Birguid Website Logo

Tanzania Economic Review Report 2019 Abstract



Located on the east coast of Africa and south of the equator, Tanzania is the continent’s main tourism destination. The country comprises of mainland, Tanganyika, and the archipelago of Zanzibar. Dodoma is its official capital, although Dar es Salaam,

the largest city and port, has long been the nation’s commercial and administrative centre. Overall, Tanzania has succeeded in maintaining political stability and economic growth. However, further collaboration between the public and private sectors is required to support the continued development of the country’s broad-based socio-economic development.

Real GDP growth was an estimated 6.6% in 2018, down from 7.1% in 2017. The services sector was the main contributor to GDP (39.3%). Drivers of the country’s economic growth in 2018 included a stable inflation rate and high gross official reserves. The external sector stymied economic growth as the current account deficit increased (despite the real depreciation of the Tanzanian shilling), due to a higher volume of imports in 2018 when compared to 2017. The increased imports included transport equipment, building and construction materials, industrial raw materials, and petroleum products for large public investment projects, such as the Standard Gauge Railway.

The fiscal deficit increased to an estimated 3.9% of GDP in 2018, due to increased capital spending on infrastructure projects. Public debt increased to an estimated 39.3% of GDP in 2018 from 38.2% in 2017. External debt accounted for about 74.9% of total public debt and the risk of debt distress remains low due to public external debt (34.5% of GDP) being concessional.

In the short-term (2019-2020), growth is projected at 6.6% supported by large infrastructure spending. Headline inflation is expected to marginally increase to 5.2% in 2019 and 5.1% in 2020 due to increased government spending. Challenges to the country’s economic growth during the forecast period (2019 – 2024) include slow budget implementation, slow progress towards inclusive growth, infrastructure bottlenecks, vulnerability to climate change and a restrictive business environment. In addition, economic policy uncertainty and increased domestic arrears could derail the government’s fiscal consolidation and stifle private sector growth.

Our report provides an overview of Tanzania’s economy and a summary of political risks to be navigated between 2019 and 2024. It also highlights the most viable opportunities in the country with the aim of enabling investors to identify and understand competitive threats and make informed, feasible investment decisions.

The Tanzania Economic Review Report:

Share This :