affected by the economic downturn caused by the coronavirus pandemic, with the average GDP growth rate having fallen from 6.9% to 4.7%.
To fight poverty, the Tanzanian economy needs to grow at least 8% yearly. This means that over the next five years there is a need for greater investment in productive sectors and the creation of more jobs.
The sector employs more than 65% of Tanzanians and yet it faces many challenges, mostly low productivity. Therefore, over the next five years, the Government will invest in commercial agriculture and encourage the use of quality seeds, fertilizers, promoting R&D, and develop infrastructure to facilitating exports.
It will also increase the area of irrigated land from 561,383 hectares to 1.2 million hectares by 2025 to reduce dependence on rain. It will also continue the construction of warehouses in various parts of the country to eliminate post-harvest losses.
At the same time, it will improve access to capital and low-interest loans by strengthening the Tanzania Agricultural Development Bank (TADB), and promote agricultural insurance.
Agriculture must link to industrial production. The Sixth Phase Government will continue its efforts to encourage the construction of factories in the country, especially those that use local raw materials, to accelerate industrialization.
Also, it will develop free trade zones with strong transport infrastructure, such as railways, ports, and roads connecting to neighboring countries.
The development of the Kongani Industrial Parks is particularly important in stimulating industrialization and enabling Tanzania to take advantage of the various trade opportunities, such as EAC, SADC, and AfCFTA.
Mining currently provides about 1.5 million jobs and its contribution to the country’s GDP has increased from 3.4% in 2015 to 5.2% in 2019. The sector has the potential to boost Tanzania’s economic growth and revenues.
The Sixth Phase Government intends to remove investment barriers in the sector, enter into joint ventures with the world’s largest miners, and encourage the construction of local refineries.
It will also support local small miners with training, loans, and equipment, and strengthen the National Mining Corporation (STAMICO) to further participate in mining projects.
These measures should enable the mining sector to increase its contribution to 10% of Tanzania’s GDP by 2025.
The Sixth Phase Government will continue its efforts to improve access to energy in the country, including completing the construction of the Nyerere Dam, and supplying electricity to the remaining 1,974 villages.
It plans to start implementing the Ruhudji and Rumakali hydropower generation projects, and the Somanga III and Kinyerezi III and IV Thermal Power Stations projects.
It will also look at renewable energy projects (solar, wind, geothermal).
All in all, it expects to generate additional 1,100 megawatts in the next five years.
It will also build power transmission lines from the Nyerere Dam to the Chalinze Central Station.
The number of tourists visiting Tanzania has increased from 1.1 million in 2015 to 1.5 million in 2019. Revenues also increased from USD 1.9 billion to USD 2.6 billion in the same period.
Over the next five years, despite the coronavirus pandemic, the government aims to increase the number of tourists to 5 million by 2025 and revenues to USD 6 billion.
For this, it will expand the tourist attractions, promote conference tourism and archeology, and build infrastructure to welcome cruise ships.
It will also encourage investments in tourism infrastructure, including hotels, to reduce accommodation costs, and promote the training of Tanzanians in various areas of tourism.
To stimulate the above-mentioned key economic sectors, Sixth Phase Government will continue to strengthen transport infrastructures.
It will build additional roads, especially in strategic areas where production activities take place.
It will also complete the construction of major bridges, including Kigongo – Busisi, Wami, Tanzanite, and Pangani.
It will complete the construction of the ports of Dar es Salaam, Tanga, Mtwara, and Kigoma.
It will complete the construction of the Dar es Salaam – Makutupora railway and begin the construction of other sections, including Mwanza – Isaka, Makutupora – Tabora, Tabora – Isaka, Tabora – Kaliua – Kigoma, and Kaliua – Mpanda.
It will also strengthen TAZARA to increase the competitiveness of the Dar es Salaam port.
The government will continue with the expansion of regional airports and build a new International Airport in Dodoma.
Also, it will continue to develop the national carrier Air Tanzania to make it more efficient.
It plans, over the next five years, to accelerate the delivery of high-speed internet, from the current 45% of the population to 80% by 2025.
Health, Education, Water
In the five years, it will strengthen access to health care by building infrastructure, increasing staff, medical equipment, and access to medication.
A committee of experts will be established in collaboration with the WHO to make a detailed analysis and provide recommendations for action to continue fighting the disease.
The government will review the 2014 Education Policy and make changes where necessary.
The government will place greater emphasis on strengthening the implementation of water projects to deliver water to 95% of the Tanzanian urban population and 85% in villages by 2025.
Business Environment and Investment Promotion
To promote investments in these key economic sectors, the Sixth Phase Government will make several amendments to policies, laws, and regulations and provide incentives to remove barriers to investment, restore investors’ confidence, and allow the private sector to participate effectively.
It will tackle issues like unpredictable policies, a volatile tax system, excessive bureaucracy, the slow issuance of permits and licenses, and land acquisition issues.
The government is already working with the Private Sector Foundation (TPSF) to establish a system to receive and address the challenges of investors in the country through the internet. The aim is the handle investors’ issues faster and to bring efficiency in serving them.