Tanzania's economic performance in 2024 reflects a stable and resilient growth trajectory, marked by low inflation, steady interest rates, and robust export growth. Despite rising debt levels, the government has maintained fiscal discipline, balancing revenue collection with critical expenditures. Strong export performance, particularly in tourism and gold, alongside improving external sector stability, demonstrates the country's ability to manage global economic fluctuations while promoting sustainable growth. However, careful monitoring of debt and continued investment in key sectors will be crucial for ensuring long-term economic stability and development.

These indicate a stable inflation environment, improved government revenue collection, manageable debt growth, and robust performance in the export sector.

1. Inflation Rates (August 2024):

• Headline inflation increased slightly to 3.1%, up from 3.0% in July 2024.
• Food inflation rose to 2.8% (from 1% in July), driven by higher retail prices of rice, wheat flour, and dried sardines.
• Core inflation eased to 3.2%, while energy inflation dropped to 11.2% (from 14.6% in July), attributed to lower kerosene and fuel prices​.

2. Interest Rates:

• Overall lending rate averaged 15.26% in August 2024, with negotiated lending rates at 12.79%.
• Deposit rates slightly declined to 7.98% from 8.15% in July​.

3. Financial Markets:

• Treasury bills in August registered a 10.61% yield, up from 8.81% in July. The auction for 10- and 20-year Treasury bonds had 13.26% and 15.40% weighted average yields, respectively​.

4. Government Budget Operations (July 2024):

• Government revenue reached TZS 2,375.6 billion, meeting 97% of the monthly target.
• The government spent TZS 2,823.5 billion, of which TZS 1,898.3 billion was for recurrent expenses and TZS 925.3 billion for development expenses​.

5. Debt Development (August 2024):

• The national debt stock increased to USD 44,891.5 million, with 72.8% being external debt.
• External debt rose by 2.1% to USD 32,675.1 million, with new loans worth USD 433 million disbursed​​.

6. Export and Import Rates:

• Exports of goods and services grew to USD 15,064.6 million in August 2024, from USD 13,290.1 million in 2023.
  • Key drivers: increased tourism and gold exports (USD 3,189.4 million).
• Imports amounted to USD 16,427.5 million, with a focus on capital goods and refined petroleum products​.

7. External Sector Performance:

• The current account deficit narrowed to USD 2,567.2 million from USD 3,846.5 million a year earlier.
• Foreign exchange reserves increased to USD 5,379.7 million, sufficient to cover 4.4 months of imports​.

Tanzania for August 2024 highlights several key aspects of the country's current economic status. 

Tanzania's economy is in a phase of cautious growth with stable inflation, controlled interest rates, disciplined government spending, and strong export performance. However, the rising debt needs careful monitoring to ensure sustainability. If managed well, the growing exports, particularly in tourism and gold, along with improving government revenue, could support long-term economic growth.

1. Controlled Inflation:

• With headline inflation at 3.1%, Tanzania has managed to keep inflation low and within acceptable regional benchmarks (EAC and SADC targets). Although food inflation has risen due to price increases in staple items like rice and wheat flour, overall inflation remains stable.
• The drop in energy inflation (11.2%, down from 14.6%) reflects declining fuel prices, which helps contain cost pressures in the economy.

• Inflation is well managed, showing the government's effective control over price stability, which is critical for sustaining consumer purchasing power and maintaining economic confidence.

2. Stable Interest Rates:

• The overall lending rate of 15.26% and the relatively lower negotiated lending rate of 12.79% indicate that credit remains expensive, though stable. The narrow spread between lending and deposit rates shows reduced credit risk in the market.

• While interest rates are relatively high, they are stable, which may indicate cautious optimism in the financial sector. Businesses may find it challenging to access affordable loans for expansion, but the stability offers predictability.

3. Fiscal Discipline and Strong Revenue Collection:

• The government collected TZS 2,375.6 billion in July 2024, meeting 97% of its target. This was driven by higher tax compliance and increased imports. On the expenditure side, the government focused on critical spending, balancing recurrent and development costs.

• The Tanzanian government is showing strong fiscal discipline, crucial for maintaining investor confidence and managing public finances. A focus on development spending indicates ongoing infrastructure and growth-focused projects.

4. Growing Debt, But Still Manageable:

• Tanzania’s debt stock, at USD 44.9 billion, is increasing, with external debt making up 72.8%. However, this is partly due to borrowing for development projects. Debt service payments remain regular, but the rising debt level should be closely monitored.

• While the rising debt levels could become a concern if the trend continues unchecked, the fact that most borrowing is for development (such as transport and energy) shows that the government is focusing on infrastructure improvements. Debt sustainability will need ongoing vigilance.

5. Strong Export Growth:

• Exports of goods and services increased by 13.4% year-on-year, driven largely by higher tourism receipts and gold exports, while imports only grew marginally.

• The growth in exports, especially in traditional goods like cashew nuts and gold, shows Tanzania’s increasing competitiveness in key sectors. This also helps to narrow the current account deficit and improve the country’s foreign exchange reserves.

6. External Sector Stability:

• The current account deficit narrowed, and foreign exchange reserves rose to USD 5.4 billion, covering 4.4 months of imports, which meets international standards.

• Tanzania’s external sector is performing well, supported by strong tourism and export growth. This helps stabilize the currency and provides a buffer against external shocks, such as fluctuating commodity prices.