Tanzania’s tourism sector has demonstrated remarkable resilience and growth over the past decade. From steady increases in visitor numbers pre-COVID-19 to a sharp decline during the pandemic, the industry has rebounded with record-breaking arrivals in 2023. Key source markets span East Africa, Western countries, and emerging Asian economies, reflecting diverse appeal. With ongoing recovery efforts and strategic investments, Tanzania is poised to solidify its position as a premier global destination, projecting visitor numbers to reach up to 3 million by 2030.

Annual Visitor Numbers (2015–2024)

Key Trends:

1. Steady Growth (2015–2019)
   • Annual growth rates ranged from 3.3% to 13.5%.
   • Peak number in 2019: 1,510,151 visitors, before the COVID-19 pandemic.
2. COVID-19 Impact (2020)
   • Visitor numbers fell by 58.9%, down to 620,867.
3. Recovery Phase (2021–2023)
   • 2021: A 48.6% recovery, reaching 922,692 visitors.
   • 2022: A robust 57.7% growth, reaching 1,454,920 visitors.
   • 2023: Achieved a record high of 1,806,359 visitors (24.2% growth).
4. 2024 Partial Data
   • Current visitor numbers stand at 1,560,641, with potential to grow depending on the remaining months.

Visitor Distribution (2024):

Top Source Markets

• East Africa:
  • Kenya: 156,674 visitors (10% of total visitors).
  • Burundi: 153,497 visitors (9.8% of total visitors).
• Western Countries:
  • USA: 112,579 visitors (7.2%).
  • France, Germany, Italy, UK: Combined total 297,823 visitors (19% of total visitors).
• Asian Markets:
  • China: 54,284 visitors (3.5%).
  • India: 48,679 visitors (3.1%).
• Other African Countries:
  • DRC: 49,963 visitors (3.2%).

Key Observations and Insights

1. Regional Breakdown:
   • East African countries dominate tourism numbers, highlighting strong regional ties and cross-border travel.
   • Western nations account for significant long-haul arrivals, driven by Tanzania’s appeal for safari and wildlife tourism.
   • Asian markets, though smaller, show consistent growth, reflecting the global rise in outbound tourism from China and India.
2. Economic Impacts of COVID-19:
   • Tourism's sharp decline in 2020 significantly affected GDP, foreign exchange earnings, and employment. The partial recovery in 2021 was supported by eased travel restrictions and successful vaccination campaigns globally.
3. Projected Growth (to 2030):
   • Assuming 8% annual growth, visitor numbers could rise to:
     • 2025: 1.94 million visitors.
     • 2030: 2.5–3 million visitors.
   • These projections hinge on stability in global travel trends, infrastructure improvement, and marketing efforts.

Figures for Context:

• Compound Growth Analysis (2015–2019):
  • Total visitors in 2015: 1,137,182.
  • Total visitors in 2019: 1,510,151.
  • Cumulative growth: 32.8%.
• Post-COVID Growth (2020–2023):
  • Visitors in 2020: 620,867.
  • Visitors in 2023: 1,806,359.
  • Cumulative recovery: 191%.
• Market Contributions (2024 Partial Year):
  • Top 5 countries combined contribute 652,850 visitors, accounting for 41.8% of total visitors.

Strategic Recommendations for Growth

1. Market Diversification: Focus on attracting more visitors from emerging markets such as India and China.
2. Infrastructure Investment: Improve airports, roads, and tourist facilities to enhance the visitor experience.
3. Marketing Campaigns: Strengthen digital marketing and participation in global travel expos targeting high-potential markets like Western Europe and North America.
4. Regional Collaboration: Leverage the East African Community (EAC) framework to promote cross-border tourism packages.

The detailed analysis of Tanzania's tourism data reveals several critical insights:

1. Steady Pre-COVID Growth (2015–2019)

• Tanzania experienced consistent growth in tourism numbers before the pandemic, indicating a positive trajectory driven by:
  • Increased global awareness of Tanzania’s attractions, including Serengeti, Zanzibar, and Mount Kilimanjaro.
  • Improved marketing efforts and participation in international tourism expos.
  • Political stability and regional peace.

What it tells:
Tourism was becoming a critical driver of Tanzania’s economy, contributing significantly to GDP and employment. The country's reputation as a premier safari and cultural tourism destination was solidifying globally.

2. Severe Impact of COVID-19 (2020)

• The sharp decline (58.9%) in visitor numbers in 2020 reflects:
  • The global halt in travel due to lockdowns and health concerns.
  • Dependency on international markets, which were heavily disrupted.

Tanzania’s tourism industry is vulnerable to global disruptions. A lack of domestic tourism reliance and a high dependence on international travelers amplified the economic shock.

3. Robust Recovery (2021–2023)

• The recovery trend, with record numbers in 2023, highlights:
  • Resilience of the tourism sector and effective reopening strategies.
  • Strong demand for travel to natural and open-space destinations post-pandemic.

Tanzania’s tourism appeal remains strong. Efforts to restore confidence, including health safety measures and international marketing campaigns, were successful.

4. Changing Source Markets (2024 Data)

• The dominance of East African countries (Kenya, Burundi) in visitor numbers suggests:
  • Cross-border ease of travel and cultural ties.
  • Growing regional tourism contributing to stability in numbers.
• Significant representation from Western countries (USA, France, Germany, UK) shows:
  • Continued global interest in Tanzania’s wildlife and safari offerings.
• Contributions from China and India point to growing engagement with emerging markets.

There’s a balanced mix of regional and international visitors, reducing over-reliance on any single market. However, opportunities exist to further tap into Asian and regional tourism.

5. Growth Projections (2025–2030)

• Assuming 8% annual growth, reaching 2.5–3 million visitors by 2030 is feasible, driven by:
  • Continued investment in tourism infrastructure.
  • Expanding marketing efforts globally.
  • Enhancing offerings to cater to diverse visitor interests.

Tanzania has immense potential for growth, but achieving these projections will require addressing challenges like infrastructure gaps, environmental sustainability, and competition from other African destinations.

6. Tourism’s Economic Role

• A high reliance on tourism emphasizes its role as:
  • A major foreign exchange earner.
  • A significant employer in sectors like hospitality, transport, and craft industries.

Tourism is a pillar of Tanzania’s economic growth. Diversifying products (e.g., eco-tourism, cultural tourism) and markets will make the sector more resilient.

Overall Takeaways

• Tanzania’s tourism industry has strong foundations, with an upward growth trajectory disrupted only by COVID-19.
• The industry is diversifying in source markets, but further efforts are needed to enhance sustainability and reduce vulnerabilities to global shocks.
• Strategic investments and innovative marketing will ensure Tanzania remains competitive in the global tourism landscape.

Tanzania's Tourism Trends: Growth, Challenges, and Opportunities

Annual Tourism Numbers (2015–2024)

Top 10 Countries Visiting Tanzania in 2024

Key Observations

• Steady Growth Pre-COVID (2015–2019): Tourism numbers grew consistently with the highest growth rates in 2016 (13%) and 2018 (13.5%).
• COVID-19 Impact (2020): Visitor numbers dropped drastically by 58.9% due to global travel restrictions.
• Post-COVID Recovery: A strong recovery trajectory began in 2021, with 2023 recording the highest annual visitors to date.
• Regional Importance: East African countries (Kenya and Burundi) dominate the top source markets, contributing significantly to overall visitor numbers.
• Western and Asian Contributions: Western countries (USA, France, Germany, Italy, UK) and Asian markets (China, India) make up a substantial portion of international tourists.

Projection to 2030

• With an assumed 8% annual growth rate, Tanzania’s tourism numbers could reach approximately 2.5–3 million visitors by 2030, contingent on stable global conditions and effective marketing efforts.

Note: *2024 data is partial and may be updated with end-of-year statistics.

In September 2024, Tanzania's bank lending rate rose slightly to 12.92% from 12.79% in August, reflecting cautious adjustments in monetary policy. This rate, slightly below the long-term average of 13.09%, highlights the Bank of Tanzania's efforts to manage inflation and stabilize the economy while maintaining a moderately high cost of borrowing for businesses and consumers.

1. Current Trends (2024)

• In September 2024, the bank lending rate increased to 12.92%, up slightly from 12.79% in August 2024.
• This indicates a monthly increase of 0.13 percentage points, reflecting a tightening of credit conditions or adjustments to monetary policy.

2. Historical Averages (2003-2024)

• Over the last 21 years, the average bank lending rate in Tanzania has been 13.09%.
• This average suggests that the current lending rate of 12.92% is slightly below the long-term trend, signaling a relatively moderate borrowing cost in the historical context.

3. Extreme Values

• Highest Rate: The lending rate peaked at 17.91% in September 2017, likely due to monetary tightening or inflation control measures.
• Lowest Rate: The lending rate hit a record low of 7.53% in March 2004, reflecting favorable credit conditions and possibly expansive monetary policy.

4. Insights from Changes

• The recent uptick in 2024 may indicate cautious monetary policy adjustments, aiming to balance economic growth with inflation control.
• Historical fluctuations reflect responses to various economic conditions, including:
  • Inflation trends: High lending rates often align with inflationary pressures.
  • Monetary policy stance: Changes in the Central Bank’s policies to control liquidity and stabilize the Tanzanian shilling.
  • Economic growth phases: Lower rates during growth-supportive periods and higher rates during economic cooling.

5. Implications for Borrowers and Businesses

• At 12.92%, borrowing costs remain significant for businesses and consumers.
• Compared to the record high of 17.91%, the current rate offers some relief, but it’s still far from the record low of 7.53%.

The bank lending rate data for Tanzania tells several important economic and monetary policy stories:

1. Monetary Policy Trends

• Current Tightening: The slight increase from 12.79% to 12.92% in September 2024 suggests that the Bank of Tanzania is either:
  • Managing inflation risks.
  • Controlling excessive credit growth.
• This indicates a cautious tightening or stabilization phase in monetary policy.

2. Credit Environment

• Borrowing Costs: A lending rate of 12.92% reflects a relatively high cost of borrowing, which can:
  • Discourage excessive credit growth, curbing inflation.
  • Limit small businesses and consumers’ ability to access affordable loans.
• Compared to historical lows (7.53% in 2004), current rates make credit more expensive, potentially affecting economic activity.

3. Historical Context

• Long-Term Average (13.09%):
  • The current rate is slightly below the historical average, suggesting that borrowing conditions are moderately stable but not overly restrictive.
• Extreme Variations:
  • The record high (17.91% in 2017) occurred during a period of high inflation and stringent monetary policy.
  • The record low (7.53% in 2004) reflects a time of looser monetary policy aimed at boosting economic growth.

4. Implications for Economic Growth

• For Businesses:
  • High lending rates increase the cost of capital, particularly for sectors dependent on bank loans, such as SMEs and agriculture.
  • Limits expansion plans and investment in capital-intensive projects.
• For Consumers:
  • Higher rates increase borrowing costs, impacting personal loans, mortgages, and spending power.

5. Signals to Stakeholders

• To Policymakers: The Bank of Tanzania might be balancing inflationary pressures against the need to support economic growth. Maintaining rates slightly below the long-term average reflects a careful approach.
• To Investors: A moderately high lending rate suggests a relatively stable financial system, but caution is needed in sectors sensitive to borrowing costs.
• To the Public: Fluctuations in rates can affect consumer confidence, especially if they expect prolonged high borrowing costs.

Tanzania ilirekodi ongezeko la 2.5% la bei za chakula mnamo Oktoba 2024, ambalo ni chini sana ikilinganishwa na wastani wa Afrika Mashariki na pia chini ya nchi zenye mfumuko wa bei ya juu kama Kenya (4.3%) na Burundi (22.5%). Hili ni mafanikio makubwa ukilinganisha na wastani wa kihistoria wa 7.79% (2010–2024). Makadirio yanaonyesha kushuka zaidi kwa mfumuko wa bei hadi kufikia 1.4% mwaka 2025 na 1.1% mwaka 2026, ikisisitiza uimara wa kilimo cha Tanzania na sera bora za kiuchumi. Barani Afrika, ambapo mfumuko wa bei ya chakula unaweza kufikia viwango vya juu kama 105% (Zimbabwe), Tanzania inajitokeza kama mfano wa uthabiti wa bei za chakula katika kanda.

Muhtasari

• Oktoba 2024: Mfumuko wa bei ya chakula uliongezeka kwa 2.5% ikilinganishwa na mwaka uliopita.
• Muktadha wa Kihistoria: Wastani wa 7.79% (2010–2024), kiwango cha juu zaidi kikiwa 27.84% (Januari 2012) na cha chini kabisa 0.10% (Machi 2019).
• Makadirio ya Muda Mfupi: Inatarajiwa kushuka hadi 2.20% kufikia robo ya mwisho ya 2024.
• Makadirio ya Muda Mrefu: Inatarajiwa kushuka zaidi hadi 1.40% mwaka 2025 na 1.10% mwaka 2026.

Nafasi ya Tanzania Afrika Mashariki

Miongoni mwa nchi za Afrika Mashariki, Tanzania inaonyesha kiwango cha chini cha mfumuko wa bei ya chakula, ikiizidi kwa mbali nchi kama Kenya (4.3%) na Burundi (22.5%):

• Rwanda: -5.8% (mfumuko wa bei hasi).
• Uganda: -2.1% (mfumuko wa bei hasi).
• Tanzania: 2.5%.
• Kenya: 4.3%.
• Burundi: 22.5%.

Utulivu huu wa bei za chakula Tanzania unadhihirisha usimamizi bora wa mnyororo wa usambazaji, athari za wastani za hali ya hewa, na kuongezeka kwa uzalishaji wa chakula.

Nafasi ya Tanzania Barani Afrika

Kwa muktadha mpana wa Afrika, kiwango cha mfumuko wa bei ya chakula cha Tanzania cha 2.5% kiko chini ya wastani wa kikanda, ambapo baadhi ya nchi zinakumbana na mfumuko wa bei wa tarakimu mbili:

• Nchi zenye Mfumuko wa Bei wa Juu: Zimbabwe (105%), Malawi (43.5%), Sudan Kusini (96.4%), na Nigeria (39.16%).
• Nchi zenye Mfumuko wa Bei wa Chini: Rwanda (-5.8%), Seychelles (-0.2%), na Morocco (0.3%).
• Wastani: Nchi kama Afrika Kusini (3.6%) na Mauritius (8.4%) zipo kati ya viwango vya juu na vya chini.

Mambo Muhimu

• Nafasi ya Kanda: Kiwango cha mfumuko wa bei ya chakula cha Tanzania ni cha chini ukilinganisha na nchi nyingi za Afrika Mashariki na Afrika, kikionyesha uthabiti wa kiuchumi na kilimo.
• Muktadha wa Ulimwengu: Wakati Afrika inakabiliwa na changamoto za mabadiliko ya tabianchi na mishtuko ya kiuchumi, makadirio ya Tanzania ya kushuka kwa mfumuko wa bei ni ya kuvutia licha ya changamoto za kimataifa za usambazaji wa chakula.

Fursa kwa Tanzania

• Kuimarisha Usalama wa Chakula: Uwekezaji endelevu katika kilimo na miundombinu unaweza kuimarisha utulivu wa bei zaidi.
• Uongozi wa Kanda: Kwa bei thabiti za chakula, Tanzania inaweza kuwa kiongozi katika usafirishaji wa chakula Afrika Mashariki na kusaidia majirani wenye mfumuko wa bei wa juu.

Tanzania recorded a 2.5% increase in food prices in October 2024, significantly lower than the East African average and well below high-inflation countries like Kenya (4.3%) and Burundi (22.5%). This marks a notable achievement compared to its historical average of 7.79% (2010–2024). Projections indicate further declines to 1.4% in 2025 and 1.1% in 2026, underscoring Tanzania's agricultural resilience and effective economic policies. In a continent where food inflation can reach extremes like Zimbabwe’s 105%, Tanzania stands out as a model for regional food price stability.

• October 2024: Food inflation increased by 2.5% year-over-year.
• Historical Context: Averaged 7.79% (2010–2024), with a peak of 27.84% (January 2012) and a record low of 0.10% (March 2019).
• Short-Term Forecast: Predicted to decline to 2.20% by Q4 2024.
• Long-Term Projection: Expected to decrease further, reaching 1.40% in 2025 and 1.10% in 2026.

Position in East Africa

Among East African countries, Tanzania exhibits relatively low food inflation, significantly outperforming nations like Kenya (4.3%) and Burundi (22.5%):

• Rwanda: -5.8% (deflation)
• Uganda: -2.1% (deflation)
• Tanzania: 2.5%
• Kenya: 4.3%
• Burundi: 22.5%

Tanzania's stability in food inflation reflects effective supply chain management, moderate climate impacts, and improved food production efforts.

Position in Africa

In a broader African context, Tanzania's 2.5% food inflation is below the regional average, where some countries experience double-digit inflation:

• High Inflation Countries: Zimbabwe (105%), Malawi (43.5%), South Sudan (96.4%), and Nigeria (39.16%).
• Low Inflation Countries: Rwanda (-5.8%), Seychelles (-0.2%), and Morocco (0.3%).
• Median Range: Countries like South Africa (3.6%) and Mauritius (8.4%) fall between the extremes.

Key Observations

• Regional Position: Tanzania's food inflation rate is lower than most East African and African nations, highlighting relative economic and agricultural stability.
• Global Context: While Africa faces challenges like climate change and economic shocks, Tanzania’s projections for declining food inflation are notable in the face of global food supply disruptions.

Opportunities for Tanzania

• Enhancing Food Security: Continued investment in agriculture and infrastructure could stabilize inflation further.
• Regional Leadership: With stable food prices, Tanzania could lead East Africa in food exports, aiding neighbors with high inflation.

Insights from Tanzania's Food Inflation and Comparative Data

1. Economic Stability in Tanzania
   • Low food inflation (2.5%) compared to regional and continental peers indicates price stability in essential commodities.
   • Reflects resilience in food supply chains, stable production, and moderate external pressures, such as global commodity price fluctuations.
2. East Africa Advantage
   • Tanzania outperforms key regional players like Kenya (4.3%) and Burundi (22.5%), suggesting that the country is effectively managing factors like climate risks and import dependencies.
   • The negative inflation in Rwanda (-5.8%) and Uganda (-2.1%), although better, may signify deflation or suppressed demand, which could indicate potential economic slowdowns.
3. Africa-Wide Comparison
   • Tanzania's inflation trends align more with stable economies like Mauritania (1.6%) and Cape Verde (2.4%), rather than volatile nations like Nigeria (39.16%) or Zimbabwe (105%).
   • This positions Tanzania as a relatively stable market within the African food sector.
4. Positive Outlook
   • Projected declines in food inflation to 1.4% (2025) and 1.1% (2026) indicate strong economic policy frameworks and growth in agricultural productivity.
   • This stability provides an opportunity for Tanzania to attract investment in agri-business and position itself as a regional food supplier.
5. Challenges and Caution
   • While inflation is low, Tanzania must maintain focus on:
     • Weather impacts: East Africa remains prone to droughts and floods.
     • Global pressures: Rising global oil prices could indirectly affect food costs.
     • Demand management: Ensuring food inflation reflects healthy demand, not oversupply or stagnation.
6. Broader Implications
   • For households: Low inflation means affordable food, reducing pressure on low-income families.
   • For investors: A stable inflation environment signals reduced risks for agricultural investments.
   • For policymakers: A need to ensure inflation reductions are sustainable, balancing supply and demand without undercutting farmer earnings.

Conclusion

Tanzania's food inflation trends suggest economic stability, policy effectiveness, and potential for growth in the agricultural sector. It also positions the country as a leader in regional food security, capable of influencing East Africa's economic trajectory.

Bei ya umeme nchini Tanzania, kwa TZS 356.32 kwa kila kWh, inaifanya kuwa chaguo nafuu katika Afrika Mashariki, ikilinganisha gharama na maendeleo ya miundombinu. Ni nafuu zaidi kuliko Uganda, Rwanda, na Kenya, lakini juu kuliko Ethiopia na Sudan ambazo zinapata ruzuku kubwa kutoka serikalini. Bei hii inasaidia ukuaji wa viwanda na uwekezaji huku ikihakikisha upanuzi endelevu wa sekta ya nishati. Ushindani huu, ukichangiwa na maboresho endelevu, unaiimarisha Tanzania kama kitovu cha viwanda vinavyotumia nishati nyingi katika kanda.

1. Bei ya Umeme Nchini Tanzania ni ya Wastani

• Kwa TZS 356.32 kwa kila kWh, bei ya umeme wa Tanzania iko katika kiwango cha kati:
  • Nafuu kuliko Uganda, Rwanda, na Kenya, hivyo inawavutia kaya na viwanda katika eneo hilo.
  • Juu kuliko Ethiopia na Sudan, ambazo zinanufaika na ruzuku au gharama za chini za uzalishaji.

2. Ushindani wa Kikanda

• Tanzania imejipanga vyema kwa shughuli za viwanda na uchumi ikilinganishwa na majirani kama Kenya (TZS 4,843.30 kwa kila kWh) kutokana na bei nafuu ya umeme.
• Hata hivyo, inaweza kushindana na nchi kama Ethiopia (TZS 651.02) na Sudan (TZS 1,020.43), ambazo bei zao za chini sana zinaweza kuvutia viwanda vinavyotumia nishati nyingi.

3. Uwiano Kati ya Gharama na Miundombinu

• Bei inaonyesha miundombinu inayoendelea ya Tanzania na utegemezi kwenye vyanzo mbalimbali vya nishati kama umeme wa maji, gesi asilia, na nishati jadidifu.
• Ingawa bei sio ya chini kabisa, inatoa usawa unaowezesha uwekezaji endelevu katika miundombinu ya nishati.

4. Fursa za Uwekezaji

• Bei ya ushindani inafanya Tanzania kuwa kivutio kwa:
  • Viwanda vinavyotumia nishati nyingi kama viwanda vya uzalishaji na uchimbaji madini.
  • Usafirishaji wa umeme kwenda nchi jirani zenye bei ya juu kama Kenya na Rwanda, ikiwa uwezo wa uzalishaji utaongezeka.

5. Changamoto za Upatikanaji wa Umeme kwa Wote

• Ingawa bei ni ya wastani, Tanzania lazima ihakikishe:
  • Ugavi wa uhakika, kwani kukatika kwa umeme na tofauti za upatikanaji bado ni changamoto vijijini.
  • Juhudi za kuendelea kupanua mtandao wa usambazaji na kuboresha ufanisi bila kuwabebesha watumiaji mzigo mkubwa.

6. Tanzania Katika Muktadha wa Afrika

• Ikilinganishwa na DR Congo (TZS 1,273.58) au Afrika Kusini (TZS 4,124.81):
  • Tanzania inatoa huduma ya kuaminika zaidi kuliko DR Congo, licha ya kuwa na bei ya juu kidogo.
  • Bado ni nafuu kuliko Afrika Kusini, ikitoa faida ya ushindani katika kuvutia biashara.

Hitimisho Muhimu

1. Bei ya wastani ya umeme nchini Tanzania inatoa uwiano kati ya gharama nafuu na mahitaji ya maendeleo.
2. Nchi ina ushindani wa kikanda, hasa ikilinganishwa na majirani wa Afrika Mashariki.
3. Kuna nafasi ya kuboresha uhakika wa ugavi, upatikanaji, na ufanisi wa gharama ili kukuza uchumi zaidi.

Bei ya Umeme Nchini Tanzania (Machi 2024)

Bei ya umeme nchini Tanzania ni TZS 356.32 kwa kila kWh

• Iko katika kiwango cha kati duniani.
• Juu kidogo kuliko baadhi ya nchi jirani za Afrika Mashariki, lakini chini ya wastani wa kimataifa na wengi wa nchi za Afrika.

Ulinganisho na Nchi za Afrika Mashariki

Maelezo Muhimu:

• Bei ya umeme nchini Tanzania ni nafuu zaidi kuliko Uganda, Rwanda, na Kenya.
• Ethiopia na Sudan zinazo bei za chini kabisa kutokana na ruzuku za serikali na uzalishaji wa ndani.

Ulinganisho na Nchi Nyingine za Afrika

Maelezo Muhimu:

• Bei ya Tanzania ni ya ushindani ikilinganishwa na nchi nyingi za Afrika.
• Nigeria na DR Congo zina bei za chini lakini zinakutana na changamoto za uhakika na upatikanaji wa umeme.
• Afrika Kusini na Ghana, ingawa zimetengenezwa zaidi, zinatoza bei za juu.

Mambo Yanayoathiri Bei ya Umeme Nchini Tanzania

1. Vyanzo vya Nishati: Tanzania inategemea mchanganyiko wa nishati ya maji, gesi asilia, na vyanzo jadidifu.
2. Ruzuku: Ruzuku ndogo ikilinganishwa na nchi kama Ethiopia na Nigeria.
3. Miundombinu: Maboresho endelevu katika mifumo ya uzalishaji na usambazaji.
4. Muktadha wa Kiuchumi: Bei za kati zinaendana na mahitaji yanayokua na upanuzi wa uchumi.

Muktadha wa Kikanda na Kimataifa

• Bei za Chini Zaidi Duniani: Iran (TZS 4.83), Ethiopia (TZS 6.51).
• Bei ya Juu Afrika Mashariki: Kenya (TZS 15,560.93).
• Mojawapo ya Nchi za Kipekee Kimataifa: Denmark (TZS 85,392.44), inayosababishwa na uwekezaji mkubwa katika nishati jadidifu.

Athari kwa Tanzania

• Umeme Nafuu: Husaidia kuvutia uwekezaji na kukuza ukuaji wa viwanda.
• Fursa ya Marekebisho: Kuna nafasi ya kuboresha uhakika na upatikanaji bila kuongezea bei kwa kiasi kikubwa.
• Ushindani wa Kikanda: Bei ya ushindani ikilinganishwa na Afrika Mashariki inaiweka Tanzania katika nafasi nzuri kwa viwanda vinavyotumia nishati nyingi.

Tanzania’s electricity price, at $0.087 per kWh, positions it as a cost-effective choice within East Africa, balancing affordability and infrastructure development. Cheaper than Uganda, Rwanda, and Kenya, but higher than heavily subsidized Ethiopia and Sudan, Tanzania’s pricing supports industrial growth and investment while ensuring continued energy sector expansion. This competitive edge, coupled with ongoing improvements, strengthens Tanzania’s role as a regional hub for energy-intensive industries.

1. Tanzania's Electricity is Moderately Priced

• At $0.087 per kWh, Tanzania's electricity prices are in the middle range:
  • Lower than Uganda, Rwanda, and Kenya, making it more affordable for households and industries in the region.
  • Higher than Ethiopia and Sudan, which benefit from government subsidies or lower production costs.

2. Regional Competitiveness

• Tanzania is better positioned for industrial and economic activities compared to neighbors like Kenya ($0.255 per kWh) due to cheaper electricity.
• However, it may face competition from countries like Ethiopia ($0.003) and Sudan ($0.006), where extremely low prices could attract energy-intensive industries.

3. Balance Between Cost and Infrastructure

• The price reflects Tanzania's developing infrastructure and reliance on diverse energy sources like hydropower, natural gas, and renewables.
• While prices are not the lowest, they ensure a balance that supports ongoing investments in energy infrastructure.

4. Opportunities for Investment

• Competitive pricing makes Tanzania attractive for:
  • Energy-intensive industries like manufacturing and mining.
  • Regional exports of electricity to higher-cost neighbors like Kenya and Rwanda, if production capacity increases.

5. Challenges for Universal Access

• Though prices are moderate, Tanzania must ensure:
  • Reliable supply, as outages and access disparities persist in rural areas.
  • Continued efforts to expand the grid and improve efficiency without overburdening consumers.

6. Tanzania in the African Context

• Compared to DR Congo ($0.058) or South Africa ($0.182):
  • Tanzania offers better reliability than DR Congo, despite its higher price.
  • It remains cheaper than South Africa, giving it a competitive edge in attracting business.

Key Takeaways

1. Tanzania's moderate electricity prices strike a balance between affordability and development needs.
2. The country is regionally competitive, particularly compared to East African neighbors.
3. There is room for improvement in reliability, access, and cost-efficiency to boost economic growth further.

Electricity prices vary significantly across countries due to differences in energy sources, infrastructure, subsidies, and economic conditions.

Tanzania's Electricity Price (March 2024)

• $0.087 per kWh
  • Positioned in the mid-range globally.
  • Higher than some neighboring East African countries but lower than the global and many African averages.

Comparison with East African Countries

• Key Insights:
  • Tanzania's electricity is cheaper than Uganda, Rwanda, and Kenya.
  • Ethiopia and Sudan have the lowest prices, benefiting from subsidies and domestic production.

Comparison with Other African Countries

• Key Insights:
  • Tanzania's price is competitive compared to many African countries.
  • Nigeria and DR Congo have lower prices but face reliability and access challenges.
  • South Africa and Ghana, though more developed, charge higher prices.

Factors Affecting Tanzania's Prices

1. Energy Sources: Tanzania relies on a mix of hydropower, natural gas, and renewables.
2. Subsidies: Limited subsidies compared to countries like Ethiopia and Nigeria.
3. Infrastructure: Ongoing improvements in generation and distribution systems.
4. Economic Context: Mid-level prices align with the growing demand and economic expansion.

Regional and Global Context

• Cheapest Globally: Iran ($0.002), Ethiopia ($0.003).
• Highest in East Africa: Kenya ($0.255).
• Global Outlier: Denmark ($0.362), driven by renewable energy investments.

Implications for Tanzania

• Affordable Electricity: Helps in attracting investment and promoting industrial growth.
• Room for Adjustment: Potential to improve reliability and access without significant price hikes.
• Regional Competitiveness: Competitive pricing relative to East Africa positions Tanzania favorably for energy-intensive industries.

Kiwango cha mfumuko wa bei cha Tanzania cha asilimia 3.0 mnamo Oktoba 2024 kinaonyesha uthabiti mkubwa wa kiuchumi, kikizidi utendaji wa nchi nyingi za Afrika. Kwa makadirio ya kushuka zaidi hadi asilimia 2.5 ifikapo 2026, sera za fedha na bajeti za Tanzania zenye busara zinaiweka nchi hii kama sehemu shindani na ya kuvutia kwa uwekezaji na biashara katika Afrika Mashariki na kwingineko.

Muhtasari wa Mfumuko wa Bei wa Tanzania

1. Kiwango cha Sasa: Asilimia 3.0 (Oktoba 2024), ikishuka kutoka asilimia 3.1 mnamo Septemba 2024.
2. Muktadha wa Kihistoria:
   • Wastani (1999-2024): Asilimia 6.28.
   • Kiwango cha Juu: Asilimia 19.8 mnamo Desemba 2011.
   • Kiwango cha Chini: Asilimia 3.0 mnamo Novemba 2018.
3. Makadirio:
   • Mwisho wa 2024: Inatarajiwa kubaki asilimia 3.0.
   • 2025: Inakadiriwa kuwa asilimia 2.7.
   • 2026: Inakadiriwa kushuka hadi asilimia 2.5.

Ulinganisho na Nchi za Afrika Mashariki

• Kenya: Asilimia 2.7 (Oktoba 2024) – chini kidogo ya Tanzania.
• Uganda: Asilimia 2.9 (Oktoba 2024) – chini kwa kiasi kidogo.
• Rwanda: Asilimia 0.5 (Oktoba 2024) – chini kwa kiasi kikubwa.

Ulinganisho na Nchi za Afrika

• Nchi zenye Mfumuko wa Bei Mdogo:
  • Senegal: -0.2%.
  • Djibouti: -0.1%.
  • Rwanda: 0.5%.
• Nchi Zenye Kiwango Kinachofanana na Tanzania:
  • Msumbiji: 2.68%.
  • Libya: 2.7%.
  • Afrika Kusini: 2.8%.
• Nchi Zenye Mfumuko wa Bei wa Juu:
  • Zambia: 15.7%.
  • Ethiopia: 16.1%.
  • Ghana: 22.1%.
  • Nigeria: 33.88%.
  • Zimbabwe: 57.5%.
  • Sudan Kusini: 107%.

Maoni Muhimu

1. Afrika Mashariki: Tanzania inabaki na kiwango thabiti cha mfumuko wa bei katika eneo hili, ikiwa bora zaidi ya nchi kama Ethiopia na Sudan ambazo zinakabiliwa na mfumuko wa bei wa tarakimu mbili.
2. Afrika: Mfumuko wa bei wa Tanzania ni miongoni mwa ya chini zaidi barani Afrika, unaonyesha uthabiti wa sera za fedha na bajeti, ikilinganishwa na nchi kama Zimbabwe na Nigeria zinazokabiliana na mfumuko wa bei wa juu.
3. Mwelekeo wa Dunia: Kiwango cha sasa cha mfumuko wa bei Tanzania kinahusiana na mwelekeo wa kimataifa wa kupungua kwa mfumuko wa bei, hasa katika Masoko Yanayochipukia na Uchumi wa Nchi Zinazoendelea (EMDEs).

Mtazamo wa Kistratejia kwa Tanzania

1. Kudumisha mfumuko wa bei wa chini kunaboresha mvuto wa kiuchumi wa Tanzania kwa wawekezaji.
2. Kuendelea kuzingatia nidhamu ya kifedha na sera za fedha za busara kutasaidia Tanzania kudumisha uthabiti wa mfumuko wa bei, hivyo kuimarisha ukuaji wa uchumi licha ya changamoto za kimataifa.

Tanzania’s inflation rate of 3.0% in October 2024 highlights its remarkable economic stability, outperforming many African countries. With projections of further decline to 2.5% by 2026, Tanzania’s prudent fiscal and monetary policies position it as a competitive and attractive destination for investment and trade in East Africa and beyond.

Tanzania's Inflation Overview:

1. Current Rate: 3.0% (October 2024), a decrease from 3.1% in September 2024.
2. Historical Context:
   • Average (1999-2024): 6.28%.
   • Peak: 19.8% in December 2011.
   • Lowest: 3.0% in November 2018.
3. Projections:
   • End of 2024: Expected to remain at 3.0%.
   • 2025: Projected at 2.7%.
   • 2026: Projected at 2.5%.

Comparison with East African Countries:

• Kenya: 2.7% (October 2024) – slightly lower than Tanzania.
• Uganda: 2.9% (October 2024) – marginally lower than Tanzania.
• Rwanda: 0.5% (October 2024) – significantly lower.

Comparison with African Countries:

• Low Inflation Countries:
  • Senegal: -0.2%.
  • Djibouti: -0.1%.
  • Rwanda: 0.5%.
• Countries Similar to Tanzania:
  • Mozambique: 2.68%.
  • Libya: 2.7%.
  • South Africa: 2.8%.
• High Inflation Countries:
  • Zambia: 15.7%.
  • Ethiopia: 16.1%.
  • Ghana: 22.1%.
  • Nigeria: 33.88%.
  • Zimbabwe: 57.5%.
  • South Sudan: 107%.

Insights:

1. East Africa: Tanzania maintains a stable inflation rate within the region, performing better than countries like Ethiopia and Sudan, which face double-digit inflation.
2. Africa: Tanzania's inflation rate is among the lowest in the continent, reflecting stable monetary and fiscal policies compared to nations like Zimbabwe and Nigeria that struggle with high inflation.
3. Global Trends: The current inflation rate in Tanzania aligns with global trends of decreasing inflation, especially in Emerging Markets and Developing Economies (EMDEs).

Strategic Outlook for Tanzania:

1. Maintaining low inflation enhances Tanzania’s economic attractiveness for investment.
2. Continued focus on fiscal discipline and prudent monetary policy will help Tanzania sustain inflation stability, bolstering economic growth amidst global uncertainties.

Implications of Tanzania's Inflation Trends and Comparisons

1. Economic Stability:
   • Tanzania’s inflation rate of 3.0% reflects macroeconomic stability. It signals controlled price levels and effective management of monetary policy by the Bank of Tanzania.
2. Regional Competitiveness:
   • In East Africa, Tanzania’s inflation is comparable to Kenya (2.7%) and Uganda (2.9%), showing it is performing well within the region.
   • This makes Tanzania attractive for investments and trade compared to neighboring countries facing higher price volatility.
3. Low Inflation Advantages:
   • Consumers: Stable inflation preserves purchasing power, ensuring that basic goods and services remain affordable.
   • Businesses: Predictable price levels reduce uncertainty, encouraging investment and expansion.
   • Government: Low inflation helps manage public finances better as borrowing costs remain under control.
4. Comparison to Africa:
   • Tanzania is among the low-inflation countries in Africa, significantly better than nations like Nigeria (33.88%) or Zimbabwe (57.5%).
   • This highlights Tanzania as a model for price stability in Sub-Saharan Africa, enhancing its reputation among global investors.
5. Policy Success:
   • Sustained low inflation reflects effective fiscal policies, stable exchange rates, and good food supply management, vital for keeping inflation in check.
6. Projection Implications:
   • Future Outlook: Inflation is projected to decrease further to 2.7% in 2025 and 2.5% in 2026, indicating continued economic resilience.
   • Lower inflation will strengthen Tanzania’s position in the global market, offering confidence to foreign investors.
7. Risks to Watch:
   • External shocks like global oil price hikes or disruptions in food supply could increase inflation.
   • Regional instability or currency fluctuations could also affect inflation dynamics.

Conclusion

Tanzania’s controlled inflation tells a story of economic discipline, regional competitiveness, and future potential. It positions the country as a stable and attractive hub for business and investment in Africa.

As of September 2024, Tanzania's total external debt reached USD 32.89 billion, accounting for 73% of the country’s total national debt. The central government held the largest share of external debt at USD 25.43 billion (78.1%), with funds directed toward critical sectors like transport (21.5%) and social welfare (20.8%). Domestically, the government owed TZS 32.62 trillion, with Treasury bonds dominating at 78.9%. Despite strategic investments, reliance on the USD (67.4% of external debt) and limited funding for agriculture (5.1%) and tourism (1.6%) pose challenges to debt sustainability and inclusive economic growth.

1. External Debt

Key Figures

• Total External Debt Stock (Sept 2024): USD 32,890.0 million.
• Proportion of National Debt: 73%.
• Main Components:
  • Disbursed Outstanding Debt: USD 31,425.6 million.
  • Undisbursed Debt: USD 5,042.7 million.

Debt Stock by Borrowers

• Central Government: USD 25,428.6 million (78.1% of external debt).
• Private Sector: USD 5,993.2 million (21.9% of external debt).
• Public Corporations: USD 3.8 million (negligible share).

Use of Funds (Disbursed Outstanding Debt)

• Transport and Telecommunications: 21.5% – Largest allocation, highlighting the government's priority on improving connectivity and mobility.
• Social Welfare and Education: 20.8% – Significant focus on human capital development.
• Balance of Payments Support: 17.9% – Indicates reliance on external financing for stabilizing the country's foreign exchange reserves.
• Energy and Mining: 14.8% – Focus on infrastructure for energy and resource exploitation.
• Agriculture: 5.1% – Low share considering Tanzania's agriculture-driven economy.
• Industries: 3.7%.
• Finance and Insurance: 4.0%.
• Tourism: 1.6% – Surprisingly low given its economic importance.
• Real Estate and Construction: 4.8%.
• Other Uses: 5.8%.

Currency Composition

• US Dollar: 67.4% – Reflects high exposure to exchange rate fluctuations against the USD.
• Euro: 16.6%.
• Chinese Yuan: 6.3%.
• Other Currencies: 9.7%.

2. Internal (Domestic) Debt

Key Figures

• Total Domestic Debt Stock (Sept 2024): TZS 32,615.7 billion.
• Month-on-Month Change: Decreased by TZS 144.5 billion.
• Main Instruments:
  • Treasury Bonds: 78.9% – Dominates domestic debt instruments, preferred for their longer maturity periods.

Domestic Debt by Creditor

• Commercial Banks: 29.7% (TZS 9,678.8 billion) – Largest creditors, showing banking sector's key role in funding government activities.
• Bank of Tanzania: 20.5% (TZS 6,696.3 billion) – Central bank’s significant share indicates monetary policy alignment.
• Pension Funds: 27.6% (TZS 8,991.4 billion) – Reflects government reliance on long-term funds.
• Insurance Companies: 5.8% (TZS 1,904.2 billion).
• BOT’s Special Funds: 1.2% (TZS 389.0 billion).
• Others: 15.2% (TZS 4,956.0 billion) – Includes various smaller creditors.

Insights

1. Debt Composition: External debt forms a significant majority (73%), exposing the economy to foreign exchange risks, especially given the dominance of USD (67.4%).
2. Focus Areas of Debt Use: Prioritization of transport, telecommunications, social services, and energy aligns with Tanzania's development goals, though agriculture and tourism receive relatively smaller allocations.
3. Domestic Financing: Treasury bonds dominate, with commercial banks and pension funds as major participants, reflecting a stable domestic borrowing market.

The key insights into Tanzania's fiscal and economic dynamics:

1. Heavy Reliance on External Debt

• External Borrowing: Makes up 73% of total debt, indicating significant dependency on international sources for financing development projects and budgetary needs.
• Risks: High exposure to currency exchange rate fluctuations, especially with 67.4% of external debt denominated in USD. Any depreciation of the Tanzanian shilling could increase the cost of servicing the debt.

2. Focused Use of Funds

• Priority Sectors:
  • Transport, telecommunications, and social welfare (education and health) receive a combined 42.3% of external debt funding. This reflects strategic efforts to improve infrastructure and human capital.
  • Energy and mining account for 14.8%, essential for supporting industrialization and reducing power shortages.
• Underfunded Areas:
  • Agriculture (5.1%) and tourism (1.6%) receive smaller shares, despite their significance in Tanzania's GDP and employment. This could suggest underprioritization of these critical sectors or reliance on other forms of financing for them.

3. Dominance of Treasury Bonds in Domestic Debt

• Treasury bonds constitute 78.9% of domestic debt, reflecting:
  • A preference for long-term instruments that reduce refinancing risks.
  • A relatively well-developed domestic bond market to absorb government debt.
• Impact: Stable borrowing through domestic sources reduces reliance on volatile external sources but concentrates risk within the local financial system.

4. Key Domestic Creditors

• Commercial Banks and Pension Funds: Together hold over 57% of domestic debt, showing reliance on institutional investors for funding.
• Central Bank Role: The Bank of Tanzania (20.5%) plays a critical role in supporting government borrowing, reflecting alignment with monetary policy goals.

5. Debt Sustainability and Macro Risks

• Short-Term Indicators: While the focus on productive sectors like transport and energy could boost long-term growth, the high proportion of debt (external and domestic) demands careful management to avoid repayment challenges.
• Diversification Needs: The small allocation to tourism and agriculture may limit potential contributions from these sectors, which are key to inclusive growth and export earnings.
• Debt Service Pressures: Heavy USD dependency can amplify costs if global financial conditions tighten (e.g., rising interest rates or strengthening dollar).

Key Messages

• Opportunities: Investment in infrastructure, energy, and education positions Tanzania for future economic growth.
• Challenges: Managing debt sustainability, diversifying financing sources, and balancing sectoral priorities remain crucial to minimize risks and maximize development impact.

As of 31 October 2024, the Bank of Tanzania reported a 0.70% growth in total assets, reaching TZS 26.04 trillion, up from TZS 25.86 trillion in September. Key drivers included a 2.56% increase in cash reserves to TZS 6.03 trillion and a significant 11.00% rise in advances to the government to TZS 4.92 trillion, highlighting active government financing. However, total liabilities grew by 1.02% to TZS 23.19 trillion, driven by a 19% increase in bank and non-bank deposits, while equity declined by 1.86% due to lower reserves. This financial position underscores the BoT's role in stabilizing the economy while adapting to fiscal demands.

1. Assets

• Cash and Cash Equivalents: Increased from TZS 5,878,336,892 to TZS 6,028,657,113 (+2.56%).
• Special Drawing Rights (SDRs): Decreased slightly from TZS 5,836,763 to TZS 5,659,158 (-3.05%).
• Gold: Increased from TZS 84,475,916 to TZS 87,517,489 (+3.60%).
• Quota in IMF: Declined from TZS 1,462,735,502 to TZS 1,418,226,416 (-3.04%).
• Foreign Currency Marketable Securities: Decreased from TZS 8,536,478,436 to TZS 8,280,498,770 (-3.00%).
• Government Securities: Rose from TZS 1,949,033,712 to TZS 2,009,684,508 (+3.11%).
• Advances to Government: Increased significantly from TZS 4,436,239,821 to TZS 4,924,120,304 (+11.00%).
• Loans and Receivables: Dropped from TZS 1,165,276,684 to TZS 632,865,021 (-45.66%).
• Other Assets: Increased from TZS 1,056,699,639 to TZS 1,345,154,889 (+27.29%).

Total Assets: Grew marginally from TZS 25,861,049,022 to TZS 26,040,992,974 (+0.70%).

2. Liabilities

• Currency in Circulation: Increased from TZS 8,466,684,070 to TZS 8,589,148,419 (+1.44%).
• Deposits (Banks and Non-Bank Financial Institutions): Rose significantly from TZS 2,666,954,338 to TZS 3,174,614,584 (+19.01%).
• Deposits (Others): Increased from TZS 1,758,144,907 to TZS 2,105,619,381 (+19.74%).
• Foreign Currency Financial Liabilities: Dropped from TZS 6,114,091,872 to TZS 5,409,925,598 (-11.53%).
• BoT Liquidity Papers: Marginal increase from TZS 529,725,459 to TZS 530,743,366 (+0.19%).

Total Liabilities: Increased from TZS 22,951,123,876 to TZS 23,185,162,980 (+1.02%).

3. Equity

• Reserves: Decreased from TZS 2,809,925,146 to TZS 2,755,829,994 (-1.92%).
• Total Equity: Declined from TZS 2,909,925,146 to TZS 2,855,829,994 (-1.86%).

Summary

• Assets: Total value grew by TZS 179.94 billion (+0.70%), driven by increases in cash, government securities, and advances to the government. However, loans and receivables declined significantly.
• Liabilities: Total liabilities increased by TZS 234.04 billion (+1.02%), with significant contributions from bank and other deposits.
• Equity: Experienced a decline of TZS 54.10 billion (-1.86%) due to reduced reserves.

The Statement of Financial Position for the Bank of Tanzania (BoT) with key insights into the institution's financial health and operational activities as of October 2024.

1. Growth in Total Assets

• The increase in total assets (+0.70%) suggests the BoT has grown its resource base, albeit modestly.
• Key contributors include:
  • Cash and Cash Equivalents: Increased liquidity may reflect robust monetary policy or efficient operations.
  • Government Securities and Advances to the Government: Indicate a rising role in financing government operations, signaling increased public sector borrowing.

The BoT is actively involved in supporting government financial needs while maintaining a stable and growing asset base. However, declines in foreign marketable securities and IMF quotas suggest reduced exposure or participation in international holdings.

2. Liabilities Growth Outpaces Equity

• Liabilities grew (+1.02%) while equity declined (-1.86%). Significant increases in deposits from financial institutions and others highlight:
  • Increased trust and participation of banks and other entities in the BoT's activities.
  • A shift toward reliance on deposits to support financial operations.
• Reduction in foreign currency financial liabilities may point to lower external debt exposure.

The BoT is leveraging more local deposits and reducing international liabilities, which could enhance financial stability but might reduce reserves, reflected in the equity decline.

3. Decline in Loans and Receivables

• A sharp decrease (-45.66%) could mean:
  • Lower lending to local institutions.
  • Recovery or consolidation of prior loans.
• This impacts revenue streams from lending operations.

The BoT might be adopting a cautious approach to lending or focusing on other asset classes.

4. Currency in Circulation

• The modest increase in currency in circulation (+1.44%) suggests stable economic activity. This is a key indicator of public demand for cash and overall economic liquidity.

Economic transactions are steady, aligning with controlled monetary policy.

5. Drop in Reserves and Equity

• The decline in reserves (-1.92%) and total equity (-1.86%) could indicate:
  • Operational expenses or funding requirements that utilized part of the reserves.
  • An ongoing balancing act to support liabilities.

While the BoT remains solvent, reserve management might require attention to maintain long-term stability.

General Observations

• The BoT is playing a significant role in government financing and domestic monetary stability, likely in response to Tanzania's broader fiscal and economic needs.
• A focus on domestic liabilities, reduced foreign exposure, and increased cash holdings indicate prioritization of internal economic stability over external engagements.
• Declining equity and reserves suggest the need for careful balance between asset growth and financial sustainability.

Key Implication

The Bank of Tanzania's financial position reflects stability in monetary policy and active government support, but pressure on equity and reserves calls for prudent fiscal management to ensure long-term resilience.