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

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

Overall Debt Trends:

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

External Debt:

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

Domestic Debt:

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

Comparison Over the Past Year:

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

Implications:

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

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

Debt Components:

External Debt:

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

Domestic Debt:

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

Total Debts:

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

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

Government Expenditure:

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

Government Revenues:

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

Deficit:

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

Overall Implications:

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

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

Government Expenditure:

Wages and Salaries:

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

Interest Costs:

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

Development Expenditure:

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

Other Recurrent Expenditure:

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

Total Government Expenditure:

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

Government Revenues:

Taxes on Imports:

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

Income Tax:

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

Tax on Local Goods and Services:

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

Other Tax:

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

Non-Tax Revenues:

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

Total Government Revenues:

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

Deficit:

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

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

Purchasing Power and Inflation:

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

Consumer Price Index (CPI):

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

Comparison with Other African Countries:

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

Economic and Social Challenges:

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

Data Source:

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

Importance of Purchasing Power Index (PPI):

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

Role of Research Bodies:

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

General

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

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

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

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

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

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

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

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

Top 10 African cities with the lowest purchasing power

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

Introduction:

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

Private Capital Landscape:

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

Private Capital Distribution:

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

Investment Overview:

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

Ranking of East Africa's Top 5 Economies:

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

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

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

Private Capital Market Share:

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

Emerging Private Equity and Venture Capital Market:

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

Government Policies and Investor Attraction:

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

Diversification of Investments:

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

Potential for Growth:

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

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

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

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

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

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

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

Environmental Conservation:

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

Carbon Emission Reduction:

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

Community Benefits:

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

Economic Growth:

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

Global Carbon Credit Market Participation:

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

Challenges and Risks:

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

Regional Influence:

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

Diversification of Investments:

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

• How might Tanzania leverage its position among the Top 10 African countries in tech funding to not only drive economic growth but also address specific social or environmental challenges within the country?
• Considering the global interest in Africa's tech landscape and the influx of funds into Tanzania, what strategies can the government and local stakeholders employ to ensure that the benefits of this tech-driven economic growth are equitably distributed across various sectors and demographics within the country?

Tanzania has emerged as one of the top 10 African countries in terms of technology funding, securing a total funding amount of USD 180 million. Nigeria leads the pack with an impressive funding of USD 4.2 billion, followed by Kenya at USD 2.5 billion, South Africa at USD 2.2 billion, Senegal at USD 380 million, Ghana at USD 360 million, Algeria at USD 185 million, and Tanzania at USD 180 million.

In recent years, the African continent has witnessed a surge in entrepreneurial dynamism, with startups reshaping the economic landscape. This information is sourced from "Africa: The Big Deal," providing a comprehensive list of the largest fundings in Africa spanning from 2019 to 2023.

With a predominantly youthful population, Africa has turned to tech-driven solutions to address urgent issues, proving to be economically viable. Consequently, global venture capitalists are increasingly drawn to the continent in search of the next big tech idea.

African startups are leveraging technology to tackle pressing challenges, ranging from fintech to healthtech. The rise of these startups is closely tied to the continent's growing internet penetration, shifts in consumer behavior, and widespread tech adoption.

The influx of investment accompanies the rise of African startups, with both local and international investors recognizing the continent's potential and actively supporting emerging businesses. The investment landscape is diversifying, with venture capital, private equity, and impact investors playing pivotal roles in fueling startup growth, significantly contributing to the continent's economy.

While African countries, to varying degrees, have benefited significantly from embracing technology, investors looking to enter this developing market prefer destinations with a history of generating substantial revenues.

The list below highlights African countries that attracted the most startup funding from 2019 to 2023, according to a report from "Africa: The Big Deal," a publication focused on African startups. The report emphasizes the dominance of the Big Four, particularly Nigeria, which claimed over a third of all funding since 2019 (USD 4.2 billion) and an impressive 300 deals surpassing the USD 1 million mark. Kenya, South Africa, and Egypt closely follow, each securing around 200 deals exceeding USD 1 million, trailing behind the Nigerian giant.

Tanzania's economic growth through tech is evident in its successful attraction of substantial tech funding, its ranking among African countries, and the positive signals of investor confidence and tech-driven innovation:

Tech Funding Achievement:

Tanzania has secured a substantial amount of tech funding, totaling USD 180 million.

African Ranking:

Tanzania is among the Top 10 African countries in terms of tech funding, showcasing its prominence in the continent's tech landscape.

Comparative Analysis:

While not the highest, Tanzania's funding amount places it in the company of countries with larger economies such as Nigeria, Kenya, and South Africa.

Investor Confidence:

The influx of funds reflects both local and international investor confidence in Tanzania's potential for technological innovation and economic development.

Tech Innovation Hub:

Tanzania's inclusion in the list indicates its emergence as a hub for tech innovation and a destination for investment in the technology sector.

Job Creation and Industry Expansion:

The investment is likely to contribute to job creation and the overall expansion of the tech industry within Tanzania, fostering economic growth.

Part of Continental Trend:

Tanzania's tech growth aligns with a broader trend across the African continent, where countries are increasingly relying on technology to address challenges and drive economic development.

Integration of Tech Solutions:

The rise of African startups using technology to address urgent issues implies that Tanzania, too, is integrating tech solutions to overcome economic challenges and promote sustainable development.

Global Interest:

The global venture capital interest in the continent's tech landscape indicates that Tanzania is part of the international tech scene, attracting attention and investment from around the world.

Potential for Continued Growth:

Tanzania's position in the top echelon of African countries in tech funding suggests the potential for continued growth and influence in the technology sector, with opportunities for further innovation and economic impact.

Top 10 African countries with the largest tech funding

Tanzania Economic Snapshot

October 2023 Inflation, Current Account, Money Supply, Export-Import Rates, Investment Development, Budget Analysis, and National Debts - A Comprehensive Overview.

Navigating Tanzania's Economic Landscape:

Key Insights from August to October 2023 Unpacking the intricacies of inflation fluctuations, trade dynamics, monetary trends, investment growth, fiscal management, and national debt shifts.

Tanzania's Economic Health:

Trends and Challenges in Q3 2023 An in-depth analysis of Tanzania's economic indicators, including inflation rates, trade performance, money supply, investment developments, budgetary outcomes, and national debt dynamics.

Economic Pulse:

Tanzania's Fiscal Resilience and Challenges Examining Tanzania's economic resilience through inflation adjustments, trade dynamics, money supply fluctuations, investment trends, fiscal prudence, and the evolving national debt landscape.

Tanzania's Economic Landscape:

Trends, Trade, and Financial Strategies A detailed exploration of Tanzania's economic updates covering inflation rates, current account shifts, money supply dynamics, export-import trends, investment growth, budget analysis, and national debt trajectories from August to October 2023.

Tanzania has witnessed a remarkable doubling of its Foreign Direct Investments (FDI) in the third quarter of 2023 compared to the corresponding period in 2022. The East African nation experienced a year-on-year surge in FDI from $524.4 million to $1.05 billion between July and September 2023, as reported by the state-run Tanzania Investment Center (TIC) and published in The East African.

These figures signify a significant stride toward Tanzania's ambitious FDI goals, aiming for $15 billion by 2025 and an even more ambitious target of $30 billion by 2030. The surge is primarily attributed to growing investor confidence in Tanzania, facilitated by President Samia Suluhu Hassan's business-oriented administration, which has actively cultivated groundbreaking partnerships.

The TIC report underscores that the increased FDI is not without its nuances, revealing a notable 14% reduction in new investment capital during the period under review, dropping from $2.41 billion to $2.06 billion. FDI accounted for 51% of the new investments, with $480.38 million directed to the real estate sector and $245.58 million to manufacturing projects.

In contrast, domestic investments experienced a decline in the first-quarter turnover from $1.91 billion in 2022 to $1.01 billion in 2023. Notably, domestic investors showed heightened interest in agriculture ($420.25 million), economic infrastructure ($212.52 million), and transportation ($178.32 million).

Tanzania's surge in FDI aligns with President Samia Suluhu Hassan's commitment to fostering global partnerships. Her administration, marked by a business-centric approach, has focused on creating an environment conducive to attracting foreign investors while concurrently supporting local investments. The president's emphasis on such partnerships has led to significant collaborations with countries worldwide, from South Korea to China and Australia.

President Samia Suluhu Hassan's economic vision is deeply rooted in elevating Tanzania to a global economic powerhouse. The International Monetary Fund projects that Tanzania's economy is on track to surpass that of Kenya, East Africa's second-largest economy. Additionally, the president has prioritized intra-East African Community partnerships, evidenced by agreements with neighboring countries such as Burundi for an interconnected electric railway and a $1 billion energy project with Kenya, among other regional initiatives.

The impacts for Tanzania's economic growth:

Significant Increase in Foreign Direct Investments (FDI):

Tanzania experienced a notable doubling of FDI in the third quarter of 2023 compared to the same period in 2022. This surge, reaching $1.05 billion, indicates growing confidence from international investors in Tanzania's economic prospects.

Ambitious FDI Goals:

Tanzania has set ambitious FDI targets, aiming for $15 billion by 2025 and an even more substantial goal of $30 billion by 2030. The fact that the country is making progress toward these targets suggests a positive trajectory in attracting foreign capital.

Diversification of FDI Sectors:

The report highlights that a significant portion of the new FDIs went into the real estate and manufacturing sectors. This diversification indicates a broadening and strengthening of the country's economic base.

Government Commitment to Business-Friendly Policies:

President Samia Suluhu Hassan's business-oriented administration is credited with fostering a conducive environment for foreign investors. The government's commitment to creating a favorable business climate is likely contributing to increased investor confidence.

Global Partnerships and Collaborations:

Tanzania's administration, under President Samia Suluhu Hassan, has actively pursued partnerships with global powerhouses, including countries like South Korea, China, and Australia. These collaborations can bring in technology, expertise, and investment, further contributing to economic growth.

Regional Collaborations:

The president's efforts in securing partnerships with neighboring countries, such as the interconnected electric railway with Burundi and the $1 billion energy project with Kenya, indicate a commitment to regional economic integration and growth.

Comparison with Kenya's Economy:

The International Monetary Fund's estimate that Tanzania's economy is on track to outdo Kenya's suggests a positive outlook for Tanzania's economic standing within the East African region.

Family businesses in East Africa may be impeding their own growth, as revealed by a recent PricewaterhouseCoopers (PwC) study. The findings show that merely 12% of family-owned enterprises in the region prioritize research and innovation, which could hinder their ability to recover economically in the post-COVID era.

The study underscores a lack of emphasis on innovation among East African family businesses, a factor that poses challenges for their recovery from the economic constraints imposed by the COVID-19 pandemic. Specifically, only 46% of the surveyed family-owned firms in the region claim to possess strong digital skills, indicating a significant gap in adapting to the ongoing trend of corporate digitalization.

According to the PwC study, East African family-run enterprises have not given due importance to research and innovation as key drivers for overcoming the economic challenges brought about by the COVID-19 pandemic. The study reports that a mere 12% of the sampled family-owned firms in the region have made substantial investments in innovation or research.

Additional insights from the research reveal that, beyond the issues of inadequate innovation and research, family-owned businesses are not fully embracing corporate digitalization, with only 46% of them asserting proficiency in digital skills.

Despite these obstacles, family-owned firms in the region express high growth aspirations for the next two years, with 75% anticipating growth, as reported by the East African news publication. The survey reflects a sense of optimism among these businesses, highlighting their resilience in the face of significant challenges and disruptions.

The study further indicates that family businesses in the area are overcoming financial difficulties, with 64% reporting growth and only 13% reporting a decline in sales. This marks a substantial shift from the previous year, where 46% reported growth and 31% reported a decrease in sales, primarily attributable to the impact of the Covid-19 epidemic.

Conducted between October 2022 and January 2023, during a period when global conditions were showing signs of recovery from the effects of COVID-19, the study covers family businesses in Kenya, Tanzania, Uganda, Rwanda, and Ethiopia.

The impacts and implications

The impacts include challenges in innovation and digital adaptation, a positive outlook for growth, and a shift in financial performance compared to the previous year. These insights can guide family businesses, policymakers, and stakeholders in addressing specific areas for improvement and capitalizing on opportunities for growth and resilience.

Limited Emphasis on Research and Innovation:

Impact Family businesses in East Africa face challenges in terms of growth and resilience due to a lack of prioritization of research and innovation.

Obstacles to Post-COVID Economic Recovery:

The insufficient emphasis on innovation poses challenges for family businesses in recovering from the economic constraints brought about by the COVID-19 pandemic.

Digital Skills Gap:

The limited possession of strong digital skills (reported by only 46% of surveyed firms) indicates a potential obstacle to adapting to the ongoing trend of corporate digitalization.

Optimism Despite Challenges:

Family-owned firms in East Africa demonstrate resilience and optimism, with 75% expressing high growth aspirations for the next two years. This positive outlook reflects a determination to overcome challenges.

Financial Performance and Growth:

Despite the obstacles, a significant portion (64%) of family businesses report growth, indicating an ability to navigate financial difficulties. This contrasts with the previous year's challenges, primarily linked to the COVID-19 epidemic.

Shift in Sales Performance:

The study highlights a substantial change in sales performance, with only 13% reporting a decline compared to the previous year. This shift suggests a recovery from the economic downturn caused by the pandemic.

Regional Variances:

The study covers family businesses in Kenya, Tanzania, Uganda, Rwanda, and Ethiopia, suggesting that the impacts and challenges are region-specific. Understanding these variations can help tailor strategies to address specific regional dynamics.

Timeframe Consideration:

The study was conducted between October 2022 and January 2023, indicating that the findings reflect a period when global conditions were showing signs of recovery. This timeframe is crucial for interpreting the context of the study results.

Tanzania does not feature among the top 10 African governments with the highest general revenues. Currently, the country is grappling with a government revenue deficit exceeding 34 percent. This deficit aims to bridge the gap between revenue and government expenditure based on the 2023/2024 budget plan.

In August 2023, the government budget performance exhibited notable variations from the estimates and actual operations in various key expenditure and revenue categories. Government expenditure experienced a marginal overall decrease of 6%, totaling TZS 3,028B compared to the estimated TZS 3,224B. Noteworthy shifts include a 20% increase in interest costs, reaching 285.1, and a substantial 27% reduction in other recurrent expenditure, amounting to TZS 562.4B. Development expenditure saw a slight decline of 3%, totaling TZS 1,357.3B. On the revenue side, the government witnessed a 2% increase in total revenues, amounting to TZS 2,537B. Tax on imports notably rose by 15%, reaching TZS824.7B, while tax on local goods and services decreased by 10%, totaling TZS 315.4B. Despite a 4% increase in income tax to TZS 988.9B, other tax and non-tax revenues experienced reductions of 10% and 13%, respectively. Consequently, the deficit decreased by 34%, totaling TZS -491B. These fluctuations in budgetary components highlight the dynamic nature of government finances in August 2023, necessitating a closer examination of the factors influencing these changes.

The leading African nations in terms of general government revenues as a percentage of GDP, according to the IMF's Fiscal Monitor report for October, are Algeria, Morocco, Mozambique, Chad, South Africa, Congo, Rwanda, Angola, Senegal, and Mali. The figures in the list denote general government revenue as a percentage of GDP.

A nation's economic well-being is heavily reliant on its government income, which serves as the financial backbone for crucial initiatives, infrastructure projects, and public services. Assessing a country's fiscal health involves considering the general government revenue as a percentage of GDP, a significant indicator.

Expressing government revenue as a percentage of GDP facilitates standardized comparisons across diverse countries and economic conditions. This ratio offers insights into the government's fiscal activities' size and efficiency relative to the overall economic activity within the country.

To facilitate such assessments, the International Monetary Fund maintains a comprehensive database covering government revenues as a percentage of GDP for every country. These countries are categorized into three financial groups: advanced economies, emerging market and middle-income economies, and low-income developing countries.

In the context of Sub-Saharan African countries categorized under low-income developing countries, the average general government revenue is 14.6, while African countries under the MENA (Middle East and North Africa) region, including North African countries, average 29.7.

For detailed information on African countries with the highest general government revenue, please refer to the IMF's Fiscal Monitor report titled "Climate Crossroads: Fiscal Policies in a Warming World."

Tanzania's specific economic context, can contribute to achieving higher government revenues as a percentage of GDP and, in turn, support sustainable economic development.

Diversify Revenue Sources:

Tanzania could explore diversifying its sources of revenue beyond traditional taxes. This may involve identifying new sectors or industries that have the potential for increased economic activity and taxation.

Improve Tax Collection Efficiency:

Enhancing the efficiency of tax collection processes can contribute significantly to increasing government revenues. This may involve implementing modern tax collection systems, reducing tax evasion, and improving compliance through better enforcement.

Promote Economic Growth:

A growing economy tends to generate higher tax revenues. Tanzania could focus on policies that stimulate economic growth, attract foreign investment, and foster the development of key industries. This could lead to an increase in overall economic activity, contributing to higher tax revenues.

Address Corruption and Illicit Financial Flows:

Corruption and illicit financial flows can undermine government revenue collection efforts. Implementing measures to tackle corruption and enhance financial transparency can help retain a greater portion of the country's economic gains.

Optimize Development Expenditure:

While maintaining necessary investments in development projects, Tanzania should continuously review and optimize its development expenditure to ensure that resources are allocated efficiently and effectively.

Enhance Fiscal Discipline:

Stricter fiscal discipline and prudent financial management can contribute to maintaining a balanced budget and avoiding unnecessary deficits, which can strain government finances.

Invest in Education and Skills Development:

Building a skilled workforce can contribute to increased productivity and, consequently, economic growth. A more skilled workforce can attract higher-paying industries and contribute to higher income tax revenues.

Promote Public-Private Partnerships (PPPs):

Encouraging partnerships between the public and private sectors can lead to the development of infrastructure and services, stimulating economic growth and generating additional revenue streams.

Regularly Review and Adjust Budget Plans:

Given the dynamic nature of economic conditions, regular reviews of budget plans can help identify adjustments and ensure that the government is responsive to changing circumstances.