The United Republic of Tanzania's economy showcased a steady performance in the first quarter of 2025, with GDP growth rising to 5.4% from 5.2% in the same period of 2024, as detailed in the National Bureau of Statistics report. Key insights reveal the top contributors to this growth include Mining & Quarrying (15.4%), Agriculture (14.2%), Finance & Insurance (12.0%), Construction (11.3%), Manufacturing (10.4%), and Transport & Storage (9.3%). The strongest growth rates were observed in Electricity (19.0%), Mining (16.6%), Finance & Insurance (15.4%), and Education (8.6%), highlighting robust sectoral advancements. However, weaker performers such as Construction (slowed to 4.3%), Trade (fell to 3.5%), and Information & Communication (halved from 14.6% to 7.8%) indicate areas needing attention to sustain overall economic momentum.

1. Overall GDP

• Growth: Q1 2025 GDP grew by 5.4%, slightly higher than 5.2% in Q1 2024.
• Size: At constant 2015 prices, GDP rose to TZS 40.7 trillion from TZS 38.6 trillion in Q1 2024.

2. Primary Activities (40.7% of GDP)

• Agriculture, Forestry & Fishing:
  • Growth improved from 2.5% (2024) to 3.0% (2025).
  • Key drivers:
    • Paddy production rose by 9.6% (568.9k tons → 623.3k tons).
    • Wheat output jumped 29.4% (29.6k → 38.3k tons).
    • Oil seeds +5.5%, beans +0.9%.
  • Contribution: 14.2% of total GDP growth.
  • Share in GDP: 27.2%.
• Mining & Quarrying:
  • Explosive growth: 3.5% (2024) → 16.6% (2025).
  • Production surged in key minerals:
    • Gold +16.1% (13,610 kg → 15,797 kg).
    • Coal +19.1% (745k tons → 888k tons).
    • Mica +475.6%, Iron ore +256%, Phosphate +465%.
  • Contribution: largest, at 15.4% of total GDP growth.
  • Share in GDP: 11.0%.

3. Secondary Activities (21.4% of GDP)

• Manufacturing:
  • Growth: 5.8% → 7.2%.
  • Supported by increased production of consumer and industrial goods.
  • Contribution: 10.4% of growth.
  • Share in GDP: 6.8%.
• Electricity:
  • Massive jump: 7.6% → 19.0%.
  • Boosted by Julius Nyerere Hydropower Dam coming online.
  • Share in GDP: 0.2% (small, but impactful growth driver).
• Water Supply:
  • Growth: 3.1% → 4.2%, linked to production rising to 98.9m m³ (from 94.7m).
  • Share in GDP: 0.4%.
• Construction:
  • Slowed: 6.4% → 4.3%.
  • Still important with 11.3% contribution to GDP growth.
  • Supported by cement & iron-steel output.
  • Share in GDP: 12.7%.

4. Tertiary Activities (37.9% of GDP)

• Trade & Repair:
  • Decline in growth: 5.3% → 3.5%.
  • Impacted by moderate import and agriculture trade flows.
  • Share in GDP: 8.4%.
• Transport & Storage:
  • Growth: 5.7% → 6.5%, driven by cargo tonnage and SGR rail services.
  • Contribution: 9.3% of GDP growth.
  • Share in GDP: 7.2%.
• Financial & Insurance:
  • Growth: 14.9% → 15.4%.
  • Supported by:
    • Deposits up 18.5% (TZS 36.3T → 43.0T).
    • Loans up 14.7% (TZS 34.1T → 39.1T).
  • Contribution: 12.0%.
  • Share in GDP: 3.5%.
• Information & Communication:
  • Slowed sharply: 14.6% → 7.8%.
  • Still supported by mobile money, internet expansion & broadcasting.
  • Share in GDP: 1.6%.
• Education:
  • Growth: 5.5% → 8.6%, thanks to rising student enrollments.
  • Share in GDP: 2.2%.

Table 1: Sectoral Growth Performance and Contribution Analysis

The economic implications of Tanzania's sectoral growth and contributions in Q1 2025 are multifaceted, reflecting both strengths and challenges:

Tanzania's Q1 2025 GDP growth of 5.4% at constant 2015 prices, rising from TZS 38.6 trillion in Q1 2024 to TZS 40.7 trillion, signals a resilient and accelerating economy amid a global slowdown. This performance outpaces the revised global projection of 2.8% for 2025, influenced by U.S. tariff policies and trade tensions, as well as Sub-Saharan Africa's expected 3.8% growth. It also exceeds regional peers in the SADC (e.g., South Africa's 0.8%, Namibia's 2.7%) and aligns with strong EAC growth (Uganda at 8.6%, Rwanda at 7.8%). This implies sustained macroeconomic stability, potentially boosting investor confidence and supporting Tanzania's ambition to reach a USD 1 trillion economy by 2050 through structural reforms. However, reliance on public sector-driven growth could strain fiscal balances if external shocks like commodity price volatility or climate events intensify.

The growth trajectory suggests potential for full-year 2025 GDP expansion of 5.8-6.0%, driven by infrastructure and sectoral diversification, but it highlights vulnerabilities: inflation risks from rising energy and food costs, and the need for private sector-led reforms to enhance job creation, as agriculture employs 65% of the workforce yet grows modestly. Positive spillovers include improved foreign exchange reserves from mining exports and reduced energy imports due to hydropower advancements, potentially stabilizing the Tanzanian shilling.

Primary Sector Implications (40.7% of GDP)

Agriculture, Forestry & Fishing (27.2% share, 3.0% growth, 14.2% contribution): The sector's uptick from 2.5% in Q1 2024, fueled by paddy (+9.6% to 623.3k tons) and wheat (+29.4% to 38.3k tons), implies enhanced food security and rural income growth, supporting poverty reduction in a sector employing most Tanzanians. However, modest overall growth underscores challenges like weather dependency and low productivity, potentially exacerbating inequality if not addressed through investments in irrigation and value chains. Positive linkages to manufacturing (e.g., agro-processing) could amplify multiplier effects, but slower trade flows might limit export gains.

Mining & Quarrying (11.0% share, 16.6% growth, 15.4% contribution): Explosive growth from gold (+16.1% to 15,797 kg), coal (+19.1% to 888k tons), and surges in mica (+475.6%), iron ore (+256%), and phosphate (+465%) positions mining as the top growth driver, boosting export revenues (gold alone accounts for ~50% of non-traditional exports) and government royalties. Implications include stronger fiscal space for infrastructure, but risks of Dutch disease—where resource booms crowd out other sectors—and environmental concerns from expanded operations. This could attract FDI but heighten volatility tied to global commodity prices.

Secondary Sector Implications (21.4% of GDP)

Manufacturing (6.8% share, 7.2% growth, 10.4% contribution): Acceleration from 5.8% reflects increased production of consumer and industrial goods, signaling progress in industrialization under Tanzania's FYDP III. This implies job creation in urban areas and reduced import dependence, with linkages to agriculture (e.g., food processing) and mining (e.g., metal fabrication). However, energy-intensive industries benefit from electricity growth, potentially lowering costs and enhancing competitiveness.

Electricity (0.2% share, 19.0% growth): The massive jump, driven by the Julius Nyerere Hydropower Dam's commissioning, enhances energy security, reduces reliance on costly imports, and supports industrial expansion. Implications include lower electricity tariffs (potentially curbing inflation), improved manufacturing productivity, and export potential via regional grids, but risks from hydrological variability due to climate change.

Water Supply (0.4% share, 4.2% growth): Tied to production rising to 98.9 million m³, this suggests better urban access, aiding health and sanitation. Broader implications: Supports agriculture and manufacturing, but urban-rural disparities could persist without expanded infrastructure.

Construction (12.7% share, 4.3% growth, 11.3% contribution): Slowdown from 6.4% amid cement and iron-steel output growth indicates a maturing infrastructure cycle (e.g., SGR rail). This implies sustained employment in labor-intensive projects but potential fiscal pressure if public spending tapers. Positive: Multiplier effects on transport and real estate.

Tertiary Sector Implications (37.9% of GDP)

Trade & Repair (8.4% share, 3.5% growth): Decline from 5.3% due to moderate imports and agriculture flows suggests subdued consumer demand or supply chain issues, potentially signaling inflationary pressures or weaker external trade amid global tensions. Implications: Slower retail growth could limit informal sector jobs, but ties to agriculture imply recovery with better harvests.

Transport & Storage (7.2% share, 6.5% growth, 9.3% contribution): Driven by cargo and SGR services, this enhances logistics efficiency, reducing costs for exports and imports. Implications: Boosts trade competitiveness, tourism, and regional integration (EAC), with potential for more FDI in ports/rail.

Financial & Insurance (3.5% share, 15.4% growth, 12.0% contribution): Supported by deposits (+18.5% to TZS 43.0 trillion) and loans (+14.7% to TZS 39.1 trillion), this reflects deepening financial inclusion via mobile money and credit expansion. Implications: Stimulates investment across sectors, but rapid credit growth risks non-performing loans if economic shocks hit.

Information & Communication (1.6% share, 7.8% growth): Sharp slowdown from 14.6% despite mobile/internet expansion implies saturation or competition. Implications: Digital economy growth supports fintech and e-commerce, enhancing productivity, but slower pace could hinder tech-driven diversification.

Education (2.2% share, 8.6% growth): Rising enrollments signal human capital investment, implying long-term productivity gains and reduced inequality.

Key Insights and Broader Risks

Top contributors (mining 15.4%, agriculture 14.2%, finance 12.0%) highlight a balanced yet resource-heavy growth model, with strongest rates in electricity (19.0%) and mining (16.6%) pointing to infrastructure-led momentum. Weaker areas like construction (4.3%), trade (3.5%), and ICT (7.8%) suggest external vulnerabilities. Overall, this fosters employment (especially in services/mining), fiscal revenues, and poverty alleviation, but calls for diversification to mitigate climate risks, global trade disruptions, and debt sustainability. IMF recommendations emphasize reforms for private sector growth to sustain 6%+ annual expansion.