Key economic indicators from the Monthly Economic Review by the Bank of Tanzania (August 2024), which provide insight into Tanzania's economic development

These indicators reflect Tanzania’s efforts toward fiscal consolidation, reduced reliance on external debt, and a stable macroeconomic environment conducive to investment and export growth.

1. GDP Growth: Tanzania's economy grew by 5.6% in the first quarter of 2024, up from 5.0% in the same period in 2023. This growth is largely attributed to sectors such as construction, agriculture, and financial services​.
2. Inflation: Tanzania's inflation remains low and stable. The headline inflation rate in July 2024 was 3.0%, a slight decrease from 3.1% in June. Food inflation saw a modest increase to 1.0%, while core inflation dropped to 3.3%​.
3. Monetary Policy: The private sector credit growth remained strong at 17.6% in July 2024, supporting economic activities like agriculture, which saw a 44.6% increase in credit​.
4. External Sector: Tanzania's exports of goods and services for the year ending in July 2024 totaled USD 14.67 billion, an increase from USD 13.03 billion in the previous year. Key exports include gold, horticultural products, and traditional goods like tobacco and cashew nuts​.
5. Foreign Reserves: The country’s foreign exchange reserves stood at USD 5.29 billion by the end of July 2024, covering 4.3 months of projected imports​.
6. Government Revenue: In June 2024, domestic revenue amounted to TZS 3,181.5 billion, achieving 96.6% of the monthly target. Tax revenue totaled TZS 2,527.8 billion, with income and import taxes surpassing expectations due to improved compliance and increased fuel imports​.
7. Public Expenditure: Total government expenditure in June 2024 was TZS 3,305.5 billion, with TZS 2,168 billion allocated for recurrent expenses (wages, salaries, and debt servicing), and TZS 1,137.5 billion directed towards development​.
8. Debt Developments: Tanzania’s national debt stood at USD 41.84 billion in July 2024, a slight decrease from the previous month. External debt, making up 70.9% of the total, was USD 29.68 billion, with multilateral institutions holding the largest share (57.5%)​.
9. External Sector (Current Account): The current account deficit narrowed to USD 2.50 billion for the year ending in July 2024, a significant improvement from USD 4.46 billion in the same period in 2023, driven by better export performance and reduced import values​.
10. Foreign Direct Investment (FDI): Continued improvement in foreign direct investment is expected due to the stable macroeconomic environment, with a focus on mining, tourism, and agricultural exports​.
11. Imports: Goods imports decreased slightly to USD 16.10 billion in the year ending July 2024 from USD 16.71 billion in the previous year. Major imports include refined petroleum products (USD 2.85 billion) and capital goods​.

The economic indicators from the Monthly Economic Review (August 2024) present a comprehensive picture of Tanzania's economic development

Tanzania's economic development is characterized by robust growth, low inflation, increasing exports, and a stable macroeconomic environment. The government’s efforts to ensure fiscal discipline, contain national debt, and attract FDI contribute to sustainable growth. These indicators point to a healthy, growing economy poised to leverage its natural resources, agricultural potential, and export diversification for future development.

1. Sustained Economic Growth:

• Tanzania’s GDP growth rate of 5.6% in the first quarter of 2024, up from 5.0% in 2023, highlights steady economic expansion. Growth has been driven by critical sectors such as construction, agriculture, and financial services, showcasing the government's investment in infrastructure, as well as the productivity of the agricultural sector—an essential pillar of the economy​.

2. Stable Inflation:

• Low inflation at 3.0% in July 2024 demonstrates effective management of inflationary pressures. This stability, aligned with the national target, indicates macroeconomic stability. Although food inflation saw a slight rise to 1.0%, the overall low inflation provides a favorable environment for both consumer spending and investment​.

3. Robust Private Sector Credit:

• Strong private sector credit growth of 17.6% in July 2024, especially the 44.6% increase in agricultural lending, underscores the role of credit in fueling economic activity. This is essential for sectors like agriculture, which contribute to rural development, poverty reduction, and economic diversification​.

4. Impressive Export Performance:

• Exports reached USD 14.67 billion in the year ending July 2024, with key commodities like gold, horticultural products, tobacco, and cashew nuts driving the increase. The growth in non-traditional exports reflects the diversification of the export base, and strong export performance helps improve the balance of payments​.

5. Healthy Foreign Reserves:

• Tanzania’s foreign exchange reserves of USD 5.29 billion, covering 4.3 months of imports, reflect sound management of external finances. These reserves provide a buffer against external shocks, maintaining investor confidence and ensuring currency stability​.

6. Revenue Generation and Fiscal Discipline:

• Domestic revenue collection reached TZS 3,181.5 billion in June 2024, demonstrating improved tax compliance and effective fiscal management. With public expenditure balanced between recurrent and development spending, the government is managing its fiscal policies to sustain both growth and fiscal consolidation​.

7. Reduction in National Debt:

• Tanzania's national debt at USD 41.84 billion in July 2024, a slight decline from the previous month, suggests efforts to contain debt growth. The country is managing external debt prudently, with multilateral institutions holding the largest share (57.5%).

8. Narrowing Current Account Deficit:

• The current account deficit improved significantly to USD 2.50 billion in 2024 from USD 4.46 billion in 2023. This narrowing is due to improved export performance and reduced imports, reflecting more balanced external trade​.

9. Steady Foreign Direct Investment (FDI):

• Continued improvement in FDI points to growing investor confidence in Tanzania, supported by a stable macroeconomic environment. Sectors like mining, tourism, and agriculture are attracting more foreign capital, which is critical for long-term economic growth​.

10. Slight Decline in Imports:

• A decrease in goods imports to USD 16.10 billion in 2024, driven by lower import costs of refined petroleum products and other capital goods, suggests improved terms of trade and reduced reliance on external goods. This also aligns with efforts to promote domestic production and reduce trade imbalances​.