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.

In Q3 2024, Africa’s private market saw 73 deals with a total disclosed value of $2.27 billion. The top 10 countries accounted for a significant portion of these transactions, led by Kenya and South Africa, each with 33% of the deal volume. Nigeria followed at 23%, while Egypt dominated North Africa with 18% of deals. Notably, Tanzania secured its place among the top 10, contributing 10% of deals in East Africa, driven by advancements in fintech and agriculture. These figures highlight the continent's growing appeal to investors focusing on localized opportunities and high-growth sectors.

Tanzania's Position in Africa's Private Investment Landscape

Regional Insights

1. East African Market Activity:
   • East Africa contributed 41% of Africa’s private market transactions in Q3 2024, ranking second to Southern Africa.
   • Within the region, Kenya dominated, contributing 80% of transactions, followed by Rwanda (15%) and Tanzania (10%).
2. Tanzania's Growing Investment Profile:
   • Fintech Leadership: NALA, a Tanzanian fintech company, raised $40 million in equity funding, emphasizing Tanzania’s emergence in tech innovation.
   • Sectoral Opportunities: Financial services accounted for 37% of deals in East Africa, while technology investments represented 60% of tech transactions across Africa.

Private Capital Trends

1. Sectoral Contributions:
   • Agriculture (15% of deals) remains vital, especially for countries like Tanzania, where it is a backbone of employment and food security.
   • Energy investments focused on renewables, aligning with Tanzania's commitment to sustainable energy solutions.
2. Debt Financing:
   • Debt financing was prevalent in agriculture and energy, comprising 79% of such deals, highlighting sectors where Tanzania could attract more capital.

Competitiveness and Economic Role

1. Strategic Positioning in East Africa:
   • Though Kenya leads, Tanzania’s growth in agriculture, fintech, and clean energy positions it as a rising economic player.
   • The country shares strong regional synergies with Kenya and Rwanda, providing opportunities for cross-border initiatives.
2. Potential for Broader Integration:
   • Tanzania’s focus on agriculture modernization and energy access supports regional goals of sustainability and economic inclusion.
   • Collaboration with dominant East African economies could amplify its investment appeal.

Strategic Implications for Tanzania

• Fintech Growth: Strengthening regulatory frameworks and promoting innovation in financial technology could drive more investments like NALA's success.
• Energy and Agriculture: Expanding clean energy projects and agriculture-focused initiatives can attract private capital in alignment with regional trends.
• Cross-Border Partnerships: Leveraging East Africa’s economic integration can enable Tanzania to secure multi-country deals and enhance its role in Africa’s investment landscape.

Key Takeaways

While Tanzania is not among the “Big 5” economies, its advancements in technology, agriculture, and energy sectors, coupled with a strategic location in East Africa, position it for growth. By fostering investor-friendly policies and focusing on high-growth sectors, Tanzania can increasingly attract private capital and cement its role as a vital player in Africa’s investment ecosystem.

Tanzania’s growing significance in sectors like agriculture and fintech, its regional role within East Africa, and the need to capitalize on strategic investments to increase competitiveness in Africa’s private investment landscape.

1. Emerging Investment Hub
   • Tanzania is gradually becoming a destination for private investments, particularly in fintech (e.g., NALA’s $40 million funding) and agriculture.
2. Sectoral Opportunities
   • Agriculture: With its importance to employment and food security, Tanzania remains an attractive destination for investments in this sector, especially in projects backed by debt financing.
   • Technology and Energy: The focus on renewable energy and tech innovation shows a shift toward modernizing the economy and improving energy access.
3. Regional Influence
   • Although Kenya dominates East Africa's transactions, Tanzania holds 10% of regional deals, reflecting growing investor interest. Collaborating with Kenya and Rwanda could further boost its visibility.
4. Competitive Challenges
   • Tanzania lags behind stronger economies like Kenya and Rwanda in East Africa. This underscores the need to enhance its investment climate, attract diverse funding, and encourage sectoral innovation.
5. Localized Investment Focus
   • The trend toward single-country investments signals an opportunity for Tanzania to attract investors who prioritize localized opportunities in high-potential sectors.
6. Strategic Next Steps
   • By improving infrastructure, regulatory frameworks, and regional partnerships, Tanzania can position itself as a key player in private capital flows within East Africa and beyond.

Top 10 African Countries by Deal Volume in Q3 2024

Key Insights

• Kenya and South Africa: Shared the top spot due to strong regional dominance.
• Tanzania: Emerging as a significant investment destination in East Africa.
• North Africa: Highly concentrated in Egypt, with limited contributions from other countries like Morocco.

Tanzania’s outstanding IMF credit of $853.3 million positions it as the third-largest borrower among East African Community (EAC) members, following Kenya ($3.02 billion) and Uganda ($992.8 million). This figure underscores Tanzania’s moderate reliance on IMF resources compared to Kenya’s significantly higher borrowing, which reflects its fiscal challenges. Rwanda and Burundi, with outstanding credits of $476.1 million and $100.6 million respectively, trail behind. Tanzania’s borrowing highlights a balanced approach, addressing financing needs while maintaining debt sustainability in the region.

• Outstanding Credit: $853,270,000 (approximately $853.3 million)
• Rank in East Africa: 3rd largest among East African Community (EAC) members.
• Context: This amount reflects Tanzania's reliance on IMF financing relative to regional peers.

East African Countries Comparison

1. Kenya: $3,022,009,900
   • Holds the highest outstanding IMF credit in East Africa.
   • Recently received an additional disbursement of $455.7 million, further elevating its position.
2. Uganda: $992,750,000
   • Second-highest in the region, with a credit position close to $1 billion.
3. Tanzania: $853,270,000
   • Third-largest, indicating moderate borrowing compared to Kenya and Uganda.
4. Rwanda: $476,141,140
   • Significantly lower than Tanzania but shows active use of IMF facilities.
5. Burundi: $100,600,000
   • The smallest credit position in the EAC, reflecting limited IMF engagement.

Insights

• Kenya's High Credit: Kenya’s large IMF borrowing aligns with its economic challenges, such as fiscal deficits and external imbalances. The additional disbursement highlights its need for ongoing support.
• Tanzania's Moderate Position: Tanzania's IMF credit is substantial but reflects a more conservative borrowing approach compared to Kenya. This aligns with its relatively stable macroeconomic environment in recent years.
• Rwanda and Burundi: Their smaller credit levels could indicate less reliance on IMF resources or limited access due to policy or capacity considerations.

Comparison with Other African Countries

• Key Context: Across Africa, countries like Egypt, Nigeria, and South Africa often have significant IMF credit levels due to their larger economies or ongoing economic reforms.
• Regional Variation: East African countries like Tanzania and Uganda show moderate use of IMF facilities, balancing economic reforms with external support.

The comparison of Tanzania's IMF credit position with other East African countries and its context within Africa highlights the following insights:

1. Economic Management and Policy Approach

• Tanzania's Moderate Position:
  • Tanzania's $853.3 million IMF credit suggests that the country has been relatively prudent in seeking external financing compared to Kenya and Uganda.
  • This aligns with Tanzania's historically cautious borrowing and stable macroeconomic management, focusing on long-term growth and sustainability.
  • The reliance on IMF funds indicates Tanzania is addressing external shocks or developmental financing gaps but is not over-leveraging.

2. Regional Dynamics

• Kenya's Dominance:
  • Kenya’s significantly higher credit position ($3 billion) shows its more immediate financial challenges, possibly driven by larger fiscal deficits, debt servicing pressures, or external imbalances.
  • This reliance might reflect Kenya’s prioritization of aggressive infrastructure development, which requires external support.
• Uganda vs. Tanzania:
  • Uganda's slightly higher credit ($992.8 million) points to slightly higher funding needs, perhaps due to different economic or social priorities.
• Rwanda and Burundi:
  • These countries' lower IMF credits reflect either limited access, smaller economies, or differing economic strategies, particularly Burundi's smaller borrowing capacity.

3. Tanzania's Position as a Balanced Borrower

• Being third in East Africa shows Tanzania strikes a balance between:
  • Using IMF funds to address short-term needs and maintaining sustainable debt levels.
  • Managing economic risks, avoiding excessive dependency, and maintaining room for further borrowing if needed.

4. Implications for Development and Reform

• Tanzania’s borrowing strategy indicates:
  • A focus on maintaining investor confidence and creditworthiness.
  • A potential readiness to address fiscal or external gaps while preserving economic stability.
  • Moderate IMF reliance reflects policy consistency in achieving economic targets, supporting reforms, and mitigating global economic risks like inflation or commodity price volatility.

5. Global and African Position

• In Africa, Tanzania's IMF credit indicates moderate external dependency compared to major borrowers like Kenya, South Africa, or Egypt, suggesting steady progress in economic resilience and diversified funding.

Key Takeaway

Tanzania’s IMF credit position signals cautious borrowing and economic stability compared to its peers, balancing development needs with sustainable debt management. This approach positions Tanzania favorably for long-term growth while maintaining flexibility to handle future challenges.

TANROADS’ top 10 infrastructure projects, valued at 1,846.422 Billion TZS, highlight a strategic focus on transformative investments between 2015 and 2021. The J.P. Magufuli Bridge, the most expensive project at 592.609 Billion TZS, underscores the prioritization of specialized, high-impact infrastructure. While projects like BRT Phase 2 Lot 1 focus on urban mobility with a cost of 189.4 Billion TZS, rural connectivity is efficiently addressed through cost-effective roadworks such as Komanga-Kasinde LOT2 and Kasinde-Mpanda LOT3, averaging just 1.24 Billion TZS/km. These investments reflect TANROADS’ commitment to improving transport, trade, and regional integration across Tanzania.

1. J.P. Magufuli Bridge

• Contract Value: 592.609 Billion TZS
• Signing Date: 29/07/2019
• Length: 3.20 km
• Cost per km: ~185.19 Billion TZS/km
• Key Features:
  • By far the most expensive project.
  • Nearly three times the cost of the second-highest project, due to its specialized infrastructure.
  • Likely serves as a critical link in Tanzania's national transportation network.

2. BRT Phase 2 Lot 1

• Contract Value: 189.400 Billion TZS
• Signing Date: 10/12/2018
• Length: 20.30 km
• Cost per km: ~9.33 Billion TZS/km
• Purpose: Developing Bus Rapid Transit (BRT) infrastructure for Dar es Salaam, enhancing urban mobility.

3. Lusitu-Mawengi LOT2

• Contract Value: 159.217 Billion TZS
• Signing Date: 22/08/2016
• Length: 50.00 km
• Cost per km: ~3.18 Billion TZS/km
• Key Features: Significant for regional connectivity.

4. Usesule-Komanga LOT1

• Contract Value: 158.800 Billion TZS
• Signing Date: 12/11/2017
• Length: 117.67 km
• Cost per km: ~1.35 Billion TZS/km
• Key Features: Covers a substantial length, making it cost-efficient on a per-km basis.

5. Widening of Morogoro Road (Kimara–Kibaha)

• Contract Value: 140.450 Billion TZS
• Signing Date: 13/07/2018
• Length: 19.20 km
• Cost per km: ~7.32 Billion TZS/km
• Type: Road widening project to reduce traffic congestion and enhance trade flow.

6. Komanga-Kasinde LOT2

• Contract Value: 140.000 Billion TZS
• Signing Date: 12/11/2017
• Length: 112.80 km
• Cost per km: ~1.24 Billion TZS/km
• Key Features: Among the lowest per-kilometer costs, reflecting efficient use of resources.

7. Kasinde-Mpanda LOT3

• Contract Value: 133.800 Billion TZS
• Signing Date: 12/11/2017
• Length: 108.00 km
• Cost per km: ~1.24 Billion TZS/km
• Key Features: Continues the connectivity corridor established by Komanga-Kasinde LOT2.

8. LOT 2: Ihumwa Dry Port – Matumbulu – Nala Section

• Contract Value: 120.860 Billion TZS
• Signing Date: 14/02/2020
• Length: 60.00 km
• Cost per km: ~2.01 Billion TZS/km
• Purpose: Facilitating logistics and trade efficiency through improved connectivity.

9. Moronga-Makete LOT2

• Contract Value: 110.446 Billion TZS
• Signing Date: 06/02/2017
• Length: 53.50 km
• Cost per km: ~2.06 Billion TZS/km

10. LOT 1: Nala – Veyula – Mtumba – Ihumwa Dry Port Section

• Contract Value: 100.840 Billion TZS
• Signing Date: 10/07/2020
• Length: 52.30 km
• Cost per km: ~1.93 Billion TZS/km

Key Observations and Trends

1. Cost Distribution

• Total Value: 1,846.422 Billion TZS
• Share of Total Budget: Represents 56.6% of all TANROADS projects analyzed.

2. Timeline Pattern

• 2017–2020 Dominance:
  • 2017: 3 projects
  • 2018: 2 projects
  • 2019: 1 project
  • 2020: 2 projects
  • 2016: 1 project

3. Project Types

• Specialized Infrastructure: High costs for unique projects like J.P. Magufuli Bridge and BRT Phase 2.
• Road Networks: Focus on connectivity and regional development.
• Urban Development: Projects like road widening (Kimara–Kibaha) address traffic and urban transit.

4. Cost Efficiency

• Highest Cost per km: J.P. Magufuli Bridge (~185.19 Billion TZS/km) reflects the complexity and engineering required.
• Lowest Cost per km: Komanga-Kasinde LOT2 and Kasinde-Mpanda LOT3 (~1.24 Billion TZS/km) due to simpler terrains or resource efficiency.

5. Geographic Distribution

• Projects cover diverse regions, from urban centers like Dar es Salaam to rural areas, ensuring equitable development.

The analysis of the top 10 TANROADS projects provides several insights into Tanzania's infrastructure priorities and investment strategy:

1. Strategic Investment Priorities

• Focus on High-Impact Projects: Projects like J.P. Magufuli Bridge and BRT Phase 2 Lot 1 emphasize TANROADS’ focus on large-scale, transformative infrastructure to support national and regional connectivity.
• Urban vs. Regional Development: Investments are balanced between improving urban transit systems (e.g., BRT, Morogoro Road) and expanding rural road networks (e.g., Komanga-Kasinde LOT2).

2. Cost Efficiency and Project Complexity

• High Costs for Specialized Projects:
  • J.P. Magufuli Bridge (~185.19 Billion TZS/km) showcases the cost-intensive nature of engineering projects requiring advanced technology and materials.
  • Urban projects like BRT also exhibit higher costs due to land acquisition and urban constraints.
• Economies of Scale in Road Projects: Projects like Komanga-Kasinde LOT2 and Kasinde-Mpanda LOT3 (~1.24 Billion TZS/km) demonstrate efficiency in rural road construction.

3. Timeline and Budget Focus

• Peak Signing Period (2017–2020): Most projects were signed during this period, signaling:
  • A deliberate push for infrastructure growth.
  • Alignment with Tanzania’s economic development plans, such as industrialization and regional trade facilitation.
• Budget Allocation Concentration: The top 10 projects account for 56.6% of the total budget, reflecting a focus on a few, impactful developments rather than dispersing resources.

4. Geographic Distribution

• Equitable Development: Projects are geographically distributed to ensure all regions benefit:
  • Urban improvements (e.g., BRT, Morogoro Road).
  • Rural connectivity (e.g., Komanga-Kasinde, Lusitu-Mawengi).

5. Infrastructure and Economic Growth Link

• Trade and Logistics: Projects like Ihumwa Dry Port – Matumbulu and Nala – Veyula – Mtumba enhance logistics, supporting Tanzania as a trade hub for East Africa.
• Urban Transit: BRT projects reduce urban congestion, enabling more efficient movement of people and goods.
• Regional Integration: Roads connecting rural areas (e.g., Kasinde-Mpanda) improve market access for farmers and small businesses.

TANROADS is executing a deliberate strategy to prioritize impactful, high-value projects that address both urban and rural needs. By focusing on cost efficiency, geographic inclusivity, and economic relevance, these projects significantly enhance Tanzania’s infrastructure, trade capacity, and economic growth potential.

Top 10 TANROADS Projects by Contract Value (2015–2021):

Key Observations:

• Highest Value: J.P. Magufuli Bridge dominates at 592.609 Billion TZS with the highest cost per km.
• Most Cost-Efficient: Komanga-Kasinde LOT2 and Kasinde-Mpanda LOT3, each at 1.24 Billion TZS/km.
• Balanced Focus: Mix of urban projects (e.g., BRT, Morogoro Road) and rural road networks to boost connectivity and trade.

Between 2015 and 2021, TANROADS has strategically increased infrastructure investments, focusing on high-value projects to drive Tanzania's economic growth. Over this period, the total investment reached 3,264.173 Billion TZS, with a peak average project value of 119.40 Billion TZS per project in 2019. In 2021, despite only 4 projects, the average remained high at 81.41 Billion TZS per project, emphasizing a shift toward impactful, large-scale infrastructure that strengthens national and regional connectivity.

Yearly Breakdown

2021

• Projects: 4 (Kasulu-Manyovu, Kanyani-Mvugwe, Mvugwe-Nduta, Nduta-Kabingo)
• Total: 325.64 Billion TZS
• Average per project: 81.41 Billion TZS

2020

• Projects: 9 (Nala-Ihumwa Dry Port, Nachingwea-Ruangwa, Sanzate-Natta)
• Total: 431.64 Billion TZS
• Average per project: 47.96 Billion TZS

2019

• Projects: 6 (J.P. Magufuli Bridge, Kazilambwa-Chagu, Kibondo Town Link)
• Total: 716.412 Billion TZS
• Average per project: 119.40 Billion TZS

2018

• Projects: 4 (BRT Phase 2, Songea Airport, Wami Bridge)
• Total: 434.72 Billion TZS
• Average per project: 108.68 Billion TZS

2017

• Projects: 10 (Key examples: Chunya-Makongolosi, Mtwara Airport, Shinyanga Airport)
• Total: 688.561 Billion TZS
• Average per project: 68.86 Billion TZS

2016

• Projects: 4 (Lusitu-Mawengi, Kidatu-Ifakara)
• Total: 378.878 Billion TZS
• Average per project: 94.72 Billion TZS

2015 and Earlier

• Projects: 12 (Kikusya-Ipinda-Matema, Nyakanazi-Kibondo)
• Total: 288.322 Billion TZS
• Average per project: 24.03 Billion TZS

Insights

1. Peak Year: The highest average project value was in 2019, highlighting significant investments in high-value infrastructure.
2. Earlier Projects: Projects before 2015 had much lower average values, reflecting either smaller scopes or older pricing trends.
3. Consistent Growth: Recent projects (2020–2021) show a steady increase in total project values with relatively fewer but higher-value contracts.

The figures reveals key insights about TANROADS' project trends and priorities over the years:

1. Investment Growth Over Time

• Increasing Project Value: The significant jump in total and average project values from earlier years (2015 and before) to recent years highlights growing investment in infrastructure. This may indicate:
  • Prioritization of large-scale projects.
  • Increased funding availability or enhanced budget allocation for road infrastructure.
• Strategic Focus on High-Value Projects: 2019 was a peak year with the highest average project value, showing TANROADS' focus on impactful projects.

2. Recent Trends (2020–2021)

• Fewer Projects, Higher Value: Despite fewer projects in 2021, the average value per project (81.41 Billion TZS) is high, reflecting a shift toward:
  • Strategic planning for major regional or national connectivity.
  • Enhanced quality and scope of individual projects.
• Funding Efficiency: A reduced number of projects but higher value per project suggests a deliberate focus on impactful and sustainable infrastructure.

3. Earlier Years (2015 and Before)

• Smaller Scopes and Budgets: Lower average project values likely indicate:
  • Smaller-scale or regionally focused road projects.
  • A phase of laying foundational infrastructure rather than ambitious nationwide connectivity goals.

4. Long-Term Trends

• Focus on Key Transport Corridors: Many projects link significant trade hubs or regions, such as:
  • Kasulu-Manyovu for international trade with Burundi.
  • Nala-Dry Port, enhancing transport and logistics efficiency in central Tanzania.
• Economic Growth Impact: Infrastructure development aligns with Tanzania’s broader economic goals, such as improving trade, reducing transport costs, and enabling regional integration.

What This Means

• Economic Development: Increased spending on high-value projects reflects efforts to bolster Tanzania’s economic growth by improving transport and logistics.
• Global Investment Attraction: The upward trend in project scope and value may help attract international investors, particularly for Public-Private Partnerships (PPPs).
• Strategic Planning: Recent years demonstrate a focus on fewer, well-targeted projects to maximize infrastructure impact.

The top 10 projects by contract value.

Key observations:

• The J.P. Magufuli Bridge is significantly more expensive than any other project
• BRT Phase 2 Lot 1 is the second most expensive project
• Most of these top 10 projects were signed between 2017-2020
• Infrastructure projects (bridges, roads, and transit) dominate the highest-cost projects

Tanzania inajitokeza kuwa miongoni mwa wapokeaji wakuu na wanufaika wa mara kwa mara wa Shirika la Maendeleo la Kimataifa (IDA), ikitumia ufadhili wa masharti nafuu kufanikisha malengo yake ya maendeleo. Kwa zaidi ya dola bilioni 16.7 zilizopatikana kupitia mikopo 288, Tanzania imefanikiwa kutumia rasilimali za IDA kushughulikia changamoto za kifedha, kupunguza umasikini, na kuimarisha miundombinu, ikithibitisha nafasi yake kama mdau muhimu katika maendeleo ya Afrika.

1. Nafasi ya Tanzania katika Ufadhili wa IDA

• Kiasi Kilichopokelewa: Tanzania inashikilia nafasi ya tatu miongoni mwa wapokeaji wakuu wa Afrika, ikiwa imepokea dola bilioni 16.7 tangu kuanza kushirikiana na IDA.
• Ulinganisho wa Kimataifa: Sehemu ya Tanzania ni kubwa, huku nchi chache nje ya Afrika (kama Vietnam na China) zikipata kiasi sawa cha ufadhili.
• Muktadha wa Kanda: Nchi za Afrika zinatawala ufadhili wa IDA, zikipokea asilimia 73% ya jumla ya mgao wa dola bilioni 210. Tanzania ni mnufaika mkubwa ndani ya muktadha huu.

2. Mara za Kufikiwa kwa Ufadhili

• Mara za Kufikiwa: Tanzania imefikia rasilimali za IDA mara 288, ikiongoza kwa idadi ya kufikiwa miongoni mwa nchi za Afrika.
• Ulinganisho: Wakati Ethiopia na Nigeria zinapokea zaidi kwa jumla, idadi ya mara Tanzania imefikia IDA inaonyesha hitaji lake endelevu na anuwai kwa ufadhili wa masharti nafuu.
• Wastani wa Kanda: Tanzania inaongoza kwa idadi ya kufikiwa ikilinganishwa na wastani wa Afrika (mara 120 kwa kila nchi), ikionyesha ushirikiano wake wa karibu na IDA.

3. Mwelekeo wa Ufadhili wa IDA

• Mchango wa Kukabiliana na Mshuko wa Uchumi: Tanzania, kama nchi nyingine za Afrika, ilitumia zaidi IDA wakati wa mizozo ya kiuchumi, ikiwemo:
  • Mpango wa Kupunguza Madeni ya Nchi Masikini (2001): Ufadhili ulisaidia kupunguza shinikizo la kifedha.
  • Mgogoro wa Kifedha wa Dunia (2009) na Janga la COVID-19 (2021): Kilele cha mikopo kilitoa msaada muhimu wa kifedha.
• Uendelevu: Tanzania imekuwa ikitumia kwa uthabiti rasilimali za IDA kwa miongo kadhaa kushughulikia changamoto za muda mrefu za maendeleo na matatizo ya kifedha ya muda mfupi.

4. Maana kwa Tanzania

• Ukuaji wa Kiuchumi: Ufikiaji endelevu wa ufadhili wa IDA ni muhimu kwa Tanzania kufadhili miundombinu, programu za kijamii, na utofauti wa kiuchumi.
• Utetezi wa Sera: Tanzania, kama mnufaika mkuu wa IDA, inaweza kuongoza juhudi za kikanda kushawishi mageuzi ya IDA na mgao wa rasilimali.

IDA imekuwa msingi wa kufadhili maendeleo ya Tanzania, ikibadilisha rasilimali zake kuwa vichocheo vya vipaumbele vya kiuchumi na changamoto.

Tanzania stands out as a top recipient and frequent beneficiary of the International Development Association (IDA), leveraging concessional financing to support its development goals. With over US$16.7 billion accessed through 288 engagements, Tanzania has effectively utilized IDA resources to address fiscal challenges, reduce poverty, and drive infrastructure growth, solidifying its position as a critical player in Africa’s development landscape.

Tanzania's significant engagement with the International Development Association (IDA), emphasizing its critical role in concessional financing for African countries.

1. Tanzania’s Position in IDA Funding

• Amount Received: Tanzania ranks among the top African recipients of IDA funding, receiving US$16.7 billion over its engagement history.
• Global Comparison: Tanzania's share is notable on the global scale, with only a few countries outside Africa (like Vietnam and China) receiving comparable amounts.
• Regional Context: African countries dominate IDA funding, collectively receiving 73% (US$210 billion) of total disbursements. Tanzania is a significant beneficiary within this context.

2. Frequency of Access

• Access Counts: Tanzania accessed IDA resources 288 times, ranking it the most frequent among African countries.
• Comparison: While Ethiopia and Nigeria receive more in absolute terms, Tanzania's frequency of access demonstrates its continuous and diverse need for concessional finance.
• Regional Average: Tanzania’s frequency is well above the African average (120 accesses per country), highlighting its proactive engagement with IDA.

3. Trends in IDA Funding

• Countercyclical Role: Tanzania, like other African countries, accessed IDA more frequently during economic crises:
  • Heavily Indebted Poor Countries Initiative (2001): A surge in funding addressed fiscal pressures.
  • Global Financial Crisis (2009) and COVID-19 Pandemic (2021): Significant spikes in lending provided much-needed financial support.
• Consistency: Tanzania has leveraged IDA’s concessional finance over decades to address long-term development challenges and short-term fiscal strains.

4. Implications for Tanzania

• Economic Growth: Continued access to IDA funding is critical for Tanzania to finance infrastructure, social programs, and economic diversification.
• Policy Advocacy: Tanzania, as a key IDA beneficiary, can lead regional efforts to influence IDA reforms and resource allocation.

IDA has been a cornerstone for Tanzania's development financing, aligning its resources with the country’s economic priorities and challenges.

A table summarizing the positions of top African countries in terms of IDA funding (volume and frequency) and their global comparisons:

Notes:

• Frequency Data: Only the top three countries by frequency (Tanzania, Ghana, Ethiopia) are specifically highlighted in the dataset. Other countries' frequency estimates are inferred to be over 200 times based on the general pattern.
• Global Comparisons: Vietnam and China are the only non-African countries in the top 10 globally for IDA funding, with US$18.5 bn and US$10.2 bn, respectively.

Tanzania's prominent and sustained engagement with the International Development Association (IDA), emphasizing its strategic use of concessional financing for development. 

1. Tanzania's Top Position in IDA Engagement

• Volume of Funding: Tanzania has received US$16.7 billion, ranking as the third-highest African recipient of IDA resources globally.
• Frequency of Access: Tanzania has accessed IDA resources 288 times, making it the most frequent IDA borrower in Africa.
• Significance: This reflects Tanzania's strong relationship with IDA, leveraging its resources more consistently than other African nations.

2. Strategic Role of IDA in Tanzania’s Development

• Critical Financing Source: IDA resources are essential for Tanzania’s development goals, particularly in poverty reduction, infrastructure development, and addressing fiscal challenges.
• Countercyclical Support: Tanzania relied on IDA heavily during economic downturns, including:
  • Heavily Indebted Poor Countries Initiative (2001): Supported debt relief efforts.
  • Global Financial Crisis (2009): Addressed fiscal gaps.
  • COVID-19 Pandemic (2021): Mitigated economic shocks.

3. Regional and Global Context

• Leadership in Africa: Tanzania’s high frequency of access shows its proactive stance compared to other African nations, where the average access is three times lower (120 vs. 40 in other regions).
• Global Relevance: Tanzania’s engagement positions it as a critical stakeholder in IDA’s concessional financing mechanisms, alongside top recipients like Ethiopia and Nigeria.

4. Implications for Tanzania

• Development Financing: The significant funding volume indicates that IDA is a key enabler of Tanzania’s development priorities, including healthcare, education, and infrastructure.
• Policy Advocacy: Tanzania’s frequent engagement makes it a strong advocate for reforms to increase IDA’s resource base and enhance its impact on poverty reduction in Africa.
• Economic Stability: The countercyclical nature of IDA lending has helped Tanzania weather global economic challenges, making it a vital partner during crises.

5. Challenges and Opportunities

• Challenges:
  • Ensuring sustainable use of concessional financing.
  • Navigating restrictive lending policies that may hinder optimal utilization of IDA resources.
• Opportunities:
  • Advocating for a larger share of IDA resources for Africa (85% target).
  • Supporting reforms for more flexible IDA policies tailored to Tanzania’s economic needs.

In summary, Tanzania's engagement with IDA demonstrates its commitment to leveraging concessional financing for sustained development. By focusing on strengthening its relationship with IDA and advocating for favorable reforms, Tanzania can maximize the impact of these resources on its economic and social development.

Tanzania's banking sector demonstrated robust growth and stability in 2023, with total assets rising by 17.8% to TZS 54,396 billion, driven by increased deposits, borrowings, and retained earnings. Deposits surged by 16.9% to TZS 38,076.5 billion, reflecting heightened public confidence, while pre-tax profits jumped 63.5% to TZS 1,527.9 billion, bolstered by efficient operations and a growing loan portfolio. The sector's Non-Performing Loan (NPL) ratio improved to 4.4%, indicating stronger credit management, and its liquid assets-to-demand liabilities ratio stood at 28.8%, well above the regulatory minimum. These figures highlight the sector's resilience and its pivotal role in advancing Tanzania’s economic stability and financial inclusion.

1. Asset Growth and Structure

• Total assets increased by 17.8% to TZS 54,396.0 billion from TZS 46,159.5 billion in 2022. This was primarily financed by increased deposits, borrowings, and retained earnings.
• Asset composition:
  • Loans, advances, and overdrafts: 58.9% of total assets.
  • Investments in debt securities: 16.0%.
  • Cash and balances: 15.3%.
• Earning assets accounted for 84.4% of total assets, growing by 20.3% to TZS 45,907.6 billion, highlighting effective utilization of resources in productive sectors​.

2. Liabilities and Deposits

• Total liabilities grew by 18.1% to TZS 46,316.7 billion.
• Deposits increased by 16.9% to TZS 38,076.5 billion, with local currency deposits rising by 19.3% to TZS 24,241.0 billion, reflecting increased public trust in the banking system.
• Borrowings rose by 18.5% to TZS 5,531.4 billion, further supporting growth initiatives​.

3. Profitability

• The sector's pre-tax profits surged by 63.5% to TZS 1,527.9 billion, up from TZS 934.4 billion in 2022.
• Return on Assets (ROA) increased to 4.4% from 3.4%, while Return on Equity (ROE) rose to 20.5% from 14.2%, showcasing stronger earnings performance​.

4. Capital Adequacy

• Core capital adequacy ratio: 17.7% (down slightly from 17.9% in 2022 but above the 10% minimum regulatory requirement).
• Total capital adequacy ratio: 18.4%, meeting the 12% regulatory threshold. These metrics indicate strong shock-absorbing capacity​.

5. Asset Quality

• The Non-Performing Loan (NPL) ratio improved to 4.4% from 5.8%, staying within the desired benchmark of less than 5%. This reflects improved credit risk management and effective regulatory measures​.

6. Liquidity

• Liquid assets to demand liabilities ratio: 28.8%, well above the regulatory minimum of 20%.
• Gross loans to total deposits ratio rose to 92.5%, indicating effective deposit utilization for loan issuance​.

7. Outreach and Inclusion

• The number of bank branches increased to 1,011 (from 987), and banking agents grew by 41.1% to 106,176.
• Agent banking facilitated deposits worth TZS 74,914.4 billion, reflecting a 21% growth, underscoring enhanced accessibility and inclusion​.

Key Takeaways:

The banking sector's strong asset growth, improved profitability, better asset quality, and enhanced financial inclusion initiatives underscore its pivotal role in Tanzania's economic development. Its resilience and compliance with regulatory requirements demonstrate preparedness to sustain internal and external economic pressures.

The performance of Tanzania's banking sector in 2023 with important insights about its growth, stability, and evolving role in the economy:

1. Growth and Resilience

• The sector has shown significant growth, with total assets rising by 17.8% to TZS 54,396 billion, reflecting robust expansion in banking activities.
• Profitability surged, with pre-tax profits growing by 63.5%, showcasing improved operational efficiency and revenue growth.
• The ability to absorb shocks is evident in strong capital adequacy ratios (17.7% core capital and 18.4% total capital), both well above regulatory requirements.

2. Improved Credit and Risk Management

• The reduction in the Non-Performing Loan (NPL) ratio to 4.4% (from 5.8%) highlights better loan repayment and enhanced credit risk management practices.
• Growth in earning assets (20.3%) indicates banks' continued focus on deploying resources in productive economic sectors.

3. Enhanced Financial Inclusion

• Banking access expanded significantly, with 41.1% growth in banking agents (now at 106,176) and a rise in branches to 1,011.
• Deposit transactions through agent banking increased by 21%, totaling TZS 74,914.4 billion, which demonstrates broader outreach, particularly to underserved populations.

4. Confidence in the Banking System

• The 16.9% growth in deposits to TZS 38,076.5 billion, driven by local currency deposits, indicates increasing public trust and effective deposit mobilization strategies by banks.
• Liquidity levels remained robust, with the liquid assets-to-demand liabilities ratio at 28.8%, well above the regulatory minimum of 20%, ensuring banks can meet obligations.

5. Challenges and Opportunities

• Although capital adequacy ratios slightly declined, they remain comfortably above regulatory thresholds, suggesting room for further loan growth and asset expansion.
• The high loan-to-deposit ratio (92.5%) reflects strong credit expansion but may warrant careful monitoring to avoid over-leveraging.

What It Tells Overall:

The 2023 performance highlights that Tanzania's banking sector is a critical driver of economic growth and stability. It is effectively balancing profitability with financial inclusion and risk management. The sector's resilience amid global and domestic challenges demonstrates its readiness to support Tanzania's economic goals while adapting to evolving market needs.