Tanzania has experienced a steady decline in foreign aid, with official development assistance (ODA) dropping from $761 million in 2013 to $389 million in 2024 and further projected to fall to $118 million in 2025. With ODA accounting for 8.55% of the country's Gross National Income (GNI) of $79 billion, this decline signals the need for stronger domestic revenue generation, increased private sector participation, and enhanced public-private partnerships (PPPs). As tax revenue remains at only 11% of GDP, Tanzania must prioritize economic reforms to sustain growth amid shifting donor priorities.

Tanzania has experienced a fluctuating trend in Official Development Assistance (ODA) disbursements, with a peak of $761 million in 2013 followed by a gradual decline to $389 million in 2024 and a further projected drop to $118 million in 2025. This reduction has several critical implications:

1. Reduced Future Aid – Strengthening Domestic Revenue
   • In 2024, ODA accounts for 8.55% of Tanzania’s Gross National Income (GNI), indicating its significance in the economy.
   • Government tax revenue stands at 11% of GDP, which is relatively low compared to regional benchmarks (e.g., Kenya at 16% and South Africa at 25%).
   • With declining aid, Tanzania must improve tax collection efficiency, broaden the tax base, and formalize informal sectors to increase revenue generation.
2. Economic Independence – Strengthening Public Finance Management
   • The country’s GNI per capita is $1,200, showing that despite economic growth, a large portion of the population still has low-income levels.
   • Public debt management and financial discipline will be critical to ensure sustainability while reducing dependence on external funding.
3. Donor Shifts – Strategic Adaptation
   • The World Bank Group remains the top donor ($1.095 billion), followed by the U.S. ($429 million) and the Global Fund ($225 million).
   • The decline in aid could mean donors are shifting priorities, focusing on humanitarian crises or new sectors like climate resilience and digital transformation.
   • Tanzania must align its national development plans with donor interests to maintain strategic funding.
4. Public-Private Partnerships (PPP) – Mobilizing Investments
   • The sharp drop in aid from $647 million in 2023 to $118 million in 2025 suggests a pressing need for alternative financing models.
   • Attracting private sector investments in infrastructure, energy, agriculture, and technology through PPP frameworks can bridge the financing gap.
   • Strengthening investment policies and reducing bureaucratic hurdles will make Tanzania more attractive to investors.

The decline in foreign aid is a wake-up call for Tanzania to enhance tax policies, strengthen financial management, align with shifting donor priorities, and attract private sector investment. By focusing on these areas, Tanzania can transition towards sustainable economic growth and reduce its reliance on foreign assistance.

The declining foreign aid to Tanzania highlights key economic challenges and the urgent need for policy shifts:

1. Foreign Aid is Declining

• Tanzania's ODA disbursements peaked at $761 million in 2013 but have been fluctuating since.
• By 2024, aid dropped to $389 million and is projected to decline further to $118 million in 2025.
• This indicates a long-term reduction in donor dependency, forcing Tanzania to seek alternative funding sources.

2. Tanzania Must Strengthen Domestic Revenue Collection

• Tax revenue as a percentage of GDP is only 11%, much lower than in peer countries (e.g., Kenya ~16%).
• With GNI at $79 billion and GNI per capita at $1,200, the economy is growing, but tax efficiency needs improvement.
• Expanding the tax base and formalizing the informal sector can help replace lost donor funding.

3. Donor Priorities are Shifting

• The World Bank ($1.095 billion) remains the largest donor, followed by the U.S. ($429 million) and Global Fund ($225 million).
• Aid cuts suggest donors are redirecting funds to other priority countries or shifting towards new focus areas like climate resilience, technology, and security.
• Tanzania must align its policies with emerging donor interests to maintain funding for key projects.

4. Public-Private Partnerships (PPP) are Essential

• With aid dropping from $647 million in 2023 to a projected $118 million in 2025, Tanzania must fill the funding gap through private investments.
• Attracting private sector participation in infrastructure, agriculture, and industrialization is crucial for long-term economic sustainability.

5. The Path to Economic Independence

• The decline in aid can push Tanzania towards self-reliance, but it requires stronger fiscal management, industrialization, and investment-friendly policies.
• Strengthening PPP frameworks, improving business environments, and reducing bureaucratic barriers will be key to ensuring sustainable economic growth.

Conclusion

The figures tell us that Tanzania can no longer rely on foreign aid as a major economic driver. The country must boost domestic revenue, attract private investments, and adapt to changing donor priorities to ensure stable and sustainable growth.

Table: Tanzania’s ODA Disbursements (2001-2025)

Tanzania has received significant Official Development Assistance (ODA) over the years, with disbursements peaking at $761M in 2013 before gradually declining to $389M in 2024 and a projected $118M in 2025. ODA accounted for 8.55% of GNI, with major donors including the World Bank ($1.095B) and the United States ($429.5M). As Tanzania's GNI reached $79B (2024) and tax revenue stood at 11% of GDP, the decline in aid signals a transition towards economic self-reliance.

An overview of official development assistance (ODA) disbursements to Tanzania in U.S. dollars, showing the financial support received from international donors over the years:

1. Disbursements Overview

• Definition: Disbursements represent the actual funds paid by federal agencies in a fiscal year to fulfill government obligations.
• Trends: The total ODA received by Tanzania has fluctuated over the years, peaking in 2013 at $761M, followed by a decline and recovery in later years.

2. Key ODA Donors to Tanzania

These organizations and countries provided the highest amounts in recent years:

• World Bank Group: $1.095B (largest donor)
• United States: $429.5M
• Global Fund: $225.0M
• France: $132.4M
• Canada: $101.8M

3. Economic and Social Indicators

• Population: 70.5 million (with 38.9% urban and 61.1% rural)
• Gross National Income (GNI): $79 billion
• GNI per capita: $1,200
• ODA as % of GNI: 8.55% (Tanzania's economy is significantly supported by foreign aid)
• ODA per capita: $41.13 (per person aid distribution)
• Government Tax Revenue: 11% of GDP (shows the domestic revenue generation capacity)

4. Trends in ODA Disbursements to Tanzania (2001-2025)

• 2001-2005: Disbursements ranged between $44M - $98M, showing slow but steady growth.
• 2006-2013: Rapid increase from $121M in 2006 to a peak of $761M in 2013.
• 2014-2019: Decline and fluctuation, reaching $647M in 2019.
• 2020-2024: Decline in disbursements, dropping to $389M in 2024.
• 2025 (Projected): A sharp decline to $118M, indicating a possible reduction in ODA support.

5. Insights

• The significant peak in 2013 suggests major funding projects or increased donor confidence.
• The decline post-2014 suggests changes in donor priorities, Tanzania’s economic status, or governance reforms.
• The projected drop in 2025 could indicate Tanzania’s transition away from dependency on foreign aid.

Key figures and trends for Tanzania’s ODA disbursements, economic indicators, and donor contributions:

Table: Tanzania’s ODA Trends and Economic Indicators (2001-2025)

ODA disbursements to Tanzania reveals several key insights about the country's economic reliance on aid, fiscal trends, and potential shifts in donor priorities:

1. Tanzania's Economic Dependency on ODA

• ODA as a Percentage of GNI (8.55%): This indicates that a significant portion of Tanzania’s economy still depends on foreign aid. A high ODA-to-GNI ratio suggests limited domestic revenue generation capacity.
• ODA Per Capita ($41.13): Each Tanzanian receives an average of $41.13 in aid, reflecting Tanzania’s classification as a low-income country.

2. Trends in Foreign Aid

• 2001-2005: Low Disbursement ($44M - $98M)
  • Aid was relatively low, likely due to limited donor commitments or governance concerns.
• 2006-2013: Rapid Increase in Aid ($121M - $761M)
  • This period saw a significant increase in aid, peaking in 2013 ($761M), possibly due to large-scale development projects or donor confidence.
• 2014-2019: Decline and Fluctuation ($599M - $647M)
  • Aid dropped post-2013, which could indicate a shift in donor priorities towards other regions or sectors.
• 2020-2024: Continuous Decline ($588M - $389M)
  • This drop might reflect Tanzania’s economic growth, reducing eligibility for certain types of aid.
• 2025 (Projected): Sharp Decline ($118M)
  • If this projection holds, it suggests that donors are reducing their financial commitments significantly.

3. Shift in Tanzania’s Financial Landscape

• Government Tax Revenue (11% of GDP)
  • Relatively low compared to international benchmarks (15-20%), showing limited domestic revenue collection.
• GNI ($79B) & GNI Per Capita ($1.2K)
  • As GNI improves, Tanzania may move towards middle-income status, leading to reduced ODA eligibility.

4. Implications for Tanzania

• Reduced Future Aid: Tanzania may need to increase domestic revenue generation through better tax policies and private sector growth.
• Economic Independence: Declining aid could push Tanzania towards self-reliance, but it requires stronger public finance management.
• Donor Shifts: The decline could mean donors are redirecting funds to other priority countries or investing in different economic sectors.
• Public-Private Partnerships (PPP): To fill the funding gap, Tanzania must attract private sector investments for infrastructure and development.

Final Thought

Tanzania is transitioning away from heavy aid dependence, which is a sign of economic progress. However, the country must strengthen its domestic revenue base, improve fiscal policies, and attract private investment to sustain growth without relying on ODA.

Table: Tanzania’s ODA Disbursements (2001-2025)

Tanzania's external debt reached USD 33.91 billion in January 2025, placing it among the top 10 most indebted African countries. This marks a significant rise from USD 2.47 billion in 2011, reflecting increased borrowing for infrastructure and economic development. The central government holds 77.4% of the debt, with USD 185.4 million paid for debt servicing in December 2024. Despite this, Tanzania’s debt-to-GDP ratio remains at 47.2%, below the IMF’s 55% risk threshold. However, careful debt management is crucial to ensure economic stability and sustainable growth.

​As of January 2025, Tanzania's external debt stood at approximately USD 33,905.10 million, a slight decrease from USD 34,075.50 million in December 2024. This positions Tanzania among the top ten African countries with substantial external debt.​

Historical Context: Over the years, Tanzania's external debt has exhibited significant growth:​

• December 2011: USD 2,469.70 million​
• December 2023: USD 29,541.7 million ​
• November 2024: USD 33,137.7 million ​
• December 2024: USD 34,075.50 million​
• January 2025: USD 33,905.10 million​

Composition of External Debt: The central government holds the majority of this debt, accounting for approximately 77.4% as of December 2024. The remaining portion is attributed to the private sector. ​

Debt Service and Disbursements: In December 2024, Tanzania received external loan disbursements totaling USD 376.8 million, primarily allocated to the central government. During the same period, the country serviced its external debt with payments amounting to USD 185.4 million, which included USD 111.2 million in principal repayments and USD 74.2 million in interest payments. ​

Public Debt Relative to GDP: As of November 2024, Tanzania's total public debt, encompassing both external and domestic obligations, was USD 38,243.5 million. This figure represents approximately 47.2% of the nation's Gross Domestic Product (GDP). ​

International Financial Support: In December 2024, the International Monetary Fund (IMF) completed a review under the Extended Credit Facility arrangement with Tanzania, resulting in an immediate disbursement of about USD 148.6 million. Additionally, the IMF approved a disbursement of approximately USD 55.9 million under the Resilience and Sustainability Facility, totaling USD 204.5 million in financial support. ​

These figures underscore Tanzania's significant external debt position within Africa, highlighting the importance of ongoing fiscal management and international financial collaborations.

Top ten African countries with high external debt based on 2025 data:

1. South Africa – USD 176,314 million (Sep 2024)
2. Egypt – USD 155,204 million (Sep 2024)
3. Tunisia – TND 128,856 million (Sep 2024)
4. Mauritius – MUR 96,713 million (Dec 2024)
5. Angola – USD 50,260 million (Dec 2023)
6. Nigeria – USD 42,900 million (Sep 2024)
7. Namibia – NAD 36,036 million (Jun 2024)
8. Tanzania – USD 33,905 million (Jan 2025)
9. Malawi – MWK 5,887,049 million (Dec 2023)
10. Burundi – BIF 1,873,263 million (Dec 2024)

Tanzania’s external debt and its position among African countries with significant debt levels:

1. Tanzania’s Debt Growth is Significant

• Tanzania's external debt has increased dramatically from USD 2.47 billion in 2011 to USD 33.91 billion in January 2025.
• This consistent rise reflects increased borrowing for infrastructure, public services, and economic projects but also raises concerns about debt sustainability.

2. Tanzania is Among Africa’s Top 10 Most Indebted Countries

• At USD 33.91 billion, Tanzania ranks 8th in Africa for external debt.
• While this debt level is high, it is still lower than economies like South Africa (USD 176.3B), Egypt (USD 155.2B), and Nigeria (USD 42.9B).

3. Most of Tanzania’s Debt is Public

• 77.4% of Tanzania’s external debt is held by the central government, meaning the government is the primary borrower.
• This suggests reliance on international loans for development, infrastructure, and fiscal needs.

4. Debt Servicing is a Major Challenge

• In December 2024, Tanzania borrowed USD 376.8M but also had to repay USD 185.4M (including interest payments).
• This means that a significant portion of revenues is spent on debt servicing, which could limit spending on public services.

5. IMF and International Financial Support Play a Key Role

• The IMF provided USD 204.5M in December 2024 to support Tanzania’s financial stability.
• This suggests Tanzania relies on international financial institutions to manage its debt obligations and sustain economic programs.

6. Tanzania’s Debt-to-GDP Ratio is Still Manageable

• Tanzania’s total public debt (domestic + external) was USD 38.24 billion, accounting for 47.2% of GDP in November 2024.
• While below the IMF’s 55% risk threshold, continued borrowing without sufficient economic growth could lead to debt distress.

7. Comparison with Other African Countries

• South Africa and Egypt have the highest external debts, but their economies are larger and more diversified.
• Nigeria has slightly higher debt than Tanzania, but its economy benefits from oil revenues.
• Tanzania’s debt is higher than Malawi, Burundi, and Namibia, suggesting it is borrowing at a faster rate.

Final Conclusion

Tanzania's rising external debt reflects ambitious economic growth plans but also poses risks of debt distress if borrowing continues at this rate without sufficient revenue growth. Proper debt management, economic diversification, and increased exports are crucial to ensuring sustainability.

Challenges and Policy Recommendations

Women and youth make up a significant portion of Tanzania’s workforce, yet they face major challenges in accessing formal employment, securing decent wages, and overcoming social and economic barriers. According to the 2025 Employment Study, women and youth account for over 60% of informal employment, highlighting the urgent need for policy interventions to improve job opportunities and workforce inclusion.

This article examines the barriers affecting women and youth in employment, presents statistical insights, and offers policy recommendations to promote greater economic participation.

Employment Status of Women and Youth in Tanzania

• 65% of women and 72% of youth are employed in the informal sector, where wages are lower and job security is minimal.
• Only 20% of women and 25% of youth have formal jobs, mainly in education, healthcare, and administrative roles.
• Unemployment among youth (33%) is nearly twice as high as the national average, highlighting the difficulty young people face in finding jobs.

Key Challenges Facing Women and Youth in Employment

1. Gender Discrimination and Societal Expectations

Women face discriminatory hiring practices, lower wages, and limited leadership opportunities.

• 29% of women cited gender-based hiring discrimination, making it harder to access high-paying jobs.
• 26% struggle with balancing work and family responsibilities, as childcare support is limited.
• 18% face financial barriers, preventing them from starting businesses or investing in skills training.

2. Limited Access to Skills Training and Education

Many young workers and women in rural areas lack technical skills, reducing their job prospects.

• 72% of formally employed women and 80% of formally employed youth have a bachelor’s degree or higher, showing that education plays a key role in accessing formal jobs.
• However, many young workers (88%) lack post-secondary education, limiting their access to structured employment.

3. High Unemployment Among Youth

Young people struggle with job market entry, as employers prefer experienced workers.

• 60% of young workers with less than one year of experience are in informal jobs, as formal employment requires prior experience.
• Only 5% of inexperienced youth find formal jobs, highlighting the need for internship and apprenticeship programs.

4. Financial and Business Challenges for Women and Youth Entrepreneurs

Many women and youth prefer self-employment, but lack financial resources to grow their businesses.

• 31% of women and youth entrepreneurs struggle to access capital for business expansion.
• 25% cite high-interest rates, making loans unaffordable.

Opportunities for Improving Women and Youth Employment

1. Expanding Technical and Vocational Training Programs

Providing job-specific skills can help women and youth access higher-paying employment.

• 37% support digital and ICT skills training, as tech-related jobs provide higher wages and flexible work opportunities.
• 32% prefer entrepreneurship training, enabling women and youth to create businesses.

2. Expanding Financial Access for Women and Youth

Providing affordable credit and microfinance services can support entrepreneurial growth.

• 38% of respondents support low-interest business loans to help young entrepreneurs grow.
• 34% prefer government-backed grants, reducing financial risks for startups.

3. Strengthening Workplace Gender Equality Policies

Companies should enforce policies that promote equal pay, leadership opportunities, and workplace safety.

• 40% job growth expected if companies enforce equal pay policies.
• 35% increase projected if workplaces offer childcare support.

Conclusion and Policy Recommendations

Women and youth remain marginalized in Tanzania’s labor market, facing high unemployment, financial challenges, and limited access to skills training. Addressing these barriers will create a more inclusive workforce.

Key Policy Recommendations:

1. Expand Vocational Training – Strengthen ICT, digital marketing, and entrepreneurship programs.
2. Improve Financial Access – Provide low-interest loans and microfinance for women and youth-led businesses.
3. Strengthen Job Market Entry Programs – Promote internships, apprenticeships, and mentorship programs.
4. Enhance Workplace Gender Policies – Enforce equal pay, leadership training, and flexible work arrangements.

NOTE:

The research and case studies presented in this report were conducted by Tanzania Investment and Consulting Group Limited (TICGL) to analyze employment trends, macroeconomic stability, and job creation dynamics in Tanzania. The study covered a sample size of 2,500 respondents, representing diverse economic sectors and geographic regions. A mixed-methods approach was employed, integrating quantitative surveys (85%), structured interviews (10%), and focus group discussions (5%) to gather both statistical data and qualitative insights. The research was conducted across six key regions: Dar es Salaam (25% of respondents), Mwanza (18%), Arusha (15%), Dodoma (14%), Mbeya (12%), and Morogoro (16%), ensuring a balance between urban and rural employment patterns.

The findings indicate that Tanzania’s workforce is 71.8% informal (25.95 million workers) and 28.2% formal (10.17 million workers), highlighting a significant divide in job security, wages, and access to social protection. Among the 2,500 surveyed individuals, formal employment accounts for 23% (550 individuals), predominantly in government (32% of formal jobs), banking and financial services (25%), manufacturing (18%), and education and healthcare (15%). On the other hand, informal employment constitutes 49% (1,170 individuals), with key sectors including agriculture (35% of informal workers), small businesses and trade (28%), transportation (15%), and casual labor (12%). The remaining 27% (650 individuals) were unemployed, with youth unemployment (ages 18–35) reaching 33%, significantly higher than the national average of 9.2%.

Employment trends indicate that formal employment is projected to rise to 38% by 2030, driven by industrialization, digital transformation, and policy reforms. However, major barriers continue to slow the transition, including limited job availability (42%), skills mismatches (26%), and bureaucratic challenges (21%). The study also found that women make up 65% of the informal workforce, primarily due to barriers in accessing formal jobs, while 72% of youth are engaged in informal employment due to limited entry-level job opportunities.

To bridge the gap between formal and informal employment, Tanzania must focus on expanding SME growth, strengthening vocational training programs, improving access to financial services for small businesses, and reducing bureaucratic hurdles for business registration. This report emphasizes the key trends, challenges, and opportunities shaping Tanzania’s employment landscape and highlights the role of public-private partnerships, investment in digital workforce expansion, and targeted policy interventions in creating a more structured and inclusive workforce by 2030.

Macroeconomic stability is a key driver of job creation and economic growth in Tanzania. Stable economic conditions—such as low inflation, consistent GDP growth, controlled fiscal deficits, and a favorable investment climate—create an environment where businesses expand, investments increase, and employment opportunities grow. According to the 2025 Employment Study, macroeconomic conditions directly influence both formal and informal employment trends in Tanzania.

This article explores how macroeconomic stability affects job creation, using figures from the study, and highlights policy recommendations for ensuring sustainable employment growth.

Macroeconomic Indicators and Employment Trends in Tanzania

• GDP growth has steadily increased from 5.2% in 2023 to a projected 6.0% in 2025, boosting business confidence and job creation.
• Inflation has declined, improving consumer purchasing power and reducing business costs.
• Fiscal deficits are being controlled, allowing more government spending on infrastructure and job-creating sectors.
• Unemployment is decreasing, reflecting stronger macroeconomic conditions.

How Macroeconomic Stability Affects Job Creation

1. GDP Growth and Employment Expansion

A growing economy creates more jobs, especially in high-growth industries such as manufacturing, services, and ICT.

• Manufacturing employment is projected to grow by 18%, driven by industrialization and PPP investments.
• ICT and digital economy jobs are expected to increase by 22%, supported by fintech and e-commerce growth.

2. Inflation and Wage Stability

Stable inflation supports higher real wages and business expansion, improving employment conditions.

• As inflation decreases, wages increase, improving living standards.
• Lower inflation helps businesses expand, creating more job opportunities.

3. Fiscal Policies and Government Investment in Job-Creating Sectors

Government spending plays a major role in employment, especially in infrastructure, public services, and industrialization.

• 30% increase in infrastructure investment has boosted construction jobs and industrial expansion.
• 18% increase in public service jobs, including education and healthcare employment.

4. Exchange Rate Stability and Foreign Direct Investment (FDI)

A stable exchange rate makes Tanzania more attractive to investors, boosting job creation in export-driven sectors.

• A stronger exchange rate has encouraged more FDI, supporting job creation in manufacturing, tourism, and agribusiness.

Challenges to Job Creation Despite Macroeconomic Stability

• 30% of respondents identified a skills gap, meaning economic growth is not fully translating into employment.
• 25% cited slow SME growth, showing that businesses still struggle despite macroeconomic improvements.

Opportunities to Enhance Job Creation Through Macroeconomic Stability

1. Expanding Vocational Training and Skills Development

Aligning skills with market demand can reduce unemployment and improve workforce readiness.

• 40% job growth expected if digital and ICT skills training is expanded.
• 30% increase in employment projected through technical education programs.

2. Strengthening SME Growth for Job Creation

Supporting small and medium enterprises (SMEs) can expand formal employment opportunities.

• 35% increase in SME jobs expected with better access to financing.

3. Enhancing Investment in Industrialization and PPPs

Boosting Public-Private Partnerships (PPPs) and industrial growth can increase formal employment opportunities.

• 40% job growth expected in Special Economic Zones (SEZs), promoting manufacturing and trade.

Conclusion and Policy Recommendations

Macroeconomic stability has played a crucial role in Tanzania’s job creation efforts, improving GDP growth, investment inflows, and employment expansion. However, structural challenges such as skills gaps, slow SME growth, and youth unemployment still need to be addressed.

Key Policy Recommendations:

1. Invest in Workforce Skills Development – Expand vocational and digital skills training to align with market needs.
2. Support SME Growth and Entrepreneurship – Provide affordable financing, business training, and regulatory reforms.
3. Encourage Foreign Investment in Job-Creating Sectors – Strengthen FDI incentives in manufacturing, ICT, and agribusiness.
4. Expand Infrastructure and Industrialization Projects – Develop Special Economic Zones (SEZs) to create more formal jobs.
5. Ensure Policy Stability and Economic Reforms – Maintain low inflation, stable exchange rates, and fiscal discipline to support long-term job creation.

NOTE:

The research and case studies presented in this report were conducted by Tanzania Investment and Consulting Group Limited (TICGL) to analyze employment trends, macroeconomic stability, and job creation dynamics in Tanzania. The study covered a sample size of 2,500 respondents, representing diverse economic sectors and geographic regions. A mixed-methods approach was employed, integrating quantitative surveys (85%), structured interviews (10%), and focus group discussions (5%) to gather both statistical data and qualitative insights. The research was conducted across six key regions: Dar es Salaam (25% of respondents), Mwanza (18%), Arusha (15%), Dodoma (14%), Mbeya (12%), and Morogoro (16%), ensuring a balance between urban and rural employment patterns.

The findings indicate that Tanzania’s workforce is 71.8% informal (25.95 million workers) and 28.2% formal (10.17 million workers), highlighting a significant divide in job security, wages, and access to social protection. Among the 2,500 surveyed individuals, formal employment accounts for 23% (550 individuals), predominantly in government (32% of formal jobs), banking and financial services (25%), manufacturing (18%), and education and healthcare (15%). On the other hand, informal employment constitutes 49% (1,170 individuals), with key sectors including agriculture (35% of informal workers), small businesses and trade (28%), transportation (15%), and casual labor (12%). The remaining 27% (650 individuals) were unemployed, with youth unemployment (ages 18–35) reaching 33%, significantly higher than the national average of 9.2%.

Employment trends indicate that formal employment is projected to rise to 38% by 2030, driven by industrialization, digital transformation, and policy reforms. However, major barriers continue to slow the transition, including limited job availability (42%), skills mismatches (26%), and bureaucratic challenges (21%). The study also found that women make up 65% of the informal workforce, primarily due to barriers in accessing formal jobs, while 72% of youth are engaged in informal employment due to limited entry-level job opportunities.

To bridge the gap between formal and informal employment, Tanzania must focus on expanding SME growth, strengthening vocational training programs, improving access to financial services for small businesses, and reducing bureaucratic hurdles for business registration. This report emphasizes the key trends, challenges, and opportunities shaping Tanzania’s employment landscape and highlights the role of public-private partnerships, investment in digital workforce expansion, and targeted policy interventions in creating a more structured and inclusive workforce by 2030.

Digital technology is transforming Tanzania’s employment landscape by expanding job opportunities, increasing business efficiency, and driving innovation. The 2025 Employment Study found that 82% of respondents believe digitalization has significantly increased employment opportunities, particularly in sectors like e-commerce, financial services, and remote work.

This article explores how digital technology is shaping employment trends, the impact of digital platforms, and the challenges and opportunities for workers in Tanzania.

Impact of Digitalization on Employment

• 82% of respondents believe digital technology has expanded job opportunities.
• 16% reported job losses due to automation replacing traditional roles.
• Only 2% stated that digitalization had no impact, showing that technology is reshaping Tanzania’s job market.

Key Ways Digital Technology is Driving Employment Growth

1. E-Commerce and Online Businesses

The rise of online marketplaces, digital payments, and mobile banking has allowed small businesses and entrepreneurs to create new jobs.

• 35% of respondents engage in e-commerce, selling goods through platforms like Facebook and Instagram.
• 29% run businesses on social media, leveraging digital advertising to reach customers.
• 25% work in online service industries, including freelance writing, web development, and virtual assistance.

2. Mobile Money and Digital Financial Services

Mobile money services like M-Pesa and Tigo Pesa have created jobs in financial technology, agency banking, and mobile payments.

• 42% of respondents reported employment growth in mobile money services.
• 34% work in fintech startups, supporting innovations in digital banking and online payments.

3. Digital Platforms for Employment Matching

Technology has improved access to job opportunities through digital job portals and remote work platforms.

• 36% of respondents use job search platforms like BrighterMonday to find formal employment.
• 32% work remotely via global platforms like Upwork and Fiverr.

4. Digital Transformation in Traditional Sectors

Technology is improving employment opportunities in agriculture, manufacturing, and retail.

• 28% of digital jobs are in agriculture, using e-farming apps for market access.
• 22% are in manufacturing, where automation increases efficiency.
• 35% work in retail, using digital payments and online stores.

Challenges in Digital Employment Growth

Despite its benefits, digital technology also presents challenges that need to be addressed.

• 44% of respondents lack affordable internet, making online job access difficult.
• 36% identified a skills gap, meaning workers need training in digital literacy.

Opportunities for Expanding Digital Employment

1. Expanding Digital Skills Training

To bridge the skills gap, more investment is needed in technical education and IT training.

• 38% of respondents want training in ICT, coding, and data analytics.
• 35% prefer digital marketing skills, which are crucial for online business growth.

2. Promoting Digital Infrastructure Development

Expanding internet coverage and reducing data costs can improve employment access.

• 45% job growth expected if internet access becomes more affordable.
• 38% increase projected if 5G networks expand to rural areas.

3. Strengthening E-Government and Digital Policy

Simplifying online business registration and tax filing can increase formal employment.

• 40% job growth expected if business registration becomes fully digital.

Conclusion and Policy Recommendations

Digital technology is a major driver of employment in Tanzania, but internet access, digital literacy, and policy support are needed to maximize its impact.

Key Recommendations:

1. Expand ICT and Digital Skills Training – Invest in coding, e-commerce, and fintech skills.
2. Lower Internet and Smartphone Costs – Provide affordable data plans and digital devices.
3. Develop Digital-Friendly Policies – Simplify online business registration and tax compliance.
4. Encourage Remote Work and Digital Startups – Create incentives for tech-based employment.

NOTE:

The research and case studies presented in this report were conducted by Tanzania Investment and Consulting Group Limited (TICGL) to analyze employment trends, macroeconomic stability, and job creation dynamics in Tanzania. The study covered a sample size of 2,500 respondents, representing diverse economic sectors and geographic regions. A mixed-methods approach was employed, integrating quantitative surveys (85%), structured interviews (10%), and focus group discussions (5%) to gather both statistical data and qualitative insights. The research was conducted across six key regions: Dar es Salaam (25% of respondents), Mwanza (18%), Arusha (15%), Dodoma (14%), Mbeya (12%), and Morogoro (16%), ensuring a balance between urban and rural employment patterns.

The findings indicate that Tanzania’s workforce is 71.8% informal (25.95 million workers) and 28.2% formal (10.17 million workers), highlighting a significant divide in job security, wages, and access to social protection. Among the 2,500 surveyed individuals, formal employment accounts for 23% (550 individuals), predominantly in government (32% of formal jobs), banking and financial services (25%), manufacturing (18%), and education and healthcare (15%). On the other hand, informal employment constitutes 49% (1,170 individuals), with key sectors including agriculture (35% of informal workers), small businesses and trade (28%), transportation (15%), and casual labor (12%). The remaining 27% (650 individuals) were unemployed, with youth unemployment (ages 18–35) reaching 33%, significantly higher than the national average of 9.2%.

Employment trends indicate that formal employment is projected to rise to 38% by 2030, driven by industrialization, digital transformation, and policy reforms. However, major barriers continue to slow the transition, including limited job availability (42%), skills mismatches (26%), and bureaucratic challenges (21%). The study also found that women make up 65% of the informal workforce, primarily due to barriers in accessing formal jobs, while 72% of youth are engaged in informal employment due to limited entry-level job opportunities.

To bridge the gap between formal and informal employment, Tanzania must focus on expanding SME growth, strengthening vocational training programs, improving access to financial services for small businesses, and reducing bureaucratic hurdles for business registration. This report emphasizes the key trends, challenges, and opportunities shaping Tanzania’s employment landscape and highlights the role of public-private partnerships, investment in digital workforce expansion, and targeted policy interventions in creating a more structured and inclusive workforce by 2030.

Public-Private Partnerships (PPPs) have become a key strategy for job creation and economic growth in Tanzania. By combining government support and private sector investment, PPPs help expand formal employment opportunities in key sectors such as infrastructure, manufacturing, agriculture, and digital services. According to the 2025 Employment Study, over 40% of new formal jobs in the last five years have been created through PPPs.

This article examines how PPPs contribute to formal employment growth, the challenges facing their implementation, and policy recommendations for maximizing their impact.

The Impact of PPPs on Formal Employment Growth

• 35% of formal jobs created through PPPs are in construction and infrastructure, due to large-scale public projects.
• 22% of new formal jobs are in manufacturing, where PPPs have boosted industrial production.
• 18% are in agribusiness, where PPP-funded processing plants and value chain projects have expanded employment.

How PPPs Are Expanding Formal Employment

1. Infrastructure Development and Construction Jobs

PPPs increase investments in roads, ports, energy, and urban development, creating thousands of formal jobs.

• 40% of infrastructure-related PPP jobs come from road and bridge construction projects.
• 30% are in energy projects, including hydropower and renewable energy initiatives.

2. Industrialization and Manufacturing Jobs

PPPs have boosted Tanzania’s industrialization agenda, helping to expand manufacturing jobs.

• 28% of PPP-supported manufacturing jobs are in textile and apparel production, driven by export-focused factories.
• 22% are in food processing, where PPP-funded factories are improving agricultural value chains.

3. Agriculture and Agribusiness Development

PPPs have helped modernize agriculture and expand agribusiness employment.

• 40% of new agriculture-related PPP jobs are in large-scale commercial farming, providing formal employment to rural workers.
• 35% are in agro-processing, creating jobs in food packaging, grain milling, and dairy processing.

4. Digital Economy and ICT Jobs

PPP collaborations in technology and digital services are creating new job opportunities in fintech, e-commerce, and software development.

• 35% of PPP-funded digital jobs are in e-commerce, where partnerships between telecom companies and fintech firms are driving job growth.
• 30% of formal ICT jobs are in mobile banking and digital financial services.

Challenges Facing PPPs in Employment Creation

Despite their success, PPPs in Tanzania face challenges that limit their full employment potential.

• 31% of respondents cited limited private sector funding, slowing down PPP project expansion.
• 26% of respondents identified bureaucracy as a key obstacle, delaying project approvals and implementation.
• 21% noted a skills gap, making it difficult to fill high-tech jobs in manufacturing and ICT.

Opportunities to Strengthen PPPs for Job Creation

1. Expanding PPP Investments in Emerging Sectors

By focusing on high-growth industries, PPPs can create long-term employment opportunities.

• Green energy PPPs can boost employment in solar and wind power projects.
• Digital economy PPPs can support tech startups and digital job creation.

2. Improving Skills Development and Workforce Readiness

Investing in training programs can close the skills gap and ensure local workers benefit from PPP projects.

• 40% more jobs could be created by expanding vocational training programs in PPP projects.
• 35% job growth is expected if universities partner with PPPs to train students in job-ready skills.

3. Reducing Bureaucracy and Improving Regulatory Efficiency

Streamlining PPP approvals can accelerate job creation.

• 50% more PPP projects could be launched if approval processes are shortened.
• 30% job growth is expected if business taxation for PPPs is simplified.

Conclusion and Policy Recommendations

PPPs have proven to be a key driver of formal employment growth in Tanzania, especially in infrastructure, manufacturing, agriculture, and ICT. However, regulatory challenges, financial limitations, and skills gaps remain barriers to maximizing their impact.

Key Policy Recommendations:

1. Increase Private Sector Funding for PPPs – Offer incentives and tax breaks for private investors in employment-generating projects.
2. Expand Vocational Training – Ensure PPP projects include skills development programs to create a skilled workforce.
3. Reduce Bureaucracy in PPP Approvals – Establish faster approval systems and streamlined regulations.
4. Strengthen Digital Economy PPPs – Encourage public-private collaborations in fintech, e-commerce, and tech startups.
5. Promote Sustainable and Green PPP Investments – Focus on renewable energy and climate-friendly infrastructure projects.

NOTE:

The research and case studies presented in this report were conducted by Tanzania Investment and Consulting Group Limited (TICGL) to analyze employment trends, macroeconomic stability, and job creation dynamics in Tanzania. The study covered a sample size of 2,500 respondents, representing diverse economic sectors and geographic regions. A mixed-methods approach was employed, integrating quantitative surveys (85%), structured interviews (10%), and focus group discussions (5%) to gather both statistical data and qualitative insights. The research was conducted across six key regions: Dar es Salaam (25% of respondents), Mwanza (18%), Arusha (15%), Dodoma (14%), Mbeya (12%), and Morogoro (16%), ensuring a balance between urban and rural employment patterns.

The findings indicate that Tanzania’s workforce is 71.8% informal (25.95 million workers) and 28.2% formal (10.17 million workers), highlighting a significant divide in job security, wages, and access to social protection. Among the 2,500 surveyed individuals, formal employment accounts for 23% (550 individuals), predominantly in government (32% of formal jobs), banking and financial services (25%), manufacturing (18%), and education and healthcare (15%). On the other hand, informal employment constitutes 49% (1,170 individuals), with key sectors including agriculture (35% of informal workers), small businesses and trade (28%), transportation (15%), and casual labor (12%). The remaining 27% (650 individuals) were unemployed, with youth unemployment (ages 18–35) reaching 33%, significantly higher than the national average of 9.2%.

Employment trends indicate that formal employment is projected to rise to 38% by 2030, driven by industrialization, digital transformation, and policy reforms. However, major barriers continue to slow the transition, including limited job availability (42%), skills mismatches (26%), and bureaucratic challenges (21%). The study also found that women make up 65% of the informal workforce, primarily due to barriers in accessing formal jobs, while 72% of youth are engaged in informal employment due to limited entry-level job opportunities.

To bridge the gap between formal and informal employment, Tanzania must focus on expanding SME growth, strengthening vocational training programs, improving access to financial services for small businesses, and reducing bureaucratic hurdles for business registration. This report emphasizes the key trends, challenges, and opportunities shaping Tanzania’s employment landscape and highlights the role of public-private partnerships, investment in digital workforce expansion, and targeted policy interventions in creating a more structured and inclusive workforce by 2030.

Barriers and Opportunities

Tanzania's workforce is predominantly informal, with 71.8% of workers engaged in unregulated jobs such as small businesses, street vending, and casual labor. Despite government efforts to formalize employment, only 28.2% of workers are formally employed. Transitioning from informal to formal employment remains a major challenge due to financial, regulatory, and skills-related barriers. This article explores the barriers preventing formalization and the opportunities that can facilitate the transition, using figures from the 2025 Employment Study.

Employment Structure in Tanzania

• 49% of the workforce is informally employed, with most working in agriculture, retail, and transportation.
• Only 23% of respondents have formal jobs, highlighting the difficulty in transitioning from informal work.
• 27% remain unemployed, signaling a gap in job creation.

Transitioning from informal to formal employment requires addressing key challenges such as business registration costs, financial access, and skill mismatches.

Barriers to Transitioning to Formal Employment

1. High Cost of Business Registration

Many informal businesses struggle with registration fees, taxation, and compliance costs.

• 21% of respondents cited business registration costs as a major obstacle.
• 16% identified high taxation, making it expensive for small businesses to formalize.
• 10% noted complex legal procedures, delaying the transition process.

2. Limited Financial Access

Small businesses and informal workers lack access to credit and financial support.

• 28% of respondents said lack of credit prevents them from formalizing.
• 20% lack collateral, making it difficult to secure business loans.

Without affordable financial services, many small businesses stay informal to avoid financial risks.

3. Skills and Education Gaps

Workers with low education levels struggle to find formal employment.

• 83% of formal workers have at least a bachelor’s degree, compared to 10% in informal jobs.
• 50% of informal workers only have a secondary education, limiting their transition options.
• Without vocational training and skills development, informal workers remain excluded from formal jobs.

4. Lack of Awareness of Formalization Benefits

Many informal workers do not understand the advantages of transitioning to formal employment.

• 54% of respondents are unaware of social security and tax incentives for formal workers.
• 35% prefer informal jobs due to their flexibility and independence.

Opportunities for Transitioning to Formal Employment

1. Government Incentives for SMEs

The government is introducing programs to support small businesses and ease registration.

• 38% of respondents support tax reductions for small businesses to encourage formalization.
• 31% want simplified business registration to reduce bureaucracy.
• 25% believe SME-friendly loan programs can help businesses transition.

2. Expansion of Vocational and Technical Training

Providing skills training can help workers qualify for higher-paying, formal jobs.

• 35% of respondents want digital skills training, which aligns with new job trends.
• 29% support entrepreneurship programs, helping small business owners formalize.

3. Digital Platforms for Business Formalization

E-commerce and digital banking allow small businesses to register and operate legally online.

• 38% of respondents believe that online registration makes formalization easier.
• 35% say mobile banking allows informal businesses to accept digital payments.

Conclusion and Policy Recommendations

Tanzania's informal sector remains dominant, but financial constraints, skill gaps, and regulatory burdens make formalization difficult. Addressing these barriers can unlock new job opportunities and improve economic stability.

Policy Recommendations:

1. Reduce Business Registration Costs – Introduce low-cost registration for SMEs.
2. Expand Access to Microfinance – Offer low-interest loans for informal businesses.
3. Strengthen Vocational Training Programs – Equip workers with formal job skills.
4. Promote Digital Tax and Registration Systems – Simplify online business formalization.
5. Raise Awareness on Formalization Benefits – Educate workers on social security and tax incentives.

NOTE:

The research and case studies presented in this report were conducted by Tanzania Investment and Consulting Group Limited (TICGL) to analyze employment trends, macroeconomic stability, and job creation dynamics in Tanzania. The study covered a sample size of 2,500 respondents, representing diverse economic sectors and geographic regions. A mixed-methods approach was employed, integrating quantitative surveys (85%), structured interviews (10%), and focus group discussions (5%) to gather both statistical data and qualitative insights. The research was conducted across six key regions: Dar es Salaam (25% of respondents), Mwanza (18%), Arusha (15%), Dodoma (14%), Mbeya (12%), and Morogoro (16%), ensuring a balance between urban and rural employment patterns.

The findings indicate that Tanzania’s workforce is 71.8% informal (25.95 million workers) and 28.2% formal (10.17 million workers), highlighting a significant divide in job security, wages, and access to social protection. Among the 2,500 surveyed individuals, formal employment accounts for 23% (550 individuals), predominantly in government (32% of formal jobs), banking and financial services (25%), manufacturing (18%), and education and healthcare (15%). On the other hand, informal employment constitutes 49% (1,170 individuals), with key sectors including agriculture (35% of informal workers), small businesses and trade (28%), transportation (15%), and casual labor (12%). The remaining 27% (650 individuals) were unemployed, with youth unemployment (ages 18–35) reaching 33%, significantly higher than the national average of 9.2%.

Employment trends indicate that formal employment is projected to rise to 38% by 2030, driven by industrialization, digital transformation, and policy reforms. However, major barriers continue to slow the transition, including limited job availability (42%), skills mismatches (26%), and bureaucratic challenges (21%). The study also found that women make up 65% of the informal workforce, primarily due to barriers in accessing formal jobs, while 72% of youth are engaged in informal employment due to limited entry-level job opportunities.

To bridge the gap between formal and informal employment, Tanzania must focus on expanding SME growth, strengthening vocational training programs, improving access to financial services for small businesses, and reducing bureaucratic hurdles for business registration. This report emphasizes the key trends, challenges, and opportunities shaping Tanzania’s employment landscape and highlights the role of public-private partnerships, investment in digital workforce expansion, and targeted policy interventions in creating a more structured and inclusive workforce by 2030.

A Formal vs. Informal Perspective

Tanzania’s labor market is split between formal and informal employment, with the informal sector accounting for 71.8% of the workforce. The 2025 Employment Study found that employment choices are influenced by factors such as education, work experience, financial barriers, and job security. This article presents key statistical insights into why workers choose either formal or informal employment.

Current Employment Distribution in Tanzania

A survey of 2,500 respondents revealed the following employment status:

The informal sector dominates because it offers low entry barriers and greater flexibility, while the formal sector is more structured and provides benefits like job security and social protection.

Key Factors Influencing Employment Choices

1. Education and Employment Type

Education is a major factor in determining employment choices. The study found that:

• 83% of formal employees have at least a bachelor’s degree, making higher education a strong requirement for formal jobs.
• 50% of informal workers only have secondary education, which limits their ability to access formal jobs.
• 35% of informal workers have primary-level education, often working in agriculture or small businesses.

2. Work Experience and Employment Type

Experience plays a crucial role in employment stability:

• 60% of informal workers have between 2–5 years of experience, suggesting they take temporary jobs before seeking formal employment.
• 45% of formal employees have 6–10 years of experience, showing that experience improves access to structured jobs.
• 35% of informal workers have less than one year of experience, reflecting high participation of young workers in casual labor.

3. Barriers to Formal Employment

Workers and small businesses face challenges transitioning into the formal sector:

• 42% of respondents cited limited job availability as the biggest challenge in finding formal employment.
• 26% identified skills mismatches, meaning available jobs don’t match their qualifications.
• 21% mentioned bureaucracy as a major hurdle, especially for small businesses trying to formalize.

4. Financial and Economic Factors

Many Tanzanians choose informal employment due to low capital requirements and business flexibility:

• 44% of informal workers are self-employed in small businesses, as formal employment requires more capital and regulatory compliance.
• 26% work in retail and street vending, which provides daily income without business registration costs.
• 8% are in transportation, such as bodaboda (motorcycle taxis), which requires minimal startup investment.

5. Job Security and Social Protection

Formal jobs offer social security benefits and stable wages, attracting workers seeking long-term financial security.

• 50% of respondents stated that access to social security, pensions, and health insurance was the primary motivation to seek formal jobs.
• 20% preferred formal jobs due to higher wages and stable income, compared to unpredictable informal earnings.
• 16% would transition to formal employment if business registration processes were simplified.

Conclusion and Policy Recommendations

The study reveals that education, work experience, financial barriers, and job security concerns are key factors influencing employment choices in Tanzania. While formal jobs offer stability, many workers prefer informal employment due to financial independence, ease of entry, and fewer regulatory burdens.

Policy Recommendations:

1. Expand Vocational Training – Equip workers with skills that match industry needs.
2. Simplify Business Registration – Reduce bureaucracy to encourage small businesses to formalize.
3. Improve SME Financing – Provide low-interest loans to informal entrepreneurs.
4. Raise Awareness on Social Protection – Promote pension and health insurance benefits for informal workers.

NOTE:

The research and case studies presented in this report were conducted by Tanzania Investment and Consulting Group Limited (TICGL) to analyze employment trends, macroeconomic stability, and job creation dynamics in Tanzania. The study covered a sample size of 2,500 respondents, representing diverse economic sectors and geographic regions. A mixed-methods approach was employed, integrating quantitative surveys (85%), structured interviews (10%), and focus group discussions (5%) to gather both statistical data and qualitative insights. The research was conducted across six key regions: Dar es Salaam (25% of respondents), Mwanza (18%), Arusha (15%), Dodoma (14%), Mbeya (12%), and Morogoro (16%), ensuring a balance between urban and rural employment patterns.

The findings indicate that Tanzania’s workforce is 71.8% informal (25.95 million workers) and 28.2% formal (10.17 million workers), highlighting a significant divide in job security, wages, and access to social protection. Among the 2,500 surveyed individuals, formal employment accounts for 23% (550 individuals), predominantly in government (32% of formal jobs), banking and financial services (25%), manufacturing (18%), and education and healthcare (15%). On the other hand, informal employment constitutes 49% (1,170 individuals), with key sectors including agriculture (35% of informal workers), small businesses and trade (28%), transportation (15%), and casual labor (12%). The remaining 27% (650 individuals) were unemployed, with youth unemployment (ages 18–35) reaching 33%, significantly higher than the national average of 9.2%.

Employment trends indicate that formal employment is projected to rise to 38% by 2030, driven by industrialization, digital transformation, and policy reforms. However, major barriers continue to slow the transition, including limited job availability (42%), skills mismatches (26%), and bureaucratic challenges (21%). The study also found that women make up 65% of the informal workforce, primarily due to barriers in accessing formal jobs, while 72% of youth are engaged in informal employment due to limited entry-level job opportunities.

To bridge the gap between formal and informal employment, Tanzania must focus on expanding SME growth, strengthening vocational training programs, improving access to financial services for small businesses, and reducing bureaucratic hurdles for business registration. This report emphasizes the key trends, challenges, and opportunities shaping Tanzania’s employment landscape and highlights the role of public-private partnerships, investment in digital workforce expansion, and targeted policy interventions in creating a more structured and inclusive workforce by 2030.

Tanzania’s Economic Growth Strengthens with Rising Credit and Financial Stability

Tanzania's economy has shown strong growth from 2021 to 2024, driven by rising domestic credit, expanding private sector lending, and increasing money supply. Domestic credit grew from 27.37 trillion TZS in 2021 to 46.82 trillion TZS in 2024 (+71%), while private sector lending increased by 72% over the same period, boosting investments and job creation. Additionally, broad money (M3) rose by 47%, and foreign currency deposits surged by 57%, reflecting greater financial confidence and economic resilience. These trends highlight Tanzania’s robust economic expansion and a strengthening financial sector.

Tanzania’s economic performance from 2021 to 2024/2025 has shown positive growth trends, primarily driven by increased credit availability, expanding money supply, and strong private sector growth. The following key indicators explain why Tanzania’s economy is performing well:

1. Strong Growth in Domestic Credit – Economic Expansion

• Domestic credit rose from 27.37 trillion TZS in 2021 to 46.82 trillion TZS in 2024, a 71% increase over four years.
• This growth suggests higher business investments, household consumption, and overall economic expansion.

2. Increased Private Sector Lending – Business Growth

• Claims on the private sector increased from 19.64 trillion TZS in 2021 to 33.76 trillion TZS in 2024, a 72% rise.
• This reflects higher business confidence, increased production, and job creation, all contributing to economic growth.

3. Rising Money Supply – Expanding Financial Sector

• Reserve Money (M0) increased from 7.91 trillion TZS in 2021 to 11.04 trillion TZS in 2024 (40% increase), ensuring liquidity in the banking sector.
• Broad Money (M2) expanded from 24.77 trillion TZS to 35.50 trillion TZS, showing more cash circulation and financial inclusion.
• Extended Broad Money (M3) grew from 32.12 trillion TZS to 47.09 trillion TZS, supporting increased lending and economic transactions.

4. Foreign Currency Deposits (FCD) Growth – Investor Confidence

• Foreign currency deposits rose from 7.35 trillion TZS in 2021 to 11.58 trillion TZS in 2024, indicating a growing trust in the banking sector.
• In 2024, foreign deposits reached 4.35 billion USD, reflecting an increase in foreign investment and trade activity.

5. Recovery of Foreign Financial Assets – Improved External Stability

• While foreign financial assets declined from 12.24 trillion TZS in 2021 to 9.66 trillion TZS in 2023, they recovered to 12.09 trillion TZS in 2024.
• This recovery suggests improved foreign exchange reserves, better trade balance management, and reduced external vulnerabilities.

6. Increased Government Borrowing for Development

• Government net claims increased from 6.50 trillion TZS in 2021 to 11.57 trillion TZS in 2024, indicating more public investment in infrastructure, education, and healthcare.
• While borrowing increased, if well-managed, it supports economic growth through capital projects that drive long-term productivity.

Conclusion – Tanzania’s Economic Strength

From 2021 to 2024, Tanzania has demonstrated consistent economic growth, supported by:
✅ 71% growth in domestic credit, fueling business expansion.
✅ 72% rise in private sector lending, boosting investments and job creation.
✅ Strong money supply growth, ensuring liquidity and financial inclusion.
✅ Increasing foreign currency deposits, reflecting confidence in the banking system.
✅ Recovery of foreign financial assets, improving economic resilience.

Table summary of Tanzania’s economic performance indicators from 2021 to 2024, showing why the economy is performing well:

Key Takeaways from the Table

✅ 71% growth in domestic credit – More loans for businesses and households, leading to higher economic activity.
✅ 72% increase in private sector lending – Boosts business expansion, investment, and job creation.
✅ Broad money (M2 & M3) increased by 43%-47% – Showing higher liquidity and financial inclusion.
✅ Foreign deposits (FCD) rose by 57%, indicating growing investor confidence in Tanzania’s economy.
✅ Foreign financial assets recovered in 2024, improving external stability.
✅ Government credit rose by 78%, signaling investment in infrastructure and development projects.