July 21, 2020. "Government policy towards improving the country's business and investment climate also remains a work in progress, particularly in tax policy and administration, access to affordable finance and bureaucratic processes," the AfDB report says.AfDB is among supporters of Tanzania's industrialisation drive, financing a wide array of projects covering infrastructure, agriculture, water and electricity supply, transport and cross-border trade.These include a $55 million facility approved in December last year to boost reforms in Tanzania’s economic competitiveness through private sector participation.Incumbent President John Magufuli, a favourite to win a second term in the October election, is set to pursue his industrialisation agenda despite growing donor apathy brought on by some of his administration's controversial and hardline policies.But even being one of his strongest backers, AfDB could not resist a few criticisms.The report cited East Africa as economically the fastest growing region on the continent in 2019, with an estimated growth of five per cent with Tanzania, Rwanda and Ethiopia among the world’s 10 fastest economic growers.Tanzania registered a 6.8 per cent real GDP growth (down slightly from seven per cent in 2018) against Rwanda's 8.7 per cent and Ethiopia's 7.4 per cent.The report attributed the positive outlook for Tanzania on a "markedly diversified economy, characterised by robust private consumption, substantial public spending, strong investment growth and an upturn in exports. Although total GDP has increased since these reforms began, GDP per capita dropped sharply at first, and only exceeded the pre-transition … The Tanzania Mortgage Refinance Company (TMRC) was established to provide medium and long-term liquidity to financial institutions. Reduced export earnings and FDI inflows are expected to further depreciate the shilling and contribute to a buildup in inflation.The fiscal deficit is projected to widen as tax revenues fall with lower trade, travel, and tourism activity amid increased public spending to contain the pandemic and interventions to support the most vulnerable population and affected businesses.The current account deficit is also expected to weaken to 4.6% of GDP in 2020 in the baseline scenario, compared with the pre-COVID–19 estimate of 4%. The economy of Tanzania advanced by 5.7 percent year-on-year in the first quarter of 2020, following a downwardly revised 6.2 percent growth in the previous period. The Mo Ibrahim Index of African Governance shows Tanzania has improved in its overall governance indicators between 2015-18.
Government efforts to expand access to social services like education, health, and water have been undermined by their declining quality as the population rises faster than the supply of the services.The World Bank’s active portfolio in Tanzania includes 20 national International Development Association (IDA) projects with total net commitments of $4.07 billion. Tanzania GDP Grew by 5.7% in Q1 2020 and Will Grow by 5.5% in 2020, BoT SayTanzania GDP to Growth 5.2% in 2020 and 6.3% in 2021, AfDB EstimateExclusive Interview with Tonia Kandiero, AfDB's Resident Representative in TanzaniaThis website uses cookies to improve your experience. "The African Development Bank has painted a generally rosy economic picture for Tanzania despite it being an election year, but with caveats on youth employment, education sector priorities and government-private sector relations.
The trade balance deteriorated in 2018, with exports contracting by 3.9% in gross value and imports increasing by 7.8%.Real GDP growth is projected to remain in the range of 5-6% over the medium term, subject to favorable weather conditions, modest but steady implementation of reforms to improve the business environment, fiscal management, and address vulnerabilities in the financial sector. This is indicated in the Guidelines for the Preparation of Plans and Budget for 2017–2018, issued by Tanzania’s Ministry of Finance in November 2016. This is due to lower exports, particularly service export receipts following the reduction in travel and tourism, which is expected to more than offset the benefits of higher gold prices and lower global oil prices. Learn how the World Bank Group is helping countries with COVID-19 (coronavirus). The planned deficit will be financed largely by non-concessional loans.
TMRC has also started to raise capital from the bond market and the project is now a strong model of maximizing finance for development. "Tourism, mining, services, construction, agriculture, and manufacturing were cited among sectors boosting growth, which is projected to be broadly stable at 6.4 per cent in 2020 and 6.6 per cent in 2021. With IDA’s help, hundreds of millions of people have escaped poverty—through the creation of jobs, access to clean water, schools, roads, nutrition, electricity, and more.