The survey, conducted over the first quarter of 2023, presents a comprehensive overview of perceptions and experiences regarding the impact of projects across various sectors in Tanzania with 2800 total number of respondents. Notably, 63% of respondents are aware of the increasing number of projects, with 67% expressing a positive impact on the overall economy. However, only 17% have personally experienced positive economic changes, prompting a closer examination of the factors influencing this discrepancy.

The sectors deemed most impactful include Agriculture, Manufacturing, and Commercial Building, with Economic Infrastructure also recognized by a significant portion of respondents. Challenges hindering the positive impact of projects include Economic Policies (23%) and Infrastructure Challenges (23%), emphasizing the need for targeted interventions.

The growth in the mortgage market, challenges such as high-interest rates and a shortage of affordable housing continue to impact its expansion. The market is dynamic, with key players and economic factors influencing its trajectory.

Credit Growth:

• The credit growth to the private sector, including mortgages, is notable, with a 21 percent increase in the year ending August 2023. This growth reflects a high demand for new loans and is consistent with improvements in the business environment and supportive fiscal policies.

Agricultural Sector Credit Growth:

• The agricultural sector has experienced substantial credit growth at 52.4 percent. This growth is attributed to policy measures taken by the Bank of Tanzania (BOT) to promote cost-effective credit intermediation, coupled with ongoing government interventions to support the sector.

Overall Economic Growth:

• The Tanzanian housing sector's growth is linked to the country's strong and sustained economic growth, with GDP growth averaging 6.2 percent over the past decade. This economic growth contributes to increased demand for housing and financial services.

Government Initiatives:

• Government efforts, in partnership with global non-profit institutions and foreign governments, are directed towards meeting the growing demand for affordable housing. This forecasts a collaborative approach between the public and private sectors in addressing housing and financial needs.

Housing Demand as an Economic Indicator:

• The demand for housing, as indicated by the estimated demand of 200,000 houses annually and a total housing shortage of 3 million houses, serves as an economic indicator. The housing sector's performance is influenced by factors such as population growth and government initiatives, reflecting the broader economic landscape.

Constraints on Financial Sector Growth:

• The information highlights high-interest rates and a lack of affordable housing as prime constraints on mortgage market growth. These challenges may also extend to other areas of the financial sector, indicating potential obstacles to overall financial market expansion.

The current state of the mortgage market in Tanzania as of September 30, 2023:

Market Growth:

• The mortgage market in Tanzania experienced a 2 percent growth in the value of residential mortgages compared to a 6 percent growth in the previous quarter (up to June 30, 2023).
• There was a 14 percent year-on-year growth from TZS 522.95 billion in Q3 2022 to TZS 593.76 billion in Q3 2023.

Market Dynamics:

• No new entrants joined the mortgage market during the quarter, and the number of banks offering mortgage portfolios remained at 31.
• The outstanding mortgage debt increased to TZS 593.76 billion, equivalent to US$ 237.53 million, compared to TZS 584.59 billion (US$ 249.92 million) reported in the previous quarter.

Competition and Market Share:

• The mortgage market was competitive, with 31 different banking institutions offering residential mortgages.
• The top five lenders dominated the market, with CRDB Bank Plc leading with a 33.30% market share, followed by KCB Bank, NMB Bank Plc., Azania Bank, and Stanbic Bank.

Debt Size and Ratios:

• The overall average mortgage debt size increased to TZS 103.46 million (US$ 41,388) from TZS 102.13 million (US$ 43,662) in the previous quarter.
• The ratio of outstanding mortgage debt to GDP increased to 0.36 percent compared to 0.33 percent in the previous quarter.

Interest Rates:

• Typical interest rates offered by mortgage lenders ranged between averages of 15 - 19 percent.

Market Drivers:

• The Tanzanian housing sector's growth is attributed to sustained economic growth, a fast-growing population, and government efforts to meet the demand for affordable housing.
• The demand for credit in the private sector, including mortgages, grew by 21 percent in the year ending August 2023.

Constraints:

• High-interest rates and a lack of affordable housing are identified as prime constraints on mortgage market growth.

Housing Demand:

• The demand for housing in Tanzania is estimated at 200,000 houses annually, with a total housing shortage of 3 million houses according to the National Housing Corporation (NHC) report.
• Easy access to mortgages has contributed to the growth in the housing sector, with the number of mortgage lenders increasing from 3 in 2009 to 31 by September 30, 2023, and the average mortgage interest rate falling from 22 percent to 15 percent.

A comprehensive overview of inflation trends in Tanzania, allowing for an analysis of price changes in specific categories and the overall economy. This information is crucial for policymakers, businesses, and individuals to make informed decisions about economic activities and financial planning.

Overall Inflation Trend:

• The overall inflation rate increased from 109.16 in November 2022 to 112.67 in November 2023.
• The 1-month change in the overall inflation rate was 0.4, indicating a slight increase.

Category-Specific Inflation:

1. Food and Non-Alcoholic Beverages:

The category experienced a 1-month increase of 0.4 and a 12-month change of 3.7, indicating a moderate rise in prices over the one-year period.

2. Alcoholic Beverages and Tobacco:

This category showed a 1-month increase of 0.7 and a 12-month change of 4.1, suggesting a notable increase in prices over the year.

3. Housing, Water, Electricity, Gas, and Other Fuels:

A significant 1-month change of 1.4 was observed in this category, with a 12-month change of 2.8, indicating notable price increases.

4. Transport:

The 1-month change was stable at 0.0, but the 12-month change was 2.9, suggesting a moderate increase in transportation costs over the year.

5. Restaurants and Accommodation Services:

This category showed a 1-month change of 0.1 and a 12-month change of 4.5, indicating a notable increase in prices for dining and accommodation services.

Stability in Some Categories:

• Categories like Health, Information and Communication, and Education Services showed minimal changes in the 1-month and 12-month periods, suggesting relative stability in these areas.

Diverse Inflation Rates Across Sectors:

• Different sectors experienced varying levels of inflation, indicating that economic factors affecting each category play a role in price fluctuations.

Economic Implications:

• Rising inflation can impact the cost of living, consumer purchasing power, and overall economic stability.
• Sectors with higher inflation rates may face increased costs, potentially affecting businesses and consumers.

Policy Considerations:

• Central banks and policymakers may use this data to assess the effectiveness of monetary and fiscal policies and consider adjustments to maintain price stability.

These figures represent the percentage change in prices for each category, providing insights into the inflation rates in Tanzania for the specified months.

Tanzania across different categories for the months of November 2022, October 2023, and November 2023, along with the 1-month and 12-month changes:

Food and non-alcoholic beverages:

• November 2022: 113.85
• October 2023: 117.57
• November 2023: 118.07
• 1 Month Change: 0.4
• 12 Month Change: 3.7

Alcoholic beverages and tobacco:

• November 2022: 103.63
• October 2023: 107.17
• November 2023: 107.88
• 1 Month Change: 0.7
• 12 Month Change: 4.1

Clothing and footwear:

• November 2022: 107.71
• October 2023: 110.72
• November 2023: 111.23
• 1 Month Change: 0.5
• 12 Month Change: 3.3

Housing, water, electricity, gas, and other fuels Furnishings, household equipment, and routine:

• November 2022: 107.65
• October 2023: 109.19
• November 2023: 110.68
• 1 Month Change: 1.4
• 12 Month Change: 2.8

Household maintenance:

• November 2022: 107.96
• October 2023: 111.41
• November 2023: 111.86
• 1 Month Change: 0.4
• 12 Month Change: 3.6

Health:

• November 2022: 104.94
• October 2023: 106.35
• November 2023: 106.38
• 1 Month Change: 0.0
• 12 Month Change: 1.4

Transport:

• November 2022: 110.48
• October 2023: 113.77
• November 2023: 113.73
• 1 Month Change: 0.0
• 12 Month Change: 2.9

Information and communication:

• November 2022: 103.53
• October 2023: 104.72
• November 2023: 104.85
• 1 Month Change: 0.1
• 12 Month Change: 1.3

Recreation, sports, and culture:

• November 2022: 104.67
• October 2023: 107.58
• November 2023: 108.23
• 1 Month Change: 0.6
• 12 Month Change: 3.4

Education services:

• November 2022: 101.9
• October 2023: 105.48
• November 2023: 105.48
• 1 Month Change: 0.0
• 12 Month Change: 3.5

Restaurants and accommodation services:

• November 2022: 108.39
• October 2023: 113.14
• November 2023: 113.28
• 1 Month Change: 0.1
• 12 Month Change: 4.5

Insurance and financial services:

• November 2022: 100.1
• October 2023: 100.66
• November 2023: 100.74
• 1 Month Change: 0.1
• 12 Month Change: 0.6

Personal care, social protection, and miscellaneous goods and services:

• November 2022: 105.74
• October 2023: 109.27
• November 2023: 109.48
• 1 Month Change: 0.2
• 12 Month Change: 3.5

Tanzania is experiencing challenges in its external trade, with a notable increase in the current account deficit. Policymakers and economists may need to examine these trends to formulate strategies that address the trade imbalances and promote economic stability.

• Tanzania is facing an increased trade deficit, especially in goods, as seen in the Goods Account and the overall Goods and Services balance.
• The Services Account has also contributed to the decline in the overall trade balance.
• While there is stability in the Primary Income Account, there is a slight increase in transfers in the Secondary Income Account.
• The overall Current Account Balance has worsened, with a larger deficit compared to both the previous month and the same period last year.

Tanzania's Current Account and the key insights about the country's economic situation:

Goods Account:

• There has been a decrease in the Goods Account balance from September to October, leading to a higher trade deficit.
• The one-year change shows an increase in the trade deficit compared to the same period last year.

Services Account:

• The Services Account has experienced a significant decrease in one month, indicating a notable change in the balance of trade in services.
• The one-year change is negative, suggesting a decline in the Services Account balance compared to the same period last year.

Goods and Services:

• The combined balance of trade in both goods and services has shown a substantial decrease, indicating an overall decline in the trade balance.

Primary Income Account:

• There is no change in the Primary Income Account from September to October.
• The one-year change is negative, suggesting a slight decrease in income flows compared to the same period last year.

Secondary Income Account:

• The Secondary Income Account has experienced a small increase in one month, indicating a rise in transfers that do not result in goods or services.
• The one-year change is positive but relatively small.

Current Account Balance:

• The overall Current Account Balance has decreased significantly from September to October, pointing to a larger current account deficit.
• The one-year change is positive, indicating a higher deficit compared to the same period last year.

Tanzania's Current Account for different time periods, and it includes components such as the Goods account, Services account, Primary income account, Secondary income account, and the overall Current account balance:

Goods Account:

• 22-Oct: -620.9
• 23-Sep: -477.6
• 23-Oct: -612.5
• 1 Month Change: -23.08%
• 1 Year Change: 28.25%

The Goods Account represents the balance of trade in physical goods. A negative value indicates a trade deficit, meaning that the country is importing more goods than it is exporting.

Services Account:

• 22-Oct: 229.83
• 23-Sep: 381.7
• 23-Oct: 334.9
• 1 Month Change: 66.08%
• 1 Year Change: -12.26%

The Services Account includes the balance of trade in services. It shows the difference between the value of services exported and imported. A positive value shows a surplus in services.

Goods and Services:

• 22-Oct: -391
• 23-Sep: -95.8
• 23-Oct: -277.6
• 1 Month Change: -75.50%
• 1 Year Change: 189.77%

This represents the combined balance of trade in both goods and services.

Primary Income Account:

• 22-Oct: -101.2
• 23-Sep: -101.2
• 23-Oct: -99.8
• 1 Month Change: 0.00%
• 1 Year Change: -1.38%

The Primary Income Account reflects income flows, such as profits and dividends, between residents and non-residents.

Secondary Income Account:

• 22-Oct: 45.3
• 23-Sep: 48.5
• 23-Oct: 48.7
• 1 Month Change: 7.06%
• 1 Year Change: 0.41%

The Secondary Income Account includes transfers that do not result in any goods, services, or financial assets in return.

Current Account Balance:

• 22-Oct: -446.9
• 23-Sep: -148.5
• 23-Oct: -328.6
• 1 Month Change: -66.77%
• 1 Year Change: 121.28%

The Current Account Balance is the sum of all the accounts mentioned above. A negative value indicates a current account deficit, meaning that the country is importing more than it is exporting, and the deficit is funded by capital inflows.

Tanzania has seen positive growth in both exports and imports, with efforts towards reducing the trade deficit. This research shows an overall improvement in the trade balance.

Export Growth:

• Tanzania has experienced a positive trend in the export of goods and services.
• The export values have increased consistently over the three years, with a significant 15% growth from 2022 to 2023 and a substantial 41% growth over the two-year period from 2021 to 2023.
• This growth shows an expansion in the international market for Tanzanian goods and services.

Import Growth:

• Import values have also risen, but at a slightly slower pace compared to exports. There was a modest 1% increase from 2022 to 2023 and a more substantial 50% increase over the two-year period from 2021 to 2023.
• The higher rate of import growth might contribute to concerns about trade imbalances and potential pressure on foreign exchange reserves.

Balance of Payment:

• The Balance of Payment represents the difference between exports and imports. A negative balance indicates a trade deficit.
• Tanzania's trade deficit has narrowed from 2022 to 2023, as evidenced by the 39% reduction in the deficit. However, it's important to note that there is still a deficit, albeit a smaller one.
• The two-year change shows a significant 128% reduction in the trade deficit from 2021 to 2023, indicating improvement in the overall trade balance. This could be attributed to the faster growth rate of exports compared to imports.

The Balance of Payment represents the difference between the value of exports and the value of imports. A negative balance indicates a trade deficit (import > export), while a positive balance indicates a trade surplus (export > import). The percentage changes provide insights into the trends and shifts in the trade balance over the specified periods.

Export of Goods and Services:

• 2021: TZS9,609 million
• 2022: TZS11,730 million
• 2023: TZS13,544 million
  • 1-Year Change (2022 to 2023): +15%
  • 2-Year Change (2021 to 2023): +41%

Import of Goods and Services:

• 2021: TZS10,764 million
• 2022: TZS16,061 million
• 2023: TZS16,173 million
  • 1-Year Change (2022 to 2023): +1%
  • 2-Year Change (2021 to 2023): +50%

Balance of Payment:

• 2021: -TZS1,154.6 million (deficit)
• 2022: -TZS4,331 million (deficit)
• 2023: -TZS2,628.4 million (deficit)
  • 1-Year Change (2022 to 2023): -39%
  • 2-Year Change (2021 to 2023): -128%

This research provides a snapshot of the Tanzania's debt dynamics, allowing policymakers, economists, and analysts to assess the financial health of the nation and make informed decisions about economic policies and future fiscal strategies. It's essential to monitor these trends over time to understand the long-term implications and make adjustments as needed.

The National Debts Development conveys important information about the country's financial situation, particularly in terms of external and domestic debts:

Overall Debt Trends:

• The total national debt increased from TZS 90,957,363.00 in September 2023 to TZS96,688,407.00 in October 2023.
• The 1-month change in total debts is 1%, indicating a moderate increase in the country's overall indebtedness during this period.

External Debt:

• External debt increased from TZS64,357,163.00 in September 2023 to TZS67,238,907.00 in October 2023.
• The 1-month change in external debt is 0%, suggesting a relatively stable external debt level during this period.
• Over the past year, external debt has increased by 5%, indicating a growth in the country's external financial obligations.

Domestic Debt:

• Domestic debt rose from TZS26,600,200.00 in September 2023 to TZS29,449,500.00 in October 2023.
• The 1-month change in domestic debt is 2%, reflecting a moderate increase in domestic financial obligations.
• Over the past year, domestic debt has experienced a more significant growth of 12%.

Comparison Over the Past Year:

• The 1-year change figures provide a perspective on the percentage increase in debts from October 2022 to October 2023.
• The total national debt increased by 7% over the past year, with external debt contributing a 5% increase and domestic debt contributing a higher 12% increase.

Implications:

• The increase in both external and domestic debts may indicate that the country is taking on more financial obligations, which could be for various reasons such as infrastructure development, economic stimulus, or budgetary needs.
• The 1-year change figures highlight the trend of growing indebtedness over a more extended period, which might raise concerns about the country's fiscal sustainability.

Tanzania's external and domestic debts, both in terms of absolute values and their percentage changes over the specified time periods. The percentage change figures indicate the growth or reduction in debt levels compared to the previous month and the same month in the previous year. The "TOTAL DEBTS" section sums up both external and domestic debts to provide a comprehensive overview of the country's overall indebtedness:

Debt Components:

External Debt:

• Sep-23: TZS64,357,163.00
• Oct-23: TZS67,238,907.00
  • 1-Month Change: 0% (Percentage change in external debt from September to October 2023)
  • 1-Year Change: 5% (Percentage change in external debt from October 2022 to October 2023)

Domestic Debt:

• Sep-23: TZS26,600,200.00
• Oct-23: TZS29,449,500.00
  • 1-Month Change: 2% (Percentage change in domestic debt from September to October 2023)
  • 1-Year Change: 12% (Percentage change in domestic debt from October 2022 to October 2023)

Total Debts:

• Sep-23: TZS90,957,363.00 (Sum of External and Domestic Debts in September 2023)
• Oct-23: TZS96,688,407.00 (Sum of External and Domestic Debts in October 2023)
  • 1-Month Change: 1% (Percentage change in total debts from September to October 2023)
  • 1-Year Change: 7% (Percentage change in total debts from October 2022 to October 2023)

The government's financial performance in October 2023, comparing actual operations with the budget estimates for the year:

Government Expenditure:

• There was a significant increase in Development Expenditure, surpassing the budget estimate by 74%. This suggests a higher-than-expected investment in development projects.
• Other Recurrent Expenditure experienced a substantial decrease of 61% compared to the budget estimate, indicating potential cost savings or underspending in certain areas.
• While Interest Costs increased by 43%, the Wages and Salaries category decreased by 12% compared to the budget estimate.

Government Revenues:

• Taxes on Imports and Tax on Local Goods and Services exceeded their budget estimates by 14% and 2%, respectively.
• Income Tax and Other Tax fell short of the budget estimates by 19% and 5%, respectively.
• Non-Tax Revenues experienced a significant decrease of 33% compared to the budget estimate.

Deficit:

• The budget deficit widened substantially, increasing by 84%. This indicates that government expenditures exceeded revenues by a larger margin than initially projected.

Overall Implications:

• The government's increased focus on development projects could stimulate economic growth, but the widening budget deficit raises concerns about fiscal sustainability.
• The substantial decrease in Other Recurrent Expenditure may be intentional cost-cutting measures or a result of underspending, warranting a closer look at the allocation of resources.
• Shortfalls in Income Tax and Other Tax revenues might be attributed to economic factors affecting income and business activities.
• The decrease in Non-Tax Revenues may require attention to alternative revenue sources or a review of existing non-tax revenue-generating mechanisms.

The Government Budget Performance Evaluation for October 2023, comparing actual operations with the budget estimates for the fiscal year 2023. The insight includes details on government expenditure, government revenues, and the resulting budget deficit, along with the percentage change between the actual and estimated figures.

Government Expenditure:

Wages and Salaries:

• Actual (2022): TZS745.6 million
• Budget Estimated (2023): TZS935.9 million
• Actual Operations (2023): TZS825.4 million
• Percentage Change Between Actual and Estimated: -12%

Interest Costs:

• Actual (2022): TZS280.4 million
• Budget Estimated (2023): TZS311.8 million
• Actual Operations (2023): TZS445.1 million
• Percentage Change Between Actual and Estimated: 43%

Development Expenditure:

• Actual (2022): TZS1,105.2 million
• Budget Estimated (2023): TZS1,237.3 million
• Actual Operations (2023): TZS2,158.7 million
• Percentage Change Between Actual and Estimated: 74%

Other Recurrent Expenditure:

• Actual (2022): TZS346.5 million
• Budget Estimated (2023): TZS758 million
• Actual Operations (2023): TZS294.4 million
• Percentage Change Between Actual and Estimated: -61%

Total Government Expenditure:

• Actual (2022): TZS2,478 million
• Budget Estimated (2023): TZS3,243 million
• Actual Operations (2023): TZS3,724 million
• Percentage Change Between Actual and Estimated: 15%

Government Revenues:

Taxes on Imports:

• Actual (2022): TZS738.2 million
• Budget Estimated (2023): TZS774.6 million
• Actual Operations (2023): TZS884.7 million
• Percentage Change Between Actual and Estimated: 14%

Income Tax:

• Actual (2022): TZS453 million
• Budget Estimated (2023): TZS626.1 million
• Actual Operations (2023): TZS510 million
• Percentage Change Between Actual and Estimated: -19%

Tax on Local Goods and Services:

• Actual (2022): TZS288.1 million
• Budget Estimated (2023): TZS472.4 million
• Actual Operations (2023): TZS460.8 million
• Percentage Change Between Actual and Estimated: -2%

Other Tax:

• Actual (2022): TZS144.5 million
• Budget Estimated (2023): TZS134.7 million
• Actual Operations (2023): TZS128.4 million
• Percentage Change Between Actual and Estimated: -5%

Non-Tax Revenues:

• Actual (2022): TZS337.5 million
• Budget Estimated (2023): TZS454.9 million
• Actual Operations (2023): TZS304.4 million
• Percentage Change Between Actual and Estimated: -33%

Total Government Revenues:

• Actual (2022): TZS1,961 million
• Budget Estimated (2023): TZS2,463 million
• Actual Operations (2023): TZS2,288 million
• Percentage Change Between Actual and Estimated: -7%

Deficit:

• Actual (2022): -TZS516.4 million (deficit)
• Budget Estimated (2023): -TZS780.3 million (deficit)
• Actual Operations (2023): -TZS1,435.3 million (deficit)
• Percentage Change Between Actual and Estimated: 84%

• How does Tanzania's exclusion from the list of African countries with the lowest purchasing power reflect on the country's economic resilience and the potential variations in standards of living among its residents?
• Considering Tanzania's Consumer Price Index for Transportation (CPI Transportation) at 113.77, how might the relatively higher transportation costs impact the overall cost of living for Tanzanians, and what potential measures could be taken to alleviate this burden and improve economic sustainability?

Purchasing Power and Inflation:

Tanzania is not among the top African countries with the lowest purchasing power. The country's current inflation rate is reported to be 3.2 percent, which can impact the purchasing power of its residents.

Consumer Price Index (CPI):

The Consumer Price Index for Tanzania is given as 112.18, indicating the relative cost of a basket of goods and services. This, combined with specific indices like food inflation (4.5 percent) and CPI Transportation (113.77), provides a snapshot of the cost of living in the country.

Comparison with Other African Countries:

Tanzania's absence from the list of countries with the lowest purchasing power shows that, in comparison, it may have a relatively higher purchasing power than some other African nations. The list includes countries like Cameroon, Ivory Coast, Ethiopia, Nigeria, Ghana, and Uganda.

Economic and Social Challenges:

The information implies that, like several other African countries, Tanzania faces challenges associated with low purchasing power. This can be indicative of broader economic and social issues that impact the standard of living for many residents.

Data Source:

The data is sourced from Numbeo, a recognized research platform. This underscores the importance of reliable data sources in assessing and understanding a country's economic conditions.

Importance of Purchasing Power Index (PPI):

The discussion on the Purchasing Power Index emphasizes its significance in gauging a region's cost of living. The fact that the PPI is one of several indicators used by Numbeo suggests its importance in understanding economic conditions.

Role of Research Bodies:

The mention of research bodies like TICGL-Economic Consulting group highlights the role of organizations in compiling and disseminating economic data. It also suggests that there are efforts to provide information that can help in addressing economic challenges.

General

Tanzania does not feature among the Top 10 African cities with the lowest purchasing power. Currently experiencing an inflation rate of 3.2 percent, Tanzania's consumer price index stands at 112.18, with food inflation at 4.5 percent and CPI Transportation at 113.77, based on September 2023 statistics.

As a result, Tanzania is absent from the list of the ten African countries with the lowest purchasing power. The country at the forefront in this aspect is Cameroon, boasting a purchasing power index of 5.7, followed by Ivory Coast with an index of 6.2, Ethiopia at 8.2, Nigeria at 10.1, Ghana at 11.4, and Uganda at 13.4.

Africa, a continent filled with promise, grapples at times with the challenge of low purchasing power. Some nations consistently contend with this issue, with many residents unaware of how their purchasing power index compares globally. The data originates from Numbeo.

The Purchasing Power Index (PPI) is crucial in determining a city's cost of living, among four other indexes. Low purchasing power has extensive implications, with numerous African countries facing economic and social challenges.

Recognizing the significance of a region's purchasing power, the availability of the purchasing power index becomes essential for addressing the issue. Fortunately, research bodies, including Numbeo, collate such data.

The Purchasing Power Index (PPI) is a key economic indicator providing valuable insights into currency worth and the cost of living worldwide. Numbeo, a prominent data and research platform, notes that the local purchasing power index is derived from the average net salary of a given region.

A local purchasing power index of 40 means residents with an average salary can afford, on average, 60% fewer goods and services compared to residents of New York City with an average salary. Numbeo utilizes the local purchasing power index, along with four other indexes, to calculate the overall cost of living globally. This calculation includes the rent index, the cost of living plus rent index, the food index, and the restaurant pricing index, with their weighted average yielding the total cost of living index.

Having said that, these are the ten African cities with the lowest purchasing power.

Top 10 African cities with the lowest purchasing power

• How might Tanzania's diverse portfolio of investments, spanning agriculture, natural resources, infrastructure, tourism, and the financial sector, contribute to the resilience and sustainable growth of its economy compared to other East African nations?
• Considering Tanzania's 6% share in the private capital market and recent shifts in government policies attracting investors, what strategic steps could other East African countries take to enhance their appeal and foster a similar environment for economic development and investment?

Introduction:

This article delves into the dynamic economic landscape of East Africa, where various factors have propelled specific nations to the forefront of the region's growth. We examine the pivotal role of private capital and draw insights from the East Africa Venture Capital Association (EAVCA) report.

Private Capital Landscape:

Kenya stands out as the dominant player, constituting 69% of transactions and 74% of deal values. Uganda, Tanzania, Ethiopia, and Rwanda also contribute significantly to the region's economic expansion, as detailed in the EAVCA report.

Private Capital Distribution:

As per the report, Kenya traditionally leads in private capital transactions, capturing 69% of the market, followed by Uganda, Tanzania, and Ethiopia each at 6%, and Rwanda at 5%. The remainder comprises multi-country transactions. In terms of deal values, Kenya maintains its dominance at 74%, trailed by Uganda at 8%, Ethiopia at 7%, and Rwanda at 5%, with the balance representing multi-country transactions.

Investment Overview:

The EAVCA report discloses a total of 427 investments, amounting to approximately USD 7.3 billion, with 51 exits valued at USD 1.3 billion.

Ranking of East Africa's Top 5 Economies:

1. Kenya: Kenya emerges as the economic epicenter, boasting a diverse economy with lower susceptibility to commodity risks. The country's sizable market, robust legal framework, and skilled workforce make it a magnet for private equity and DFI investments. Nairobi also serves as the regional headquarters for many regional firms.
2. Uganda: Uganda solidifies its position as a key player, accounting for 12% of investments. Its strategic location and expanding market, particularly in the financial services and agriculture sectors, make it an attractive destination for investors.
3. Tanzania: Tanzania's 6% share underscores its emergence as a promising private equity and venture capital market. Recent shifts in government policies enhance its appeal to investors, with investments gaining momentum in agriculture, natural resources, infrastructure, tourism, and the financial sector.
4. Ethiopia: With a rapidly growing economy and extensive market, Ethiopia captures investor attention. Political instability and currency regulations have posed challenges, but the country's potential remains high.
5. Rwanda: Despite having a smaller market, Rwanda excels in the realm of venture capital. It has become a hotspot for innovative startups and smaller investments, setting itself apart in the East African landscape.

Other East African countries collectively contribute a 2% share, enriching the diversity and dynamism of the East African investment landscape, even if not in the spotlight.

Tanzania appears to be carving out a distinct position in the East African economic landscape. Its share in the private capital market, coupled with emerging opportunities in diverse sectors and favorable government policies, positions Tanzania as a promising destination for investors and contributes to the overall economic dynamism of the region:

Private Capital Market Share:

Tanzania holds a 6% share in the private capital market in East Africa, indicating a notable presence in the region.

Emerging Private Equity and Venture Capital Market:

The 6% share underscores Tanzania's emergence as a promising market for private equity and venture capital. This suggests that the country is attracting investments in these sectors, signifying confidence from investors.

Government Policies and Investor Attraction:

Recent shifts in government policies in Tanzania have enhanced its attractiveness to investors. This implies that the government's efforts or policy changes have positively influenced the investment climate, making it more appealing for businesses and investors.

Diversification of Investments:

Investments in Tanzania are noted in various sectors, including agriculture, natural resources, infrastructure, tourism, and the financial sector. This diversification suggests that Tanzania is not reliant on a single industry, making its economy more robust and resilient to changes in specific sectors.

Potential for Growth:

The information hints at a momentum in investments in Tanzania, indicating the potential for economic growth. The fact that investments are gaining traction in multiple sectors suggests a positive outlook for the country's economic development.

Tanzania has recently finalized a significant carbon credit deal, marking one of East Africa's most substantial initiatives in this field. The agreement involves the collaboration of Tanzania's National Park Agency (Tanapa) and Carbon Tanzania, with additional financial support pledged by Mohammed Dewji for this groundbreaking project.

This expansive undertaking encompasses six national parks, covering an extensive 1.8 million hectares (4.4 million acres), according to BBC Africa. The key stakeholders in this arrangement are Tanzania's National Park Management Agency, Tanapa, and the local enterprise Carbon Tanzania. Carbon Tanzania has affirmed that a portion of the revenue generated from this venture will be directed towards Tanapa and local communities, emphasizing the project's dual objective of conservation and safeguarding national parks.

The specific national parks involved in this initiative are Burigi-Chato, Katavi Plains, Ugalla River, Mkomazi, Gombe Stream, and Mahale Mountains, as highlighted in the BBC's report. Mohammed Enterprises Tanzania Limited, an agricultural and manufacturing company owned by prominent Tanzanian businessman Mohammed Dewji, will provide additional financial support to bolster the success of this monumental venture.

Tanzania's commitment to carbon credit initiatives aligns with its broader engagement in this environmentally conscious market. In July, reports indicated that Tanzania attracted interest from approximately 20 corporations willing to invest over $20 billion (Sh46.9 trillion), indicating a substantial surge in the carbon credit market. With 51% of Tanzania's land designated as forests, equivalent to 48 million hectares, the country stands poised to emerge as a prominent player in the global carbon credit trade.

Interestingly, Zimbabwe is also positioning itself as a significant contender in Africa's carbon credit market. The Africa Voluntary Carbon Markets Forum has noted Zimbabwe's efforts to register projects generating offsets on a carbon registry at the Victoria Falls Stock Exchange, denoting the nation's aspirations to become a key player in this environmentally conscious domain.

The impacts of Tanzania's large-scale carbon credit deal are multifaceted and extend across environmental, economic, and social dimensions:

Environmental Conservation:

The primary objective of the carbon credit project is to protect and conserve six national parks spanning 1.8 million hectares. This could lead to the preservation of biodiversity, protection of ecosystems, and mitigation of deforestation, contributing to overall environmental conservation.

Carbon Emission Reduction:

By participating in the carbon credit market, Tanzania aims to reduce carbon emissions. The funds generated through carbon credits are typically tied to projects that sequester or reduce greenhouse gas emissions, thus contributing to global efforts to combat climate change.

Community Benefits:

Local communities are expected to benefit from the revenue generated by the carbon credit project. This could lead to improved livelihoods, infrastructure development, and community empowerment. The project's success may depend on the equitable distribution of benefits among community members.

Economic Growth:

The influx of funds from the carbon credit project, combined with additional financial support from Mohammed Dewji and potential future investments, can contribute to economic growth in Tanzania. This growth may be observed in sectors related to conservation, tourism, and sustainable development.

Global Carbon Credit Market Participation:

Tanzania's active engagement in the carbon credit market positions the country as a key player in the global carbon trading landscape. This involvement can enhance Tanzania's international standing, attract further investments, and foster collaborations with other nations committed to environmental sustainability.

Challenges and Risks:

Despite the positive aspects, there may be challenges such as ensuring the effective implementation of conservation measures, addressing potential conflicts with local communities, and managing the complexities of the carbon credit market. Robust governance and community involvement will be crucial in mitigating these risks.

Regional Influence:

As one of East Africa's largest carbon credit initiatives, Tanzania's success could influence neighboring countries to explore and invest in similar projects. This might contribute to a regional shift towards sustainable and environmentally conscious practices.

Diversification of Investments:

The commitment of Mohammed Dewji and other potential investors signifies a diversification of investments in Tanzania's economy. This diversification could contribute to the resilience of the economy and reduce dependence on traditional sectors.