Mnamo Agosti 2024, Shilingi ya Tanzania (TZS) ilishuka kidogo dhidi ya dola ya Marekani, ikiendeleza mwelekeo wa kudhoofika kwa polepole. Kiwango cha wastani cha kubadilisha fedha kwa mwezi huo kilikuwa TZS 2,694.25 kwa dola moja ya Marekani, ikilinganishwa na TZS 2,663.76 kwa dola moja ya Marekani mnamo Julai 2024, ikiwa ni kushuka kwa thamani kwa asilimia 10.3 kwa mwaka.

Kushuka kwa thamani ya Shilingi ya Tanzania mnamo Agosti 2024 kunaakisi ongezeko la mahitaji ya fedha za kigeni kutokana na uagizaji wa bidhaa kutoka nje, pamoja na kupungua kwa ushiriki wa benki kuu katika soko la fedha za kigeni. Ingawa kushuka kwa thamani ya sarafu kulikuwa kidogo, hali hii inaashiria shinikizo linaloendelea kwa shilingi kutokana na mahitaji yanayokua ya bidhaa zinazoagizwa kutoka nje, licha ya utendaji mzuri wa mauzo nje na akiba ya fedha za kigeni iliyokuwa imara.

Sababu Muhimu za Kushuka kwa Thamani:

1. Mahitaji ya Fedha za Kigeni: Kushuka kwa thamani kuliendeshwa kwa kiasi fulani na ongezeko la mahitaji ya dola za Marekani, hususan kwa uagizaji wa bidhaa. Gharama ya kuagiza bidhaa nchini Tanzania, ikiwa ni pamoja na mafuta, bidhaa za mitaji, na mashine, imeongeza mahitaji ya fedha za kigeni. Mnamo Agosti 2024, uagizaji wa bidhaa ulifikia dola milioni 1,468.3, ikilinganishwa na dola milioni 1,163.9 katika mwezi huo huo wa mwaka 2023.
2. Mapato ya Msimu ya Mauzo Nje: Licha ya ongezeko la msimu la mapato ya mauzo nje kutoka sekta kama utalii na kilimo, shilingi iliendelea kushuka thamani. Uboreshaji wa ukwasi wa fedha za kigeni kutokana na mapato haya haukuweza kumaliza mahitaji makubwa ya fedha za kigeni.
3. Ushiriki Mdogo wa Benki Kuu: Ushiriki wa Benki Kuu ya Tanzania katika soko la fedha za kigeni (Interbank Foreign Exchange Market - IFEM) ulipungua kwa kiasi kikubwa. Mnamo Agosti 2024, Benki iliuza kiasi cha dola milioni 2.1 pekee, ikilinganishwa na dola milioni 10.5 mnamo Julai. Ushiriki huu mdogo uliiruhusu soko kujirekebisha kwa kawaida, hali iliyochangia kushuka kwa thamani kidogo.

Akiba ya Fedha za Kigeni:

Akiba ya fedha za kigeni ya Tanzania iliongezeka hadi dola milioni 5,379.7, ambayo inatosha kugharamia miezi 4.4 ya uagizaji wa bidhaa unaotarajiwa. Akiba hii inazidi kigezo cha nchi kwa akiba ya nje, ikiiruhusu Benki Kuu ya Tanzania kutuliza sarafu endapo kutahitajika. Hata hivyo, ushiriki mdogo wa benki kuu mnamo Agosti unaonyesha uamuzi wa kuruhusu nguvu za soko kuamua kiwango cha kubadilisha fedha, angalau kwa muda.

Tanzania's debt development in August 2024 reflects a careful approach to financing government operations and development initiatives. The increase in total debt stock, primarily driven by external loans, suggests a reliance on borrowing to support key infrastructure projects and social services. However, the significant proportion of external debt and the ongoing requirement for debt service payments emphasize the importance of sustainable debt management strategies to maintain fiscal health and ensure economic stability.

1. National Debt Stock:

• As of the end of August 2024, Tanzania’s total national debt stock reached USD 44,891.5 million, marking a 1.7% increase from the previous month​.
• The composition of the debt was predominantly external, with 72.8% of the total being external debt.

2. External Debt:

• The external debt stock increased to USD 32,675.1 million, which represents a 2.1% monthly rise.
• During August, the government disbursed USD 433 million in external loans, primarily directed to central government projects.
• Debt service payments on external debt totaled USD 30.6 million, which included:
  • Principal Repayment: USD 20.6 million
  • Interest Payments: USD 10 million​.

3. Composition of External Debt:

• The breakdown of external debt shows that 76.9% is owed to the central government, with multilateral institutions being the largest creditors at 53.7% of the total external debt stock​.
• The sectors holding the most significant portion of disbursed outstanding external debt included:
  • Transport and Telecommunications: 21.3%
  • Social Welfare and Education: 19.9%

4. Domestic Debt:

• Domestic debt stock was reported at TZS 32,760.2 billion at the end of August 2024, reflecting an increase of TZS 295 billion from the previous month.
• The government raised TZS 755.6 billion from the primary domestic market for budget financing in August. This amount included:
  • TZS 650.9 billion through Treasury bonds
  • TZS 104.7 billion through Treasury bills​.

5. Debt Service Payments:

• Total debt service payments for domestic debt in August amounted to TZS 731.2 billion, which included:
  • Principal Repayments: TZS 454.6 billion
  • Interest Payments: TZS 276.7 billion

The debt development data for Tanzania in August 2024 with critical insights about the country's fiscal health and economic management

The overall picture of Tanzania’s debt development underscores a critical balancing act. While borrowing is essential for financing development and growth, the rising debt levels—especially external debt—demand careful monitoring and management to ensure sustainability. The government’s ability to service this debt without compromising other areas of public expenditure will be crucial for maintaining economic stability and fostering long-term growth. Proper fiscal policies and economic management strategies will be essential to mitigate risks associated with high debt levels.

1. Rising National Debt:

• The total national debt stock of USD 44,891.5 million, with a 1.7% monthly increase, indicates that the government is actively borrowing to finance its budget and development projects. While some debt accumulation is necessary for growth, continued increases can raise concerns about sustainability if not managed properly.

2. Predominance of External Debt:

• With 72.8% of the national debt being external, Tanzania is significantly reliant on foreign loans. The increase to USD 32,675.1 million in external debt suggests ongoing engagement with international lenders, primarily multilateral institutions.
• This reliance exposes the country to exchange rate risks and potential vulnerabilities in global financial markets. If the Tanzanian Shilling depreciates further, the cost of servicing foreign-denominated debt could rise, putting additional strain on government finances.

3. Strategic Borrowing for Development:

• The disbursement of USD 433 million in external loans primarily for government projects indicates a focus on financing critical infrastructure and social programs. This strategic borrowing can drive economic growth and improve living standards if the funds are effectively utilized.

4. Debt Servicing Pressure:

• The USD 30.6 million in debt service payments (including both principal and interest) reflects the government's obligation to manage its debt responsibly. As debt increases, so too do these obligations, which can limit the government's flexibility to allocate funds for other important areas, such as health, education, and development.

5. Domestic Debt Dynamics:

• The increase in domestic debt stock to TZS 32,760.2 billion and the substantial debt service payments (TZS 731.2 billion) suggest that the government is balancing its financing needs between domestic and external sources. The ability to raise TZS 755.6 billion from domestic markets indicates confidence from local investors.

In August 2024, Tanzania’s financial sector displayed a stable interest rate environment, with lending rates remaining steady while deposit rates saw a slight increase. The overall lending rate stood at 15.26%, reflecting stable borrowing conditions, while savings deposit rates rose to 3.02%, encouraging more savings. A narrowing interest rate spread indicates reduced credit risk and increased market confidence. These developments signal a healthy and efficient financial sector, supporting both savers and borrowers in Tanzania's growing economy.

1. Overall Lending Rates:

• The overall lending rate stood at 15.26%, only slightly lower than 15.29% in July 2024.
• The short-term lending rate (loans with a maturity of up to 1 year) averaged 15.50%, a small decline from 15.67% in the previous month.

2. Negotiated Lending Rates:

• Negotiated lending rates, which are rates agreed upon between banks and clients, averaged 12.79% in August 2024, which remained almost unchanged from 12.78% in July 2024.

3. Deposit Rates:

• The overall deposit rate slightly decreased to 7.98% in August, compared to 8.15% in July 2024.
• Savings deposit rates rose to 3.02%, up from 2.87% in July, reflecting banks offering better returns on savings deposits.
• The negotiated deposit rate reached 10.12%, up from 9.96% in July.

4. Interest Rate Spread:

• The spread between the short-term lending rate and deposit rate averaged 6.68 percentage points in August, a slight increase from 6.66 percentage points in July 2024.
• This was a notable improvement compared to 8.08 percentage points recorded in August 2023, indicating a reduction in credit risk in the market.

The interest rate figures for Tanzania in August 2024 reveals several important insights about the country’s economic and financial conditions

The stability in interest rates, combined with better deposit returns and a narrowing spread, reflects growing confidence in Tanzania’s economic environment. While lending rates are still relatively high, the overall conditions suggest that the financial sector is healthy, credit risk is reducing, and banks are positioned to support both savings and borrowing activities. This is a positive indicator for both consumers and businesses looking to engage in financial transactions.

1. Stable Lending Environment:

• The overall lending rate of 15.26% suggests that banks are maintaining stable interest rates for borrowers. While high compared to international standards, the rate’s stability indicates that Tanzania's banking sector is cautious but not tightening credit conditions further.
• The short-term lending rate (15.50%) is slightly lower than previous months, suggesting a slight easing of conditions for businesses and consumers seeking short-term loans.

Stability in lending rates reflects banks’ confidence in economic stability, and it offers predictability for businesses planning to borrow for investment or expansion.

2. Increased Savings Returns:

• The increase in savings deposit rates (from 2.87% to 3.02%) indicates that banks are offering better returns to attract deposits. This rise may encourage households and businesses to save more.
• Negotiated deposit rates, which rose to 10.12%, show that some clients can secure even higher returns for large or long-term deposits, making it more attractive to keep money in the bank.

Higher savings rates can promote more savings, increasing liquidity in banks, which can then be used to extend more credit to businesses.

3. Narrowing Interest Rate Spread:

• The spread between lending and deposit rates narrowed to 6.68 percentage points from 8.08 percentage points a year earlier. This narrowing suggests reduced credit risk and increased competition among banks.

A lower spread means that banks are charging less of a premium on loans, making borrowing slightly cheaper while offering better returns for depositors. This is a positive sign for the economy, indicating improved efficiency in the financial sector.

4. Slightly Lower Risk Perception:

• The narrowing of the interest rate spread also indicates that banks perceive less risk in lending, likely due to better economic performance and improved borrower confidence.

Tanzania's export and import performance in August 2024 demonstrates robust growth in exports, particularly in traditional and non-traditional goods, driven by increased global demand. While imports also rose, reflecting strong economic activity and ongoing demand for capital and intermediate goods, the trade balance shows a deficit, underscoring the challenges of managing external trade flows. Overall, these trends highlight the need for continued focus on enhancing export competitiveness while managing the import bill to ensure sustainable economic growth.

1. Export Performance:

• Total Exports: Tanzania's exports of goods and services surged to USD 15,064.6 million in the year ending August 2024, up from USD 13,290.1 million in the same period of the previous year, representing an increase of approximately 13.4%​.
• Breakdown of Exports:
  • Traditional Exports: These increased to USD 1,099.9 million, up from USD 807.9 million in the previous year. The increase was largely attributed to higher exports of:
    • Tobacco and cashew nuts, driven by both volume and price improvements.
  • Non-Traditional Exports: Amounted to USD 6,568.3 million, compared to USD 6,349.8 million previously, largely driven by:
    • Gold exports: Increased by 8.2% to USD 3,189.4 million, reflecting strong global demand and favorable prices.
    • Horticultural products: Saw a significant rise of 35.3%, reaching USD 454.4 million, driven by increased shipments of edible vegetables​.
• Monthly Export Figures: In August 2024, exports of goods totaled USD 934.3 million, compared to USD 785.3 million in August 2023, showing growth year-on-year​.

2. Import Performance:

• Total Imports: Imports increased to USD 16,427.5 million for the year ending August 2024, up from USD 16,327.7 million the previous year, indicating a slight increase of about 0.6%​.
• Breakdown of Imports:
  • Capital Goods: Imports of capital goods rose to USD 2,912.4 million, a marginal increase from the previous year, with significant purchases of machinery and transport equipment.
  • Intermediate Goods: These accounted for USD 9,860.0 million, with notable increases in:
    • Fuel and lubricants: Totaled USD 3,090.1 million, highlighting the ongoing demand for energy imports.
    • Iron and steel: Imports of these materials surged, reflecting ongoing infrastructure projects and construction activities​.
• Monthly Import Figures: In August 2024, goods imports amounted to USD 1,468.3 million, compared to USD 1,163.9 million in August 2023, indicating robust import activity​.

3. Trade Balance:

• The trade balance (the difference between exports and imports) indicates a current account deficit:
  • Goods Account: Reported a deficit of USD 534.0 million in August 2024, with exports of USD 934.3 million and imports of USD 1,468.3 million​.

Growth and Potential

Tanzania, nestled within the vibrant East African region, has emerged as one of Africa's most promising economic success stories. Over the past decade, the country has consistently achieved impressive GDP growth rates, averaging 6-7% annually before the COVID-19 pandemic. Despite global challenges, Tanzania's economy has shown remarkable resilience, with the World Bank projecting a robust recovery and growth rate of 5.4% in 2023, expected to rise to 6.1% by 2025.

This growth is not isolated to Tanzania alone. The East African Community (EAC), comprising Tanzania, Kenya, Uganda, Rwanda, Burundi, and South Sudan, has been one of the fastest-growing regions in Africa. The EAC's combined GDP has more than doubled over the last decade, with an average annual growth rate of around 5-6%. This regional dynamism creates a substantial market of over 177 million people, with Tanzania strategically positioned to serve as a gateway to this burgeoning economic bloc.

Demographic Dividend

One of the key drivers of East Africa's economic potential is its favorable demographics. Tanzania, like its regional counterparts, boasts a young and rapidly growing population. As of 2023, Tanzania's population is estimated at 65 million, with a median age of just 18 years. This youthful population presents a significant demographic dividend, offering a large workforce and a growing consumer base.

The region's high birth rates further underscore its demographic vitality:

• Tanzania: 4.6 births per woman
• Uganda: 4.8 births per woman
• Kenya: 3.4 births per woman
• Rwanda: 3.8 births per woman

These birth rates, while gradually declining, ensure a continued expansion of the population and, by extension, the consumer market. The United Nations projects that Tanzania's population could reach 100 million by 2050, potentially making it one of the largest countries in Africa.

Urbanization and Middle-Class Growth

Accompanying this population growth is a rapid urbanization trend. Tanzania's urban population is increasing by about 5% annually, one of the highest rates globally. This urbanization is driving demand for housing, infrastructure, and consumer goods – including furniture and home furnishings.

Moreover, East Africa is experiencing a notable expansion of its middle class. In Tanzania, the middle class is projected to grow from about 3.7 million in 2020 to over 15 million by 2030. This emerging middle class, with its increased purchasing power and aspirational lifestyles, is driving demand for quality products and modern living spaces.

Investment Climate and Opportunities

Tanzania has been actively improving its business environment to attract foreign investment. The government has implemented various reforms to streamline business processes, enhance infrastructure, and promote key sectors such as manufacturing, agriculture, and services.

The country's strategic location, with access to eight landlocked neighboring countries and a coastline on the Indian Ocean, positions it as a potential logistics and manufacturing hub for the region. This geographic advantage, combined with Tanzania's membership in the EAC and the African Continental Free Trade Area (AfCFTA), opens up vast opportunities for investors to tap into a market far beyond Tanzania's borders.

In light of these economic and demographic trends, sectors such as furniture manufacturing stand to benefit significantly. The growing population, increasing urbanization, and rising middle class all point to a surge in demand for home furnishings, office furniture, and related products. Investors entering this market now have the opportunity to establish themselves in a rapidly expanding ecosystem, potentially capturing substantial market share as the region's economy continues to flourish.

As we delve into specific investment opportunities in the furniture sector and beyond, it's crucial to keep this broader context of growth, youth, and regional integration in mind. Tanzania, as part of the dynamic East African landscape, offers not just a market of 65 million, but a gateway to hundreds of millions of consumers in one of the world's most promising economic regions.

The bank lending rate is the interest rate charged by commercial banks for loans to private individuals or businesses.

The cost of borrowing has fluctuated based on economic conditions, policies, and other market dynamics in Tanzania. A lower lending rate typically encourages more borrowing and investment, while higher rates tend to restrain borrowing and reduce inflation.

Tanzania’s bank lending rates from 2003 to July 2024:

1. Recent Trend (June to July 2024):

• In July 2024, the bank lending rate in Tanzania decreased to 12.78% from 12.82% in June 2024.
• This is a 0.04% decline within a month.

2. Historical Average (2003 to 2024):

• The average lending rate from 2003 to 2024 was 13.09%.
• This suggests that, over this 21-year period, the cost of borrowing for businesses and individuals in Tanzania has typically been around 13.09%.

3. All-Time High:

• The highest lending rate was 17.91% in September 2017.
• This period represented the peak in borrowing costs, which could have been influenced by economic factors such as inflation, monetary policy changes, or liquidity issues in the banking sector.

4. All-Time Low:

• The lowest lending rate was 7.53% in March 2004.
• This would have been a favorable time for borrowers as the cost of accessing credit was at its lowest in recent history.
  

Summary of Key Data:

• July 2024: Lending rate = 12.78%
• June 2024: Lending rate = 12.82%
• 2003-2024 average: Lending rate = 13.09%
• All-time high: Lending rate = 17.91% (September 2017)
• All-time low: Lending rate = 7.53% (March 2004)
  

The fluctuations in the bank lending rate tell us several things about Tanzania’s economic and financial environment

the trends in Tanzania’s lending rates reflect the country's monetary policy decisions and its response to inflation, economic growth, and financial stability concerns. A gradual reduction in rates could suggest a focus on boosting economic activity, while higher rates historically reflect efforts to control inflation or mitigate risk.

1. Recent Decline (July 2024):

The slight decrease from 12.82% in June to 12.78% in July 2024 indicates a marginal easing of borrowing costs.

• This could signal that the central bank is trying to stimulate economic activity by making credit more affordable. It may also reflect improved liquidity conditions in the banking sector or a response to inflation trends.

2. Historical High in September 2017 (17.91%):

• The sharp increase in the lending rate in September 2017 to 17.91% suggests that there was either an effort to control inflation or to protect the currency from depreciation.
• Higher rates tend to reduce borrowing and spending, which can help stabilize an overheating economy or high inflationary pressures.

3. Historical Low in March 2004 (7.53%):

• The record low rate of 7.53% in March 2004 points to a period of relatively low inflation and/or expansionary monetary policy.
• This lower rate made borrowing cheaper and could have stimulated investments, which supports economic growth.

4. Long-Term Average (13.09%):

• The long-term average of 13.09% suggests that lending rates in Tanzania are generally high compared to other emerging markets. This may reflect the risk premium that banks assign to loans due to factors such as:
  
  • Credit risk (likelihood of default),
  • Inflation volatility,
  • Regulatory environment, or
  • Other economic uncertainties.

High lending rates can limit access to finance for businesses and individuals, particularly for small businesses, and can stifle growth in sectors that rely on loans for expansion.

5. Impact on Borrowers and Economic Growth:

• Lower lending rates generally encourage businesses to take out loans for investment, leading to potential growth in sectors like manufacturing, agriculture, and services.
• Higher rates, on the other hand, discourage borrowing, which can slow down economic growth as businesses and consumers have less access to affordable credit.

Tanzania's economic performance in Q4 2024 exhibited remarkable growth across several indicators. The number of registered investment projects rose by 53.49%, reaching 198, while job creation skyrocketed by 558.04%, with 96,278 new jobs compared to just 14,631 in Q4 2023. Capital investment surged by 60.72%, amounting to US$ 1.62 billion, with manufacturing leading the way at US$ 636.84 million. Foreign-owned projects and joint ventures also increased, along with a 76.19% rise in locally-owned ventures. Dar es Salaam attracted the most projects, cementing its role as the economic hub. Overall, these positive trends signal growing investor confidence and strong economic development in Tanzania.

Number of Projects:

• 198 investment projects were registered in Q4 2024
• This represents a 53.49% increase compared to Q4 2023, when 129 projects were registered

Number of Jobs Created:

• The 198 projects are expected to generate 96,278 new job opportunities
• This is a massive 558.04% increase compared to Q4 2023, which created 14,631 jobs

Capital Invested:

• Total investment value of US$ 1,619.45 million in Q4 2024
• This is a 60.72% increase from US$ 1,007.63 million invested in Q4 2023

Key sectors:

• Manufacturing was the top performing sector, with an estimated capital investment of US$ 636.84 million
• Other top sectors included Commercial Building, Human Resources, Transportation and Tourism

Ownership:

• Foreign-owned projects increased to 89 (from 55 in Q4 2023)
• Joint venture projects increased to 35 (from 32 in Q4 2023)
• Local ownership increased by 76.19%

Regional distribution:

• Dar es Salaam attracted the most projects with 75
• Followed by Pwani (30 projects), Arusha (19 projects) and Dodoma (13 projects)

Tanzania's economic development in Q4 2024 shows strong signs of growth and progress compared to Q4 2023

The improvements in project numbers, job creation, and capital investment reflect growing investor confidence in Tanzania and an improving business environment, contributing positively to Tanzania's economic development.

1. Significant Growth in Investments:
   • The number of investment projects increased by 53.49% from 129 to 198. This shows a notable rise in business activities and interest in the Tanzanian market.
2. Substantial Job Creation:
   • The investments are expected to create 96,278 jobs, a staggering 558.04% increase compared to the 14,631 jobs in Q4 2023. This reflects a major boost to employment opportunities, which can reduce poverty and improve livelihoods.
3. Increase in Capital Investment:
   • The total capital invested grew by 60.72%, reaching US$ 1,619.45 million compared to US$ 1,007.63 million in Q4 2023. This indicates that larger investments are flowing into Tanzania, showing an enhanced investor confidence.
4. Key Sectors Driving Growth:
   • Manufacturing led with US$ 636.84 million in investments, followed by sectors such as Commercial Building, Human Resources, Transportation, and Tourism. Growth in diverse sectors suggests a broad-based development trajectory.
5. Ownership Shifts:
   • Foreign-owned projects increased by 61.82%, and joint ventures rose by 9.38%, showing that international and collaborative investments are rising. More notably, locally-owned projects surged by 76.19%, highlighting stronger domestic participation in the economy.
6. Regional Distribution:
   • Dar es Salaam attracted the most projects, followed by Pwani, Arusha, and Dodoma, showing regional growth distribution. Dar es Salaam's dominance suggests its position as the business hub.

Tanzania's economic development trajectory

1. Tax/GDP Ratio (%)

• 2021/2022: 11.4%
• 2022/2023: 11.7%
• 2023/2024: 12.1%
• 2024/2025 (projected): 12.5%

This shows the percentage of Gross Domestic Product (GDP) that comes from tax revenue. From 2021/2022 to 2024/2025, this ratio is increasing, indicating an improvement in tax collection or efficiency in revenue generation. Over the four years, the tax/GDP ratio rises by 1.1 percentage points (from 11.4% to 12.5%).

2. GDP (in trillion TZS)

• 2021/2022: 154.8 trillion TZS
• 2022/2023: 176.7 trillion TZS
• 2023/2024: 191.5 trillion TZS
• 2024/2025 (projected): 207.5 trillion TZS

Tanzania’s GDP is growing year by year, with an increase of 52.7 trillion TZS projected over four years, which reflects a healthy economic expansion. From 2021/2022 to 2024/2025, the GDP grows by about 34%.

3. Budget Deficit (% of GDP)

• 2021/2022: -3.2%
• 2022/2023: -3.5%
• 2023/2024: -3.0%
• 2024/2025 (projected): -2.8%

The budget deficit represents how much the government is spending more than it collects in revenue, expressed as a percentage of GDP. The deficit was at its highest in 2022/2023 at -3.5%, but it is projected to decline, showing fiscal consolidation efforts.

4. Public Debt (% of GDP)

• 2021/2022: 39.5%
• 2022/2023: 40.8%
• 2023/2024: 41.2%
• 2024/2025 (projected): 41.5%

Public debt as a percentage of GDP is gradually increasing, indicating that the government's debt levels are rising in proportion to the country's total economic output. However, the increase is modest, only 2 percentage points over four years.

5. Public Debt (in trillion TZS)

• 2021/2022: 61.1 trillion TZS
• 2022/2023: 72.1 trillion TZS
• 2023/2024: 78.9 trillion TZS
• 2024/2025 (projected): 86.1 trillion TZS

The actual public debt in Tanzania is increasing by 25 trillion TZS from 2021/2022 to 2024/2025, showing a steady rise in borrowing. This rise corresponds with the growing economy, and the debt-to-GDP ratio is increasing at a slower pace, meaning that while debt is rising, the economy is growing as well.

A Path Toward Sustainable Economic Growth and Fiscal Stability

1. Tax Revenue Growth (Tax/GDP Ratio)

• The steady increase in the tax-to-GDP ratio from 11.4% in 2021/2022 to 12.5% in 2024/2025 indicates an improving capacity to generate revenue internally. This reflects enhanced tax collection efficiency, better compliance, and possibly a widening tax base.
• Economic Implication: A higher tax-to-GDP ratio strengthens the government’s ability to finance public services, reduce reliance on debt, and invest in development projects such as infrastructure, education, and healthcare.

2. Robust GDP Growth

• The GDP is projected to grow from 154.8 trillion TZS in 2021/2022 to 207.5 trillion TZS in 2024/2025. This signifies that the Tanzanian economy is expanding at a healthy pace, with a growth rate of about 34% over four years.
• Economic Implication: Rising GDP suggests that sectors like agriculture, mining, manufacturing, and services are performing well, contributing to the overall economic growth. This provides opportunities for job creation, increased investments, and poverty reduction efforts.

3. Reduction in Budget Deficit

• The budget deficit narrows from -3.5% in 2022/2023 to -2.8% in 2024/2025. This indicates efforts to bring the government’s spending under control and improve fiscal discipline.
• Economic Implication: A smaller budget deficit reduces the need for external borrowing and creates fiscal space for developmental projects. Controlling the deficit helps maintain macroeconomic stability, which is crucial for sustaining investor confidence and long-term growth.

4. Moderate Rise in Public Debt

• The public debt as a percentage of GDP increases modestly from 39.5% to 41.5% over four years. However, in absolute terms, public debt rises by 25 trillion TZS from 61.1 to 86.1 trillion TZS.
• Economic Implication: Tanzania's debt levels are increasing, but the rise is in line with economic growth. This shows that borrowing is being managed cautiously, likely for infrastructure and development investments rather than unsustainable expenditures. If debt is used effectively to finance growth-enhancing projects, it can contribute positively to long-term economic development.

5. Sustainable Fiscal Management

• The combination of increasing tax revenues, controlled budget deficits, and a modest rise in public debt indicates Tanzania is focusing on sustainable fiscal management. This can help maintain economic stability and resilience against external shocks.

Overall Economic Development Trends:

• Positive Economic Growth: Tanzania is experiencing healthy GDP growth, driven by effective economic policies, investments, and sectoral development.
• Focus on Fiscal Responsibility: The government is working towards reducing deficits while increasing tax revenues, reflecting a commitment to fiscal sustainability.
• Debt Management: Public debt is rising, but within reasonable limits, allowing room for strategic investments in infrastructure and other development projects.

Implication for Development:

• The improvement in tax collection and GDP growth highlights progress towards self-reliance and reducing aid dependence.
• Investments in infrastructure, healthcare, and education can further spur economic growth, job creation, and poverty reduction.
• The stable macroeconomic environment will attract foreign direct investment (FDI), fostering industrialization and technology adoption, key drivers of long-term economic development in Tanzania.

The Tanzania All Share Index (DSEI) is a key benchmark index that tracks the overall performance of all listed companies on the Dar es Salaam Stock Exchange (DSE).

The DSEI serves as a valuable indicator for investors, analysts, and policy makers to gauge the overall health of Tanzania’s stock market. The upward trend in 2024 shows investor confidence and could be driven by various factors such as favorable economic policies, strong corporate earnings, or increased foreign investment. However, the forecasted decline suggests that there may be challenges ahead, possibly related to market corrections or economic adjustments.

1. Current Performance (2024):
   • The DSEI has increased by 358 points, which represents a 20.43% rise since the beginning of 2024. This is a significant uptick, reflecting a strong performance of the Tanzanian stock market this year.
   • This increase is based on data from contracts for difference (CFDs), a financial instrument that allows traders to speculate on the price movements of assets without owning the underlying asset itself.
2. Historical Peak (2015):
   • The DSEI reached its all-time high of 2850.15 points in June 2015, showing a strong historical performance. This indicates that the Tanzanian stock market saw remarkable growth during that period, though it has since experienced fluctuations.
3. Latest Data (September 2024):
   • As of September 12, 2024, the DSEI was recently updated with its current performance metrics, reflecting the strong gains since the start of the year.
4. Forecasts:
   • End of 2024 Q3 (by September 30, 2024): According to TICGL Economics global macro models and analysts’ expectations, the DSEI is predicted to trade at 2081.02 points by the end of this quarter. This suggests a slight drop compared to the current level but still reflects relative stability in the index.
   • 12-Month Outlook (2025): The DSEI is forecasted to trade at 2026.01 points within the next 12 months, indicating a possible moderate decline over the longer term.
     

Tanzania stock market and economy

The current stock market surge in Tanzania signals short-term strength and investor confidence, but the forecasted decline suggests that there may be challenges ahead, requiring careful monitoring of economic and market conditions. This mixed outlook indicates a need for cautious optimism when investing in Tanzanian equities.

1. Strong Stock Market Performance in 2024:
   • The 20.43% increase since the beginning of 2024 reflects growing investor confidence in Tanzanian businesses. It suggests that the listed companies are performing well or that external factors (such as favorable policies, investor sentiment, or economic conditions) are encouraging investment.
   • This growth indicates economic optimism or recovery, possibly fueled by sectors such as banking, telecommunications, or agriculture, which are key to Tanzania’s economy.
2. Historical High in 2015:
   • The fact that the DSEI reached its all-time high in 2015 but is currently trading below that peak indicates that the market has experienced some fluctuations or challenges since then. Factors like economic slowdowns, political changes, or external shocks may have contributed to this decline.
3. Moderate Forecasts for the Future:
   • The forecast for the DSEI to drop slightly to 2081.02 by the end of Q3 2024 and further to 2026.01 over the next 12 months suggests that analysts expect some cooling off in the stock market. This might indicate concerns over economic growth slowing down, challenges in corporate profitability, or external risks such as global economic conditions or inflation.
   • It could also mean that the current growth may not be sustainable, and market corrections are anticipated.
4. Market Volatility and Investor Sentiment:
   • The increase in 2024 followed by a projected decline implies that the market may be experiencing some volatility. While investor sentiment is currently positive, analysts foresee potential risks or market corrections that could impact future performance.
5. Broader Economic Signals:
   • The stock market often reflects the broader economy. The growth in the DSEI points to a relatively strong economic performance in 2024, possibly driven by sectors benefiting from government policies, foreign investment, or economic reforms.
   • However, the projected decline might signal caution regarding future economic growth, possibly linked to inflation, interest rates, or global economic challenges.

Viwango vya sasa na vya utabiri vya mfumuko wa bei ya vyakula vinaonyesha kuwa Tanzania inapiga hatua katika kuhakikisha utulivu wa kiuchumi, kuboresha uzalishaji wa kilimo, na kuunda mazingira yanayovutia uwekezaji zaidi. Hii inaonyesha mwelekeo mzuri wa maendeleo ya kiuchumi ya Tanzania, ikionesha kuwa taifa linakwenda katika ukuaji endelevu na kuboresha hali za maisha za wananchi wake.

1. Kiwango cha Mfumuko wa Bei ya Vyakula (Agosti 2024):
   Katika Agosti 2024, gharama ya vyakula Tanzania ilipanda kwa asilimia 2.80% ikilinganishwa na Agosti 2023. Hii inaonyesha kuwa, wastani, bei za vyakula ziliongezeka kwa kiasi kidogo katika kipindi cha mwaka mmoja uliopita. Hili ni kiwango cha chini cha mfumuko wa bei ikilinganishwa na historia ya miaka iliyopita, ikiashiria udhibiti bora wa utulivu wa bei ya vyakula katika kipindi hiki.
   
2. Historia ya Mfumuko wa Bei ya Vyakula (2010–2024):
   • Wastani wa mfumuko wa bei ya vyakula Tanzania kati ya 2010 hadi 2024 ulikuwa asilimia 7.85%, ikionyesha kuwa bei za vyakula ziliongezeka kwa kiwango cha juu zaidi katika kipindi hiki.
   • Mwezi Januari 2012, kiwango cha juu zaidi cha mfumuko wa bei ya vyakula kilirekodiwa kuwa asilimia 27.84%, kilichosababishwa na mambo kama mavuno hafifu, kuongezeka kwa bei za bidhaa za kimataifa, na pengine gharama kubwa za usafirishaji na usambazaji.
   • Kiwango cha chini kabisa cha mfumuko wa bei ya vyakula kilirekodiwa Machi 2019 kwa asilimia 0.10%, ikionesha karibu utulivu wa bei za vyakula wakati huo, pengine kutokana na hali nzuri ya kilimo au hatua madhubuti za serikali.
3. Matarajio ya Baadaye kwa 2024:
   Kulingana na mifano ya kimataifa ya TICGL na matarajio ya wachambuzi:
   • Mfumuko wa bei ya vyakula unatarajiwa kupungua zaidi hadi asilimia 2.60 kufikia mwisho wa robo ya tatu ya 2024 (Q3 2024). Hii inaashiria kuwa bei za vyakula zitaendelea kuwa tulivu kwa muda mfupi, isipokuwa kama kutakuwa na changamoto zisizotarajiwa.
4. Matarajio ya Muda Mrefu (2025–2026):
   • Katika muda mrefu, mfumuko wa bei ya vyakula unatarajiwa kupungua zaidi, huku viwango vikitarajiwa kufikia asilimia 1.40 mwaka 2025 na asilimia 1.10 mwaka 2026. Matarajio haya yanaonyesha matarajio ya kuongezeka kwa utulivu wa bei za vyakula, jambo ambalo linaweza kutokana na maboresho katika uzalishaji wa kilimo, ufanisi katika minyororo ya ugavi, au sera nzuri za kiuchumi zinazolenga kudhibiti bei za vyakula.
     

Uchanganuzi wa Mfumuko wa Bei ya Vyakula Tanzania

1. Utulivu wa Bei na Udhibiti wa Mfumuko wa Bei:
   • Kiwango cha wastani cha mfumuko wa bei ya vyakula cha asilimia 2.80 mnamo Agosti 2024, ikilinganishwa na wastani wa juu zaidi wa kihistoria, kinaonyesha kuwa Tanzania inafanikiwa kudhibiti bei za vyakula. Hii inaweza kuwa ishara ya usimamizi bora wa kiuchumi, uzalishaji bora wa kilimo, na udhibiti mzuri wa shinikizo za mfumuko wa bei.
   • Mwelekeo wa kupungua kwa mfumuko wa bei, huku matarajio ya asilimia 1.40 ifikapo 2025 na asilimia 1.10 ifikapo 2026, yanaonyesha matarajio ya utulivu wa kiuchumi wa kudumu. Viwango vya chini vya mfumuko wa bei vinaongeza uwezo wa kununua na kuchangia kupunguza umaskini kwa kuhakikisha bidhaa muhimu kama vyakula zinabaki kuwa nafuu.
     
2. Kuboreka kwa Sekta ya Kilimo:
   
   • Kihistoria, kupanda kwa kasi kwa mfumuko wa bei ya vyakula (kama asilimia 27.84 mnamo Januari 2012) kulisababishwa na kuzorota kwa uzalishaji wa kilimo, mavuno duni, au upungufu wa ufanisi katika minyororo ya usambazaji. Viwango vya chini vya sasa na vya utabiri vinaashiria maboresho katika sekta ya kilimo ya Tanzania.
     
   • Utulivu na viwango vya chini vya mfumuko wa bei vinaonyesha kuwa juhudi za Tanzania za kuongeza uzalishaji, kuboresha teknolojia za kilimo, na kuhakikisha usalama wa chakula zinafanikiwa, hivyo kuchangia ukuaji wa uchumi wa jumla.
     
3. Utulivu wa Kiuchumi wa Jumla:
   • Viwango vya chini vya mfumuko wa bei kwa kawaida vina uhusiano na utulivu wa kiuchumi. Katika hali hii, kushuka kwa mfumuko wa bei ya vyakula kunamaanisha kuwa sera za kifedha na za kiuchumi za Tanzania zinasaidia kudhibiti mfumuko wa bei kwa ufanisi.
   • Viwango thabiti vya mfumuko wa bei vinaweza kuvutia uwekezaji kwa kutoa mazingira ya kiuchumi yenye utabiri. Wawekezaji wanavutiwa zaidi kuwekeza katika sekta kama kilimo, viwanda, na biashara endapo wanajua kuwa mfumuko wa bei hautaharibu faida zao.
4. Kuimarika kwa Uwezo wa Wateja na Kupunguza Umaskini:
   • Kadri bei za vyakula zinavyotulia, hasa katika nchi ambapo vyakula vinachukua sehemu kubwa ya matumizi ya kaya, watumiaji wanapata imani zaidi katika uwezo wao wa kununua. Hii inaongeza ustawi wa kaya na kupunguza hatari ya ukosefu wa usalama wa chakula, jambo muhimu kwa maendeleo ya binadamu kwa ujumla.
   • Mfumuko wa bei ya chini huchangia kupunguza umaskini, kwani bei za vyakula zinazotulia au kushuka zina maana kwamba kaya, hasa zile zenye kipato cha chini, zinaweza kumudu mahitaji ya msingi, hivyo kuboresha viwango vya maisha.
5. Ulinganifu na Malengo ya Maendeleo ya Muda Mrefu:
   • Kupungua kwa mfumuko wa bei ya vyakula kunalingana na malengo mapana ya maendeleo ya kiuchumi ya Tanzania, kama vile Dira ya Maendeleo ya 2025, inayolenga kufikia uchumi wa kipato cha kati. Kwa kuhakikisha utulivu wa bei za vyakula, serikali inashughulikia moja ya vipengele muhimu vya maendeleo endelevu: uimara wa kiuchumi na usalama wa chakula.
   • Bei za vyakula thabiti pia zinaunga mkono sekta nyingine kama utalii, viwanda, na biashara, kwani mfumuko wa bei ya chini husaidia kudumisha ushindani wa bei za bidhaa na huduma.
6. Kuvutia Uwekezaji wa Ndani na wa Kimataifa:
   • Kadri mfumuko wa bei unavyotulia, hasa mfumuko wa bei ya vyakula, Tanzania inakuwa kivutio zaidi kwa wawekezaji wa ndani na wa kimataifa. Mazingira thabiti ya mfumuko wa bei hupunguza kutotabirika, hivyo kuruhusu biashara kupanga kwa muda mrefu na kupunguza hatari ya mabadiliko ya bei ambayo yanaweza kupunguza faida.
   • Kwa matarajio ya mfumuko wa bei ya vyakula kufikia asilimia 1.10 ifikapo 2026, Tanzania inaweza kushuhudia ongezeko la uwekezaji katika sekta zake za kilimo na usindikaji wa vyakula, jambo linaloweza kuchochea uundaji wa ajira, ukuaji wa usafirishaji bidhaa nje ya nchi, na ongezeko la Pato la Taifa (GDP).
7. Mafanikio ya Sera:
   • Matarajio haya yanaonyesha mafanikio ya sera zinazolenga usalama wa chakula, kama vile maboresho ya kilimo, programu za maendeleo ya vijijini, na maboresho ya miundombinu (kama vile mitandao bora ya usafirishaji wa vyakula). Pia inaonyesha maendeleo katika juhudi za Tanzania za kupunguza utegemezi wa uagizaji wa vyakula kwa kuongeza uzalishaji wa ndani.
   • Sera za serikali za kudhibiti mfumuko wa bei na kuhakikisha utulivu wa kiuchumi, kama vile sera za fedha za tahadhari na udhibiti wa matumizi ya umma, pia zinazaa matokeo.