Activities across zones

In the fiscal year 2023/24, Tanzania's trade landscape, particularly in cross-border activities, displayed notable shifts across various regions. The overall trade surplus with neighboring countries decreased by 23.1%, settling at TZS 4,484.3 billion, driven by reduced exports in key sectors such as minerals and agricultural products, along with rising imports of manufactured goods. The Lake Zone emerged as the largest contributor to exports, totaling TZS 4,699.7 billion but marking a decline of 6.6% from the previous year, while the Southern Highlands saw a significant growth in agricultural exports, increasing by 17.4% to TZS 4,393.7 billion. Conversely, the Northern Zone faced a trade deficit of TZS 466.9 billion due to surging imports, highlighting a growing dependency on external goods. These dynamics underscore both the challenges and opportunities in Tanzania’s trade framework, emphasizing the need for policy interventions to bolster local production and enhance competitiveness in global markets.

1. Cross-Border Trade Surplus:
   • The overall trade surplus with neighboring countries narrowed by 23.1%, totaling TZS 4,484.3 billion. This decline was due to reduced exports, notably in minerals, fertilizers, live cattle, fish, and other consumables, coupled with increased imports of manufactured goods​.
2. Exports by Zone:
   • Lake Zone:
     • Export value: TZS 4,699.7 billion, a decrease of 6.6% from the previous year.
     • Lake Zone still accounted for the largest share of exports at 44.6% of total cross-border exports.
   • Southern Highlands:
     • Export value: TZS 4,393.7 billion, an increase of 17.4% year-over-year, reflecting growth in agricultural exports.
   • Northern Zone:
     • Export value: TZS 1,355.1 billion, showing a decrease of 7.2% from the prior year.
   • South Eastern Zone:
     • Export value was much smaller at TZS 96.8 billion, yet it marked a significant increase, suggesting emerging trade activities in this region​.
3. Imports by Zone:
   • Lake Zone: Recorded TZS 1,037.3 billion in imports, a slight decrease of 0.4%, accounting for 17.1% of the total import share.
   • Southern Highlands: Imported goods valued at TZS 3,200.4 billion, an increase of 55.5%, accounting for 52.8% of the total imports, driven mainly by manufactured goods.
   • Northern Zone: Imports rose to TZS 1,822.1 billion, a 38.2% increase, reflecting higher demand for goods like plastics, machinery, pharmaceuticals, and chemicals​(2024110115114536).
4. Trade Balance by Zone:
   • Lake Zone: Despite a reduction, it maintained a strong trade surplus of TZS 3,662.4 billion.
   • Southern Highlands: Had a surplus of TZS 1,193.3 billion, though it decreased by 29.1% compared to the previous year.
   • Northern Zone: Notably recorded a trade deficit of TZS 466.9 billion due to higher imports of manufactured goods.
   • South Eastern Zone: Saw a positive trade balance of TZS 95.5 billion, benefiting from growth in exports​.

Tanzania’s fiscal year 2023/24 provides insights into regional economic trends, challenges, and opportunities:

1. Strong Export Dependency on Agriculture:
   • Regions like the Lake Zone and Southern Highlands have robust exports, largely driven by agriculture, which accounted for significant shares of the country’s exports. This reliance on agricultural exports shows the importance of the agricultural sector to Tanzania’s trade balance but also highlights vulnerability to fluctuations in global demand or agricultural productivity.
2. Increasing Import Dependency:
   • The narrowing trade surplus and growth in imports, particularly in the Northern Zone, indicate rising domestic demand for manufactured goods like machinery, chemicals, and pharmaceuticals. This trend suggests that as Tanzania’s economy grows, there is an increasing need for imported industrial and consumer goods, possibly due to limited domestic production capacity for these items.
3. Regional Trade Imbalances:
   • The Lake Zone and Southern Highlands maintain trade surpluses, indicating these areas are economic strongholds in export production. In contrast, the Northern Zone recorded a trade deficit, driven by higher import needs. This imbalance points to a need for economic diversification in regions with trade deficits, as well as opportunities to boost local production to meet domestic demand and reduce import reliance.
4. Emerging Trade Activity in South Eastern Zone:
   • The growth in exports and trade balance in the South Eastern Zone, although from a smaller base, suggests that this region is starting to gain traction in cross-border trade. This growth could reflect improvements in infrastructure or strategic efforts to diversify Tanzania’s export portfolio.
5. Challenges with Export Competitiveness:
   • The overall reduction in exports, particularly in minerals and other commodities, indicates potential challenges in maintaining competitiveness or meeting international demand. This decrease could signal the need for investment in value-added processing to make Tanzania’s exports more competitive globally, beyond raw materials and basic agricultural products.
6. Trade as an Economic Indicator:
   • The trade patterns reflect broader economic dynamics, such as the growth in consumption and industrial needs across regions, increased reliance on imports, and the potential for further industrialization. The demand for imports underscores Tanzania’s growing economy, while the dependency on specific zones for export revenue highlights areas for policy focus, such as regional economic development, infrastructure, and manufacturing incentives.

Across different zones and GDP per capita

Tanzania's economic landscape in 2023 showcased robust growth, with the national GDP reaching TZS 188,788.1 billion, a significant increase from TZS 170,820 billion in 2022. This growth reflects a 10.5% rise, indicating resilience in various economic sectors despite global challenges.

Regionally, the Lake Zone emerged as the largest contributor, generating TZS 48,990.5 billion, which accounts for 25.9% of the national GDP. Following closely were the Dar es Salaam Zone and Northern Zone, contributing TZS 32,189.2 billion (17.1%) and TZS 32,484.9 billion (17.2%), respectively. Other zones, including the Southern Highlands, Central, and South Eastern, contributed TZS 29,859.8 billion (15.8%), TZS 25,521.6 billion (13.5%), and TZS 19,742.1 billion (10.5%), respectively, highlighting disparities in economic activity across the country.

In terms of GDP per capita, Dar es Salaam outpaced other regions significantly, recording TZS 5,743,367. The Northern Zone followed with TZS 3,612,424, and the Southern Highlands reached TZS 3,424,384. The national average stood at TZS 3,058,847, underscoring the economic concentration in urban areas while pointing to opportunities for development in less affluent regions. This distribution emphasizes the need for targeted investment and infrastructure improvements in areas with lower GDP per capita to foster inclusive growth and address regional economic disparities.

1. Overall National GDP:
   • Total GDP for Tanzania Mainland reached TZS 188,788.1 billion in 2023, up from TZS 170,820 billion in 2022.
2. Zonal GDP Contribution:
   • Lake Zone: Largest contributor with TZS 48,990.5 billion (25.9% of the national GDP).
   • Dar es Salaam Zone: TZS 32,189.2 billion (17.1%).
   • Northern Zone: TZS 32,484.9 billion (17.2%).
   • Southern Highlands Zone: TZS 29,859.8 billion (15.8%).
   • Central Zone: TZS 25,521.6 billion (13.5%).
   • South Eastern Zone: TZS 19,742.1 billion (10.5%).
3. GDP per Capita:
   • Dar es Salaam recorded the highest GDP per capita at TZS 5,743,367.
   • Northern Zone (Arusha, Kilimanjaro, Manyara, Tanga) followed with TZS 3,612,424.
   • Southern Highlands Zone (Mbeya, Njombe, Iringa, etc.) reached TZS 3,424,384.
   • The national average GDP per capita was TZS 3,058,847.

Tanzania's GDP highlights several key points

1. Regional Economic Disparities: Dar es Salaam’s high GDP per capita (TZS 5,743,367) compared to other regions shows a concentration of economic activities in the city. As Tanzania's commercial hub, Dar es Salaam benefits from strong financial, trade, manufacturing, and service sectors, which contrasts with more agriculturally dependent regions.
2. Lake Zone’s Economic Significance: The Lake Zone, contributing the highest share of national GDP (25.9%), emphasizes the economic importance of agriculture, mining, and fishing, which are dominant in that region. It also highlights potential for growth in other sectors if there are investments in infrastructure and industry.
3. Potential for Development in Southern Zones: The Southern Highlands and South Eastern zones, despite having large agricultural outputs and rich mineral resources, contribute less to GDP. This suggests untapped potential that could be leveraged with investment in infrastructure, energy, and processing industries to add value to raw products.
4. National Economic Structure: The dominance of agriculture, trade, transport, and construction as GDP drivers reflects Tanzania's focus on essential industries. However, the high reliance on agriculture makes the economy vulnerable to climate and market fluctuations, underlining the need for economic diversification.
5. Opportunities for Inclusive Growth: Regions with lower GDP per capita, like the Central and South Eastern zones, may benefit from targeted development initiatives, such as improved access to markets, financial services, and investment in education and skills development. This could promote more balanced growth across the country.