Estudos Económicos
Tanzania, United Republic of

Tanzania, United Republic of

Population 58.0 million
GDP 1,110 US$
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major macro economic indicators

  2019 2020 2021 (e) 2022 (f)
GDP growth (%)* 5.8 2.0 4.0 5.0
Inflation (yearly average, %)* 3.4 3.3 3.5 3.7
Budget balance (% GDP)** -3.1 -1.9 -3.4 -3.9
Current account balance (% GDP)* -3.5 -1.6 -1.9 -4.5
Public debt (% GDP)* 39.7 38.7 40.4 41.0

(e): Estimate (f): Forecast * Fiscal year from 1st July - 30th June. 2022 data: FY21-22. * *Fiscal year from 1st July - 30th June. 2022 data: FY21-22. grants included


  • Rich in mineral resources (gold, copper)
  • Gas potential thanks to offshore reserves discovered in 2010
  • Tourism attractions (national parks, coastline)
  • Regional cooperation strategy, accelerated integration into the East African Community (EAC) under President Samia Suluhu Hassan
  • International support in the form of concessional loans
  • Development of monetary policy instruments


  • Heavily reliant on gold prices
  • Agriculture (29% of GDP and 65% of employment) vulnerable to climatic conditions
  • Inadequate infrastructure, especially in power and transportation
  • Inconsistent industrial policy and poor business environment
  • Religious tensions between Zanzibar and the mainland


Numerous infrastructure projects boost activity

Although the Tanzanian economy was hurt by the COVID-19 pandemic in 2020 and 2021, growth remained positive thanks to gold exports (40% of total exports) and the authorities' refusal to impose excessive health restrictions. In 2022, growth is expected to gain momentum on the back of private consumption (55% of GDP), supported by cuts to income tax and other levies, including VAT, as well by the 30% reduction in the mobile money tax following protests in July and August 2021. Investment (43% of GDP), both public and private, will continue to be stimulated by the country’s numerous infrastructure projects (railway lines, ports, energy infrastructure and motorway upgrades). These include the upcoming construction phases of the Standard Gauge Railway (SGR) project, which aims to link Tanzania to Rwanda and Uganda, before crossing these two countries to reach Burundi and the Democratic Republic of Congo, as part of the East African Railway Master Plan. In addition, construction of the East African Crude Oil Pipeline (EACOP) to transport crude from Uganda's oil fields to the port of Tanga in Tanzania will continue, also attracting investment. Conversely, although talks between the government and international oil companies have resumed, the estimated USD 30 billion project for the development and liquefaction of offshore natural gas reserves is unlikely to get under way in 2022, as investments will only begin once an agreement is reached. The government hopes to see work start in mid-2023. Foreign trade is expected to contribute negatively to growth. The need to import materials for infrastructure projects, as well as medical equipment and vaccines, will push up the import bill. This will be only partially offset by increased export earnings (gold, gems, and tobacco). Tourism earnings are also poised to rebound, but will remain below their pre-crisis level. Despite the increase in imported goods and persistently high commodity prices, inflation will nevertheless remain below the central bank's 5% target. 


Pandemic and development projects cause twin deficits to widen

Despite the reductions to taxes and other levies in 2021, budgetary revenues will increase in the 2021-2022 fiscal year thanks to the proceeds from import taxes. The government also plans to improve revenue collection by strengthening tax administration and implementing a "friendly” mechanism for collecting revenue from the informal sector (39% of GDP). However, this increase in revenue will not be enough to cover expenditures, which are themselves on the rise, causing the budget deficit to widen. Development expenditures (31.0% increase) and the Tanzania COVID-19 Socioeconomic Response Plan (TCRP) (10.0% of the initial budget) will contribute to this. Public debt, which is mostly external (73% at end-November 2021), will remain sustainable, as 71% of its external share is made up of concessional loans granted by multilateral and bilateral partners. Its domestic share is held mainly by commercial banks and pension funds. The current account deficit will widen significantly in fiscal year 2021-2022, due to strong demand for imported capital goods. The wider trade deficit will mask a rising surplus in the services account, which is expected to grow as tourism recovers. The primary income account (mainly investment income) is structurally in deficit, only half of which is offset by the surplus in the secondary income account, which is mainly fuelled by remittances. Concessional and non-concessional loans, FDI and project aid will easily cover more than 60% of the external financing requirement. The balance will be covered by exceptional financing granted by the IMF to fight the pandemic, comprising a first disbursement of USD 189 million in September 2021 and a second in November of USD 378 million. Reserves, which were bolstered in August 2021 by a USD 543 million SDR allocation from the IMF, will remain strong, covering about 6.8 months of imports as of November 2021


New president breaks with predecessor's policies 

John Magufuli died in March 2021 after being re-elected in October 2020 for a second five-year term, taking nearly 85% of the vote in a tense election. Vice President Samia Suluhu Hassan was sworn in as president to complete Magufuli's term (2025). Although she was unanimously elected president, her support within Chama Cha Mapinduzi (CCM), the party that has dominated the domestic political scene since the country's independence, is not entirely secure. Parliamentary speaker Job Ndugai resigned in January 2022 after his criticism of external borrowing angered Hassan. On the domestic front, the new president has taken steps to restore calm to the social climate. The complete reversal of the country's pandemic response strategy will help, as will cutting the mobile money tax. Externally, efforts to position the country as a regional trade hub could strengthen ties to neighbouring countries (e.g. pipeline project with Uganda, steps to strengthen the country's integration into the EAC). However, the October 2020 attack on Kitaya near the border with Mozambique showed that Tanzania is exposed to insecurity linked to its neighbour’s Islamist insurgency, which is proving hard to contain.


Last updated: February 2022