Estimated Budget (Total Collections): 47.42 Tsh. Trillions

This represents the total amount of revenue the government expects to collect during the fiscal year 2024/2025. It includes all sources of income, including internal revenue, aids, domestic credit, and foreign loans.

Internal Revenue: 34.43 Tsh. Trillions

Internal revenue refers to the income generated by the government from sources within the country. This includes taxes, fees, and other revenue streams collected domestically.

Aids: 4.29 Tsh. Trillions

Aids in this context likely refer to financial assistance or grants received by the government from international organizations, foreign governments, or donor countries. These funds are often provided to support specific development projects or programs.

Domestic Credit: 6.14 Tsh. Trillions

Domestic credit is the amount of money borrowed by the government from domestic sources, such as banks or the issuance of government bonds within the country. This can be used to cover budget deficits or fund various government initiatives.

Foreign Loans: 2.55 Tsh. Trillions

Foreign loans represent the funds borrowed by the government from foreign entities, such as international financial institutions or foreign governments. These loans may be used to finance infrastructure projects, economic development, or other national initiatives.

Tanzania can ensure that the estimated budget has a direct and positive impact on the economy at the local level. Effective budget management and the strategic allocation of resources can help promote economic growth, reduce poverty, and improve the overall well-being of its citizens.

For Tanzania to ensure that the estimated budget for the year 2024/2025 has a direct and positive impact on the economy, especially at the local level, key issues to consider and should be taken into account:

Effective Revenue Collection and Management:

Improve the efficiency and effectiveness of internal revenue collection to maximize the funds available for the budget. This includes tackling issues related to tax evasion and enhancing tax administration.

Transparency and Accountability:

Ensure transparency in budget allocation and expenditure. Publish detailed budgets and financial reports to inform the public about how funds are being utilized. Accountability mechanisms, including audits, should be in place to prevent misappropriation of funds.

Infrastructure Development:

Allocate a portion of the budget to infrastructure development projects that can have a direct and immediate impact on the local economy. Investments in roads, bridges, utilities, and other public infrastructure can create jobs, stimulate economic activity, and improve the quality of life for local communities.

Supporting Small and Medium-sized Enterprises (SMEs):

Encourage the growth of local SMEs by providing them with access to credit, training, and market opportunities. This can stimulate entrepreneurship, create jobs, and contribute to economic growth at the grassroots level.

Agricultural and Rural Development:

Invest in agriculture and rural development programs. Agriculture is a significant contributor to Tanzania's economy, and supporting smallholder farmers, promoting agribusiness, and improving access to markets can have a direct impact on rural communities.

Education and Skill Development:

Allocate funds for education and skill development programs to improve the human capital of the local population. A well-educated and skilled workforce is essential for economic growth and innovation.

Healthcare and Social Services:

Prioritize healthcare and social services, as a healthy and well-supported population is more productive. Invest in healthcare infrastructure and services to improve public health.

Regional Equity:

Ensure that budget allocations take into account the specific needs of different regions within the country. Address regional disparities by directing resources to underdeveloped areas.

Monitoring and Evaluation:

Implement a robust system for monitoring and evaluating the impact of budget expenditures. Regularly assess whether the allocated funds are achieving their intended outcomes and make adjustments as necessary.

Public Participation and Consultation:

Engage with local communities and stakeholders in the budget planning process. Seek their input and involve them in decision-making to ensure that budget priorities align with local needs.

Boosting Tanzania's Economy: IMF Allocation of USD 150 Million and Its Economic Implications

Tanzania has joined the list of African countries receiving funds from the IMF's $1 billion initiative. In this allocation, Tanzania will receive $150 million. Senegal leads the list, set to receive $276 million, followed closely by Rwanda, which is designated to receive $262 million. The Democratic Republic of Congo follows with a sum of $200 million, and Tanzania comes in fourth, securing $150 million. Somalia is next in line to receive $100 million, with Gambia receiving $10 million, and COMOROS getting $4.7 million.

This information comes from a report by the East African, and it's worth noting that while eight countries were considered, only seven will benefit from the $1 billion fund.

The International Monetary Fund (IMF) has assessed the economic, financial, social, and governance policies of eight African countries over the past month (October) to bolster their dwindling foreign exchange reserves and provide budgetary support. As a result of these evaluations, seven of the eight countries have committed to financing exceeding $1 billion, pending approval by the IMF Executive Board.

Africa has long grappled with a complex array of challenges, including economic disparities, inadequate healthcare, infrastructure deficiencies, and political uncertainties. The financial assistance provided by the IMF holds the promise of strengthening struggling economies, mitigating the impact of global economic shifts, and creating a foundation for sustainable development.

Typically, the IMF's support for Africa aims to foster an environment where African nations can harness their potential, empowering themselves to build resilient, self-sufficient economies and thriving societies.

With that said here is the list of African countries set to receive funding from the IMF, as seen in a report by the East African.

The funds are used and the success of their deployment will depend on the Tanzanian government's policies and priorities. Careful planning and management are essential to maximize the economic advantages of receiving this financial support.

Receiving USD 150 million from the IMF offers several potential economic advantages for Tanzania:

Financial Stability:

The funds can help stabilize Tanzania's economy by providing an injection of foreign exchange reserves. This stability can help mitigate economic fluctuations and reduce the risk of financial crises.

Budgetary Support:

The funds can be used to support the government's budget, allowing for increased public spending on essential services, infrastructure development, and social programs. This can contribute to economic growth and improved living standards.

Debt Management:

Tanzania can use the funds to manage its debt, making it easier to meet debt service obligations and potentially refinance debt on more favorable terms. This can reduce the financial burden on the government.

Economic Development:

The funds can be directed towards development projects and investments in key sectors of the economy, such as infrastructure, education, and healthcare. This can stimulate economic growth, create jobs, and improve the overall economic well-being of the population.

Resilience to External Shocks:

Tanzania can use the funds to build resilience to external economic shocks, such as fluctuations in global commodity prices or disruptions in international trade. This can help the country better weather economic challenges.

Improved Investment Climate:

By demonstrating the ability to secure financial support from international organizations like the IMF, Tanzania may become a more attractive destination for foreign investment, which can further boost economic growth.

Enhanced Creditworthiness:

Successfully utilizing IMF funds can demonstrate responsible fiscal and monetary policies to international creditors and investors, potentially leading to improved creditworthiness, which can lower borrowing costs in the future.

It's crucial for Tanzania to ensure that any funds received, including those from the IMF, are effectively managed, invested in productive sectors, and aligned with a comprehensive economic development strategy. Transparency, accountability, and sound economic policies are essential to make sure that external financial support positively impacts the country's long-term economic well-being:

Dependency and Moral Hazard:

Relying on external funds can create a dependency on such assistance, leading to a reduced incentive for the government to implement necessary economic reforms and fiscal discipline. This can result in a moral hazard, where Tanzania may not take the necessary steps to ensure sustainable economic growth.

Debt Burden:

Continuously receiving funds without clear economic impact can lead to an accumulation of debt. If the funds are not effectively managed and invested, they may contribute to a growing debt burden, which can become unsustainable in the long run.

Inflation:

If the funds are not channeled into productive investments and instead lead to increased government spending, it can fuel inflation. This can erode the purchasing power of the currency and harm the overall economy, particularly if inflation outpaces wage increases.

Resource Misallocation:

Ineffective use of funds can lead to misallocation of resources, with money going to projects or areas that do not contribute significantly to economic growth. This can result in inefficiencies and waste.

Corruption and Mismanagement:

A continuous inflow of funds without clear oversight and accountability can create opportunities for corruption and mismanagement. This can divert funds away from their intended purposes and hinder economic development.

Crowding Out Private Investment:

If government spending driven by these funds crowds out private investment, it can hinder the development of a vibrant private sector, which is essential for long-term economic growth.

Loss of Sovereignty:

Continuous reliance on external funding can limit the economic sovereignty of Tanzania, as the country may be required to implement specific policies or reforms dictated by the funding source, potentially undermining national interests.

Lack of Ownership and Responsibility:

If the funds do not originate from within the country, there may be a lack of ownership and responsibility for the economic development process among domestic stakeholders, including the government and private sector.

Taxation and Economic Growth in Tanzania: Challenges and Opportunities

The tax rates and structure in Tanzania are designed to balance the need for government revenue with considerations for income inequality and foreign worker taxation.

Monthly Income Tax Rates for Residents:

• Where total monthly income does not exceed Tshs 270,000/=, there is no income tax (NIL).
• Where total monthly income exceeds Tshs 270,000 but does not exceed Tshs 520,000/=, the tax rate is 8% of the amount in excess of Tshs 270,000/=.
• Where total monthly income exceeds Tshs 520,000 but does not exceed Tshs 760,000/=, the tax is calculated as Tshs 20,000/= plus 20% of the amount in excess of Tshs 520,000/=.
• Where total monthly income exceeds Tshs 760,000/= but does not exceed Tshs 1,000,000/=, the tax is calculated as Tshs 68,000/= plus 25% of the amount in excess of Tshs 760,000/=.
• Where total monthly income exceeds Tshs 1,000,000/=, the tax is calculated as Tshs 128,000/= plus 30% of the amount in excess of Tshs 1,000,000/=.

Annual Income Threshold:

The annual income threshold for which no tax is levied is Tshs. 3,240,000/=. This means if your annual income does not exceed this threshold, you won't be subject to income tax.

Withholding Tax for Non-Resident Employees:

• Remunerations paid to a non-resident employee of a resident employer is subject to a withholding tax of 15%. This means that the employer deducts 15% of the non-resident employee's income and remits it to the tax authority.
• The total income of non-resident individuals is chargeable at the rate of 30%. This is the applicable tax rate for non-resident individuals on their total income in Tanzania.

Secondary Employment Tax Rate:

An employee with secondary employment is chargeable at the rate of 30%. If an individual has more than one job, their income from the secondary employment is subject to a flat tax rate of 30%.

Potential Disincentive for High Earners:

High-income individuals may view the progressive tax system as a disincentive to earning more income, as higher earnings are subject to higher tax rates. This could reduce their motivation to invest, work harder, or engage in economic activities that drive growth.

Complexity and Compliance Costs:

A tax system with multiple tax brackets and varying rates can be complex and burdensome for taxpayers to understand and comply with. This complexity can increase compliance costs and discourage investment.

Reduced Secondary Employment:

A flat 30% tax rate on secondary employment may discourage individuals from taking on multiple jobs or engaging in part-time work, potentially limiting their income-generating opportunities.

The provided tax rate for Tanzania it does offer some insights into how the government raises revenue and potentially supports economic development:

Progressive Taxation:

Tanzania's tax system employs a progressive tax structure for residents, meaning that as an individual's income increases, they are subject to higher tax rates. This system is designed to promote income redistribution by taxing higher earners more heavily. Progressive taxation can be seen as a way to address income inequality and potentially support economic growth by funding social programs and infrastructure development.

Threshold for Non-Taxable Income:

The fact that there is a threshold (Tshs. 3,240,000/= annually) under which income is not taxable indicates an attempt to protect low-income individuals from the burden of taxation. This can help improve the financial well-being of those with lower incomes, potentially contributing to poverty reduction and providing them with more disposable income.

Withholding Tax for Non-Resident Employees:

By imposing a withholding tax of 15% on remunerations paid to non-resident employees, the government is generating revenue from foreign workers. This can help support economic growth by capturing a portion of income earned by non-resident individuals working in Tanzania, which can be reinvested in the country's development.

Taxation on Secondary Employment:

Taxing secondary employment at a flat rate of 30% might encourage individuals to limit their secondary employment or engage in more primary, full-time employment. This could potentially boost the labor market and create opportunities for job seekers. However, the 30% flat rate may be perceived as high and could affect the willingness of individuals to take on secondary employment.

Tanzania's government should work on a holistic strategy that combines fiscal policies with other initiatives to promote long-term economic growth and development:

Simplify and Streamline the Tax System:

A complex tax system can be burdensome for taxpayers and can discourage compliance. Simplifying the tax code and making it more user-friendly can encourage voluntary compliance and reduce administrative costs.

Broaden the Tax Base:

Expanding the tax base by including more sources of income or economic activities can increase government revenue. Ensuring that all economic actors contribute their fair share can reduce the burden on those who are currently paying taxes.

Enhance Tax Enforcement:

Strengthening tax enforcement measures to combat tax evasion and fraud is crucial. This includes investing in better tax administration, technology, and training for tax authorities.

Review Tax Rates and Thresholds:

Periodically reviewing tax rates and income thresholds can help ensure that the tax system remains fair and equitable. Adjusting tax rates to match inflation and economic conditions can prevent tax brackets from becoming outdated.

Promote Investment and Job Creation:

Lowering tax rates on certain economic activities, such as small businesses and industries that are significant drivers of employment, can stimulate investment and job creation, which are critical for economic growth.

Consider Incentives for Specific Sectors:

Targeted tax incentives for industries or activities that have the potential to drive economic growth, such as manufacturing or export-oriented sectors, can be effective in spurring development.

Review Withholding Tax for Non-Resident Employees:

Carefully evaluate the withholding tax on non-resident employees. The rate and administration should strike a balance between generating revenue and attracting foreign expertise and investment.

Improve Transparency and Accountability:

Transparency in tax collection and usage of tax revenue can build trust and encourage compliance. Ensuring that tax revenue is used for public infrastructure and services can support economic development.

Align Tax Policy with Economic Goals:

Tax policies should be consistent with broader economic goals, such as poverty reduction, infrastructure development, and investment promotion. A well-crafted tax policy can complement these objectives.

Consult Stakeholders:

Engaging with stakeholders, including the business community, civil society, and tax experts, can provide valuable insights and ensure that tax policies align with the needs and aspirations of the country.

Inflation Rate:

In September 2023, Tanzania's headline inflation rate held steady at 3.3%, remaining unchanged from the previous month, August 2023, but marking a noticeable decline from the previous year, September 2022, when it was 4.8%. Despite this stable inflation rate, the overall index of prices increased from 108.73 in September 2022 to 112.35 in September 2023, indicating a general rise in the prices of goods and services over the course of a year. This tells that, on average, prices in the Tanzanian economy were higher in September 2023 compared to September 2022, despite the headline inflation remaining constant, reflecting the importance of considering long-term trends in price levels alongside short-term inflation rates.

GDP Growth Rate:

Tanzania's GDP growth rate stands at a healthy 5.6 percent, indicating a steady upward trajectory. Comparing it to previous years, there's a consistent increase from 5.5 percent in 2022 and 5 percent in 2021. Key contributing sectors include agriculture, construction, mining, trade, manufacturing, finance, and insurance.

Money Supply:

In August 2023, Tanzania's money supply experienced significant fluctuations in various components, with notable changes in net foreign assets, central bank assets, and different money supply measures. Net foreign assets surged by 113% in one month, indicating a substantial influx of foreign currency, possibly driven by foreign investments or trade balances. The growth in the Bank of Tanzania's assets suggests active monetary policy interventions to stabilize or stimulate the economy. Conversely, net domestic assets and domestic claims decreased, reflecting a contraction in domestic lending and money creation, possibly aimed at addressing monetary concerns. The slight increase in claims on the private sector suggests banks' willingness to extend credit to support economic activity, while the decline in the extended broad money supply (M3) may impact spending and investment. Reduced foreign currency deposits may affect exchange rates and international trade, and contractions in M2 and M1 may influence economic liquidity and consumer spending. An increase in currency in circulation and a decrease in transferable deposits could be indicative of shifts in consumer preferences and financial stability. Overall, these monetary contractions may raise concerns about short-term economic activity, but the efforts to increase net foreign assets and central bank assets signal long-term economic growth and stability.

Import and Export Rate:

Tanzania's trade performance from 2021 to the projected 2023 reveals significant trends. Export of goods and services demonstrated robust growth, with a 43% increase over this period, showcasing Tanzania's successful expansion of its international market presence. Conversely, imports grew by 61%, outpacing exports and leading to a widening trade deficit. The balance of payment, representing the gap between exports and imports, went from a negative balance of -$1,063 million in 2021 to -$3,597.6 million in 2022 but improved slightly to -$3,361.7 million in 2023, marking a 7% reduction in the negative balance. This indicates efforts to address the trade imbalance, emphasizing the importance of managing trade imbalances for long-term economic stability and sustainability in Tanzania.

Budget Analysis:

The Government Budget Performance Evaluation for August 2023 reveals critical insights into Tanzania's fiscal situation for the year, comparing 2022 and 2023 financial data. Notably, government expenditure exceeded the budget due to increased development expenditure, while revenue collection fell short, resulting in a concerning deficit expansion. Government expenditure categories such as wages, salaries, interest costs, and development expenditure saw fluctuations, with wages and salaries and interest costs falling below budget and development expenditure surpassing it.

In terms of government revenues, both tax and non-tax sources underperformed compared to budget projections, leading to a significant deficit increase of 56%. These findings signal challenges in revenue collection and deficit management, potentially hindering economic growth. To address these issues, the government should prioritize improving tax collection, managing deficits, and exploring alternative revenue sources. The focus on development expenditure is a positive step towards fostering economic growth, but the revenue shortfall and deficit increase pose potential obstacles to sustainable economic development.

National Debts:

In August 2023, Tanzania's national debt amounted to USD 40,574.6 million, with a significant portion of it being external debt. This reduction in debt can be attributed to exchange rate fluctuations, particularly the appreciation of the US dollar. The composition of the debt reveals that 70.5 percent of it is owed to foreign creditors, indicating a substantial reliance on foreign borrowing. The data indicates that over the past year, external debt increased by 4% while domestic debt increased by 16%, contributing to a 7% increase in the total national debt. Short-term changes show a 3% decrease in external debt and a 3% increase in domestic debt in a month. It's essential to assess the sustainability of this growing debt burden concerning the country's economic growth.

In the Government Budget Performance Evaluation for August 2023, it is noted that government expenditure exceeded the budget due to higher development expenditure, while revenue collection fell short of expectations, resulting in a widening deficit. The actual government revenues in 2023 were 7% less than the budgeted amount, primarily driven by declines in income tax and other tax revenues. This significant budget deficit increase of 56% raises concerns about fiscal management and may lead to increased government borrowing. The government must address revenue collection challenges, manage deficits effectively, and explore alternative revenue sources while prioritizing development expenditure for economic growth.

The Monetary Policy Committee (MPC) held its 28th Meeting on October 27, 2023, to review the implementation of monetary policy and assess the state of the economy.

In light of the current economic conditions, the MPC decided to maintain the less accommodative monetary policy. This policy will continue to be closely coordinated with fiscal and structural policies, and monetary measures will be implemented to achieve the targets set under the Extended Credit Facility Program for the quarter ending December 2023.

Successful Monetary Policy:

The less accommodative monetary policy implemented in August, September, and October 2023 effectively maintained liquidity at appropriate levels. This policy, combined with supportive fiscal and structural measures, helped control inflation, support economic activities, and maintain financial stability.

Global Economic Environment:

The global economic growth remained weak due to factors such as monetary policy tightening, geopolitical tensions, and high oil prices. While inflation eased in many countries, it still exceeded targets, leading central banks to continue monetary policy tightening.

Domestic Economic Performance:

The domestic economy saw satisfactory growth in the first and second quarters of 2023, with a projected annual growth rate of 5.3 percent. Inflation trended downwards, largely due to declining food prices. Money supply (M3) and credit to the private sector grew significantly, driven by an improved business environment and less accommodative monetary policy.

Government Budget Performance:

Government revenue was strong during the first quarter of 2023/24, and expenditure aligned with available resources.

Current Account Deficit:

The current account deficit narrowed year-on-year, but remained high due to increased commodity prices in the world market. The deficit is expected to gradually improve, driven by earnings from tourism, gold, and traditional export crops.

Foreign Exchange Reserves:

Foreign exchange reserves remained above $5 billion, providing adequate import cover. The banking sector remained well-capitalized and profitable, with reduced non-performing loans.

Improved Foreign Currency Situation:

Shortages of foreign currency were gradually improving due to earnings from tourism, minerals, manufacturing, and cash crops. The central bank's efforts to address foreign currency denominated loans extended to importers also contributed to the improvement.

Tanzania's economic performance in 2023 has been positive, with growth, inflation control, and overall economic stability being key features of its performance. The government's fiscal discipline and effective management of the financial sector have also contributed to these positive economic outcomes.

Growth:

Tanzania's economy showed satisfactory growth in the first and second quarters of 2023, with growth rates of 5.4 percent and 5.2 percent, respectively. The annual growth rate is projected to reach 5.3 percent in 2023. This indicates that the Tanzanian economy has been performing well and maintaining a positive growth trajectory.

Inflation:

Inflation in Tanzania trended downward, particularly since June 2023, reaching 3.3 percent in September 2023. This decrease is associated with declining food prices. This suggests that the country has been successful in managing inflationary pressures.

Money Supply and Credit:

Money supply (M3) grew significantly, surpassing the target, driven by strong private sector credit growth. Credit to the private sector also increased, primarily in agricultural activities. This demonstrates robust lending activity and increased business investment.

Government Budget Performance:

Government revenue during the first quarter of 2023/24 was strong, and expenditures were aligned with available resources. This suggests effective fiscal management and budget discipline.

Current Account Deficit:

While the current account deficit narrowed year-on-year, it remained high due to increased commodity prices in the world market. However, there is an expectation of gradual improvement in the deficit, driven by earnings from tourism, gold, and traditional export crops.

Foreign Exchange Reserves:

Tanzania's foreign exchange reserves remained above $5 billion, indicating stability and the ability to cover import requirements.

Banking Sector:

The banking sector in Tanzania was reported to be adequately capitalized, liquid, and profitable. Non-performing loans decreased significantly, which should encourage banks to increase lending to the private sector.

Foreign Currency Situation:

The reported shortage of foreign currency was gradually improving, driven by earnings from various sectors and measures taken by the central bank and the government.

Tanzania is conspicuously absent from the list of the top 10 African countries boasting the most robust startup ecosystems in 2023. However, despite its absence, Tanzania can seize the opportunity to glean valuable insights from the countries that have attained this recognition, for various compelling reasons.

Tanzania can benefit from studying the experiences and strategies of these top African countries to build a vibrant startup ecosystem. This may involve a combination of government policies, investment incentives, educational programs, and infrastructure development to create an environment where startups can thrive and attract both local and international attention and investment.

The startup ecosystem in Tanzania was still emerging and faced several challenges. However, it's important to note that the situation in the startup ecosystem can change rapidly, and new developments may have occurred since then:

Emerging Ecosystem:

Tanzania's startup ecosystem was in its early stages of development. While it had shown potential, it was not as mature as ecosystems in some other African countries like Kenya, Nigeria, or South Africa.

Challenges:

Tanzania faced several challenges that hindered the growth of startups. These challenges included limited access to funding, a lack of supportive policies and regulations, inadequate infrastructure, and a relatively small pool of skilled talent.

Access to Funding:

Access to funding was a major hurdle for Tanzanian startups. The availability of venture capital and angel investors was limited compared to more established startup hubs. Startups often struggled to secure investment to scale their businesses.

Government Initiatives:

The Tanzanian government had expressed interest in supporting entrepreneurship and innovation. However, it was still in the process of developing and implementing policies and programs to foster a more conducive environment for startups.

Incubators and Accelerators:

There were a few incubators and accelerators in Tanzania that provided support to startups, offering mentorship, training, and networking opportunities.

1. Buni Hub: Located in Dar es Salaam, Buni Hub is a well-known innovation and incubation hub. They offer co-working spaces, mentorship, and training programs for tech startups.
2. KINU (Kigali Innovation City): KINU provides support to Tanzanian tech startups through accelerator programs, mentorship, and access to resources. While the organization's name suggests a connection to Kigali, Rwanda, it's crucial to verify its current location and activities.
3. Smart Lab Tanzania: Smart Lab is an innovation hub that supports startups across various sectors. They offer incubation programs, mentorship, and access to a network of entrepreneurs and investors.
4. NINAJI (Netherlands Initiative for Capacity Development in Higher Education): NINAJI focuses on incubating startups and offers capacity-building programs and entrepreneurship development support.
5. TANZICT (Tanzania Commission for Science and Technology): TANZICT has supported innovation and entrepreneurship in Tanzania by providing training, mentorship, and funding to startups.
6. The Innovation Space: Based in Dar es Salaam, The Innovation Space provides incubation and co-working opportunities for startups. They also offer mentorship and training programs.
7. HDIF (Human Development Innovation Fund): HDIF supports innovations and startups in areas like education, health, and agriculture. They offer funding and capacity-building opportunities for startups.
8. University-Based Incubators: Some universities in Tanzania, such as the University of Dar es Salaam and the Nelson Mandela African Institute of Science and Technology (NM-AIST), have established their own incubators to support student and alumni startups.
9. Youth Innovation Centers: Various youth innovation centers in Tanzania, often established in partnership with government and non-governmental organizations, provide support to young entrepreneurs by offering mentorship, training, and resources.
10. TANInvest: TANInvest is an organization that supports entrepreneurship and investment in Tanzania. They offer programs to connect startups with potential investors and mentors.

Key Sectors:

Some Tanzanian startups were focused on sectors such as agriculture, fintech, health, and education. These sectors held promise for innovation and growth.

Local Initiatives:

Local organizations and universities were taking steps to promote entrepreneurship and provide training and resources to aspiring entrepreneurs.

Community Building:

The Tanzanian startup community was actively engaged in organizing events, meetups, and conferences to facilitate networking and knowledge sharing among entrepreneurs.

Global Awareness:

While the Tanzanian startup ecosystem was not as well-known globally as some other African ecosystems, there was a growing interest in and awareness of the potential in the country.

Tanzania can learn from the success of the top African countries with the best startup ecosystems in 2023:

Invest in Infrastructure:

Develop a solid physical infrastructure to support new businesses. Infrastructure plays a crucial role in providing the foundation for startups. Mauritius, for example, has a relatively developed physical infrastructure that has contributed to its startup ecosystem.

Promote Innovation:

Focus on creating an environment that encourages innovation. Kenya has become an innovative tech hub, especially in mobile payment solutions. Encourage innovation and entrepreneurship through education, research, and industry collaboration.

Access to Skilled Talent:

Attract and retain skilled workers and entrepreneurs. Egypt offers access to skilled and affordable talent, which is crucial for the growth of startups. Invest in education and training programs to develop a skilled workforce.

Attract Investment:

Attract both domestic and foreign investment. Nigeria's massive consumer market and Lagos' position as a startup hub are due in part to significant funding and investments. Create a friendly environment for investors and startups through policies and incentives.

Supportive Legislation:

Consider the development of supportive legislation. Ghana's initiatives like the Ghana Startup & Innovation Bill show the importance of creating a legal framework that encourages startup growth.

Promote Entrepreneurship Culture:

Foster a culture of entrepreneurship and provide mentorship and training to aspiring entrepreneurs. The support offered by various organizations to Ghana's startup ecosystem is a good example to follow.

Innovative Visa Programs:

Explore innovative visa programs to attract talent and digital nomads. Cape Verde's Remote Working Program and green card offer incentives to foreigners, which can contribute to the growth of the local startup ecosystem.

Access to Markets:

Ensure easy access to regional and international markets. Senegal's strategic location with access to major seaports is an advantage. Tanzania should consider how it can leverage its geographical location for business opportunities.

Government Support:

Encourage government support for startups. Tunisia has introduced a startup support organization, Startup Tunisia, to nurture and support its startup ecosystem.

Overcome Challenges:

Address challenges that may hinder startup growth. Namibia faces challenges such as heavy bureaucracy and administrative requirements, access to the market, and low levels of funding. Identifying and addressing these challenges is essential for fostering a conducive environment for startups.

Tanzania Mobile money subscriptions are a crucial aspect of the financial technology (FinTech) industry, particularly in regions with limited access to traditional banking services. These subscriptions represent the number of active SIM cards that are linked to mobile money service accounts and have been used for at least one transaction or activity within the past three months. Mobile money services enable users to perform various financial transactions and manage their money through their mobile phones, offering a convenient and accessible alternative to traditional banking.

Tanzania Mobile money subscriptions are counted based on the number of mobile phone users who have registered and actively used mobile money services provided by a telecom operator or a mobile money service provider. These services typically include features such as sending and receiving money, paying bills, purchasing goods and services, and accessing savings and credit options.

Growth and Importance: The growth in mobile money subscriptions indicates the increasing adoption and acceptance of digital financial services. It is a significant indicator of financial inclusion, as it brings banking and financial services to individuals who may not have had access to traditional banks.

Quarterly Comparison: In the provided data shows, there is a notable increase in mobile money subscriptions from 47.3 million accounts in the quarter ending June 2023 to 51.4 million accounts in the quarter ending September 2023. This growth of approximately 4.1 million accounts in just three months highlights the rapid expansion and popularity of mobile money services.

Factors Driving Growth: Factors can contribute to the growth of mobile money subscriptions:

1. Financial Inclusion: Many people who were previously unbanked or underbanked are now gaining access to financial services through mobile money, making it easier for them to manage their finances.
2. Convenience: Mobile money services are accessible 24/7, allowing users to perform transactions and manage their accounts at any time and from almost anywhere.
3. Digital Payments: The increasing trend toward digital payments and e-commerce has boosted the use of mobile money for online purchases.
4. Government Initiatives: In some countries, governments are actively promoting mobile money services as part of their financial inclusion strategies.

Challenges: While Tanzania mobile money services offer numerous advantages, they also face challenges, including issues related to security, regulatory compliance, and interoperability between different service providers.

Global Reach: Tanzania Mobile money services are not limited to one region but have a global presence. Popular mobile money platforms include M-Pesa in Kenya and Tanzania, GCash in the Philippines, and many more, each tailored to the specific needs and regulations of their respective markets.

Use Cases: Tanzania Mobile money services are used for a variety of financial activities, including sending remittances, paying bills, topping up mobile phone credit, and even accessing loans and savings products.

"Number of Telecom Subscriptions" and "Mobile Money Subscriptions" for the months of June, July, August, and September

The telecom industry is expanding, and more people are subscribing to telecommunication services, which may be driven by various factors. Mobile money services are also on the rise, with a growing number of users adopting them for financial transactions and management, indicating the increasing popularity of digital financial services.

Number of Telecom Subscriptions:

• June: In June, there were 64,008,651 telecom subscriptions. This number likely includes both mobile phone and landline subscriptions. Telecom subscriptions are an essential indicator of the reach and accessibility of communication services. A growth in this number suggests an increasing demand for telecommunication services, which may be influenced by population growth, urbanization, or technological advancements.
• July: The number of telecom subscriptions increased to 65,095,230 in July, indicating growth in the telecom sector. This growth could be due to various factors, such as new customers, increased mobile phone adoption, or promotions and offers from telecom providers.
• August: The number of subscriptions further increased to 66,405,748 in August. This continuous growth suggests that the telecom sector is expanding, and more people are subscribing to telecommunication services.
• September: By September, the number of telecom subscriptions reached 67,117,449. This trend of steady growth is positive for the telecom industry and suggests that communication services are in high demand.

Mobile Money Subscriptions:

• June: In June, there were 47,275,660 mobile money subscriptions. These subscriptions represent the number of active SIM cards linked to mobile money service accounts that had been used in the past three months. The growth in mobile money subscriptions is a positive sign of increased financial inclusion and the popularity of mobile money services.
• July: Mobile money subscriptions increased to 48,673,694 in July, indicating that more people are embracing mobile money services for financial transactions and management.
• August: By August, the number of mobile money subscriptions reached 50,007,613, continuing the upward trend. This growth reflects the convenience and accessibility of mobile money services.
• September: Mobile money subscriptions further increased to 51,369,347 in September, suggesting that even more people are adopting these services. The consistent growth of mobile money subscriptions can be attributed to factors like financial inclusion initiatives, ease of use, and the expansion of mobile money service providers.

Relationship between the number of telecom subscriptions and mobile money subscriptions in Tanzania:

1. Simultaneous Growth: As the number of telecom subscriptions increased from June to September, the number of mobile money subscriptions also increased over the same period. This suggests that there is a simultaneous growth in both telecom subscriptions and mobile money subscriptions.
2. Positive Relationship: The increase in the number of telecom subscriptions is generally accompanied by an increase in mobile money subscriptions. This positive relationship indicates that a larger telecom subscriber base can provide a larger pool of potential users for mobile money services.
3. Access and Adoption: A larger number of telecom subscriptions means more people have access to mobile phones and communication services. Mobile money services often rely on mobile phone access, and as more people acquire mobile phones through telecom subscriptions, the potential user base for mobile money services expands.
4. Convenience and Adoption: Mobile money services are often offered by telecom operators, making it convenient for subscribers to access these services. The convenience of using the same mobile phone for both communication and financial transactions can encourage users to adopt mobile money services.
5. Economic Development: The positive correlation can also indicate economic development. As more people subscribe to telecom services, it can be a sign of economic growth and increased disposable income. This, in turn, can drive the adoption of mobile money services as people seek more convenient and efficient ways to manage their finances.

The increase in mobile money subscriptions offers social benefits such as financial inclusion, security, and access to services, while also contributing to economic growth, efficiency, and financial empowerment:

Social Advantages:

1. Financial Inclusion: Mobile money services extend financial access to people who may not have had access to traditional banking services. This can help reduce the number of unbanked and underbanked individuals, promoting financial inclusion.
2. Access to Basic Services: Mobile money allows users to pay for essential services such as healthcare, education, and utilities, even in remote or underserved areas. This ensures that individuals have access to vital services they might otherwise struggle to obtain.
3. Remittances: Mobile money provides a convenient and affordable way for individuals to send and receive remittances from family members working in different locations or countries. This can improve the livelihoods of recipients and strengthen social connections.
4. Security and Safety: Mobile money reduces the need for carrying cash, which can be risky. This promotes safety and security, particularly for those living in areas with a high risk of theft.
5. Empowerment of Women: Mobile money can empower women by giving them greater control over their finances. Women in some societies have traditionally been excluded from traditional banking, and mobile money can provide them with financial autonomy.

Economic Advantages:

1. Economic Growth: The use of mobile money can stimulate economic growth by facilitating financial transactions, payments, and commerce. It can also increase the velocity of money circulation in the economy, which can boost economic activity.
2. Savings and Investment: Mobile money accounts often provide savings and investment options, allowing users to save and invest their money. This can encourage individuals to build financial assets and improve their economic prospects.
3. Access to Credit: Mobile money history and transaction data can be used to assess creditworthiness, making it easier for users to access credit and loans. This can support entrepreneurship and business development.
4. Cost Savings: Mobile money transactions are often more cost-effective than traditional banking or remittance methods. Users can save on transaction fees and travel expenses, which can result in more disposable income.
5. Efficiency: Mobile money can enhance the efficiency of financial transactions, reducing the time and effort required for banking activities. This efficiency can translate into increased productivity in both personal and business finances.
6. Tax Collection: Governments can benefit from increased mobile money subscriptions by using mobile money platforms for tax collection, reducing tax evasion and improving revenue collection.
7. Reduced Cash Dependence: A decrease in cash transactions and increased use of mobile money can reduce the cost of printing and handling physical currency, contributing to economic savings.
8. Financial Literacy: Mobile money services often come with financial education and literacy programs, which can enhance users' understanding of financial matters and improve their decision-making.

Sparkling Opportunities for Society and Economy

Tanzania ranks among Africa's top ten diamond-producing countries, with a production value of 375,533.14, equivalent to USD 110,936,767.64. The leading producer is Botswana, with a production volume of 24,509,939.00, followed by the Democratic Republic of Congo at 9,908,997.66, South Africa at 9,660,233.0, Angola at 8,763,309.30, Zimbabwe at 4,461,450.15, Namibia at 2,054,227.06, Lesotho at 727,736.95, Sierra Leone at 688,970.20, Tanzania at 375,533.14, and Guinea at 128,770.65.

In 2022, eight African nations secured their esteemed positions within the top ten global diamond-producing countries. This information is sourced from the Kimberley Process.

It's common knowledge that Africa possesses a wealth of valuable minerals essential for economic growth, ranging from substantial oil reserves to fertile agricultural lands. The continent accounts for roughly 30% of the world's total mineral reserves, encompassing resources such as gold, copper, platinum, cobalt, uranium, lithium, and more, which play pivotal roles across various industries, from electronics and infrastructure to energy production.

What's intriguing is that these mineral riches are not concentrated in a specific region but are dispersed across the continent, significantly contributing to the economic development of numerous African nations. Amidst this abundance of resources, diamonds emerge as highly sought-after treasures. The continent is home to several of the world's most prolific diamond-producing countries, each with its unique story in the global diamond industry.

Recent diamond production statistics from the Kimberley Process, a collaborative initiative involving governments, industries, and civil society to regulate the diamond trade and production, underscore the prominent role played by African nations in the global diamond industry. Globally, only 22 countries are engaged in rough diamond production, also known as uncut, raw, or natural diamonds, extracted from deposits within their borders. Remarkably, in 2022, eight African nations secured their esteemed positions within the top ten global diamond-producing countries.

Diamond production can bring significant benefits, it also comes with challenges, including environmental concerns, the need for transparent and accountable governance, and ensuring that the benefits reach the wider population. Careful management of the diamond industry is crucial to maximize the social and economic advantages for Tanzania:

Economic Growth:

High diamond production contributes significantly to the country's GDP. The revenue generated from diamond exports can be used for infrastructure development, public services, and various developmental projects, thereby promoting economic growth.

Job Creation:

The diamond industry provides employment opportunities for many Tanzanians, both directly in mining and processing and indirectly in support services, such as logistics, security, and retail. This helps reduce unemployment and poverty levels.

Foreign Exchange Earnings:

Diamond exports bring in foreign currency, which can stabilize Tanzania's balance of payments. This, in turn, can support the stability of the Tanzanian Shilling and ensure the country's capacity to import goods and services.

Infrastructure Development:

Revenue generated from diamond production can be reinvested in improving infrastructure, such as roads, schools, hospitals, and utilities. This not only benefits the mining regions but also has a positive ripple effect on the entire country.

Skill Development:

The diamond industry requires a skilled workforce, leading to skill development and capacity building. This can enhance the overall employability of the Tanzanian workforce.

Social Programs:

The government can use diamond revenue to fund social programs, including healthcare, education, and poverty alleviation initiatives, which can improve the overall well-being of the population.

Attracting Foreign Investment:

A thriving diamond industry can attract foreign investment, which can lead to technology transfer, increased productivity, and further economic development.

Regional Development:

Diamonds are often mined in rural or less-developed regions. The industry can stimulate the growth of these areas, providing access to basic amenities and improving the quality of life for local communities.

Infrastructure for Mining:

The presence of a robust diamond mining sector can lead to the development of infrastructure such as roads, electricity, and transportation networks, which can benefit both the diamond industry and other sectors of the economy.

Promotion of Sustainable Practices:

The revenue generated from diamonds can be used to invest in sustainable and responsible mining practices, minimizing the environmental impact and ensuring long-term viability of the industry.

Here are the top 10 diamond-producing countries in Africa:

Key Strategies for Growth and Security

Tanzania does not rank among the top 10 African countries with the largest pension assets, as per the Absa Africa Financial Markets Index for 2023. The ability to foster local investment is closely tied to the strength of a country's pension assets, a key observation highlighted in the 2023 Financial Market Report by Absa.

The term "large pension assets" denotes a substantial pool of financial resources held within pension funds or retirement savings accounts. These resources are earmarked and invested to ensure financial security and income for individuals during their retirement years.

In Absa's 2023 Africa Financial Markets report, the measurement of local investor capacity is one of the six fundamental pillars used to assess the most thriving financial markets throughout Africa. This specific pillar concentrates on local investor capacity by evaluating the growth of pension systems. According to the report, pension funds possess the potential to drive the development of capital markets due to their extended investment horizons and their ability to diversify across a wide array of asset classes, including listed equities, corporate bonds, and private markets.

The report further elaborates that this pillar relies on two main components: the assessment of pension fund assets per capita to gauge their size and their comparison to domestically listed securities to assess their contribution to local capital markets.

The absence of substantial pension assets in Tanzania has a direct impact on the country's ability to invest locally, develop its capital markets, ensure retirement security, and support infrastructure development. Addressing these issues by strengthening the pension system can contribute to the country's long-term economic well-being and prosperity.

What Tanzania is missing out:

Limited Local Investment:

With inadequate pension assets, Tanzania's ability to invest locally is constrained. A significant portion of pension funds from other countries can be invested in local infrastructure projects, businesses, and financial markets, contributing to economic growth and job creation.

Reduced Capital Market Development:

Robust pension assets play a crucial role in developing a nation's capital markets. These assets provide stability and liquidity, attracting more investors and fostering the growth of financial markets. Tanzania's limited pension assets mean it's missing the opportunity to build a thriving capital market, which is essential for long-term economic stability.

Retirement Security:

Inadequate pension assets can result in limited retirement security for the country's aging population. Without substantial pension savings, retirees may struggle to maintain their standard of living, increasing the burden on social safety nets and potentially leading to financial insecurity among the elderly.

Limited Infrastructure Investment:

Pension funds often invest in long-term infrastructure projects, such as roads, bridges, and energy facilities. Tanzania's lack of significant pension assets means less funding available for such projects, which are crucial for the country's development and economic competitiveness.

Missed Diversification Opportunities:

Pension assets can serve as a source of diversification in the investment portfolio. Insufficient pension assets limit the ability to invest in a broad range of asset classes, potentially missing out on opportunities for higher returns and risk management.

Reduced Economic Growth:

A robust pension system can contribute to economic growth by channeling savings into productive investments. Tanzania's limited pension assets mean less capital available for productive investments, hindering economic growth and development.

Tanzania can create an environment conducive to the growth of large pension assets, ensuring financial security for retirees and contributing to the long-term economic development of the country:

Reform and Strengthen Pension Legislation:

Tanzania should focus on revising and enhancing pension laws and regulations to provide a robust legal framework for pension funds. This includes defining contribution rates, eligibility, and ensuring compliance with international best practices.

Encourage Private Pension Participation:

Promote the growth of private pension schemes, allowing individuals and employers to contribute to retirement savings beyond government systems. Incentives and tax breaks can be introduced to encourage participation.

Increase Financial Literacy:

Improve financial literacy among the population to raise awareness about the importance of saving for retirement. Financial education programs can empower individuals to make informed decisions about their pension contributions and investments.

Diversify Investment Options:

Allow pension funds to invest in a broader range of asset classes, including equities, bonds, and alternative investments. Diversification can potentially yield higher returns and reduce risk.

Enhance Governance and Transparency:

Implement strong governance and transparency standards within the pension industry to build trust among participants and investors. Robust oversight can prevent mismanagement and fraud.

Promote Employer-Sponsored Plans:

Encourage employers to establish pension plans for their employees. Mandatory or voluntary employer-sponsored plans can significantly increase the coverage and contributions to pension funds.

Introduce Auto-Enrollment:

Consider implementing auto-enrollment systems, where employees are automatically enrolled in pension plans, but they have the option to opt out if they choose. This can boost participation rates.

Long-Term Investment Focus:

Encourage a long-term investment approach by pension funds. Regulations can be designed to discourage short-term thinking and promote investments in infrastructure and other long-term projects.

Public Awareness Campaigns:

Launch public awareness campaigns to educate citizens about the benefits of pension savings and the potential consequences of not saving for retirement.

Collaborate with Financial Institutions:

Partner with financial institutions to provide pension products and services that cater to various income levels, making pension participation accessible to a broader segment of the population.

Regular Monitoring and Evaluation:

Continuously monitor and evaluate the performance of pension funds and the effectiveness of pension policies, making adjustments as necessary to ensure growth and sustainability.

Government Contributions:

Explore the possibility of government contributions to pension funds, particularly for low-income individuals who may struggle to make adequate contributions themselves.

DP World's $250 Million Investment in Tanzania's Port Infrastructure

Dubai has secured a 30-year agreement with Tanzania to oversee a portion of the Dar es Salaam port, the largest in the country. This deal, despite facing previous opposition from Tanzanian opposition groups and human rights organizations, will see DP World, a state-owned Dubai-based ports operator, take on the lease and operational responsibilities for four of the port's 12 berths.

The port of Dar es Salaam plays a vital role in serving landlocked nations in East and Southern Africa, such as Uganda, Rwanda, Burundi, and Zambia, which is a significant copper producer. According to the Director General of the state-owned Tanzania Ports Authority (TPA), DP World will operate berths four to seven. The Tanzanian government has also been actively seeking other investors to manage berths eight through eleven. The contract with DP World has a 30-year term, with performance evaluations every five years.

The collaboration with DP World aims to enhance the port's efficiency by reducing cargo clearance times and increasing its capacity to accommodate 130 vessels per month, a notable improvement from the current capacity of 90 vessels. During the signing ceremony in Dodoma, DP World's Chairman and Chief Executive, Sultan Ahmed Bin Sulayem, pledged a $250 million investment over the next five years. This investment will primarily focus on upgrading the port's infrastructure, particularly in improving cargo clearing systems and eliminating delays to streamline port operations.

While the Tanzanian parliament endorsed the bilateral agreement between Tanzania and Dubai back in June, it encountered opposition from various quarters, including the Catholic church, legal professionals, activists, and opposition parties, who believed the terms favored DP World and provided limited benefits to Tanzania. In response to these concerns, President Samia Suluhu Hassan emphasized that her administration had considered all perspectives and feedback during the negotiation process with DP World.

The social and economic impacts of Tanzania's 30-year port agreement with DP World are significant and multifaceted:

Social Impacts:

• Employment Opportunities: The collaboration is expected to generate job opportunities in the region, which can help reduce unemployment and improve the livelihoods of local communities.
• Reduced Cargo Clearance Times: The improved efficiency of the port will lead to faster clearance of goods, reducing delays and enhancing trade. This can positively affect various sectors, including agriculture and manufacturing, by ensuring timely access to imported and exported products.
• Enhanced Regional Trade: A more efficient port will encourage increased trade with neighboring landlocked nations in East and Southern Africa, strengthening economic ties and regional cooperation.

Economic Impacts:

• Economic Growth: The investment of $250 million by DP World in port infrastructure will stimulate economic growth and development in Tanzania. It will create opportunities for local businesses to supply goods and services to support the port's operations.
• Increased Capacity: The expanded capacity of the port will accommodate more vessels and cargo, contributing to higher import and export volumes. This is likely to boost economic activities and trade.
• Attracting Investment: The partnership with a well-known global port operator like DP World could attract further foreign direct investment to Tanzania, spurring economic development in various sectors.
• Infrastructure Development: The focus on upgrading the port's infrastructure will have a positive ripple effect on the overall transportation network in the country, further facilitating trade and economic growth.
• Strengthened Regional Position: The efficient operation of Dar es Salaam port will enhance Tanzania's position as a trade gateway for landlocked countries like Uganda, Rwanda, Burundi, and Zambia. This could lead to increased transit trade and economic opportunities for Tanzania.

It's important to note that while this agreement is expected to bring many benefits, it may also have challenges and potential downsides, such as concerns about the terms of the agreement and its impact on local businesses. The social and economic impacts will depend on how well the partnership is managed and how effectively it addresses the needs and interests of the Tanzanian people and economy.

Social Impacts:

Tanzania's 30-year port agreement with DP World carries several potential negative social consequences. Firstly, while the partnership is expected to bring job opportunities, it may also lead to job displacement, particularly if DP World introduces automation or brings in its own workforce. Additionally, the widespread opposition to the agreement, coming from political opposition, activists, and religious institutions like the Catholic church, raises concerns about social discontent and the potential for protests that could disrupt social stability. Infrastructure expansion tied to the agreement may also result in the displacement of local communities, exacerbating social upheaval and community disruptions.

Economic Impacts:

From an economic perspective, the long-term port agreement with DP World could have unfavorable terms that raise concerns about equity, potentially favoring DP World over Tanzania. This could lead to economic imbalances and an unequal distribution of benefits. If the agreement does not prioritize local businesses and suppliers, it may limit the economic advantages that Tanzania can derive from the partnership, impacting local economic growth and development. The agreement may also entail financial risks, possibly increasing Tanzania's debt burden if not managed effectively, diverting vital resources away from other critical sectors. There's a risk of dependence on external expertise and resources due to this partnership, which may pose economic vulnerabilities, and it may result in reduced control over the port's operations, potentially hampering Tanzania's ability to tailor the port's activities to its specific economic needs. Nonetheless, the degree of these negative impacts can be mitigated through careful negotiation, rigorous oversight, and effective governance, and the ultimate success of the partnership hinges on addressing these challenges while maximizing positive social and economic outcomes.