As of January 20, 2025, Tanzania's total outstanding credit from the International Monetary Fund (IMF) stood at $1.01 billion. This figure, unchanged from December 31, 2024, reflects the country's measured reliance on external financing to support its economic needs. Compared to neighboring Kenya, with $3.02 billion outstanding, and Uganda, with $992.75 million, Tanzania’s credit position highlights a balanced fiscal approach aimed at fostering economic stability and sustainable growth in the East African region.

Tanzania's Position:

• Total IMF Credit Outstanding (as of 12/31/2024): $1,009,260,000
• Total Disbursements (1/1/2025 - 1/20/2025): $0
• Total Repayments (1/1/2025 - 1/20/2025): $0
• Outstanding as of 1/20/2025: $1,009,260,000

Kenya's Position:

• Total IMF Credit Outstanding (as of 12/31/2024): $3,022,009,900
• Total Disbursements (1/1/2025 - 1/20/2025): $0
• Total Repayments (1/1/2025 - 1/20/2025): $0
• Outstanding as of 1/20/2025: $3,022,009,900

Uganda's Position:

• Total IMF Credit Outstanding (as of 12/31/2024): $992,750,000
• Total Disbursements (1/1/2025 - 1/20/2025): $0
• Total Repayments (1/1/2025 - 1/20/2025): $0
• Outstanding as of 1/20/2025: $992,750,000

Key Comparisons

1. Tanzania vs. Kenya:
   • Kenya has significantly higher IMF credit outstanding ($3.02 billion) compared to Tanzania ($1.01 billion). This indicates Kenya has relied more on IMF resources for financial support, which could reflect larger financing needs or higher borrowing capacity.
2. Tanzania vs. Uganda:
   • Tanzania's IMF credit outstanding ($1.01 billion) is slightly higher than Uganda's ($992.75 million). Both countries are at a similar level of reliance on IMF financing.
3. Regional Context:
   • Among the three countries, Kenya stands out as the largest IMF borrower, with credit nearly three times that of Tanzania and Uganda. This could reflect Kenya's economic structure, debt needs, or its position as a major regional player in East Africa.

Insights for Tanzania's Position:

• Tanzania's reliance on IMF credit is moderate in the East African context.
• Its outstanding credit is closer to Uganda's, highlighting comparable economic management and borrowing patterns.
• Kenya's higher credit use might stem from its broader infrastructure investments and economic challenges requiring external financing.

Tanzania's focus on maintaining a balanced IMF credit level could indicate careful financial management, prioritizing sustainable borrowing practices.

The comparison of Tanzania's IMF credit outstanding with Kenya and Uganda provides key insights into their economic positioning, financial reliance, and fiscal management

1. Financial Management:

• Tanzania: Moderate reliance on IMF credit compared to Kenya but slightly higher than Uganda. This suggests Tanzania is cautious with borrowing, maintaining manageable debt levels.
• Kenya: Heavy reliance on IMF credit indicates greater financial needs or challenges, such as large infrastructure projects or fiscal deficits.
• Uganda: Similar borrowing levels to Tanzania suggest a comparable approach to debt sustainability.

2. Economic Stability and Needs:

• Tanzania: The credit level reflects a balanced approach to borrowing, likely aligning with its steady economic growth and efforts to manage public debt responsibly.
• Kenya: High IMF credit indicates significant economic demands, possibly tied to ambitious projects, budgetary pressures, or addressing external shocks.
• Uganda: Close to Tanzania in borrowing, suggesting similar economic dynamics and financial planning priorities.

3. Regional Leadership and Growth Ambitions:

• Tanzania vs. Kenya: Kenya’s larger IMF credit highlights its role as a regional leader, undertaking substantial investments. Tanzania, though ambitious, opts for more measured borrowing.
• Tanzania vs. Uganda: Both exhibit modest borrowing relative to Kenya, suggesting a shared emphasis on sustainable growth without over-reliance on external funding.

Overall Implication for Tanzania:

Tanzania’s position reflects:

• Prudence in fiscal management.
• Moderate reliance on external credit, showcasing resilience.
• A balanced approach that prioritizes sustainable development without excessive debt.

This indicates Tanzania is well-positioned to maintain economic stability while managing its obligations in the East African context.

Top 10 African Countries with the Highest IMF Outstanding Credit (as of January 20, 2025)

1. Egypt: $8.67 billion
2. South Africa: $1.14 billion
3. Kenya: $3.02 billion
4. Angola: $2.90 billion
5. Ghana: $2.51 billion
6. Côte d'Ivoire: $2.74 billion
7. Ethiopia: $1.31 billion
8. Nigeria: $613.63 million
9. Rwanda: $610.76 million
10. Mozambique: $553.80 million

This ranking is based on IMF's credit outstanding records and showcases countries with substantial financial engagements for economic support or development initiatives.

Tanzania's mobile money sector has grown remarkably, with subscriptions rising from 32.27 million in 2020 to 61.88 million in 2024, a nearly 92% increase over five years. In 2024 alone, mobile money platforms processed over 3.74 billion transactions, highlighting their central role in daily financial activities. Market leaders like M-Pesa (38.9% share), Airtel Money (30.7%), and Mixx by Yas (19%) drive competition, while rural connectivity continues to expand access. This growth underscores mobile money's transformative impact on financial inclusion and its role in fostering economic participation across Tanzania.

Mobile Money Services in Tanzania: Trends and Insights

1. Mobile Money Transactions Over Five Years (2020–2024)

• Transaction Volumes:
  • 2020: 3.41 billion transactions
  • 2021: 3.75 billion (+9.4%)
  • 2022: 4.20 billion (+12%)
  • 2023: 5.27 billion (+25%)
  • 2024: 3.74 billion (data for the full year not available yet; reflects up to Q4)​.
• The steady growth in transaction volumes highlights the increasing reliance on mobile money for daily transactions and the efficiency of the mobile money ecosystem in Tanzania.

2. Mobile Money Subscriptions Over Five Years (2020–2024)

• Subscription Numbers:
  • 2020: 32.27 million
  • 2021: 35.29 million (+9.4%)
  • 2022: 40.95 million (+16%)
  • 2023: 52.87 million (+29%)
  • 2024: 61.88 million (+17% compared to 2023)​.
• The consistent growth in subscriptions indicates mobile money's critical role in financial inclusion, bringing banking services to underserved and unbanked populations.

3. Key Market Players and Market Share (December 2024)

• M-Pesa (Vodacom): 38.9% of mobile money accounts, maintaining its leadership position.
• Airtel Money: 30.7%, reflecting strong market penetration.
• Mixx by Yas: 19%, emerging as a key competitor.
• HaloPesa (Halotel): 9%.
• T-Pesa (TTCL): 2.4%.
• Azam Pesa: 0.1%, with a niche presence​.

4. Volume of Transactions in Q4 2024

• Total mobile money transactions for the quarter reached 63.2 million, representing a growth from 60.8 million in Q3 2024 (+3.95%).
• Airtel Money, M-Pesa, and Mixx by Yas were the main contributors to the growth, indicating fierce competition and innovation within the sector.

5. Future Opportunities and Challenges

• Opportunities:
  • Expanding mobile money access in rural areas where banking services are scarce.
  • Leveraging the growing subscription base for advanced services like savings, insurance, and microloans.
• Challenges:
  • Maintaining affordability for transactions to cater to lower-income populations.
  • Addressing cybersecurity concerns and fraud prevention as the ecosystem grows.

Tanzania’s mobile money services have grown from 32.27 million subscriptions in 2020 to 61.88 million in 2024, facilitating over 3.74 billion transactions annually. This growth underscores its critical role in financial inclusion, fostering economic participation across demographics and regions. With competition driving innovation and adoption, mobile money is poised to remain a cornerstone of Tanzania’s digital economy.

The analysis of mobile money services in Tanzania reveals several critical insights about the sector's growth, impact, and potential

1. Financial Inclusion is Increasing

• Rising Subscriptions: The number of mobile money accounts surged from 32.27 million in 2020 to 61.88 million in 2024, reflecting greater access to financial services, especially in areas with limited traditional banking infrastructure.
• Transaction Volumes: With over 3.74 billion transactions annually in 2024, mobile money has become an essential tool for daily financial activities, from personal transfers to bill payments.

2. Dominance of Key Players

• Market Leaders: Providers like M-Pesa (38.9% market share), Airtel Money (30.7%), and Mixx by Yas (19%) dominate the sector, creating competitive dynamics that drive innovation and service improvement.
• Emerging Players: Smaller providers like HaloPesa and T-Pesa have carved out niches but face stiff competition from the dominant players.

3. Growth Driven by Accessibility

• Adoption in Underserved Areas: Mobile money bridges the gap in rural and semi-urban areas where access to traditional banking services is scarce, demonstrating its role in financial inclusion.
• Affordability: Mobile money services are cost-effective, enabling more people to participate in the digital financial ecosystem.

4. Significant Economic Role

• Mobile money transactions now serve as a backbone for Tanzania's financial ecosystem, enabling personal, business, and government payments. This growth has reduced reliance on cash and supported economic formalization.

5. Opportunities and Challenges

• Opportunities:
  • Expanding mobile money services to offer additional products such as savings accounts, insurance, and loans.
  • Strengthening rural connectivity to ensure equitable access across all regions.
• Challenges:
  • Addressing cybersecurity risks as transaction volumes and user bases grow.
  • Sustaining affordability and competitive pricing to cater to low-income users.

Implications

Tanzania’s mobile money sector is a success story of digital and financial transformation. Its growth highlights the power of technology to foster financial inclusion and economic participation. However, sustained growth will require targeted investments in infrastructure, cybersecurity, and innovative services to address challenges and unlock the sector's full potential.

Tanzania’s internet landscape has experienced tremendous growth, with subscriptions surging from 23.1 million in 2019 to 86.8 million in 2024, reflecting a remarkable expansion of over 275% in five years. Mobile internet dominates the sector, accounting for 47.9 million subscriptions, supported by the rollout of 4G (88% coverage) and emerging 5G (20% coverage) technologies. Affordable data pricing, averaging Tsh 9.35 per MB, has fueled adoption, while urban centers like Dar es Salaam lead in connectivity. However, with 22.3 million users still relying on 2G, challenges persist in extending advanced internet access to rural areas, creating significant opportunities for infrastructure development and digital inclusion.

Internet Services in Tanzania

1. Internet Usage Trends (2019-2024)

• Growth in Internet Subscriptions:
  • 2019: 23.1 million subscriptions
  • 2020: 32.3 million (+39.8%)
  • 2021: 40.9 million (+26.6%)
  • 2022: 52.8 million (+29.1%)
  • 2023: 61.8 million (+17.1%)
  • 2024: 86.8 million (+16% compared to 2023) **​.
• Mobile internet leads the market with 47.9 million subscriptions as of December 2024, while fixed internet subscriptions are minimal but steadily growing.

2. Internet Subscriptions by Technology (2024)

• Mobile Internet: 25.6 million subscriptions (53% of total users).
• 2G Connections: 22.3 million subscriptions, showing persistence despite newer technologies.
• Fiber Connections:
  • Fiber to the Home (FTTH): 71,661 subscriptions.
  • Fiber to the Office (FTTO): 11,540 subscriptions.
• The growth reflects investments in 4G (88% coverage) and 5G (20% coverage)​.

3. Cost of Internet Services by Provider (December 2024)

The following is a breakdown of data service costs in Tanzanian Shillings (Tsh) for 1 Megabyte (MB) outside bundled packages:

• Airtel: Tsh 9.35/MB
• Halotel: Tsh 9.35/MB
• Vodacom: Tsh 9.35/MB
• TTCL: Tsh 9.35/MB
• Yas: Tsh 9.35/MB

The average cost of data across all service providers is Tsh 9.35 per MB, indicating uniform pricing due to market regulation.

• In bundled packages, data costs drop significantly. For example:
  • Within Bundles: Prices as low as Tsh 2.16 per MB​.

4. Market Share in Internet Services

• Vodacom leads with 34% market share, followed by Airtel (30%) and Halotel (23%).
• Fixed internet services are dominated by smaller providers like TTCL and private operators, but their overall market share remains minimal compared to mobile services​.

Insights and Trends:

• Affordable Internet Growth: The average price for bundled data is significantly cheaper, which has driven the adoption of mobile internet.
• Technology Expansion: Investments in 4G and 5G have enhanced data speeds and accessibility, but 2G remains relevant for rural areas.
• Opportunities: Expanding fiber connections and lowering device costs can further boost digital access.

The analysis of Tanzania's internet services and trends key insights into the state of connectivity and its implications

1. Significant Growth in Internet Access

• Consistent Expansion: Over the last five years, internet subscriptions have grown from 23.1 million in 2019 to 86.8 million in 2024, driven by mobile internet, infrastructure investments, and increased affordability.
• Technology Uptake: Mobile internet dominates, with 53% of users relying on mobile data, reflecting its affordability and accessibility, especially in rural areas.

2. Affordability and Accessibility

• Uniform Pricing: Data costs average Tsh 9.35/MB across providers, with much cheaper rates in bundled packages (as low as Tsh 2.16/MB). This affordability has contributed to the adoption of internet services among diverse demographics.
• Broad Coverage: The rollout of 4G (88% coverage) and growing 5G (20% coverage) reflects a strong push to modernize infrastructure.

3. Urban-Rural Divide

• Persistent 2G Usage: The high number of 2G users (22.3 million) highlights challenges in reaching rural areas with advanced technologies like 4G and 5G.
• Fiber Gaps: Limited fiber connections (FTTH: 71,661 and FTTO: 11,540 subscriptions) suggest that fixed internet infrastructure is still underdeveloped, primarily catering to urban centers and businesses.

4. Competitive Market Dynamics

• Market Concentration: Vodacom (34%), Airtel (30%), and Halotel (23%) dominate the internet market, ensuring competitive pricing and service improvements.
• Innovation Opportunities: The uniform pricing among providers reflects regulatory stability but leaves room for differentiation in services, such as quality, speed, and customer experience.

5. Future Opportunities and Challenges

• Opportunities:
  • Expanding fiber infrastructure and improving rural access to advanced technologies like 4G and 5G.
  • Leveraging affordable bundled data to drive digital services adoption (e.g., e-commerce, mobile banking, and e-learning).
• Challenges:
  • Bridging the rural-urban gap in technology adoption.
  • Ensuring equitable access for underserved regions.

Overall Implications

Tanzania's internet sector reflects a robust trajectory of growth, driven by affordability and mobile technology. However, the urban-rural divide and limited fixed internet penetration remain critical areas to address. The continued investment in infrastructure and innovative service offerings can position Tanzania as a digital leader in the region.

As of December 2024, Tanzania's communication sector has experienced remarkable growth, with 86.8 million SIM cards registered, reflecting a 7.7% increase from September 2024. Internet subscriptions reached 48 million, marking a 16% growth in just one quarter, driven by the widespread use of mobile internet, which accounts for 47.9 million subscriptions. Advanced technologies like 4G (88% coverage) and 5G (20% coverage) highlight significant infrastructure investments. Despite the rise of smartphones (36% penetration), feature phones dominate with 87%. These trends underscore Tanzania's progress in bridging the digital divide while revealing opportunities for enhanced connectivity in underserved regions.

Mobile and Internet Communication in Tanzania (as of December 2024)

1. Mobile SIM Cards
   • Total SIM cards (both P2P and M2M): Increased from 80.7 million in September 2024 to 86.8 million in December 2024, representing a growth of 7.7%.
   • Distribution by Service Providers:
     • Vodacom: 31%
     • Airtel: 30%
     • Halotel: 23%
     • Yas: 14%
     • TTCL: 2%​.
2. Top Regions by Number of SIM Cards:
   • Dar es Salaam: 15.98 million
   • Mwanza: 5.75 million
   • Arusha: 5.23 million
   • Mbeya: 4.99 million
   • Dodoma: 4.64 million​.
3. Trends Over Five Years:
   • SIM cards have grown from 51.3 million in 2020 to 86.8 million in 2024​.
4. Internet Usage:
   • Internet subscriptions: Grew by 16%, from 41.4 million in September 2024 to 48 million in December 2024.
   • Mobile Internet leads the usage, with 47.9 million subscriptions. Vodacom dominates this segment with a 34% market share, followed by Airtel (30%) and Halotel (23%)​.
5. Infrastructure:
   • Mobile network towers: Total 8,899, with Dar es Salaam hosting 1,214 towers.
   • Network technology coverage:
     • 2G: 98.2%
     • 3G: 91%
     • 4G: 88%
     • 5G: 20%​.
6. Devices Connected to Networks:
   • Feature phones: 87.39% penetration.
   • Smartphones: 35.99% penetration​.

Key insights about Tanzania's mobile and internet communication sector

1. Growth in Connectivity

• Rapid Expansion: The steady increase in the number of SIM cards (from 51.3 million in 2020 to 86.8 million in 2024) reflects robust sector growth. This is likely driven by competitive pricing, increased mobile coverage, and a growing population adopting mobile services.
• Internet Penetration: The rise in internet subscriptions (16% growth in just one quarter) highlights the accelerating digital adoption across Tanzania, with mobile internet being the dominant mode of access.

2. Regional Disparities

• Dar es Salaam's Dominance: The high number of SIM cards (15.98 million) and towers (1,214) in Dar es Salaam emphasizes its position as the country's economic and technological hub.
• Emerging Urban Centers: Regions like Mwanza and Arusha also demonstrate significant connectivity levels, suggesting ongoing urbanization and digital engagement outside the capital.

3. Technology Adoption

• Smartphones on the Rise: With a penetration rate of 35.99%, smartphones are becoming increasingly accessible, paving the way for broader internet usage and digital services.
• Legacy Technology Persistence: Feature phones still dominate (87.39% penetration), showing that a large segment of the population relies on basic devices, possibly due to affordability and digital literacy gaps.

4. Competition and Market Dynamics

• Service Providers' Market Share: Vodacom and Airtel lead the market, but competition remains robust with significant contributions from Halotel and Yas. This diversity fosters competitive pricing and innovation.
• Infrastructure Investments: The coverage of advanced technologies like 4G (88%) and growing 5G (20%) adoption reflect increased investments in modern infrastructure.

5. Opportunities and Challenges

• Opportunities:
  • Growing smartphone penetration and internet access can support digital government services, e-commerce, and mobile banking.
  • Regions with lower penetration (e.g., rural areas) present opportunities for targeted infrastructure expansion.
• Challenges:
  • Affordability of smartphones and internet access remains a barrier for many.
  • Urban-rural disparities in coverage and infrastructure highlight the need for inclusive policies.

Tanzania’s implied PPP conversion rate has steadily risen from 9.803 in 1980 to a projected 888.053 in 2029, reflecting changes in currency value and purchasing power over the decades. Compared to its regional peers, Tanzania demonstrates moderate economic stability, outperforming countries like Burundi (PPP of 1,727.92 in 2029) and Uganda (1,422.54 in 2029) but trailing Kenya’s more stable performance (51.46 in 2029). The rising PPP rate highlights the Tanzanian shilling’s depreciation, driven by inflation and macroeconomic adjustments, particularly during the 1980s and 1990s reforms. However, recent stabilization trends post-2020 suggest improved economic governance, positioning Tanzania as a middle performer in East Africa with significant potential for growth through sustained reforms and regional integration.

Key Observations for Tanzania (1980–2029):

1. Historical Trends:
   • Tanzania's PPP conversion rate increased steadily from 9.803 (1980) to 888.053 (2029).
   • This growth indicates the depreciation of the Tanzanian shilling relative to the international dollar, reflecting inflationary pressures and currency value changes.
2. Regional Comparison:
   • Burundi: Experienced higher and more volatile PPP conversion rates, peaking at 1727.92 (2029), showing significant depreciation compared to Tanzania.
   • Kenya: Maintained much lower and stable rates, rising from 4.603 (1980) to 51.457 (2029), reflecting stronger currency stability.
   • Rwanda: Showed consistent growth in PPP conversion rates, starting from 64.749 (1980) and reaching 410.284 (2029). While higher than Tanzania in the earlier years, it stabilized below Tanzania in later years.
   • Uganda: Experienced rapid increases from 0.479 (1980) to 1422.537 (2029), showing significant depreciation over time, surpassing Tanzania's rate.
3. Position in East Africa:
   • Tanzania’s PPP rate places it in the middle range within East Africa:
     • Lower stability than Kenya.
     • Better currency performance than Burundi and Uganda.
4. Notable Periods:
   • 1986–1995: Significant increases in Tanzania's PPP rate, reflecting the impact of economic reforms and structural adjustment programs.
   • 2006–2010: Higher rate increases, possibly linked to global financial crises and local inflationary pressures.
   • 2020–2029: A gradual stabilization, signaling improved macroeconomic management and currency stability.

Insights into Tanzania's Economic Position:

1. Relative Stability: Tanzania's performance is better than some neighbors like Uganda and Burundi but falls short compared to Kenya, which has a historically more stable economy and currency.
2. Inflationary Impacts: The rise in PPP rates correlates with inflation and economic challenges, including high public debt and reliance on imports.
3. Policy Implications:
   • Tanzania's economic policies during periods of stabilization (e.g., post-2017) have likely supported improved currency valuation.
   • Investments in key sectors like agriculture, mining, and manufacturing may enhance future stability.
4. Future Outlook:
   • If Tanzania sustains its growth trajectory and maintains macroeconomic reforms, its PPP rate could stabilize further.
   • Integration into regional economic blocs (e.g., EAC) and trade partnerships will enhance competitiveness relative to its peers.

Comparative Summary (2029 Projections):

Tanzania's performance reflects a mix of growth potential and challenges in currency stability. Regional cooperation and investment reforms are critical for enhancing its competitiveness.

The PPP conversion rate tells us several important things about Tanzania and its economic positioning compared to other East African countries

1. Economic Growth and Currency Stability

• Trend in PPP Rates: The steady increase in Tanzania’s implied PPP rate shows currency depreciation over time due to inflation and economic growth challenges.
• A higher PPP rate indicates that more Tanzanian shillings are needed to purchase the same goods and services, suggesting weaker currency stability compared to countries like Kenya.
• However, Tanzania has shown signs of stabilization in recent years, particularly after 2020, indicating improved macroeconomic management.

2. Regional Competitiveness

• Comparison with Kenya: Kenya's consistently lower PPP rate reflects a more stable and stronger economy with controlled inflation and higher productivity. This suggests Kenya has been better at maintaining monetary and fiscal stability.
• Comparison with Burundi and Uganda: Tanzania performs better than these countries, which have experienced more significant economic challenges, including hyperinflation (Burundi) and volatile exchange rates (Uganda).
• Middle Performer: Tanzania occupies a middle ground in East Africa, reflecting moderate economic performance but with room for improvement to match Kenya’s stability.

3. Impact of Economic Reforms

• During the 1980s and 1990s, Tanzania underwent significant economic reforms, including structural adjustment programs. These caused sharp increases in the PPP rate as the economy adjusted to market liberalization and inflationary pressures.
• More recently, infrastructure investments and policy improvements have likely contributed to stabilizing the PPP rate, signaling better economic management.

4. Inflation and Purchasing Power

• The rising PPP rate shows that the purchasing power of the Tanzanian shilling has declined over the decades.
• For citizens, this means higher costs of living, as more local currency is needed to purchase goods and services.
• For businesses, it reflects reduced competitiveness in global trade, as currency depreciation can make imports more expensive.

5. Future Potential

• The recent stabilization suggests that Tanzania is moving in the right direction. To further improve:
  • Control inflation through sound monetary policies.
  • Boost productivity by investing in key sectors like agriculture, mining, and manufacturing.
  • Strengthen regional trade by leveraging its position in the East African Community (EAC) and African Continental Free Trade Area (AfCFTA).

Tanzania’s reflects progress in economic growth, moderate performance compared to peers, and the need for sustained reforms to improve currency stability and purchasing power. It highlights that Tanzania is transitioning from historical challenges to a more stable economic future, but regional competition (especially with Kenya) underscores the need for continued improvement in governance, trade, and investment climates.

NOTE: The Purchasing Power Parity (PPP) conversion rate provides a measure of how much of a country's currency is needed to purchase the same basket of goods and services in the international market.

In 2024, Tanzania achieved remarkable progress in transforming its investment landscape, attracting over TZS 40 trillion through Public-Private Partnerships (PPPs) and increasing business registrations by 25% compared to the previous year. With a focus on modernizing key sectors such as agriculture, energy, and digital infrastructure, the government maintained economic stability, keeping inflation at 4% and increasing the tax-to-GDP ratio to 14.5%. As the nation looks to 2025, ambitious plans aim to mobilize an additional TZS 50 trillion to drive industrialization, enhance energy generation by 300 MW, and modernize 200,000 hectares of agricultural land, paving the way for inclusive and sustainable growth.

Investment Achievements and Focus Areas (2024):

1. Improved Investment Flow:
   • Investment achievements are linked to a growing inflow of capital in key sectors such as agriculture, energy, and infrastructure.
   • Figure Example: TZS 40 trillion is targeted through Public-Private Partnerships (PPPs) to supplement government development projects.
2. Sectoral Contributions:
   • Agriculture: This remains a priority for Tanzania's economy, contributing approximately 26.7% to GDP and employing over 65% of the workforce.
   • Energy and Infrastructure: Massive investments have been directed toward renewable energy projects and transportation networks, such as port expansions and rail development.
   • Digitalization: Efficiency improvements in business processes are projected to reduce licensing times from 7 days to 3 days, fostering a business-friendly environment.

Business Environment Enhancements:

• Ease of Doing Business:
  • Simplified procedures for business registration have increased the number of businesses registered.
  • Figure Example: Business registrations increased by 25% compared to 2023, with over 5,000 new businesses reported in 2024.
• Infrastructure Modernization:
  • TZS 500 billion invested in digital infrastructure to streamline operations and improve service delivery across government institutions.

Economic Targets for 2025:

1. Projected Investment Goals:
   • The government aims to attract an additional TZS 50 trillion in both foreign and local investments, focusing on industrialization and renewable energy adoption.
   • PPP Contributions: Private sector involvement is expected to cover nearly 60% of large-scale projects.
2. Sectoral Expansion:
   • Plans to modernize 200,000 hectares of agricultural land with irrigation systems and mechanized farming to enhance productivity.
   • Increase the energy generation capacity by 300 MW, particularly focusing on renewable sources like hydropower and solar.

Economic Performance and Challenges:

1. Revenue Growth:
   • Revenue collections have increased by 10% in 2024 compared to the previous year, amounting to approximately TZS 25 trillion.
   • Tax-to-GDP ratio improved to 14.5% in 2024, up from 13.9% in 2023.
2. Inflation Control:
   • Inflation rates have been maintained at around 4%, attributed to effective fiscal and monetary policies.

Tanzania’s government is leveraging strategic investments to drive economic growth while addressing infrastructure deficits and promoting sustainable development. The figures highlight significant progress in revenue collection, sectoral contributions, and investment mobilization, aligning with Vision 2025 goals.

Tanzania's progress in improving its business environment, attracting investments, and achieving economic development goals for 2024, while laying out ambitious targets for 2025

1. Progress in Investment Climate

• Tanzania is actively working to attract both domestic and foreign investment by improving the regulatory and business environment.
• Efforts such as faster business registration and investment in infrastructure are showing results, with increasing private sector contributions.
• Figures such as TZS 40 trillion targeted through Public-Private Partnerships (PPPs) illustrate the scale of private-sector involvement in development projects.

2. Key Economic Sectors Driving Growth

• Agriculture is highlighted as a priority sector, with substantial contributions to GDP (around 26.7%) and employment (over 65% of the population).
• Energy and Infrastructure are central to economic transformation, with investments aimed at expanding energy capacity and modernizing transportation systems.
• Digitalization is improving efficiency and transparency, reducing time for processes like business registration and licensing.

3. Goals for 2025

• There is a focus on sustainable and inclusive growth, with a projected investment target of TZS 50 trillion for key sectors such as industrialization, agriculture, and renewable energy.
• Modernizing agriculture through irrigation and mechanization, expanding renewable energy, and enhancing industrial output are key priorities.

4. Economic Metrics and Stability

• Revenue collection and tax-to-GDP ratio improvements reflect better fiscal management. For instance:
  • Tax-to-GDP ratio rose to 14.5% in 2024 from 13.9% in 2023.
  • Revenue collections grew by 10% year-on-year.
• Inflation has been maintained at manageable levels (~4%), indicating effective monetary policies.

5. Commitment to Long-Term Growth

• The government’s strategy focuses on leveraging private investment to reduce the burden on public finances while ensuring impactful development projects.
• There is an emphasis on public-private collaboration to sustain infrastructure projects and foster economic resilience.

Hence, Tanzania’s commitment to fostering a competitive and efficient investment environment to achieve its Vision 2025 goals. It communicates confidence in ongoing reforms and ambitious plans for economic diversification and industrial growth. The specific figures, targets, and sectoral focus underline the government’s strategic planning and performance in driving the economy forward.

Tanzania’s current account balance, a vital indicator of its trade and investment flows, has witnessed significant improvement over the past four decades. From a peak deficit of -17.3% of GDP in 1993, reflecting economic imbalances, Tanzania has made strides to reduce this figure to an estimated -2.5% by 2029. While it outperforms Burundi (-18.9%) and Rwanda (-7.5%), Tanzania's deficit remains higher than Kenya’s (-4%) and Uganda’s (-2.6%). These figures highlight Tanzania’s economic transformation and its growing competitiveness in East Africa’s dynamic economic landscape.

1. Trends in Tanzania's Current Account Balance

• 1980s: Tanzania had moderate deficits, averaging around -4.5% of GDP.
  • High point: -2.0% (1983).
  • Low point: -5.2% (1987 and 1989).
• 1990s: The deficit worsened significantly, peaking at -17.3% in 1993 due to macroeconomic imbalances and external shocks.
• 2000s: The deficit narrowed in early years but widened to -7.7% in 2008, driven by increased imports and investment.
• 2010s: Gradual improvement as deficits reduced, attributed to improved exports, reduced oil imports, and favorable exchange rates.
  • Best year: -2.8% (2018).
  • Worst year: -11.6% (2012).
• 2020s: Continued stability, with deficits around -2.5% projected up to 2029.

2. Comparison with Other East African Countries

Burundi:

• Historically struggled with high deficits, peaking at -32.4% (2007) and maintaining double-digit deficits post-2010.
• Structural weaknesses in trade and low export diversification contribute to persistently high deficits.

Kenya:

• Moderate deficits, generally stable compared to other East African countries.
  • Improved during the 1990s, briefly achieving surpluses (e.g., 1993: +8.6%).
  • Post-2000s, deficits ranged from -3% to -9%, indicating sustained import reliance.

Rwanda:

• Moderate deficits until the 2010s, after which they worsened, peaking at -15.3% (2017).
• Improvements observed recently, with deficits projected around -7.5% in 2029.

Uganda:

• Generally low deficits, similar to Kenya in the 1980s and 1990s.
  • Peaked in 2020 at -9.5% due to reduced exports during the COVID-19 pandemic.
  • Projected to recover to a deficit of around -2.6% by 2029.

3. Tanzania's Relative Position

• Stability: Tanzania's current account balance has been more stable than Burundi and Rwanda, with deficits consistently below -12% since 2015.
• Competitiveness: Compared to Kenya and Uganda, Tanzania's deficits are slightly higher but have shown steady improvement.
• Recent Projections: By 2029, Tanzania is projected to maintain a deficit of -2.5%, positioning it among the more stable economies in the region.

4. Regional Patterns

• Burundi and Rwanda: High deficits reflect reliance on aid and low export bases.
• Kenya and Uganda: Moderate deficits indicate better trade management and diversified economies.
• Tanzania: Positioned as a middle-ground performer, with significant improvements driven by better fiscal policies, economic reforms, and investment.

Key Takeaways

• Tanzania’s Current Account Deficits: Have decreased significantly, reflecting economic improvements and fiscal discipline.
• Regional Performance: While Tanzania fares better than Burundi and Rwanda, it trails Kenya and Uganda in reducing deficits.
• Outlook: Tanzania’s consistent policy measures and growing exports could improve its position further.

The current account balance as a percentage of GDP provides critical insights into a country's economic health, particularly regarding trade, savings, and investment. What Tanzania's figures and its comparison to other East African countries tell us

1. Tanzania’s Economic Position

• Persistent Deficits: Tanzania has consistently had a current account deficit, meaning it imports more goods, services, and capital than it exports. This can indicate:
  • Reliance on foreign goods, services, or investment.
  • Challenges in domestic production or export capacity.
• Improvement Over Time: The reduction in deficits, particularly since the 2010s, shows:
  • Economic reforms and better fiscal policies.
  • Growth in exports, especially in sectors like agriculture, minerals, and tourism.
  • Controlled import costs due to diversification of local production.

2. Economic Health and Sustainability

• Investment-Driven Growth: Persistent deficits are not inherently bad if they fund productive investments, as seen in Tanzania's infrastructure projects like ports, railways, and energy. This can:
  • Boost long-term growth.
  • Improve export capacity.
• Risks of High Deficits: Periods of larger deficits, such as in the 1990s and early 2000s, reflect economic vulnerabilities, including:
  • Heavy reliance on foreign aid or debt.
  • Exposure to external shocks like global oil price changes.

3. Regional Competitiveness

• Middle Performer: Tanzania performs better than Burundi and Rwanda, which face chronic trade and fiscal challenges, but lags behind Kenya and Uganda in maintaining lower deficits.
  • Kenya and Uganda: Stronger export bases and better trade balances contribute to their relatively lower deficits.
  • Tanzania: Improvements suggest potential for catching up, especially with its natural resource wealth and ongoing industrialization.

4. Structural Economic Challenges

• Reliance on Imports: Tanzania's imports of machinery, equipment, and fuel often outweigh exports. Addressing this requires:
  • Enhancing domestic manufacturing and industrial sectors.
  • Expanding export markets.
• Trade Composition: Exports remain concentrated in a few sectors (e.g., gold, agricultural products), making the country vulnerable to price fluctuations.

5. Policy Implications

• Strengthening Exports: Policies should focus on:
  • Diversifying export products.
  • Expanding markets, particularly in regional and international trade.
• Reducing Import Dependency: Promoting local industries and value-added production can help manage deficits.
• Sustainable Financing: Ensuring that deficits are used for productive investments rather than consumption to avoid unsustainable debt levels.

Broader Interpretation

• Growth Potential: Tanzania's improving trend signals a positive outlook for economic growth and trade balance stabilization.
• Development Challenges: The country still faces structural barriers to becoming a trade-surplus economy, such as reliance on primary commodity exports and limited industrial capacity.
• Regional Leadership: With continued improvement, Tanzania can leverage its geographic and resource advantages to strengthen its position as a leading East African economy.

Stability at 41.7% of GDP and a Projected Decline to 40.8%

Tanzania's general government gross debt stands at a moderate 41.7% of GDP (2023), showcasing a prudent approach to borrowing compared to regional peers like Kenya (68.6%) and Uganda (51.1%). While many African nations have seen sharp increases in debt levels, Tanzania has maintained stability by prioritizing strategic investments and domestic resource mobilization. The debt is forecasted to peak at 47.3% in 2024 before declining to 40.8% by 2029, underscoring sustainable fiscal management. This stability enhances investor confidence, ensuring that economic growth is not compromised by excessive debt servicing pressures.

Tanzania's General Government Gross Debt (% of GDP)

Tanzania has demonstrated a relatively stable debt trajectory over the years. Below are key figures:

• 2001: 50.8%
• 2005: 46.1% (sharp decline from early 2000s due to HIPC debt relief programs)
• 2010: 27.6% (lowest point in the two-decade period)
• 2015: 39.5%
• 2020: 41.3%
• 2024 (forecasted): 47.3%
• 2029 (forecasted): 40.8%

Comparison with Kenya and Uganda

Kenya

Kenya's debt level has been consistently higher than Tanzania's over the years, reflecting its aggressive borrowing strategy for infrastructure projects:

• 2001: 41.3%
• 2010: 36.7%
• 2015: 45.8%
• 2020: 68.0%
• 2024 (forecasted): 69.9%
• 2029 (forecasted): 66.1%

Key Insights:

• Kenya’s debt increased sharply after 2013, coinciding with major infrastructure investments like the Standard Gauge Railway.
• By 2020, Kenya’s debt was 26.7 percentage points higher than Tanzania's.

Uganda

Uganda’s debt levels have been consistently lower than Tanzania's until the mid-2010s when it started to rise:

• 2001: 51.4%
• 2010: 18.4%
• 2015: 28.0%
• 2020: 46.3%
• 2024 (forecasted): 51.4%
• 2029 (forecasted): 36.3%

Key Insights:

• Uganda reduced debt significantly in the early 2000s but experienced a resurgence due to investment in energy and oil infrastructure.
• By 2024, Uganda’s debt will exceed Tanzania's, but it is projected to decline sharply afterward.

Regional and Global Context

Sub-Saharan Africa

• 2001: 59.3%
• 2010: 25.4%
• 2020: 56.3%
• 2024 (forecasted): 59.7%

Africa (Region)

• 2001: 63.1%
• 2010: 32.0%
• 2020: 64.6%
• 2024 (forecasted): 66.7%

Key Insights:

• Tanzania’s debt has consistently remained below the regional average.
• The region has seen significant increases in debt levels since 2010, driven by borrowing for development projects and economic shocks like COVID-19.

Tanzania’s Strategic Position

• Debt Sustainability: Tanzania has managed its debt more conservatively than its neighbors, maintaining moderate levels and avoiding spikes seen in Kenya and Uganda.
• Fiscal Discipline: Tanzania's focus on domestic resource mobilization and cautious borrowing supports its fiscal health.
• Future Outlook: While the debt-to-GDP ratio is expected to rise to 47.3% in 2024, it remains sustainable and within international thresholds.

Key Takeaways

1. Tanzania's debt trajectory is stable, peaking at 47.3% in 2024 but projected to decline gradually to 40.8% by 2029.
2. Kenya has significantly higher debt levels, reflecting its infrastructure-driven borrowing strategy.
3. Uganda's debt is rising, projected to exceed Tanzania's by 2024, but it’s forecasted to decline in the long term.
4. Tanzania stands out as fiscally disciplined, with a debt level below Sub-Saharan Africa's and Africa’s regional averages.

The analysis of Tanzania's general government gross debt (% of GDP), compared to its regional peers, tells several key stories about its fiscal management, economic priorities, and potential risks.

1. Fiscal Discipline and Stability

• Tanzania’s debt levels are moderate and have remained relatively stable compared to its neighbors like Kenya and Uganda.
  • This indicates prudent borrowing practices and fiscal discipline.
  • The debt-to-GDP ratio has stayed below international risk thresholds (often cited as 55-60% for emerging economies).
  • Tanzania's focus on mobilizing domestic resources reduces over-reliance on external borrowing.

2. Strategic Approach to Borrowing

• Tanzania has adopted a conservative borrowing strategy, focusing on critical projects while avoiding excessive reliance on external loans.
  • Unlike Kenya, which heavily borrowed for large-scale infrastructure projects like railways and highways, Tanzania’s debt growth has been more measured.
  • This approach ensures that debt servicing does not crowd out essential public investments.

3. Resilience Amid Global Trends

• While Sub-Saharan Africa and global averages for debt-to-GDP ratios have increased sharply since 2010, Tanzania has managed to keep its debt growth moderate.
  • This resilience reflects the country's ability to weather global economic shocks (e.g., COVID-19) and maintain economic growth.
  • Policies promoting self-reliance, such as prioritizing agriculture and industrialization, have helped mitigate external pressures.

4. Comparisons with Kenya and Uganda

Kenya:

• Kenya’s debt-to-GDP ratio is significantly higher, indicating a reliance on borrowing for infrastructure projects and other expenditures.
  • This raises concerns about Kenya’s ability to manage debt sustainably, as evidenced by its rising debt servicing costs.
  • Tanzania’s lower debt reflects its avoidance of similar fiscal risks.

Uganda:

• Uganda’s debt trajectory shows a sharp rise due to investment in energy and oil infrastructure.
  • However, its debt is expected to decline significantly after 2024.
  • Tanzania’s steadier debt management avoids the peaks and troughs seen in Uganda, indicating better planning.

5. Economic Priorities and Challenges

• The moderate debt reflects Tanzania’s focus on long-term economic priorities, such as improving infrastructure, energy access, and agriculture.
• However, the rising trend in debt (forecasted to peak at 47.3% of GDP by 2024) signals emerging challenges, including:
  • Increased borrowing for large projects (e.g., Standard Gauge Railway, Julius Nyerere Hydropower Dam).
  • Servicing debt costs, which could strain public finances if economic growth slows.

6. Tanzania’s Debt Sustainability

• Tanzania's debt remains sustainable, with the trajectory expected to reverse and decline post-2024 (40.8% by 2029).
• Sustainability is supported by:
  • Economic diversification: Reducing dependence on a few sectors (e.g., mining, agriculture).
  • Sound macroeconomic policies: Controlling inflation, fostering stable GDP growth.
  • Infrastructure development: Targeting projects with clear economic returns to boost productivity and revenue generation.

7. Signals to Investors and Stakeholders

• Tanzania’s fiscal stability is an attractive signal to both domestic and international investors.
• It positions Tanzania as a safer investment destination compared to its regional peers.
• However, maintaining this stability will require:
  • Continued transparency in debt management.
  • Focus on revenue generation (tax reforms, enhanced public-private partnerships).
  • Efficient implementation of development projects.

Key Implications for Policy

1. Caution on Future Borrowing: As debt levels approach 50% of GDP, Tanzania must ensure that new borrowing is directed toward high-return projects.
2. Revenue Mobilization: Increasing tax revenue and expanding the tax base are crucial to reducing reliance on borrowing.
3. Debt Management: Transparent reporting and effective repayment strategies are vital for maintaining credibility.

Tanzania’s debt story reflects a measured and sustainable approach to fiscal management, offering lessons for regional peers while highlighting the importance of maintaining growth-oriented policies.

A Sign of Economic Stability

In November 2024, the Tanzania shilling exhibited notable appreciation, trading at an average of TZS 2,659.03 per USD, up by 2.3% from October's TZS 2,719.91. This improvement reflects enhanced foreign exchange inflows from sectors like tourism and exports, alongside effective monetary policies. The annual depreciation rate also slowed to 6.3% from 9% the previous month, indicating strengthening financial stability. With the Interbank Foreign Exchange Market turnover surging to USD 186.7 million, the shilling's performance highlights a resilient economy poised for sustained growth.

Financial Stability: Performance of the Tanzania Shilling in November 2024

The Tanzania shilling demonstrated signs of stability and appreciation during November 2024, supported by improved foreign exchange inflows and effective monetary policy measures.

1. Exchange Rate Performance

• The average exchange rate of the Tanzania shilling against the US dollar was TZS 2,659.03 per USD, marking a 2.3% appreciation from TZS 2,719.91 per USD recorded in October 2024.
• On an annual basis, the pace of depreciation slowed significantly to 6.3% in November 2024, compared to 9% in October 2024.

2. Foreign Exchange Market Activity

• The Interbank Foreign Exchange Market (IFEM) turnover rose sharply to USD 186.7 million, compared to USD 50.7 million in October 2024 and USD 13.1 million in November 2023.
• The Bank of Tanzania purchased USD 23 million in November 2024, significantly higher than the USD 4.5 million purchased in October, contributing to stabilizing the shilling.

3. Drivers of Stability and Appreciation

• Improved Foreign Exchange Inflows:
  • Increased earnings from key sectors such as tourism and cash crop exports (e.g., cashew nuts, tobacco, and minerals) strengthened foreign currency availability.
• Policy Effectiveness:
  • The Bank of Tanzania's tight monetary policy stance and enforcement of regulations (e.g., restricting foreign exchange use for domestic transactions) bolstered the shilling's performance.
• Global Economic Conditions:
  • Favorable international capital market conditions, driven by policy rate cuts globally, eased financial pressures on the domestic economy.

Key Figures in Summary

Implication:

• The appreciation of the Tanzania shilling reflects financial stability, supported by strong foreign inflows and effective monetary policy.
• The reduced annual depreciation rate (6.3%) highlights improving external conditions, mitigating pressures from previous years.
• The significant increase in IFEM activity (from USD 13.1 million in November 2023 to USD 186.7 million in November 2024) indicates robust participation in the foreign exchange market, ensuring liquidity and stability.

Conclusion

The Tanzania shilling's performance in November 2024 underscores its strengthening position, driven by sound economic fundamentals, improved foreign inflows, and prudent monetary policies. This stability enhances confidence in Tanzania's economic outlook, fostering a conducive environment for trade and investment.

A Strategic Approach to Fiscal Stability

Tanzania’s domestic debt, totaling TZS 33.6 trillion in November 2024, reflects a strategic focus on long-term financing through Treasury Bonds, which account for 78.2% of the debt portfolio. With a diverse creditor base led by commercial banks (28.8%), pension funds (26.9%), and the Bank of Tanzania (21%), the government balances long-term commitments with short-term liquidity needs. This approach minimizes exchange rate risks and supports fiscal stability, underscoring the importance of sustainable debt management for economic growth.

1. Overview of Domestic Debt

As of November 2024, Tanzania’s domestic debt stock amounted to TZS 33,569.2 billion, reflecting an increase of TZS 546 billion from the previous month. This growth was primarily driven by the issuance of new Treasury bonds and bills.

2. Government Domestic Debt by Borrowing Instruments

The distribution of government domestic debt by instruments in November 2024 is as follows:

Key Observations:

• Treasury Bonds (78.2%) dominate the debt portfolio, reflecting a preference for long-term financing.
• Non-securitized debt, mainly overdraft facilities (15.2%), complements government borrowing for short-term needs.

3. Government Domestic Debt by Creditor Category

The breakdown of creditors for domestic debt as of November 2024 is as follows:

Key Observations:

• Commercial Banks (28.8%) are the largest creditors, reflecting their significant role in financing government operations.
• Pension Funds (26.9%) and Bank of Tanzania (21.0%) also play major roles in providing stable financing to the government.

4. Summary of Figures

Insights:

1. Long-Term Borrowing: The dominance of Treasury Bonds reflects a strategy to stabilize financing over longer horizons.
2. Creditor Diversification: The government relies on a balanced mix of creditors, led by commercial banks and pension funds, ensuring stable domestic funding.
3. Short-Term Financing Needs: Overdrafts and Treasury Bills address immediate liquidity needs, complementing long-term instruments.

Tanzania’s domestic debt portfolio appears strategically managed, emphasizing long-term stability while maintaining access to short-term funds​

The details about Tanzania's domestic debt provide valuable insights into the government’s fiscal strategy and borrowing practices

1. Reliance on Long-Term Borrowing Instruments

• The dominance of Treasury Bonds (78.2%) shows the government’s preference for long-term financing, which spreads repayment obligations over an extended period and minimizes refinancing risks.
• The smaller share of Treasury Bills (6.0%) indicates limited use of short-term borrowing, reducing the pressure of frequent rollovers.

Implication: This strategy reflects a focus on financial stability and sustainable debt management, avoiding excessive short-term debt accumulation.

2. Diverse Creditor Base

• Commercial Banks (28.8%) are the largest creditors, demonstrating the banking sector’s significant role in government financing.
• Pension Funds (26.9%) and the Bank of Tanzania (21.0%) also contribute substantially, providing stable, long-term financing.
• The involvement of insurance companies and special funds (7.1%), along with others (16.2%), indicates broader participation, reducing dependency on any single creditor group.

Implication: A diversified creditor base enhances resilience to shocks, ensuring continued access to domestic financing even during economic uncertainties.

3. Use of Non-Securitized Debt

• Non-securitized debt, primarily overdraft facilities (15.2%), supports the government’s short-term liquidity needs. These facilities complement long-term instruments like Treasury Bonds, ensuring flexibility in managing cash flows.

Implication: The government balances long-term commitments with immediate fiscal needs, reflecting a pragmatic approach to debt management.

4. Domestic Financing Reduces Exchange Rate Risks

• Unlike external debt, domestic borrowing eliminates exposure to exchange rate fluctuations, making it a safer option in times of currency volatility.
• The reliance on domestic debt also reflects efforts to utilize internal financial markets, promoting local economic growth.

Implication: The emphasis on domestic debt aligns with sound fiscal management, leveraging local resources while avoiding external currency risks.

5. Debt Sustainability and Fiscal Discipline

• The steady growth of domestic debt (an increase of TZS 546 billion in November 2024) suggests an ongoing need to finance government operations and development projects.
• While the reliance on Treasury Bonds indicates fiscal discipline, rising debt levels demand productive use of borrowed funds to ensure economic returns.

Conclusion:
Tanzania’s domestic debt strategy emphasizes long-term stability, diversified financing, and fiscal flexibility. However, as debt levels grow, effective utilization of funds for development and maintaining debt sustainability will be critical to avoiding financial strain in the future.