Tanzania's Zonal Economic Performance: Regional Breakdown and Growth Prospects

This research provided data related to the Gross Domestic Product (GDP) of Tanzania for the year 2022, broken down by economic activities and regions, as well as the percentage change in GDP per capita for different zones between 2022 and 2023:

Nominal Gross Domestic Product (GDP) in 2022:

• The nominal GDP for Tanzania in the year 2022 was TZS 170,255.6 billion.
• This represented an increase from the previous year, where the GDP was TZS 156,375.3 billion.

Economic Activities:

The GDP is divided by economic activities, and the following activities accounted for the largest share of GDP in 2022:

• Agriculture
• Construction
• Mining and quarrying
• Manufacturing
• Trade

Regional Distribution:

• The data also provides information about the distribution of GDP by region. It mentions that the Lake zone had the largest share of GDP, accounting for 25.9 percent.
• The regions of Northern and Dar es Salaam also had significant shares of GDP.

Percentage Change in GDP per Capita (2022/2023):

This part of the data shows the percentage change in GDP per capita for different zones between 2022 and 2023. It measures how the income per person is expected to change in these regions from one year to the next.

The percentage changes are as follows for each zone:

• Central: -2.7% (a decrease of 2.7%)
• Dar Es Salaam: 12% (an increase of 12%)
• Lake: 10.6% (an increase of 10.6%)
• Northern: 8.4% (an increase of 8.4%)
• Southern Eastern: -6.5% (a decrease of 6.5%)
• Southern Highlands: 0.3% (an increase of 0.3%)

Dar Es Salaam, the Lake zone, and the Northern zone appear to be experiencing positive economic growth, while the Central, Southern Eastern, and Southern Highlands zones may face economic challenges or slower growth. This research is valuable for policymakers and analysts to understand and address regional disparities in social and economic development.

The insights into the social and economic growth in different zones of Tanzania based on the Gross Domestic Product (GDP) and the percentage change in GDP per capita between 2022 and 2023:

Regional Economic Activity:

• The data shows that various economic activities, including agriculture, construction, mining and quarrying, manufacturing, and trade, contribute to the GDP of Tanzania. The fact that these activities are mentioned suggests that they are significant drivers of economic growth in the country.

Regional Distribution of GDP:

• The regional distribution of GDP indicates that different zones have varying levels of economic activity. In 2022, the Lake zone had the largest share of GDP at 25.9 percent, followed by Northern and Dar es Salaam zones. This suggests that these regions are relatively more economically developed or have specific industries that contribute significantly to the national GDP.

Percentage Change in GDP per Capita:

The percentage changes in GDP per capita between 2022 and 2023 provide insights into the expected growth or decline in income levels for residents in different zones. Here's what it indicates:

• Dar Es Salaam is expected to experience significant growth with a 12% increase in GDP per capita. This may reflect strong economic activity and job opportunities in the region.
• The Lake zone is also expected to see substantial growth with a 10.6% increase, indicating improving living standards.
• Northern zone is expected to grow by 8.4%, indicating positive economic prospects.
• Central and Southern Highlands zones, however, are expected to see a decrease in GDP per capita, which may signal economic challenges or slower growth in these areas.
• Southern Eastern zone is expected to experience a significant decline of -6.5%, suggesting potential economic difficulties in this region.

Tanzania's Absence from Top African Financial Centers for Business and Investment: Strategies for Improvement

Tanzania does not rank among the top financial centers for conducting business and investment in Africa, despite the government's encouragement of investment within the country. According to the Global Financial Centers Index (GFCI) 34, published in September 2023, Casablanca, Morocco, takes the lead as the primary financial hub in Africa. This list also includes other prominent cities like Mauritius, Kigali, Johannesburg, Nairobi, Cape Town, and Lagos.

The index indicates that numerous African nations are poised for substantial growth in the near future. Africa, as a continent, is on an upward trajectory. It boasts a youthful and expanding population, abundant natural resources, and a firm commitment to economic reform, which positions many African nations for significant growth in the coming years.

These countries, as mentioned earlier, are all strategically positioned for rapid expansion. With their burgeoning and youthful populations, abundant natural resources, and dedication to economic reform, they are poised to become major players on the global economic stage.

In addition to these factors, several other trends are contributing to Africa's growth, including the increasing adoption of technology, the expansion of the middle class, and the growing integration of African economies into the global marketplace.

Africa is a continent with a promising future. With the implementation of appropriate policies and investments, Africa has the potential to realize its full capabilities and emerge as a prominent economic force on the world stage.

Here is a list of the top African countries for business and investment in 2023, along with their respective GFCI 34 rankings and ratings:

• Casablanca: GFCI 34 Rank - 54, GFCI 34 Rating - 682
• Mauritius: GFCI 34 Rank - 68, GFCI 34 Rating - 666
• Kigali: GFCI 34 Rank - 81, GFCI 34 Rating - 651
• Johannesburg: GFCI 34 Rank - 83, GFCI 34 Rating - 642
• Nairobi: GFCI 34 Rank - 90, GFCI 34 Rating - 629
• Cape Town: GFCI 34 Rank - 91, GFCI 34 Rating - 628
• Lagos: GFCI 34 Rank - 103, GFCI 34 Rating - 613

Tanzania needs to enhances its business and investment climate, ultimately attracting more domestic and foreign investors and improving its standing in Africa's business and investment landscape

Key steps and strategies can be considered: Tanzania's ranking as a top destination for business and investment in Africa

Strengthen the Legal and Regulatory Environment:

• Enhance legal and regulatory frameworks to ensure transparency, consistency, and ease of doing business.
• Streamline business registration and permit processes, reducing bureaucracy and red tape.

Infrastructure Development:

• Invest in infrastructure development, including transportation, energy, and telecommunications, to facilitate the movement of goods and people.
• Upgrade and expand ports, airports, and road networks to improve connectivity.

Access to Finance:

• Foster a robust and inclusive financial sector to provide easier access to credit and capital for businesses, especially small and medium-sized enterprises (SMEs).
• Promote financial literacy and encourage the use of digital financial services.

Invest in Education and Skills Development:

• Improve the quality of education and vocational training to equip the workforce with relevant skills.
• Encourage partnerships between educational institutions and industries to address skill gaps.

Promote Innovation and Technology:

• Support research and development initiatives to spur innovation and technological advancement.
• Create incentives for tech startups and entrepreneurs.

Political Stability and Governance:

• Maintain political stability and ensure good governance to build investor confidence.
• Address corruption and promote accountability within the public sector.

Trade Facilitation:

• Simplify and expedite customs procedures to reduce trade barriers.
• Promote regional and international trade agreements to expand market access.

Investor-Friendly Policies:

• Offer tax incentives and investment promotion schemes to attract foreign and domestic investors.
• Provide clear and consistent investment policies that protect property rights.

Infrastructure for Sustainable Energy:

• Develop renewable energy sources to reduce energy costs and promote sustainability.
• Encourage private investment in clean energy projects.

Market Diversification:

• Diversify the economy beyond traditional sectors like agriculture and mining to reduce dependence on commodity prices.
• Explore new industries and value-added processing.

Skills and Workforce Development:

• Invest in education and workforce training to ensure a skilled and adaptable workforce.
• Promote vocational and technical training to align with industry needs.

Promote Regional Integration:

• Collaborate with neighboring countries and regional economic communities to enhance cross-border trade and investment.
• Implement regional infrastructure projects to improve connectivity.

Marketing and Promotion:

• Launch targeted marketing campaigns to promote Tanzania as an attractive investment destination.
• Participate in international trade fairs and forums to showcase opportunities.

Sustainable Development:

• Prioritize sustainable practices to protect the environment and attract socially responsible investors.
• Encourage responsible corporate practices and corporate social responsibility (CSR).

Consult with Stakeholders:

• Engage with businesses, investors, and industry associations to gather feedback and address their concerns.
• Foster collaboration between the public and private sectors.

Tanzania Banking Sector's Market Dominance 2023-2024

A look at the variety of banks operating in Tanzania's financial sector.

Number of Banks:

• Large Banks: 13
• Medium Banks: 18
• Regional and Small Banks: 8
• Non-Banking Financial Institutions: 2

Market Share (in Trillions):

• Market Share of Total Assets: 46 trillion
• Market Share of Loans and Advances: 26 trillion
• Market Share of Customer Deposits: 30 trillion

Growth Rates (Year-over-Year):

These percentages represent the year-over-year growth rates for total assets, customer deposits, and loans and advances in 2021 and 2022. These growth rates show the sector's expansion or contraction during these periods.

1. Growth in Total Assets:
   • 2021: 14.60%
   • 2022: 17.30%
2. Growth in Customer Deposits:
   • 2021: 17.10%
   • 2022: 11.40%
3. Growth in Loans and Advances to Customers:
   • 2021: 13%
   • 2022: 24.90%

Financial Ratios:

• Capital Adequacy (16.80%): This is the ratio of a bank's capital (such as equity and reserves) to its risk-weighted assets. It reflects the bank's ability to absorb losses.
• Return on Average Assets (2.10%): It measures a bank's profitability relative to its total assets. A higher ROAA indicates better profitability.
• Return on Average Equity (13.40%): This ratio evaluates a bank's profitability relative to its shareholders' equity. Higher ROAE indicates better returns for shareholders.
• Non-Performing Loans (4.80%): This percentage represents the proportion of loans in the bank's portfolio that are not generating income because they are in default.
• Net Interest Margin (8%): It is the difference between a bank's interest income and interest expenses, usually expressed as a percentage of its total interest-earning assets. A higher NIM is generally positive.
• Loan to Deposit Ratio (87.80%): This ratio shows the proportion of loans a bank has issued relative to the deposits it holds. A high ratio may indicate higher lending risk.

Tanzania's banking sector is generally performing well, with healthy growth, profitability, and capital adequacy. The sector seems to be effectively managing risks, as evidenced by the NPL ratio, and is playing a significant role in providing financial services to the country's economy. However, the high loan to deposit ratio suggests a need for prudent lending practices to manage potential risks associated with a large loan portfolio.

Tanzania banking sector's performance offers insights into various aspects of the sector's health and functioning:

1. Number and Diversity of Banks: Tanzania has a diverse banking landscape with a mix of large, medium, regional/small banks, and non-banking financial institutions, which indicates a competitive and varied market.
2. Market Share: The sector collectively manages a significant portion of the country's financial resources, holding a substantial share of total assets, loans, and customer deposits. This suggests the sector's importance in the country's financial system.
3. Growth Trends: The growth rates in total assets, customer deposits, and loans and advances demonstrate the sector's expansion over the years, with significant growth observed in 2022, particularly in loans and advances. This growth is a positive sign for the sector's ability to provide financing to businesses and individuals.
4. Financial Ratios:
   • Capital Adequacy: The capital adequacy ratio of 16.80% indicates that the banks in Tanzania maintain a healthy capital buffer to absorb potential losses, contributing to financial stability.
   • Return on Average Assets (ROAA): The ROAA of 2.10% suggests that, on average, the sector is generating a reasonable return on its assets, indicating profitability.
   • Return on Average Equity (ROAE): With an ROAE of 13.40%, the sector appears to be providing satisfactory returns to its shareholders.
   • Non-Performing Loans (NPL): The NPL ratio of 4.80% implies that a relatively small portion of loans has turned non-performing, which is generally a positive sign for asset quality.
   • Net Interest Margin (NIM): The NIM of 8% indicates that banks are effectively managing the spread between interest income and expenses, which contributes to profitability.
   • Loan to Deposit Ratio: The loan to deposit ratio of 87.80% suggests that banks are lending out a significant portion of their deposits, potentially contributing to economic growth but also implying higher lending risk.

Recommendations on Tanzania Banking sector performance for the coming years:

Growth Trends:

The positive growth trends observed in total assets, customer deposits, and loans and advances in 2022 suggest that the sector is expanding. If the Tanzanian economy continues to grow, it's possible that these trends may continue into the coming year, although actual growth rates may vary based on economic conditions.

Financial Ratios:

The strong financial ratios, including capital adequacy, return on assets, and return on equity, indicate a relatively healthy banking sector. If banks maintain prudent management practices and risk mitigation strategies, these ratios could remain favorable in the coming year.

Non-Performing Loans (NPLs):

The NPL ratio at 4.80% suggests that banks are managing credit risk reasonably well. However, it's important to monitor this ratio closely in the coming year to ensure that the quality of the loan portfolio remains stable.

Interest Rates:

The net interest margin (NIM) of 8% indicates effective management of interest income and expenses. Changes in interest rates could impact NIM, so interest rate trends will be a critical factor to watch.

Economic Conditions:

The performance of the banking sector is closely tied to the overall economic conditions in Tanzania. Economic growth, inflation, and government policies can all influence the sector's performance in the coming year.

Regulatory Changes:

 Any changes in banking regulations, such as capital requirements or lending restrictions, can have a significant impact on the sector's operations and profitability.

Concerns and Considerations in Government Tax Assessment Procedures

This research encapsulates the key findings from a survey encompassing 350 enterprises that sheds light on prevailing concerns regarding the government's tax assessment procedures. The survey revealed that the current approach to evaluating tax burdens has raised multiple apprehensions within the business, investment, and project development sectors.

• Concerns Regarding Tax Burden Evaluation: More than 66% of respondents expressed dissatisfaction with the government's ability to attract investments due to inadequate tax burden evaluation. This deficiency in assessment was seen as a major hindrance to potential investments, affecting businesses' willingness to expand within these sectors.

• Inconsistency in Tax Burden Scrutiny: Over 72% of participants conveyed their dissatisfaction with the lack of consistency in the government's scrutiny of tax burdens. This inconsistency led to complications in tax payments for both business proprietors and employees, causing operational challenges and financial stress.

• Diverse Perspectives on Government Efforts: While 33% of respondents appreciated the government's efforts to promote business, investment, and project development through favorable assessments, only 1% remained neutral on the issue. In contrast, a substantial 69% rejected the idea of considering the scale of businesses and investments when determining tax collection levels, posing a significant hurdle in tax management.

• Call for Comprehensive Assessment and Economic Consideration: The survey highlighted a demand from 31% of participants for the government to analyze tax burdens across various business revenue spectrums. Additionally, 80% of respondents pointed out that the government often overlooked the impact of businesses' longevity and economic disparities when calculating taxes.

• Geographical Implications on Tax Estimates: A remarkable 89% of respondents noted that tax estimates did not align with the geographic placement of companies, investments, or project developments. This misalignment resulted in challenges for enterprises and a subsequent decline in revenue, emphasizing the need for geographic context in tax assessments.

• Path Forward: Enhancing Tax Evaluation Methodologies: The study underscores the urgency of addressing these concerns to improve tax evaluation methodologies. Consideration of factors such as business scope, age, industry segments, economic expansion, and geographical aspects is crucial. Addressing these concerns could contribute to creating a more conducive economic environment and bolstering business achievements.

The survey showcases the vital need for the government to reassess its tax assessment procedures. By addressing the highlighted concerns and taking into account various influencing factors, including economic growth and geographic nuances, a more favorable economic landscape can be nurtured, fostering enhanced business prosperity and investment attraction.

Tanzania Economic Updates: Tanzania's Investment Development and Economic Landscape

Inflation Rate:

• Tanzania maintains a stable inflation rate at 3.3 percent, with a minor 0.4 percent decrease in the past month.
• Across various sectors, inflation rates vary, with food, alcoholic beverages, housing, and healthcare exhibiting different short-term and long-term trends.
• In contrast, neighboring countries show varying inflation rates, with Zimbabwe experiencing hyperinflation, while Seychelles faces negative inflation.

GDP Growth Rate:

• Tanzania's GDP growth rate stands strong at 5.6 percent, signaling a consistent upward trend.
• When compared to previous years, there is a steady increase from 5.5 percent in 2022 and 5 percent in 2021.
• Key contributing sectors to this growth include agriculture, construction, mining, trade, manufacturing, finance, and insurance.

Money Supply:

• Money circulation decreased by 0.02 percent in a month but rose by 0.05 percent over a year.
• The central bank actively reduced money in circulation by 4.07 percent in one month, leading to a 7.5 percent increase within a year.
• Net foreign assets increased by 1.3 percent in a month but declined by 9.67 percent in a year.
• Net domestic assets showed slight increases of 0.12 percent in a month and 0.24 percent in a year.

Export Rate:

• Tanzania has witnessed a substantial 86 percent increase in exports over two years, with a 5 percent increase in the past year.
• This export growth is credited to various sectors, including gold, manufactured goods, traditional exports, and industrial transport equipment.
• However, horticultural and cereal exports have experienced declines of 23 percent and 65 percent, respectively, within a year.

Import Rate:

• Import rates have shown significant fluctuations, with a 116 percent increase in a month and a staggering 1209 percent increase in a year.
• Import trends vary across categories, with consumer goods, machinery, industrial transport equipment, and other goods undergoing different short-term and long-term changes.
• Notably, insecticides, rodenticides, and similar products saw a significant 93 percent decrease within a year.

Investment Development:

• An extensive analysis of investment projects in Tanzania highlights the sectors of focus, their investment levels, and their expected contributions to job creation.
• As of August 2023, there are 58 planned projects with an estimated total value exceeding USD 931 million.
• These projects are expected to generate more than 25,731 jobs, making a significant impact on local and regional economic growth.
• Job creation is particularly prominent in the transportation and agriculture sectors, with the latter expected to create 20,613 job positions.
• In addition to ongoing projects, there are 22 upcoming projects worth USD 64 million, set to create over 1,094 job opportunities.

Investment Regions:

• Tanzania has implemented 58 projects across 18 regions, with Dar es Salaam, the coastal region, and Dodoma being notable contributors.
• Surprisingly, Morogoro and Kagera, each with only two projects, are poised to create an impressive 10,120 jobs.
• Despite its 22 projects not primarily focused on employment, Dar es Salaam is expected to contribute more than 1778 jobs.
• The coastal region stands out with projects valued at USD 307 million, followed by Kagera and Dar es Salaam.
• The number of project announcements is on the rise, but questions arise about their impact on economic growth.

Budget Analysis:

• A review of the government's budget until August 2023 reveals that there was no deficit in 24 percent of cases.
• Expenditures have decreased by over 11 percent compared to the estimated budget, while income has declined by more than 8 percent.
• Key expenditure areas like wages and salaries, interest costs, and development expenditure have experienced fluctuations.
• Revenue sources, including import taxes and income tax, have declined significantly, while local goods and services taxes have seen a substantial increase.

National Debts:

• Tanzania's total government debt has exceeded USD 43,287 million, increasing by 14 percent over a year and 1 percent within a month.
• External debts increased by 8 percent over the year but decreased by 1 percent in a month, while domestic debt grew by 29 percent over the year with a 6 percent increase in a month.
• Effective management of this growing debt is critical for Tanzania's fiscal health and economic stability.

Tanzania's 2023 GDP per Capita: An overview of Tanzania's Gross Domestic Product per capita in 2023.

Tanzania's GDP per capita, historical trends, and future projections. It indicates that Tanzania's income per person has been on the rise, with expectations of further improvement in 2023. However, it's crucial to consider broader economic factors and policy decisions when analyzing a country's economic development.

GDP per Capita in 2022:

In 2022, Tanzania's GDP per capita was recorded at $1,056.87 USD. This figure indicates the average income per person in Tanzania for that year.

Comparison to World's Average:

Tanzania's GDP per capita, at $1,056.87 USD, is approximately 8 percent of the world's average GDP per capita. This means that, on average, Tanzanians had a lower income compared to the global average in 2022.

Expected GDP per Capita in 2023:

According to forecasts by Trading Economics, Tanzania's GDP per capita is expected to increase to $1,112.00 USD by the end of 2023. This projection suggests a potential improvement in the country's average income for the coming year.

Historical Trends:

The historical data indicates that Tanzania's GDP per capita has varied over time. It has averaged $719.18 USD from 1988 until 2022. The highest recorded GDP per capita in Tanzania was $1,056.87 USD in 2022, while the lowest recorded value was $503.93 USD in 1994.

Long-term Outlook:

The data also suggests that Tanzania's GDP per capita has seen fluctuations over the years, and it is important to consider long-term trends and economic policies to understand the trajectory of the country's economic development.

It's important to note that while an increase in GDP per capita is generally a positive indicator, it doesn't provide a complete picture of a country's economic and social well-being. Other factors, such as the distribution of wealth, employment quality, access to healthcare and education, and overall living conditions, also play critical roles in determining the overall welfare of the population.

Moreover, economic conditions can change over time due to various factors, including global economic trends, government policies, and external shocks, so ongoing monitoring and analysis are essential to understand the evolving social and economic dynamics in Tanzania.

Social Implications:

• Income Inequality: While Tanzania's GDP per capita has been increasing, it's important to consider income inequality within the country. If the wealth generated by the economy is not distributed fairly, it could lead to disparities in living standards and access to essential services among the population.
• Poverty Reduction: The rise in GDP per capita suggests that, on average, Tanzanians may have a higher income. This can contribute to poverty reduction as more people have the potential to meet their basic needs.
• Standard of Living: An increase in GDP per capita can lead to an improved standard of living for the population, including better access to education, healthcare, housing, and other essential services.
• Employment Opportunities: A growing economy may create more job opportunities, potentially reducing unemployment rates and providing livelihoods for the workforce.

Economic Implications:

• Economic Growth: Rising GDP per capita often indicates overall economic growth. This growth can attract foreign investments and stimulate domestic industries, leading to further economic expansion.
• Investment Potential: A higher GDP per capita can make Tanzania a more attractive destination for foreign investors, as it suggests a growing consumer market and increased purchasing power among the population.
• Government Revenue: The government may collect more tax revenue with a higher GDP per capita, which can be reinvested in infrastructure, social programs, and other development initiatives.
• Inflation and Price Levels: As the economy grows, there may be pressure on prices and inflation. Managing inflation is important to ensure that the increased income doesn't lead to a decrease in purchasing power.
• Economic Stability: A consistently increasing GDP per capita can contribute to economic stability and reduce the vulnerability to economic shocks.

Government Initiatives to Lower Transaction Costs

Sending and withdrawing 10,000 Tanzanian Shillings, the total cost varies depending on whether you are sending money within the same mobile network or to a different mobile network. For same-network transfers (M-Pesa to M-Pesa), the total cost is approximately 20.04% of the amount sent, while for cross-network transfers (M-Pesa to Tigopesa), the total cost is approximately 21.49% of the amount sent. These costs include both transaction fees and government levies.

Sending Money:

1. Same Mobile Network (M-Pesa to M-Pesa):
2. Total Fee: 350 Tanzanian Shillings
3. Government Levy: None
4. Different Mobile Network (M-Pesa to Tigopesa):
5. Total Fee: 495 Tanzanian Shillings
6. Government Levy: None

Withdrawing Cash:

Total Fee for Withdrawal: 1,552 Tanzanian Shillings

• M-Pesa Fee: 1,450 Tanzanian Shillings
• Government Levy: 102 Tanzanian Shillings

Total Cost for Sending and Withdrawing 10,000 Tanzanian Shillings:

Same Mobile Network (M-Pesa to M-Pesa):

• Sending Cost: 350 Tanzanian Shillings
• Withdrawal Cost: 1,552 Tanzanian Shillings
• Government Levy: 102 Tanzanian Shillings
• Total Cost: 2,004 Tanzanian Shillings

Different Mobile Network (M-Pesa to Tigopesa):

• Sending Cost: 495 Tanzanian Shillings
• Withdrawal Cost: 1,552 Tanzanian Shillings
• Government Levy: 102 Tanzanian Shillings
• Total Cost: 2,149 Tanzanian Shillings

Percentage of Total Amount Sent:

Same Mobile Network (M-Pesa to M-Pesa):

• Total Cost as a Percentage of 10,000 Tanzanian Shillings: (2,004 / 10,000) * 100% ≈ 20.04%

Different Mobile Network (M-Pesa to Tigopesa):

• Total Cost as a Percentage of 10,000 Tanzanian Shillings: (2,149 / 10,000) * 100% ≈ 21.49%Top of Form

It's essential for governments to strike a balance between ensuring the sustainability of mobile money operators and protecting the interests of consumers, particularly those with lower incomes. By implementing these strategies and policies, governments can help reduce the costs of sending and receiving money through mobile networks, ultimately fostering economic growth and financial inclusion.

Reducing the costs of sending and receiving money through mobile networks is crucial for financial inclusion and economic growth, especially in regions where these costs are relatively high. To address this issue, governments can consider implementing various strategies and policies:

Regulation and Oversight:

• Governments can regulate and oversee mobile money operators to ensure fair pricing practices and to prevent monopolistic behavior that can lead to high costs.
• Implementing price ceilings or caps on transaction fees can help control costs for consumers.

Competition Enhancement:

• Encourage healthy competition among mobile network operators by facilitating the entry of new players into the market. More competition often leads to lower prices.
• Promote interoperability between different mobile money services to allow customers to send money across networks easily.

Taxation and Levies:

• Reevaluate and potentially reduce government levies and taxes imposed on mobile money transactions. High taxes can significantly increase the cost of using these services.
• Consider alternative revenue sources for the government to compensate for the reduction in mobile money transaction taxes.

Consumer Education:

• Invest in consumer education campaigns to ensure that people are aware of the costs associated with mobile money transactions and the most cost-effective ways to use these services.

Infrastructure Investment:

• Invest in improving digital infrastructure, including network coverage and reliability, which can help reduce operational costs for mobile network operators, potentially leading to lower fees for consumers.

Partnerships and Collaboration:

• Facilitate partnerships between mobile network operators and financial institutions to create innovative financial products and services that can reduce costs while expanding access to financial services.

Incentives for Cost Reduction:

• Provide incentives or subsidies to mobile network operators that demonstrate efforts to reduce the costs of their services, especially for low-income customers.

Transparent Pricing:

• Mandate transparent pricing practices, ensuring that customers are fully aware of all fees and charges associated with mobile money transactions.

Research and Data Analysis:

• Conduct regular research and data analysis to monitor the cost structures of mobile money services and identify areas where costs can be reduced without compromising service quality or security.

Financial Inclusion Policies:

• Develop and implement comprehensive financial inclusion policies that prioritize affordable and accessible financial services for all citizens.

Navigating Tanzania's Business Frontier: Insights from the Reward Index

Tanzania has emerged as one of the ten African nations that offer favorable conditions for conducting business despite the facts having high tax rates in the year 2023.

This ranking is derived from the "Africa Risk-Reward Index" report by Oxford Economics Africa, which assesses three critical factors. In today's interconnected global landscape, businesses have the opportunity to expand their horizons beyond national borders in search of new markets and investment prospects. While venturing into foreign markets can be challenging, certain countries are exceptionally conducive for both businesses and individuals. These countries boast welcoming business environments, robust infrastructure, stable economies, and accommodating regulatory frameworks.

This holds particularly true for Africa, which has become a prime destination for investment. Africa is recognized as one of the world's fastest-growing economies, and despite the continent's array of socio-economic challenges that hinder business growth, a significant number of countries within the region are swiftly adapting to the needs of business owners.

Oxford Economics Africa, an independent economic advisory firm, underscores this point in its 2023 report titled "The Africa Risk-Reward Index." The report analyzes the benefits and drawbacks of polarization within each African nation, African-led security initiatives, and the strategies employed by African countries to secure their financial future.

By considering these three key factors, the research can identify the countries with the highest risk-to-reward ratios for establishing foreign businesses. A previously published list of the top ten riskiest African countries for conducting business also reveals that some of these high-risk countries are also among the most rewarding for investment.

The reward scores encompass medium-term economic growth projections, economic size, economic structure, and demographic factors. Economic growth prospects carry the greatest weight in determining the reward score, as investment opportunities thrive in regions with robust economic growth.

These rankings reflect the overall attractiveness of these countries for conducting business, taking into account factors such as economic growth, stability, infrastructure, and regulatory environment. Businesses considering international expansion often use such indices to assess potential markets for investment.

1. Ethiopia (Reward Index: 6.58):
   • Ethiopia is a rapidly growing economy in East Africa.
   • It has a large population and is known for its significant agricultural and industrial sectors.
   • The country has been actively promoting foreign investment, especially in sectors like manufacturing and infrastructure.
2. Côte d'Ivoire (Reward Index: 5.77):
   • Côte d'Ivoire, also known as Ivory Coast, is located in West Africa.
   • It has experienced economic growth and political stability in recent years, making it an attractive destination for investment.
   • Key sectors for investment include agriculture, mining, and energy.
3. Uganda (Reward Index: 5.53):
   • Uganda is situated in East Africa and is known for its diverse landscapes, including the famous Lake Victoria.
   • The country has been working to improve its business environment and attract foreign investment, particularly in agriculture and energy sectors.
4. Nigeria (Reward Index: 5.50):
   • Nigeria is the largest economy in Africa and is located in West Africa.
   • It has a diverse economy with sectors like oil and gas, telecommunications, and banking being prominent.
   • Despite its potential, Nigeria faces challenges like infrastructure deficits and security concerns.
5. Senegal (Reward Index: 5.41):
   • Senegal is in West Africa and has a stable political environment.
   • It is focusing on sectors like agriculture, renewable energy, and tourism to drive economic growth.
6. Egypt (Reward Index: 5.38):
   • Egypt is located in North Africa and has a rich history and culture.
   • The country's economy is diverse, with key sectors including tourism, manufacturing, and energy.
7. Kenya (Reward Index: 5.22):
   • Kenya, in East Africa, is known for its innovation and technology sector, particularly in the city of Nairobi.
   • It's a hub for startups and has a growing middle class, which attracts investment in various industries.
8. Tanzania (Reward Index: 5.19):
   • Tanzania, also in East Africa, has been working on infrastructure development to support economic growth.
   • The country's natural resources, such as minerals and agriculture, present investment opportunities.
9. Democratic Republic of Congo (DRC) (Reward Index: 5.15):
   • The DRC, in Central Africa, is rich in minerals and natural resources.
   • However, it faces challenges related to political instability and infrastructure development.
10. Morocco (Reward Index: 4.99):
    • Morocco, located in North Africa, has a diverse economy with strengths in agriculture, manufacturing, and tourism.
    • It has been attracting foreign investment through various economic reforms and incentives.

Short-term and Long-term Projections

This research provides a snapshot of the recent trends in food prices and food inflation in Tanzania, as well as projections for the near future subject to change based on various economic and market factors.

August 2023 Food Price Increase:

In August of 2023, the cost of food in Tanzania increased by 5.60 percent compared to the same month in the previous year. This indicates a year-on-year increase in food prices.

Expected Food Inflation:

Food inflation in Tanzania is expected to reach 5.70 percent by the end of the current quarter (presumably the quarter in which this information was provided). This projection is based on macro models and analysts' expectations.

Long-Term Food Inflation Projections:

Looking ahead, there are projections for food inflation in Tanzania for the coming years. It is anticipated to trend around 5.00 percent in 2024 and further decrease to 4.30 percent in 2025. These projections are based on econometric models.

Historical Food Inflation Data:

Over the period from 2010 to 2023, food inflation in Tanzania has exhibited fluctuations. The average food inflation rate during this period was 8.28 percent. It reached its highest point at 27.84 percent in January 2012, indicating a sharp spike in food prices during that month. On the other hand, it reached a record low of 0.10 percent in March 2019, signifying a period of very low food price inflation.

It's essential to recognize that the consequences of rising food inflation are complex and can vary widely depending on the specific economic conditions of a Tanzania, government policies, and global economic trends.

Governments of Tanzania and central banks often monitor food inflation closely and may implement measures to mitigate its negative impacts, aiming for price stability and economic growth.

Hence, various factors, including crop yields, weather patterns, and global commodity prices, can influence food inflation and its trajectory.

Economic and social consequences can occur when food inflation continue to rise, subject to change based on various economic and market factors. Here are some potential outcomes:

• Increased Cost of Living: Rising food prices can lead to an increased cost of living for households. When people spend more on essential food items, they have less disposable income for other goods and services. This can strain household budgets, especially for low-income individuals and families.
• Impact on Poverty: Higher food prices can push more people into poverty or worsen the conditions of those already living in poverty. People with limited incomes may struggle to afford basic food necessities, leading to food insecurity and malnutrition.
• Social Unrest: In extreme cases, persistent food inflation can lead to social unrest and protests. When people are unable to afford basic food items, it can result in public demonstrations and demands for government intervention.
• Economic Slowdown: High and persistent food inflation can contribute to overall economic instability. It can reduce consumer spending on non-essential goods and services, affecting various sectors of the economy. Central banks may respond to inflation by raising interest rates, which can also slow economic growth.
• Policy Responses: Governments often respond to rising food inflation through policy measures. These may include subsidies on essential food items, price controls, and import/export restrictions. The effectiveness of these policies can vary and may have unintended consequences.
• Impact on Businesses: Businesses that rely on food inputs may face increased production costs, which could be passed on to consumers through higher prices for their products. This can affect competitiveness and profit margins.
• Global Trade Implications: Rising food inflation in one country can affect global food prices and trade. It may lead to increased demand for food imports, impacting global supply chains and trade balances.
• Agricultural Investment: Higher food prices can incentivize increased investment in agriculture, including increased production and technology adoption. However, the impact on agricultural supply can take time to materialize.
• Exchange Rates: Inflation can influence exchange rates, which, in turn, can impact the cost of imported food items. Currency depreciation can make imported food more expensive.
• Consumer Behavior: As food prices rise, consumers may alter their purchasing habits, opting for cheaper alternatives or reducing consumption of certain items. This can have an impact on demand patterns.

Public Investment and Budget Performance Evaluation

Enhancing Strategic Project Implementation and Transparency

This research report delves into the evaluation of ongoing strategic initiatives in Tanzania, focusing on project performance, planning, financial aspects, and implementation. The study emphasizes the significance of each project, with a particular focus on the three most scrutinized initiatives: standard gauge railways (SGR), the Julius Nyerere hydropower project, and Tanzania Airlines (ATCL) enhancements. These projects were chosen due to their substantial societal and economic impact.

• Despite the substantial financial allocation by the government towards strategic development initiatives, what factors contribute to the persistent delays in the completion of these projects?
• In spite of the significant financial investment made by the government in strategic development projects, what are the reasons behind the recurrent delays in their timely completion?
• While the government appears to allocate a substantial amount of funds towards strategic development projects, what are the underlying reasons for the consistent delays in successfully concluding these projects on schedule?