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TICGL | Economic Consulting Group
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Global growth is projected to stabilize at 2.6% in 2024, rising to 2.7% by 2025-2026, which is slower than the pre-COVID average of 3.1%. Emerging Market and Developing Economies (EMDEs) are forecasted to grow at 4.0% in 2024, with Sub-Saharan Africa growing at 3.5%. Global inflation is expected to moderate to 3.5%, though it will remain above pre-pandemic levels, especially in EMDEs. Oil prices are set to average $84 per barrel in 2024, while non-energy commodity prices remain stable. Risks to growth include geopolitical tensions and high debt distress in 40% of EMDEs.

  1. Global Growth:
    • Global GDP growth is projected to stabilize at 2.6% in 2024, with an expected increase to 2.7% in 2025-2026. This growth is slower than the 3.1% average in the decade before COVID-19​.
    • By 2026, 80% of the world’s population will experience slower growth compared to pre-pandemic levels.
  2. Regional Growth:
    • Emerging Market and Developing Economies (EMDEs) are forecast to grow at 4.0% in 2024, down from 4.2% in 2023. China’s growth is expected to slow to 4.8% in 2024.
    • Sub-Saharan Africa is expected to grow at 3.5% in 2024, with a rise to 4.0% in 2026​.
  3. Global Inflation:
    • Inflation is projected to moderate to 3.5% globally in 2024, but it will remain higher than pre-pandemic levels​.
    • Inflation in EMDEs is expected to decline but will remain challenging for many regions due to commodity price fluctuations.
  4. Commodity Prices:
    • Oil prices are projected to be slightly higher in 2024, averaging $84 per barrel, but lower than 2023 prices​.
    • Prices for non-energy commodities are expected to remain stable​.
  5. Risks to Global Growth:
    • Escalating geopolitical tensions and trade fragmentation pose significant risks to global growth.
    • Debt distress risks remain high for 40% of EMDEs, with many economies vulnerable to shocks​.

Source: Global Economic Prospects June 2024 report

Global growth prospects in 2024 show diverse regional dynamics. South Asia is the fastest-growing region, with projected growth of 6.2%, driven by India’s 6.6% expansion. East Asia and Pacific (EAP) growth is expected at 4.8%, led by China, though slowing due to structural issues. Sub-Saharan Africa (SSA) will see a modest improvement to 3.5%, while Europe and Central Asia (ECA) and the Middle East and North Africa (MENA) regions forecast 3.0% and 2.8% growth, respectively. Latin America and the Caribbean (LAC) will have the slowest growth at 1.8%, constrained by fiscal challenges and weak investment.

1. East Asia and Pacific (EAP)

2. Europe and Central Asia (ECA)

3. Latin America and the Caribbean (LAC)

4. Middle East and North Africa (MENA)

5. South Asia

6. Sub-Saharan Africa (SSA)

7. Low-Income Countries (LICs)

Summary of Regional Outlooks:

Source: The Global Economic Prospects June 2024 report

Commodity prices are projected to stabilize after the volatility caused by the COVID-19 pandemic and the war in Ukraine, though they will remain at historically high levels. In 2024, oil prices are forecast to rise to $84 per barrel, up from $82.6 in 2023, but will gradually decline to $78.1 per barrel by 2026. Non-energy commodities, including metals and agricultural products, are expected to see modest declines, with the non-energy index slightly decreasing to 110.1 in 2024. However, risks such as geopolitical tensions, climate change, and trade disruptions could still affect price trends globally.

1. Overview of Commodity Prices

2. Energy Prices

3. Non-Energy Commodities

4. Food and Agricultural Commodities

5. Risks to Commodity Prices

6. Long-Term Projections

Key Figures:

Summary of Commodity Price Outlook:

Source: Global Economic Prospects June 2024 report

Addressed Infrastructure, Regulatory Efficiency, and Public Service Challenges

The Business Ready 2024 report provides an assessment of Tanzania's business environment based on three key pillars: Regulatory Framework, Public Services, and Operational Efficiency

  1. Regulatory Framework: Tanzania scored 65.00 points, placing it in the third quintile, meaning its regulatory environment is moderately favorable. This includes regulations that govern business entry, labor, taxation, and financial services, though there is room for improvement in areas like market competition and insolvency.

What it Means: The Regulatory Framework pillar focuses on the laws, rules, and regulations that businesses must follow in Tanzania. A score of 65.00 indicates that while the regulatory environment is moderately favorable, it still has areas that need improvement.

What is Measured: This pillar assesses the rules, laws, and regulations that businesses must follow as they enter, operate, and exit the market. It focuses on whether these regulations are clear, fair, and supportive of entrepreneurial activity.

Key Areas Measured:

What It Tells About Tanzania:

  1. Public Services: Tanzania's score for public services is 51.56 points, placing it in the fourth quintile. This reflects challenges in public service provision that support businesses, including utility services and government institutions related to business regulation.

What it Means: This pillar evaluates the quality of government-provided services that help businesses comply with regulations, such as utility services (electricity, water), online tax services, and other government support structures.

What is Measured: This pillar looks at the quality of public services provided by the government that are necessary for businesses to function, including utility services, government transparency, and the infrastructure that supports business compliance with regulations.

Key Areas Measured:

What It Tells About Tanzania:

  1. Operational Efficiency: Tanzania performed better in operational efficiency with a score of 62.15 points, placing it in the third quintile. This category measures how efficiently businesses can comply with regulations and access public services.

What it Means: The Operational Efficiency pillar measures how easy it is for businesses to comply with regulations and access services. Tanzania’s score in this pillar suggests that businesses face some challenges but generally have moderate success in navigating the regulatory landscape and accessing the services they need.

What is Measured: This pillar evaluates how easy it is for businesses to comply with the regulatory framework and access public services. It measures the practical implementation of the rules and services described under the first two pillars.

Key Areas Measured:

What It Tells About Tanzania:

Tanzania's scores in the Business Ready 2024 report provide valuable insights into the country's economic development by highlighting strengths and challenges in its business environment. Here's a breakdown of what these figures reveal about Tanzania's economic development:

1. Regulatory Framework (Score: 65.00)

2. Public Services (Score: 51.56)

3. Operational Efficiency (Score: 62.15)

Overall Economic Development Insights:

Strategic Recommendations for Economic Development:

  1. Invest in Infrastructure: Improving utility services, especially reliable electricity and internet access, will lower operational costs and improve productivity across sectors, boosting overall economic growth.
  2. Strengthen the Legal and Regulatory Environment: Enhancing regulations related to market competition, insolvency, and business disputes will create a more favorable environment for entrepreneurship and innovation, encouraging more domestic and foreign investment.
  3. Improve Public Service Delivery: Streamlining processes such as tax filing, permit issuance, and customs procedures through digitalization would significantly reduce the cost of doing business and improve Tanzania’s global competitiveness.
Business Ready 2024 Executive SummaryDownload

Event Details

POST-BUDGET CONFERENCE TO TANZANIA'S ECONOMY

As we conclude the 2025 fiscal year, the upcoming Post-Budget Conference stands as a critical event in our nation's economic governance. This gathering serves as a vital platform for evaluation, reflection, and forward planning, playing a crucial role in shaping Tanzania's economic trajectory.

Why Post-Budget Conference

  1. Comprehensive Evaluation: The conference provides an opportunity to thoroughly assess the implementation and impact of the budget over the past year, offering insights into what worked well and what needs improvement.
  2. Accountability: By bringing together diverse stakeholders to review budget performance, we reinforce accountability in public financial management, fostering trust between the government and citizens.
  3. Learning and Adaptation: The post-budget analysis allows us to learn from our experiences, helping to refine our approaches and adapt our strategies for future budget cycles.
  4. Policy Effectiveness Assessment: This is a crucial moment to evaluate the effectiveness of fiscal policies implemented during the year, understanding their real-world impacts on various sectors of our economy.
  5. Stakeholder Feedback: The conference creates a platform for different sectors of society to provide feedback on budget implementation, ensuring a participatory approach to economic governance.

Why to Our Economy

  1. Economic Performance Review: The post-budget conference allows for a comprehensive review of our economic performance against set targets, providing a clear picture of our nation's economic health.
  2. Fiscal Discipline: By scrutinizing expenditure and revenue collection, we reinforce fiscal discipline, which is crucial for long-term economic stability and growth.
  3. Investment Climate: A transparent post-budget review process enhances investor confidence by demonstrating our commitment to sound financial management and economic governance.
  4. Course Correction: The insights gained from the conference enable timely adjustments to our economic strategies, allowing us to address emerging challenges and capitalize on new opportunities.
  5. Resource Allocation Efficiency: By analyzing the outcomes of our spending decisions, we can improve the efficiency of resource allocation in future budgets, maximizing the impact of every Tanzanian shilling.
  6. Economic Planning: The conference provides crucial inputs for future economic planning, ensuring that our subsequent budgets are grounded in real-world evidence and experience.
  7. Social Impact Assessment: This is an opportunity to evaluate how budget implementation has affected social indicators, helping us to refine our approaches to poverty reduction and social development.
  8. Transparency Enhancement: The post-budget review process enhances transparency in public financial management, which is essential for building public trust and combating corruption.
  9. Global Economic Integration: By conducting thorough post-budget analyses, we demonstrate our commitment to sound economic management to international partners and institutions, potentially improving our global economic standing.
  10. Sustainable Development: The conference allows us to assess our progress towards sustainable development goals, ensuring that our economic growth is balanced with environmental and social considerations.

In essence, the Post-Budget Conference is not merely a retrospective exercise, but a forward-looking process that bridges our past performance with our future aspirations. It serves as a cornerstone of good economic governance, providing the insights and direction needed to steer our nation towards greater prosperity.

Your participation in this conference is crucial. It represents an investment in our collective future, ensuring that our economic policies and practices continue to evolve and improve. Together, we have the opportunity to learn from our experiences, celebrate our successes, address our challenges, and chart a course for a more prosperous and equitable Tanzania.

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):

2. Interest Rates:

3. Financial Markets:

4. Government Budget Operations (July 2024):

5. Debt Development (August 2024):

6. Export and Import Rates:

7. External Sector Performance:

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:

2. Stable Interest Rates:

3. Fiscal Discipline and Strong Revenue Collection:

4. Growing Debt, But Still Manageable:

5. Strong Export Growth:

6. External Sector Stability:

Zanzibar's economic performance in 2024 demonstrates resilience and recovery, particularly in the tourism sector, supported by stable inflation and improved agricultural outputs. The government's focus on enhancing revenue collection and infrastructure development reflects a strategic approach to boosting economic growth and ensuring sustainability. However, continued efforts are needed to address challenges such as trade imbalances and the need for diversified economic activities to strengthen the overall economy.

1. Economic Growth:

2. Tourism Sector:

3. Inflation Trends:

4. Agricultural Performance:

5. Trade Balance:

6. Budgetary Operations:

7. Development Initiatives:

Tanzania's government budget operations for July 2024 show a robust revenue collection process amid fiscal constraints. With a focus on recurrent and development expenditures, the government aims to maintain essential services and invest in growth, despite running a fiscal deficit. This approach underscores the importance of fiscal discipline and strategic planning in managing public finances.

In July 2024, Tanzania's government budget operations reflected a focus on fiscal discipline and efficient resource allocation. Here are the key details regarding government budget operations:

1. Government Revenue:

The strong performance in tax revenue was largely due to improved tax compliance and an increase in imported goods​

2. Government Expenditures:

The government has prioritized essential spending on wages, salaries, and debt servicing, while also focusing on development projects​.

3. Fiscal Balance:

Fiscal Deficit=Total Expenditure−Total Revenue

=2,823.5 billion−2,375.6 billion

=447.9 billion

This indicates that the government spent TZS 447.9 billion more than it collected in revenue during July, highlighting the ongoing need for financing mechanisms to cover budget shortfalls.

4. Revenue Sources:

5. Focus on Fiscal Consolidation:

The budget operation demonstrates a commitment to maintaining fiscal discipline while also investing in development projects. This balance is crucial for sustaining economic growth, improving infrastructure, and enhancing public services. However, the fiscal deficit highlights the ongoing challenge of financing government operations, necessitating effective debt management and revenue generation strategies.

Tanzania's external sector performance in August 2024 reflects a positive trajectory, with a narrowing current account deficit driven by strong export growth and robust performance in the services sector. While the primary income account deficit remains a concern, the overall stability provided by healthy foreign exchange reserves offers a buffer against potential economic shocks. Continued focus on enhancing export competitiveness and managing import levels will be essential for maintaining this positive trend in the external sector.

1. Current Account Performance:

2. Goods Account:

3. Services Account:

4. Primary Income Account:

5. Secondary Income Account:

6. Foreign Exchange Reserves:

The external sector performance of Tanzania in August 2024 with key insights into the country’s economic health and trade dynamics

Overall, the external sector performance in August 2024 indicates a positive trend in Tanzania’s trade dynamics, characterized by improved export performance and a narrowing current account deficit. However, the challenges posed by the primary income deficit highlight the need for careful debt management. Strengthening the export base and diversifying the economy will be crucial for maintaining this positive trajectory while ensuring long-term economic stability.

1. Improved Current Account Balance:

2. Strong Export Growth:

3. Services Sector Contribution:

4. Primary Income Deficit:

5. Solid Foreign Exchange Reserves:

In August 2024, Tanzania's financial market displayed mixed but stable performance, with rising yields on government securities reflecting higher returns for investors, while the interbank cash market showed increased short-term liquidity demand. The Tanzanian Shilling experienced slight depreciation, though foreign exchange reserves grew to USD 5.38 billion, ensuring adequate coverage for imports. These trends suggest a balanced but cautious economic environment, with both opportunities for investors and pressures on liquidity management.

1. Government Securities Market:

2. Interbank Cash Market (IBCM):

3. Interbank Foreign Exchange Market (IFEM):

4. Foreign Exchange Reserves:

The performance of Tanzania's financial market in August 2024 with insights into the country's economic environment

Tanzania’s financial market is stable, but experiencing some pressure points. The government is offering higher yields to finance its operations, while liquidity tightness in the banking sector is driving up short-term borrowing costs. The Tanzanian Shilling remains stable, supported by strong foreign exchange reserves, though there is some pressure on the currency. These trends highlight the need for ongoing monitoring of liquidity and fiscal dynamics to ensure continued economic stability.

1. Higher Returns on Government Securities:

This could be a sign that the government is increasing borrowing to finance development projects or cover fiscal needs, or it may suggest tighter liquidity in the market, prompting higher rates to attract funds. Investors benefit from these higher returns, but it may also signal growing fiscal pressures.

2. Shift in Liquidity Conditions in the Interbank Cash Market:

Banks are prioritizing short-term liquidity needs, likely due to seasonal factors like crop purchasing and higher demand for the Tanzanian Shilling. The increase in the IBCM interest rate (from 7.24% to 7.79%) reflects rising costs of short-term borrowing for banks, which may tighten credit availability.

3. Stable but Slightly Depreciating Currency:

The slight depreciation reflects seasonal factors, such as fluctuations in demand for foreign currency due to import and export activities. However, the improvement in foreign exchange reserves (to USD 5.38 billion) suggests that the central bank has a buffer to stabilize the currency and manage external shocks.

4. Improving Foreign Exchange Reserves:

This increase in reserves provides economic stability and strengthens Tanzania’s ability to withstand external economic shocks, such as rising import costs or fluctuations in global commodity prices. It also reflects the positive impact of rising export revenues, especially from sectors like tourism and gold.

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