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

1. J.P. Magufuli Bridge

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

2. BRT Phase 2 Lot 1

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

3. Lusitu-Mawengi LOT2

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

4. Usesule-Komanga LOT1

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

5. Widening of Morogoro Road (Kimara–Kibaha)

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

6. Komanga-Kasinde LOT2

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

7. Kasinde-Mpanda LOT3

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

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

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

9. Moronga-Makete LOT2

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

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

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

Key Observations and Trends

1. Cost Distribution

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

2. Timeline Pattern

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

3. Project Types

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

4. Cost Efficiency

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

5. Geographic Distribution

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

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

1. Strategic Investment Priorities

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

2. Cost Efficiency and Project Complexity

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

3. Timeline and Budget Focus

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

4. Geographic Distribution

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

5. Infrastructure and Economic Growth Link

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

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

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

Key Observations:

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

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

Yearly Breakdown

2021

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

2020

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

2019

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

2018

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

2017

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

2016

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

2015 and Earlier

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

Insights

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

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

1. Investment Growth Over Time

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

2. Recent Trends (2020–2021)

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

3. Earlier Years (2015 and Before)

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

4. Long-Term Trends

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

What This Means

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

The top 10 projects by contract value.

Key observations:

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

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

1. Nafasi ya Tanzania katika Ufadhili wa IDA

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

2. Mara za Kufikiwa kwa Ufadhili

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

3. Mwelekeo wa Ufadhili wa IDA

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

4. Maana kwa Tanzania

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

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

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

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

1. Tanzania’s Position in IDA Funding

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

2. Frequency of Access

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

3. Trends in IDA Funding

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

4. Implications for Tanzania

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

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

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

Notes:

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

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

1. Tanzania's Top Position in IDA Engagement

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

2. Strategic Role of IDA in Tanzania’s Development

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

3. Regional and Global Context

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

4. Implications for Tanzania

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

5. Challenges and Opportunities

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

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

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

1. Asset Growth and Structure

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

2. Liabilities and Deposits

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

3. Profitability

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

4. Capital Adequacy

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

5. Asset Quality

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

6. Liquidity

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

7. Outreach and Inclusion

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

Key Takeaways:

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

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

1. Growth and Resilience

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

2. Improved Credit and Risk Management

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

3. Enhanced Financial Inclusion

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

4. Confidence in the Banking System

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

5. Challenges and Opportunities

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

What It Tells Overall:

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

Tanzania's financial sector, led by the banking sub-sector, continues to drive economic growth, accounting for over 70% of the sector's total assets. In 2023, the sector demonstrated remarkable resilience and growth, with total banking assets reaching TZS 54,396 billion, a 17.8% increase from 2022. Deposits grew by 16.9% to TZS 38,076.5 billion, supported by increased public confidence and robust deposit mobilization strategies. The sector's profitability surged by 63.5%, with pre-tax profits rising to TZS 1,527.9 billion, driven by improved operational efficiency and a growing loan portfolio. Enhanced credit risk management reduced the Non-Performing Loan (NPL) ratio to 4.4%, below the regulatory benchmark of 5%. These achievements underscore the sector's stability and its pivotal role in expanding financial inclusion and supporting Tanzania's macroeconomic stability.

Financial Sector Composition

The financial sector consists of five sub-sectors:

1. Banking: Dominates with over 70% of the total financial sector assets.
2. Social Security Schemes
3. Insurance
4. Capital Markets
5. Microfinance

Banking Sub-Sector

1. Institutions:
   • Commercial Banks: 34 banks accounted for 97.3% of total banking sector assets.
   • Development Banks: 2 banks contributed 1.9% of total assets.
   • Microfinance Banks: 3 banks, with total assets at 0.4% of total.
   • Community Banks: 5 banks contributed 0.4% of total assets.
2. Performance Highlights (2023):
   • Total banking sector assets: TZS 54,396.0 billion (17.8% growth from TZS 46,159.5 billion in 2022).
   • Total loans, advances, and overdrafts: TZS 32,011.0 billion (22.7% growth from TZS 26,095.9 billion in 2022).
   • Deposits: TZS 38,076.5 billion (16.9% increase from TZS 32,584.7 billion in 2022).
   • Profitability: Sector profit increased by 63.5% to TZS 1,527.9 billion from TZS 934.4 billion in 2022.
   • Non-Performing Loan (NPL) ratio improved to 4.4% from 5.8% in 2022.
3. Capital and Liquidity:
   • Core capital adequacy ratio: 17.7% (above the 10% minimum requirement).
   • Liquid assets to demand liabilities: 28.8% (above the 20% regulatory requirement).
4. Service Delivery:
   • Banking agents increased by 41.1% to 106,176.
   • Agent banking deposit transactions: TZS 74,914.4 billion (21% growth).
   • Branches increased to 1,011 from 987 in 2022.

Non-Banking Financial Institutions (NBFIs)

1. Social Security Schemes:
   • Total assets: TZS 18,834.1 billion (investment assets grew by 5.8%).
   • Members' contributions increased by 13.4% to TZS 4,382.4 billion.
2. Microfinance Service Providers:
   • Licensed entities (Tier 2): Increased from 1,095 to 1,579.
   • Total loans disbursed: TZS 962.3 billion (18.6% growth).
3. Mortgage Finance:
   • Total assets increased slightly to TZS 255.9 billion.
   • Loan portfolio grew by 7.8% to TZS 177.5 billion.

Credit Reference System

1. Credit inquiries: 17 million, up 197.7% from 5.7 million in 2022.
2. Credit reports sold: 9.7 million, an increase of 257.6%.

Major Developments

• Issued 484 licenses for non-deposit-taking microfinance service providers (Tier 2).
• Approved mergers and revoked licenses to enhance sector stability.

The overview of Tanzania's financial sector with key insights about its structure, growth, stability, and trends:

1. Dominance of the Banking Sub-Sector

• The banking sector dominates the financial landscape, holding 70% of the total financial sector assets. This indicates its central role in the country's economic operations and financial intermediation.
• With TZS 54,396 billion in assets, the sector has shown significant growth (17.8%) from 2022, reflecting increasing economic activities, better access to financial services, and public confidence.

2. Improved Asset Quality and Stability

• A reduction in the Non-Performing Loan (NPL) ratio from 5.8% to 4.4% signals better credit risk management and stronger financial health in the banking sector.
• Capital adequacy ratios remain well above regulatory requirements, ensuring that banks are adequately capitalized to absorb shocks.

3. Expansion and Financial Inclusion

• A 41.1% increase in banking agents (to 106,176) and a growth in branch networks from 987 to 1,011 indicate a continued push for financial inclusion.
• The significant rise in agent banking transactions (deposit transactions valued at TZS 74,914.4 billion) demonstrates increasing reliance on alternative delivery channels.

4. Profitability and Efficiency Gains

• Banking sector profitability surged by 63.5%, driven by higher interest income, operational efficiency, and growth in non-interest income.
• The cost-to-income ratio improved to 50.5%, within the desired limit of 55%, indicating better operational management.

5. Role of Non-Banking Financial Institutions (NBFIs)

• NBFIs, though smaller in scale, contribute to financial services diversity. For instance:
  • Social security schemes managed TZS 18,834 billion in assets.
  • Microfinance services expanded, with Tier 2 loans rising to TZS 962.3 billion, helping to bridge gaps in credit access for smaller enterprises and individuals.
  • Mortgage financing and leasing companies, though niche, support housing and equipment financing needs.

6. Increased Use of Credit Reference Bureaux

• A 197.7% growth in credit inquiries and a 257.6% increase in credit reports sold highlight growing reliance on credit data for lending, reducing information asymmetry and improving credit underwriting.

7. Challenges and Opportunities

• While the sector is stable and growing, issues like a slight decline in total capital adequacy ratios (due to increased risk-weighted assets) and reliance on deposits for funding (loan-to-deposit ratio at 92.5%) indicate areas needing attention.
• Regional disparities in banking access (e.g., agent concentration in urban centers like Dar es Salaam) highlight the need to enhance rural penetration.

Key Takeaways:

• Resilience: Despite global challenges, the sector remains robust, supported by favorable policies and supervision.
• Growth Potential: Expansion of financial services and digital channels demonstrates untapped potential in underserved areas.
• Strategic Focus: Regulatory advancements, such as implementing Basel II & III, show a long-term commitment to aligning with international standards.

This paints a picture of a growing, inclusive, and stable financial system with areas of improvement to enhance its role in Tanzania's economic development. 

Balancing Growth Amid Persistent Challenges

The October 2024 IMF report on Sub-Saharan Africa’s economic outlook reveals a steady yet cautious path forward, with growth projected at 3.6% in 2024 and inflation expected to ease from 18.1% to 12.3% by 2025. While fiscal policies have stabilized the region’s debt-to-GDP ratio at 58%, the high cost of debt servicing – consuming over 20% of revenues in many countries – limits resources for development. With rising food prices driving social unrest, and climate shocks intensifying, the report underscores the need for balanced policy adjustments. Sustained progress will depend on targeted reforms, social support mechanisms, and external funding to support economic resilience across diverse economies.

1. Growth and Inflation:
   • Real GDP growth for the region is projected at 3.6% in 2024, with expectations to slightly rise to 4.2% in 2025. Resource-intensive countries grow slower than others, with oil exporters facing the most challenges.
   • Inflation has seen a decline due to policy tightening, with the region's headline inflation forecasted to reduce from 18.1% in 2024 to 12.3% in 2025.
   • Resource-intensive countries like Tanzania are forecasted to grow below the regional average, constrained by tight external financing conditions and structural weaknesses affecting the business environment​.
2. Debt and Fiscal Balance:
   • The median public debt-to-GDP ratio stabilized at 58% in 2024. However, debt service burdens remain high, consuming over 20% of revenues in a quarter of the countries, leading to reduced resources for development spending.
   • For Tanzania, debt sustainability remains a concern as public debt continues to limit fiscal space for growth-stimulating investments​.
   • Fiscal consolidation has been a focus, with a reduction in the fiscal deficit by 1.3 percentage points of GDP across many countries in 2023. More countries are expected to further reduce deficits by 0.4 percentage points in 2024.
   • Tanzania is expected to see additional consolidation in 2024, focusing on expanding tax revenues and controlling expenditures to stabilize the debt level. However, tight fiscal conditions pose challenges for financing social and infrastructure projects essential for sustainable development​

3. External Position:
   • Median current account deficit is projected to narrow by 0.7 percentage points of GDP in 2024, helped by fiscal consolidation and adjustments in exchange rates.
4. Social and Political Pressures:
   • Social unrest is a rising concern due to high poverty, job scarcity, and inflation, especially in countries like Nigeria and Kenya. Food prices have risen sharply, with food price indexes up significantly since 2019.
   • Tanzania, like other countries, faces potential social unrest if economic conditions do not improve, particularly for unemployed youth and low-income households impacted by rising costs. Effective fiscal management and equitable resource allocation are critical to addressing these pressures​
5. Key Risks:
   • Climate risks, social unrest, and global market volatility are major threats. Political fragility, seen in the rising number of coups and conflicts, further complicates policy implementation.
   • Tanzania faces heightened risks from climate-induced events such as droughts, affecting agriculture and food security, and contributing to inflation pressures. The IMF notes that climate adaptation will require significant resources, impacting budget allocation​
   • An IMF model suggests that a 150-basis-point rise in sovereign risk premiums could reduce growth by 0.7 percentage points in 2025–26, worsening investment and growth (AFRMOD model simulation).
   • Debt and Financing: External financing remains tight, with rising interest rates and geopolitical tensions reducing access to affordable debt. Tanzania, with moderate reserves, may experience increased borrowing costs, further stressing its fiscal space.
   • Global Market Risks: Regional exposure to global financial fluctuations adds to uncertainty, especially with tightening US monetary policy potentially increasing debt servicing costs for Tanzania. Additionally, regional conflicts and commodity price fluctuations may destabilize Tanzania's economic outlook​
6. Policy Recommendations:
   • Tanzania’s need for continued fiscal discipline, inflation control, and resilience to social and climate-related pressures to stabilize and stimulate long-term growth in an increasingly challenging environment.
   • Policymakers are advised to focus on stabilizing prices, ensuring debt sustainability, and building social protection frameworks. Measures include broadening tax bases, improving governance, and enhancing social inclusiveness to gain public support for reforms.

These efforts aim to foster resilience and inclusive growth but require balancing economic stabilization with social acceptance amid complex challenges.

The October 2024 Regional Economic Outlook for Sub-Saharan Africa from the IMF provides a mixed view of progress and challenges for economic stability and growth across the region.

1. Economic Progress with Persistent Vulnerabilities:
   • Growth in Sub-Saharan Africa remains steady at 3.6% but lacks momentum. Inflation is coming down in most countries due to stricter monetary policies, yet remains high in oil-dependent and resource-intensive economies.
   • Fiscal efforts have improved debt stability, with debt-to-GDP ratios holding steady around 58%. However, the debt burden still strains public finances, with high debt servicing costs cutting into funds available for development.
2. Social and Political Pressures:
   • The region faces growing social unrest driven by high inflation, especially in food prices, job scarcity, and widespread poverty. These pressures make reform implementation difficult for policymakers, particularly in fragile countries with limited resources.
3. Climate and Global Risks:
   • Climate change impacts, including droughts and floods, severely threaten food security and economic stability. Additionally, global financial market volatility and geopolitical tensions pose risks to financing and growth.
4. Strategic Recommendations:
   • The IMF recommends that policymakers pursue balanced economic policies, carefully manage inflation, and focus on debt sustainability. Building stronger social safety nets and effective communication strategies are critical to maintaining public support for necessary reforms.
5. Path Forward with IMF Support:
   • The IMF emphasizes its commitment to aiding the region through concessional financing and capacity-building initiatives. Given the tough financing environment, it highlights the importance of external support and sustainable development strategies tailored to each country’s specific needs.

In summary, while Sub-Saharan Africa shows resilience in some areas, challenges like high inflation, limited financing, climate impacts, and social unrest highlight the need for carefully coordinated reforms that balance economic stability and social needs.

Between 1996/97 and 2021/22, revenue collections by the Tanzania Revenue Authority (TRA) in Zanzibar have shown significant growth, rising from TShs 16,671.4 million to TShs 356,042.2 million. This equates to a total growth of 2,035% over 25 years, reflecting an average annual growth rate of approximately 13.2%. This strong overall trend highlights long-term improvement in revenue collection and economic activities in Zanzibar, despite fluctuations across different periods.

Period-by-Period Analysis

• Early Period (1996-2000):
  During this initial phase, Zanzibar’s revenue collections grew impressively, from TShs 16,671.4 million to TShs 39,098.8 million, marking a 134.5% increase over four years. The average annual growth rate was about 23.8%, driven by foundational efforts to enhance revenue systems and expand economic activities.
• Decline and Stabilization (2000-2005):
  From 2000, revenue collections experienced a sharp downturn, falling from TShs 39,098.8 million to TShs 20,734.9 million by 2005. This 47% decrease represented the most severe dip in the dataset, potentially caused by economic challenges or inefficiencies in collection methods. The period was marked by an average growth rate of -0.9% annually, indicating stagnation and stabilization attempts.
• Recovery and Growth (2006-2015):
  Following the downturn, recovery took place from 2006, with collections rising from TShs 22,374.6 million in 2005/06 to TShs 143,936.4 million in 2014/15. This impressive 543% growth showed resilience, as the average annual growth rate reached around 23%. Improved administration and economic activities likely supported this phase of robust growth.
• Recent Period (2015-2021):
  From 2015/16, revenue collections grew from TShs 170,967.6 million to TShs 298,157.7 million in 2020/21, indicating a 74.4% rise with an average annual growth rate of around 11.8%. Although growth was slower than in earlier periods, this phase still demonstrated consistent improvement, which contributed to long-term revenue expansion.

Notable Year-over-Year Changes

The analysis highlights key years of growth and decline:

• The largest single-year increase occurred in 2017/18, with a 25.6% growth rate.
• The most significant annual decline was in 2000/01, where collections fell by 40.2%.
• The most recent growth from 2020/21 to 2021/22 saw a strong 19.4% increase, indicating recovery and resilience in Zanzibar’s revenue collection efforts.

Share of Total TRA Collections

Despite Zanzibar’s overall revenue growth, its share of total TRA collections has declined:

• 1996/97: Zanzibar accounted for 3.2% of the total collections.
• 2020/21: This share decreased to 1.7%.
• 2021/22: The share further dropped to 1.6%.

This trend suggests that although collections in Zanzibar have increased, growth in mainland Tanzania has outpaced that in Zanzibar, reducing Zanzibar’s relative contribution to the total collections.

Growth Phases

• Slowest Growth Phase (2000-2005): The period marked a challenging time with an average annual growth rate of -0.9%, a result of economic setbacks and collection difficulties.
• Fastest Growth Phase (2015-2018): Revenue collections grew rapidly in these years, averaging 22.3% annually, driven by reforms and enhanced economic activities.
• Most Stable Growth Phase (2010-2015): This period was marked by steady growth, with consistent annual increases of 13-15%, showing a balance between collection efficiency and economic activity.

Recent Performance (Last 5 Years)

• 2017/18: Achieved high growth of 25.6%.
• 2018/19: Maintained positive growth at 13.1%.
• 2019/20: Experienced a slight decline of -3.5%, likely due to economic or external factors.
• 2020/21: Growth rebounded at 6.7%.
• 2021/22: Strong recovery with a 19.4% increase.

Summary

Over the years, TRA Zanzibar has shown an upward trend in revenue collections, albeit with fluctuations. Despite a reduction in its share of the total TRA collections, Zanzibar has maintained growth, particularly through strong phases of recovery and steady improvement in recent years. The findings indicate that while TRA Zanzibar faces challenges, the region’s economic activities and revenue collection efficiency have improved significantly over time.

The revenue collection trends for TRA Zanzibar with key insights into Zanzibar's economic environment, fiscal policy effectiveness, and overall revenue collection dynamics over the last 25 years:

1. Long-Term Growth with Fluctuations

• The substantial 2,035% growth over 25 years suggests an overall positive trajectory in Zanzibar’s economic activities and revenue collection efficiency.
• Despite this, the fluctuations—periods of decline, recovery, and stabilization—show that Zanzibar’s revenue base is susceptible to both internal and external factors, which can significantly impact growth rates.

2. Early Growth and Subsequent Stabilization

• The high growth rate in the early years (1996-2000) likely indicates foundational economic growth and perhaps initial stages of improved tax administration.
• However, the severe decline from 2000-2005 suggests vulnerabilities, potentially tied to administrative challenges, economic contractions, or changes in tax policy or compliance.

3. Improvement in Revenue Collection Efficiency

• The significant recovery and growth from 2006 onward highlight improvements in revenue collection practices, likely influenced by better tax administration, policy reforms, and economic development efforts in Zanzibar.
• Steady growth phases, especially the stable 2010-2015 period, suggest that the TRA developed more consistent and effective revenue collection mechanisms.

4. Lower Share in Total TRA Collections

• Zanzibar’s declining share of total TRA collections—dropping from 3.2% in 1996 to 1.6% in 2021—indicates that mainland Tanzania has grown faster in revenue collection. This could reflect a larger economic expansion on the mainland compared to Zanzibar, emphasizing the need for Zanzibar to diversify and strengthen its revenue base.

5. Resilience in Recent Years

• The recovery and growth in recent years, including a 19.4% increase in 2021/22, reflect resilience and adaptability, possibly supported by more robust administrative frameworks and economic activity post-pandemic.
• Continued positive year-over-year performance, despite some setbacks, suggests that TRA Zanzibar can maintain growth if current trends in policy and administrative efficiency continue.

6. External and Economic Sensitivity

• The periodic declines highlight Zanzibar’s sensitivity to economic and possibly political factors that can affect tax collection.
• With noticeable declines like those in 2000-2005 and smaller dips in specific years, there is a clear indication that Zanzibar’s revenue performance could benefit from a focus on economic diversification and stability.

Overall Implication

The research suggests that while Zanzibar has demonstrated long-term growth in revenue collection, it needs to address its reliance on relatively narrow economic drivers and further improve revenue administration to minimize fluctuations. Additionally, fostering consistent economic growth, reducing dependency on specific sectors, and expanding the tax base could help maintain or increase Zanzibar’s share of total TRA collections.

The Annual Agricultural Sample Survey (AASS) 2022/23 reveals that agriculture remains vital to Tanzania’s economy, with 8.97 million households engaged in farming, of which 98.3% produce crops and 60.6% rear livestock. Maize production dominates, with 6.3 million hectares yielding 7 million tons, underscoring its central role in food security. However, only 4.6% of cultivated land (922,852 hectares) is irrigated, leaving most farming reliant on rainfall and vulnerable to climate shocks. While 41.3% of households use improved seeds, 79.6% still depend on traditional seeds, impacting productivity. Additionally, only 4.9% of farmers accessed agricultural loans, highlighting a gap in financial support that limits investment. These findings point to critical opportunities for enhancing productivity through irrigation, input access, and financial inclusion.

1. Agricultural Households and Activities:
   • Total Agricultural Households: 8,970,096, with 8,814,646 in Mainland Tanzania and 155,450 in Zanzibar.
   • Crop Production: 98.3% of households (8.82 million) engaged in crop production.
   • Livestock Rearing: 60.6% of households (5.43 million) reared livestock.
2. Land Use and Crop Production:
   • Total Area Planted: 17.2 million hectares, including 8.86 million hectares for cereal crops.
   • Maize: 6.3 million hectares were dedicated to maize, the most widely cultivated crop.
   • Cassava: Planted on 0.78 million hectares, cassava represents a major root crop.
3. Crop Yields and Production:
   • Cereal Crops: Produced 9.7 million tons, with maize alone accounting for 7 million tons.
   • Roots and Tubers: Generated 1.72 million tons, with cassava contributing 0.7 million tons.
4. Land Ownership:
   • 52.3% of cultivated land was owned under customary rights.
5. Irrigation and Seed Use:
   • Irrigated Area: 922,852 hectares, covering 4.6% of planted land.
   • Improved Seeds: 41.3% of households used improved seeds, while 79.6% relied on local seeds.
6. Fertilizer Use:
   • 60.7% of households used organic fertilizers, while 56.1% used inorganic fertilizers.
7. Agricultural Shocks:
   • Short Rainy Season: 9.5% (516,763 hectares) of planted area was fully affected.
   • Long Rainy Season: 11% (910,318 hectares) was fully affected, with additional areas partially affected.
8. Agricultural Loans:
   • Only 4.9% of agricultural households accessed loans for agricultural purposes.

These findings highlight the structure and resilience of Tanzania's agricultural sector, with significant reliance on traditional practices and challenges related to climate variability impacting production stability.

The Annual Agricultural Sample Survey (AASS) 2022/23 for Tanzania provides several critical insights into the agricultural sector's structure, challenges, and opportunities.

1. High Reliance on Smallholder Agriculture:
   • With 8.97 million agricultural households (98% engaged in crop production), smallholder farming remains the backbone of Tanzania's agriculture. The data shows a significant portion of the population relies on agriculture for livelihoods, underscoring the sector's role in food security, income, and rural employment.
2. Dominance of Maize and Cereal Production:
   • Maize is the primary crop, planted on 6.3 million hectares and yielding 7 million tons. This emphasizes maize's critical role in national food security and suggests a need for resilient maize production practices to stabilize food supply.
3. Land Ownership Patterns and Agricultural Investment:
   • Over half (52.3%) of cultivated land is owned under customary rights, which may impact farmers' access to financing and formal land titles. This limited ownership framework could hinder the growth of commercial farming or agricultural investment, indicating a potential area for reform in land policy.
4. Limited Irrigation Coverage:
   • Only 4.6% of total planted area (922,852 hectares) is irrigated. The heavy reliance on rain-fed agriculture makes Tanzanian farming vulnerable to climate variability, as seen in significant crop losses during the short and long rainy seasons. Expanding irrigation infrastructure could increase resilience against climate change.
5. Use of Traditional Inputs vs. Modern Inputs:
   • While 41.3% of households use improved seeds, the majority (79.6%) still depend on local seeds, which may affect crop yields. Similarly, 60.7% of households use organic fertilizers, showing some environmental awareness or resource constraints, but a considerable 56.1% also use inorganic fertilizers, indicating a blend of traditional and modern practices. Increased access to quality inputs could boost productivity.
6. Agricultural Shocks and Vulnerability to Climate:
   • Climate shocks have impacted a large share of agricultural land, with 9.5% of crops in the short rainy season and 11% in the long rainy season being fully affected. This highlights the need for climate-resilient farming methods, improved crop varieties, and possibly more insurance mechanisms for farmers.
7. Access to Credit:
   • Only 4.9% of households accessed agricultural loans, reflecting either a lack of financial access or hesitancy toward formal borrowing. Limited access to credit restricts farmers' ability to invest in better inputs, machinery, or land improvements, which are essential for productivity gains.

In summary, the research suggests that while agriculture is the foundation of Tanzania's economy, it faces constraints such as low irrigation, dependence on traditional inputs, vulnerability to climate shocks, and limited access to finance. Addressing these areas through policy interventions, infrastructure development, and access to technology could enhance the sector's resilience, productivity, and contribution to national growth.

The National Bureau of Statistics report on Tanzania's Industrial Production Index (IIP) for Q2 2024 reveals a promising increase of 6% in overall industrial production from Q1 to Q2, moving the index from 98.9 to 104.9. This growth is largely driven by a 7.6% rise in the manufacturing sector, with notable production surges in tobacco products (up 56.9%), rubber and plastics (up 27.8%), and pharmaceuticals (up 10.2%). Compared to Q2 2023, the IIP shows a modest year-over-year increase of 0.4%, indicating long-term stability with mixed results across sectors. While water supply and waste management saw a 4.8% increase, declines in mining (-2.1%) and electricity supply (-2.5%) highlight areas that may need strategic support to sustain Tanzania’s industrial growth.

1. Overall Industrial Production Index:
   • The overall IIP rose from 98.9 in Q1 2024 to 104.9 in Q2 2024, a 6% increase.
   • Compared to Q2 2023 (104.5), there was a modest year-over-year increase of 0.4%.
2. Sectoral Performance:
   • Manufacturing: Increased by 7.6% from Q1 to Q2 2024. Within this sector, notable increases included:
     • Tobacco products: 56.9% increase
     • Rubber and plastics: 27.8% increase
     • Pharmaceuticals: 10.2% increase
     • Motor vehicles: 9.4% increase
   • Mining and Quarrying: Increased by 5.0% from Q1 to Q2 2024.
   • Electricity, Gas, Steam, and Air Conditioning: Increased by 1.4%.
   • Water Supply and Waste Management: Increased by 1.6%.
3. Declines in Specific Manufacturing Areas:
   • Manufacture of electrical equipment dropped by 15.0%.
   • Printing and reproduction of media decreased by 8.2%.
   • Manufacture of wood products decreased by 7.8%.
4. Long-term Trends (Comparing Q2 2023 to Q2 2024):
   • Water supply and waste management showed a 4.8% increase.
   • Manufacturing showed a 2.1% increase.
   • In contrast, electricity, gas, and steam supply decreased by 2.5%, and mining and quarrying declined by 2.1%.

Tanzania's Index of Industrial Production (IIP) for Q2 2024 provides a valuable snapshot of the country’s industrial performance, highlighting areas of growth and decline.

1. Overall Industrial Growth:
   • The 6% increase from Q1 to Q2 2024 signals positive growth and resilience in Tanzania's industrial sector, suggesting that industrial activities are rebounding or accelerating post-pandemic and amidst global challenges.
   • However, the modest year-over-year growth of 0.4% from Q2 2023 indicates that while there’s short-term improvement, longer-term growth has been slower, which could reflect challenges or fluctuations in industrial output over the past year.
2. Manufacturing as a Key Growth Driver:
   • Manufacturing recorded the highest growth (7.6% from Q1 to Q2 2024), pointing to this sector as a leading driver of industrial expansion. Significant increases in specific manufacturing areas (e.g., tobacco, rubber, and pharmaceuticals) may reflect both increased domestic demand and potential export opportunities.
   • High growth in pharmaceuticals and plastics could also indicate shifts in production focus, possibly due to changes in health sector demands and consumer goods preferences.
3. Mixed Performance Across Sub-sectors:
   • Some areas, like water supply and waste management, showed steady growth, while mining and electricity saw minor increases. These improvements reflect stability in essential service sectors, which are less volatile and respond to consistent demand.
   • However, declines in areas like electrical equipment and printing signal potential issues, such as reduced demand or production challenges in those areas, possibly influenced by shifts in technology or reduced investment.
4. Long-term Stability with Caution:
   • The comparison of Q2 2024 to Q2 2023 shows that while some manufacturing activities are growing, sectors like electricity, mining, and certain manufacturing sub-sectors (e.g., electrical equipment) are experiencing declines. This suggests potential structural challenges, like limited investment in infrastructure or energy, which might need policy attention for sustainable growth.

Hence, this research reveals a robust industrial recovery in the short term, driven by manufacturing, but also shows areas of concern in specific sub-sectors. It signals that targeted policies could help stabilize and grow underperforming areas, ensuring a more balanced industrial expansion for Tanzania.