The Finance Act, 2025, of Tanzania introduces significant amendments to tax, duty, and levy structures, shaping the business and investment landscape through 2028. With measures like a three-year VAT exemption on locally produced fertilizers saving up to TZS 1.8 billion annually for a TZS 10 billion revenue company, and a 75% customs duty relief on capital goods reducing costs by TZS 187.5 million per TZS 1 billion import, the Act fosters growth in agriculture and manufacturing. However, challenges arise from increased costs, such as a TZS 22,000 per tonne carbon emission tax adding TZS 2.2 billion yearly for a 100,000-tonne emitter, and a 0.5% excise duty hike on telecom services imposing TZS 500 million extra for a TZS 100 billion operator. This analysis quantifies these impacts, projecting opportunities and hurdles for businesses navigating Tanzania’s economic environment from 2025 onward.

Opportunities for Business and Investment Growth

1. Tax Relief and Incentives to Stimulate Investment
   • Value Added Tax (VAT) Exemptions:
     • The Act introduces VAT exemptions for locally produced fertilizers for three years and textiles made from locally grown cotton for one year (Section 56 and 57). This reduces production costs, making these sectors more competitive and attractive for investment.
     • VAT exemptions are also proposed for refined edible oils using locally produced seeds, reinsurance, natural gas, and equipment for alternative charcoal production. These exemptions lower input costs, encouraging investment in agriculture, energy, and manufacturing.
     • Example: A textile manufacturer using local cotton could save 18% (standard VAT rate) on production costs, potentially increasing profit margins or allowing price reductions to capture market share.
   • Customs Duty Relief:
     • A 75% customs duty exemption is provided for non-originating capital goods imported by registered investors under the Investment and Special Economic Zones Act (Section 19). This reduces the cost of capital equipment, incentivizing large-scale investments.
     • Example: An investor importing machinery worth TZS 1 billion could save TZS 187.5 million (assuming a 25% customs duty rate), improving project viability.
   • Simplified Tax Compliance for Small Businesses:
     • The Act simplifies tax collection for small traders in the informal sector by requiring registration with relevant authorities and integrating Taxpayer Identification Numbers (TIN) for those below the income tax threshold (Section 23). This formalizes the sector, potentially improving access to credit and markets.
     • The Income Tax Act amendments exempt certain small-scale transport businesses (e.g., two-wheeled motorcycles, tricycles, and light cargo vehicles up to 500 kg) from complex tax calculations, replacing them with presumptive tax rates. This reduces compliance costs, encouraging small business growth.
     • Example: A motorcycle taxi operator with annual revenue of TZS 20 million could pay a flat presumptive tax (e.g., TZS 100,000 annually), avoiding the burden of detailed tax filings.
2. Support for Local Industries
   • Excise Duty Adjustments to Protect Local Production:
     • The Act imposes higher excise duties on imported goods compared to locally produced ones, such as TZS 100/kg vs. TZS 50/kg for preserved vegetables and fruits. This protects local producers from cheaper imports, fostering domestic manufacturing.
     • Example: A local potato chip producer faces an excise duty of TZS 50/kg, while imported chips are taxed at TZS 100/kg, giving the local producer a cost advantage.
   • Export Levy Allocation for Cashew Industry:
     • All export levies on raw cashews are directed to the Cashewnut Board’s account for four years starting July 1, 2025 (Section 25). This provides funding for subsidies and research, enhancing the competitiveness of the cashew sector.
     • Example: Increased funding could improve cashew processing facilities, potentially increasing export revenues, which were TZS 570 billion in 2023/24 (based on historical data).
3. Encouraging Strategic Investments
   • Mining Sector Incentives:
     • Amendments to the Investment and Special Economic Zones Act recognize investors with government agreements as strategic investors (Sections 2 and 21). This could attract large-scale mining investments by offering tailored incentives.
     • Example: A mining company investing TZS 10 billion could benefit from tax holidays or reduced royalties, improving return on investment.
   • Business Licensing Restrictions:
     • The Act restricts non-citizens from certain business activities (Section 14A), reserving opportunities for Tanzanian entrepreneurs and encouraging local business growth.
     • Example: Local traders in retail sectors protected from foreign competition could see increased market share.
4. Improved Financial Sector Stability:
   • Amendments to the Banking and Financial Institutions Act allow the Deposit Insurance Board (DIB) to provide liquidity support to struggling banks (Section 39A). This enhances financial stability, encouraging investor confidence in the banking sector.
   • The Bank of Tanzania Act amendments strengthen the central bank’s independence and oversight (Sections 5, 9, 12), potentially stabilizing monetary policy and attracting foreign investment.
   • Example: A stable banking sector could increase foreign direct investment (FDI), which was USD 1.34 billion in 2023 (Bank of Tanzania data), by reducing perceived financial risks.

Challenges for Business and Investment Growth

1. Increased Tax and Levy Burdens:
   • Higher Excise Duties:
     • The Act increases excise duties on various goods, such as electronic communication services (from 17% to 17.5%), pay TV services (from 5% to 10%), and imported used tableware (20% duty) (Section 126). These increases raise operational costs for businesses in these sectors.
     • Example: A telecom company with TZS 100 billion in revenue faces an additional TZS 500 million in excise duty (0.5% increase), potentially reducing profitability or increasing consumer prices.
   • Carbon Emission Tax:
     • A new excise duty of TZS 22,000 per tonne of carbon emitted from coal or natural gas (Section 126) increases costs for energy-intensive industries like cement or power generation.
     • Example: A cement factory emitting 100,000 tonnes of carbon annually incurs an additional TZS 2.2 billion in costs, potentially reducing competitiveness.
   • AIDS Levy on Multiple Sectors:
     • A 0.1% levy on mineral value (Section 113A), TZS 500 per railway ticket (Section 73A), and levies on motor vehicle registration (Section 5A) increase costs for mining, transport, and automotive sectors.
     • Example: A mining company with TZS 50 billion in mineral sales pays an additional TZS 50 million in AIDS levy, impacting profit margins.
2. Increased Compliance and Administrative Burdens:
   • Mandatory Approvals for Fees and Charges:
     • Government institutions must seek prior approval from the Minister of Finance before imposing or revising fees, levies, or charges (Section 60A; Section 5). This could delay business operations reliant on government services.
     • Example: A logistics company awaiting approval for port service charges may face delays in operations, increasing costs.
   • Electronic Tax Systems:
     • The Tax Administration Act mandates electronic tax systems and penalties for non-compliance (Section 42). Small businesses with limited technological capacity may struggle to comply, facing fines or operational disruptions.
     • Example: A small retailer with TZS 50 million in annual revenue may need to invest TZS 1-2 million in electronic systems, straining finances.
3. Restrictions on Non-Citizens:
   • The Business Licensing Act restricts non-citizens from certain business activities (Section 14A). While this protects local businesses, it may deter foreign investors, reducing FDI in restricted sectors.
   • Example: A foreign retailer planning a TZS 5 billion investment may reconsider due to licensing restrictions, limiting sector growth.
4. Increased Costs for Specific Sectors:
   • Gaming Industry:
     • The tax on gambling winnings increases from 10% to 15% for sports betting and from 12% to 15% for land-based casinos (Section 34). This could reduce consumer participation or profitability for operators.
     • Example: A casino with TZS 1 billion in winnings faces an additional TZS 30 million in tax (3% increase), potentially passing costs to customers.
   • Fuel and Road Tolls:
     • An additional TZS 10 per liter levy on petrol, diesel, and kerosene (Section 4 and 5) increases transport and logistics costs, affecting businesses reliant on fuel.
     • Example: A transport company consuming 100,000 liters of diesel monthly incurs an additional TZS 1 million in costs, reducing margins.
5. Potential Reduction in Consumer Demand:
   • Higher taxes and levies (e.g., excise duties on alcohol, telecom services, and pay TV) may increase consumer prices, reducing disposable income and demand for goods and services.
   • Example: A 10% excise duty on pay TV services could lead to subscription cancellations, impacting media companies’ revenues.

Quantitative Impact Analysis

To illustrate the impact, let’s consider two hypothetical businesses:

1. Local Textile Manufacturer:
   • Opportunity: Benefits from a one-year VAT exemption on textiles using local cotton (Section 56). If annual revenue is TZS 10 billion, the company saves TZS 1.8 billion (18% VAT). This could fund expansion or price reductions to compete with imports.
   • Challenge: Faces increased electricity costs due to the carbon emission tax (TZS 22,000/tonne). If the factory emits 10,000 tonnes annually, it incurs TZS 220 million in additional costs, partially offsetting tax savings.
2. Telecom Operator:
   • Opportunity: The Act’s focus on electronic payment systems (Section 38) could streamline transactions, reducing operational costs by 1-2% (e.g., TZS 1-2 billion for a company with TZS 100 billion revenue).
   • Challenge: The excise duty increase from 17% to 17.5% (Section 126) adds TZS 500 million to costs for a TZS 100 billion revenue company. This may force price hikes, risking customer loss.

Conclusion

The Finance Act, 2025, presents a mixed impact on business and investment growth in Tanzania:

• Opportunities: Tax exemptions, customs duty relief, and support for local industries (e.g., textiles, agriculture, and cashew) create a favorable environment for domestic businesses and strategic investors. These measures could increase investment by reducing costs and protecting local markets, potentially boosting GDP growth (projected at 5.5% for 2025 by the Bank of Tanzania).
• Challenges: Increased taxes and levies (e.g., excise duties, carbon tax, AIDS levy) raise operational costs, particularly for energy, telecom, and transport sectors. Compliance burdens and restrictions on non-citizens may deter foreign investment and strain small businesses.

Key Figures from the Finance Act, 2025 (Tanzania)

Notes

• Financial Impact: Calculated based on hypothetical scenarios to illustrate potential savings or costs. Actual impacts depend on business size and operations.
• Currency: All figures are in Tanzanian Shillings (TZS).
• Assumptions: VAT rate assumed at 18% (standard rate), customs duty at 25% (typical rate), and sector-specific revenue/volume estimates based on typical Tanzanian business scales.

Tanzania’s revenue collection, particularly through taxes on businesses and services, has seen steady improvement, yet challenges like tax evasion and administrative inefficiencies persist. The 2024/2025 budget of TZS 49.35 trillion (USD 18.85 billion) delivered 5.5% real GDP growth, collecting TZS 45.07 trillion (89.6% of TZS 50.29 trillion target), with domestic revenue at TZS 29.83 trillion (15.0% of GDP). This supported low-income Tanzanians through TZS 708.6 billion in fertilizer subsidies, TZS 444.7 billion for fee-free education, and infrastructure projects creating jobs. The 2025/2026 budget, projected at TZS 56.49 trillion (USD 22.07 billion), an 11.6% increase, targets 6.0% GDP growth with TZS 38.9 trillion in domestic revenue (16.7% of GDP) and introduces tax reforms to boost compliance. This case study evaluates whether these projections, given the state of revenue and taxation, can achieve the goal of promoting economic growth for low-income Tanzanians, using key figures and sectoral analysis.

1. State of Revenue Collection and Taxation in Tanzania

Tanzania’s revenue mobilization relies heavily on taxes from businesses and services, including income tax, VAT, and import duties. The current tax-to-GDP ratio of 14.9% is below the Sub-Saharan Africa average of 18.6%, indicating room for improvement. Recent performance and challenges provide context for the 2025/2026 projections.

2024/2025 Revenue Performance:

• Total Revenue: TZS 45.07 trillion (89.6% of TZS 50.29 trillion target), with TZS 29.83 trillion from domestic sources (15.0% of GDP).
• Tax Revenue: By February 2025, TZS 22.38 trillion was collected, driven by income tax (TZS 1,573.8 billion in January 2025 alone) and import duties (TZS 962.2 billion), reflecting business growth and trade activity.
• Non-Tax Revenue: Increased by 40% to TZS 884.7 billion (July 2024–May 2025), due to dividends and digital systems.
• Achievements: January 2025 collections reached TZS 3,877.4 billion, exceeding targets by 8.6%, indicating improved compliance and economic activity.
• Challenges: TRA faced criticism for malpractices, prompting a presidential commission review. Lower taxes on local goods suggest weaker domestic demand.

Taxation on Businesses and Services:

• Income Tax: Strong collections (TZS 1,573.8 billion in January 2025) reflect business growth, particularly in ICT (13.5% growth projected by 2026) and mining (9.3%).
• VAT and Exemptions: The 2024/2025 budget introduced VAT exemptions for fertilizers and edible oils, benefiting low-income farmers, but repealed exemptions on precious metals to boost revenue.
• Import Duties: Contributed 40% of tax revenue in H1 2024/2025, supporting fiscal stability despite global challenges.
• Reforms: Digital systems and oversight have reduced leakages, but the informal sector (~30% of GDP) and agriculture remain under-taxed.

2025/2026 Revenue Projections:

• Domestic Revenue: TZS 38.9 trillion (16.7% of GDP, up from 15.0%), with TRA targeting TZS 29.17 trillion (13.3% of GDP) from taxes.
• Total Revenue: Expected to exceed TZS 50.29 trillion, financed by TZS 40.47 trillion domestic revenue and TZS 14.95 trillion loans.
• New Taxes: Mandatory travel insurance for visitors, removal of EPZ/SEZ tax holidays, and 20% gold output for local processing aim to boost revenue.
• Goal: Increase tax-to-GDP ratio to 14% by 2050, targeting TZS 350 trillion annually.

Assessment: The 8.6% revenue surplus in January 2025 and 40% non-tax revenue growth suggest Tanzania can achieve TZS 38.9 trillion if TRA reforms address inefficiencies and broaden the tax base (e.g., informal sector). However, global economic risks and domestic demand weaknesses could hinder collections.

2. 2025/2026 Budget Framework and Economic Growth Target

The TZS 56.49 trillion budget, an 11.6% increase from TZS 49.35 trillion in 2024/2025, aims for 6.0% real GDP growth. Key financial and economic strategies include:

• Budget Structure:
  • Recurrent Expenditure: TZS 38.6 trillion (68.3% of budget) for wages, debt servicing, and elections.
  • Development Expenditure: TZS 16.4 trillion (29.0% of budget) for SGR, JNHPP, and social projects.
  • Financing: TZS 38.9 trillion domestic revenue, TZS 16.02 trillion external sources (TZS 1.02 trillion aid, TZS 5.6 trillion concessional loans, TZS 9.4 trillion commercial loans).
• Macroeconomic Targets:
  • GDP growth: 6.0% in 2025, up from 5.5% in 2024.
  • Inflation: 3.0–5.0% to ensure affordability.
  • Domestic revenue: 16.7% of GDP to reduce borrowing reliance.
  • Reserves: ≥4 months of imports (4.4 months in 2024).
• Sectoral Drivers:
  • Agriculture (26.5% of GDP, ~65% employment).
  • Industry (construction 13.2%, mining 9.0%).
  • Services (ICT 13.5%, tourism 7.0% growth projected).

Comparison with 2024/2025:

• 2024/2025 achieved 5.5% growth with TZS 15.75 trillion development spending, despite revenue shortfalls (89.6%).
• 2025/2026’s TZS 16.4 trillion development budget and 16.7% GDP revenue target position it to exceed prior performance if execution is efficient.

Assessment: The budget’s 6.0% growth target is feasible, supported by projections from the IMF (6.0% in 2025), AfDB (6.0%), and local estimates (6.1–6.4% by 2026) (Web ID: 7, 8, 12). Increased domestic revenue (TZS 38.9 trillion) and strategic investments could drive growth, but success depends on revenue collection and global stability.

3. Promoting Economic Growth for Low-Income Tanzanians

The budget aims to uplift low-income Tanzanians (26.4% abject poverty, 8.0% extreme poverty in 2018) through sectoral investments and social programs. Below is an analysis of key measures and their potential impact.

a. Agriculture

Context:

• Contributes 26.5% to GDP, employs ~65% of Tanzanians.
• TZS 708.6 billion in fertilizer subsidies (2021/22–2023/24) reduced costs by 50%, boosting yields.
• VAT exemptions on fertilizers and seeds supported farmers.

2025/2026 Measures:

• Continued subsidies (inferred from prior budgets).
• TADB loans via a ¥22.7 billion Japan agreement for climate-resilient farming.
• Irrigation and value addition to enhance exports (11.6% of GDP in 2024).

Impact:

• Could contribute 1.0–1.5 percentage points to GDP growth (4–6% sectoral growth).
• Subsidies and loans increase incomes for low-income farmers, potentially reducing extreme poverty below 8.0%.
• Exports (6.0% growth projected in 2025) stabilize prices via reserves (USD 5.7 billion in 2024).

b. Industry

Context:

• Construction (13.2%) and mining (9.0%) grew via TZS 1.68 trillion for SGR and TZS 574.8 billion for JNHPP/rural electrification in 2024/2025.
• Mining revenue rose due to gold exports.

2025/2026 Measures:

• TZS 2.75 trillion for transport (SGR, ports) and TZS 2.2 trillion for energy (JNHPP, rural electrification).
• SIDO programs and mining reforms (20% gold for local processing).
• Completion of JNHPP (2,115 MW) to reduce energy costs.

Impact:

• Could contribute 1.5–2.0 percentage points to GDP growth (7–8% sectoral growth).
• Jobs from SGR and JNHPP benefit low-income workers.
• Cheaper energy lowers business costs, reducing prices for consumers.

c. Services

Context:

• Services (~40–50% of GDP) grew via tourism (USD 7.2 billion, 1.4 million visitors) and ICT (12.5% growth) in 2024/2025.
• Exports at 20.3% of GDP narrowed the trade deficit to USD 5,157.2 million.

2025/2026 Measures:

• TZS 359.9 billion for tourism promotion.
• ICT investments (13.5% growth by 2026) via digital infrastructure.
• SGR and Air Tanzania to reduce transport costs.

Impact:

• Could contribute 2.5–3.0 percentage points to GDP growth (6–7% sectoral growth).
• Tourism and ICT jobs are accessible to low-income workers.
• Lower transport costs reduce commodity prices.

d. Social Programs

Context:

• TZS 444.7 billion for fee-free education, TZS 636.0 billion for student loans, and TZS 414.7 billion for healthcare in 2024/2025 improved access.
• PSSN cash transfers reduced child malnutrition.

2025/2026 Measures:

• Sustained or increased education and health funding (e.g., training 28,000 health workers).
• PSSN expansion for vulnerable households.
• TZS 378.7 billion (2024/2025 level) for water projects, inferred to continue.

Impact:

• Enhances skills and health, reducing poverty cycles.
• Cash transfers improve food security for low-income households.

4. Can the Budget Achieve the Goal?

Strengths:

• Revenue Potential: TZS 38.9 trillion (16.7% of GDP) is achievable, given 8.6% surplus in January 2025 and 40% non-tax revenue growth (Web ID: 5, 6). Tax reforms (e.g., gold processing) could broaden the base.
• Economic Growth: 6.0% target aligns with IMF and AfDB projections, supported by TZS 16.4 trillion development spending.
• Low-Income Focus: Subsidies (TZS 708.6 billion historically), education (TZS 444.7 billion), health (TZS 414.7 billion), and energy (TZS 2.2 trillion) directly benefit low-income Tanzanians, potentially reducing extreme poverty below 8.0%.
• Fiscal Stability: Public debt at 46.5% of GDP and reserves at 4.4 months ensure sustainability.

Challenges:

• Revenue Risks: 2024/2025’s 89.6% shortfall (TZS 45.07 trillion vs. TZS 50.29 trillion) and TRA inefficiencies could jeopardize TZS 38.9 trillion.
• Taxation Burden: New taxes (e.g., travel insurance) and EPZ/SEZ changes may strain businesses, reducing job creation.
• External Risks: Currency depreciation (TZS 2,585/USD) and global shocks could raise import costs, affecting low-income consumers.
• Implementation: Delays in SGR or JNHPP could limit economic benefits.

Conclusion

The TZS 56.49 trillion 2025/2026 budget has strong potential to promote economic growth for low-income Tanzanians by achieving 6.0% GDP growth and reducing poverty through targeted investments. However, success hinges on improving revenue collection (TZS 38.9 trillion), addressing TRA inefficiencies, and mitigating external risks. If executed effectively, the budget could surpass the 2024/2025 impact, uplifting low-income Tanzanians through jobs, affordability, and social services.

In 2024/2025, Tanzania’s TZS 49.35 trillion budget achieved 5.5% real GDP growth, collecting TZS 45.07 trillion (89.6% of target) and spending TZS 15.75 trillion on development, including TZS 1.68 trillion for SGR and TZS 574.8 billion for rural electrification. Social investments like TZS 444.7 billion for fee-free education and TZS 708.6 billion in fertilizer subsidies supported low-income citizens, reducing costs and improving access.

The TZS 56.49 trillion 2025/2026 budget, an 11.6% increase, targets 6.0% growth by raising domestic revenue to TZS 38.9 trillion (16.7% of GDP) and allocating TZS 16.4 trillion for development, prioritizing agriculture, industry, and services. Continued subsidies, education, and healthcare investments aim to further reduce poverty (8.0% extreme poverty in 2018) and enhance livelihoods for low-income Tanzanians.

2024/2025 Budget Performance (Total: TZS 49.35 trillion, USD 18.85 billion)

The 2024/2025 budget, themed “Realising Competitiveness and Industrialisation for Human Development,” aimed to achieve 5.4% real GDP growth while prioritizing infrastructure, social services, and economic inclusion. Key performance highlights by May 2025:

• Real GDP Growth: Achieved 5.5%, surpassing the 5.4% target, driven by agriculture (26.5% of GDP), construction (13.2%), and mining (9.0%).
• Revenue Collection: Collected TZS 45.07 trillion (89.6% of TZS 50.29 trillion target), with domestic revenue at TZS 29.83 trillion (15.0% of GDP, up from 13.7% in 2020/2021) due to Tanzania Revenue Authority (TRA) reforms and mining contributions.
• Expenditure: Disbursed TZS 42.90 trillion (85.3% of TZS 50.29 trillion), including TZS 30.63 trillion for recurrent expenditure (90.8%) and TZS 15.75 trillion for development (95.1%), with notable allocations of TZS 1.68 trillion for Standard Gauge Railway (SGR), TZS 1.58 trillion for roads/bridges, and TZS 574.8 billion for rural electrification.
• Inflation: Maintained at 3.1% (within 3.0–5.0% target), ensuring affordability for low-income households.
• Trade Balance: Deficit narrowed to USD 5,157.2 million from USD 6,032.3 million in 2023, with exports at 20.3% of GDP, driven by tourism (1.4 million visitors) and gold.
• Social Spending: Allocated TZS 444.7 billion for fee-free education, TZS 636.0 billion for student loans, TZS 414.7 billion for healthcare supplies, and TZS 378.7 billion for water projects, directly benefiting low-income citizens.
• Debt: Public debt at TZS 107.70 trillion (40.3% of GDP, below 55% threshold), with external debt at USD 32.89 billion by September 2024, indicating fiscal sustainability.

Impact on Low-Income Citizens:

• Subsidies: TZS 708.6 billion for fertilizer subsidies (2021/22–2023/24) reduced farming costs by 50% per bag, boosting agricultural productivity for low-income farmers.
• Fuel Subsidies: TZS 100 billion monthly in 2022 stabilized transport and commodity prices.
• Social Services: Fee-free education and healthcare investments improved access, while rural electrification (TZS 574.8 billion) and water projects (TZS 378.7 billion) enhanced livelihoods and small business opportunities.
• Job Creation: Infrastructure projects (e.g., SGR, roads) generated employment, supporting low-income households.

Challenges:

• Revenue shortfall (89.6% of target) limited spending capacity.
• External borrowing (TZS 2.43 trillion, 81.3% of target) and currency depreciation (TZS 2,610.50/USD) increased import costs, affecting low-income consumers.
• TRA faced criticism for tax administration issues, prompting a presidential commission review.

2025/2026 Budget Overview (Total: TZS 56.49 trillion, USD 22.07 billion)

The 2025/2026 budget, themed “Inclusive Economic Transformation through Domestic Resource Mobilization and Resilient Strategic Investment for Job Creation and Improved Livelihoods,” represents an 11.6% increase from TZS 49.35 trillion in 2024/2025. It aims to achieve 6.0% real GDP growth, with a budget deficit of 3.0% of GDP, and prioritizes agriculture, industry, services, and social inclusion.

Key Financial Structure:

• Total Budget: TZS 56.49 trillion (USD 22.07 billion at TZS 2,560/USD, inferred from exchange rate context).
• Revenue Projections:
  • Domestic revenue: TZS 38.9 trillion (16.7% of GDP, up from 15.8% in 2024/2025), with TRA targeting TZS 29.41 trillion (13.3% of GDP).
  • External sources: TZS 16.02 trillion, including TZS 1.02 trillion in aid, TZS 5.6 trillion in concessional loans, and TZS 9.4 trillion in commercial loans.
• Expenditure:
  • Recurrent: TZS 38.6 trillion (68.3% of budget) for wages, debt servicing, and elections.
  • Development: TZS 16.4 trillion (29.0% of budget) for strategic projects (e.g., SGR, Julius Nyerere Hydropower Project [JNHPP]).
• Sectoral Allocations (partial, from web sources):
  • Tourism: TZS 359.9 billion for promotion, infrastructure, and conservation ().
  • Energy: TZS 2.2 trillion for power generation, rural electrification, and oil/gas infrastructure.

Macroeconomic Targets (Budget Speech):

• Real GDP growth: 6.0% in 2025, up from 5.5% in 2024.
• Inflation: 3.0–5.0% to maintain affordability.
• Domestic revenue: 16.7% of GDP to reduce borrowing reliance.
• Foreign exchange reserves: ≥4 months of imports (4.4 months in 2024).

Sector-Specific Contributions to Economic Growth (2025/2026)

The 2025/2026 budget focuses on agriculture, industry, and services to drive 6.0% GDP growth, with specific measures to support low-income Tanzanians, building on 2024/2025 outcomes.

a. Agriculture

2024/2025 Performance:

• Contributed 26.5% to GDP, employing ~65% of the workforce.
• TZS 708.6 billion in fertilizer subsidies (2021/22–2023/24) reduced costs, boosting cash crop output (Budget Speech).
• Investments via Tanzania Agricultural Development Bank (TADB) and Agricultural Seed Agency (ASA) enhanced productivity.

2025/2026 Budget Priorities:

• Continued fertilizer subsidies and irrigation expansion to improve resilience and yields.
• TADB credit expansion, leveraging 21.2% private sector credit growth in 2024.
• Modernization (quality seeds, value addition) to boost exports (11.6% of GDP for goods in 2024).

Projected Impact:

• Agriculture could contribute 1.0–1.5 percentage points to GDP growth (assuming 4–6% sectoral growth).
• Subsidies and credit access increase incomes for low-income farmers, reducing extreme poverty (8.0% in 2018).
• Export growth (e.g., cashew nuts, coffee) strengthens reserves (USD 5.7 billion in 2024), stabilizing prices.

b. Industry (Manufacturing, Mining, Construction)

2024/2025 Performance:

• Construction (13.2% of GDP) and mining (9.0%) drove growth via TZS 1.68 trillion for SGR, TZS 1.58 trillion for roads, and TZS 574.8 billion for JNHPP/rural electrification.
• Mining revenue rose due to reforms and global demand (e.g., gold).
• Investment-to-GDP ratio at 37.1% supported industrial expansion.

2025/2026 Budget Priorities:

• Completion of SGR and JNHPP (2,115 MW) to reduce logistics/energy costs.
• TZS 2.2 trillion for energy projects, including rural electrification and gas infrastructure.
• Support for National Development Corporation (NDC) and Small Industries Development Organization (SIDO) to expand manufacturing.

Projected Impact:

• Industry could contribute 1.5–2.0 percentage points to GDP growth (assuming 7–8% sectoral growth, ~20% GDP share).
• Job creation from infrastructure projects (e.g., SGR, roads) benefits low-income workers.
• Cheaper energy (JNHPP) and import substitution reduce business costs, lowering prices for consumers.

c. Services (Tourism, Transport, Trade, ICT)

2024/2025 Performance:

• Services contributed ~40–50% to GDP, with exports at 20.3% of GDP, led by tourism (USD 7.2 billion from 1.4 million visitors) and transport.
• ICT grew at 12.5%, driven by digital infrastructure.
• Current account deficit narrowed to -2.6% of GDP due to tourism receipts.

2025/2026 Budget Priorities:

• TZS 359.9 billion for tourism promotion, infrastructure, and conservation.
• Investments in Air Tanzania (ATCL), ports (TPA), and SGR to enhance trade and transport.
• ICT expansion (13.5% growth projected by 2026) via digital services and mobile penetration.

Projected Impact:

• Services could contribute 2.5–3.0 percentage points to GDP growth (assuming 6–7% sectoral growth).
• Tourism and transport jobs (e.g., hospitality, logistics) are accessible to low-income workers.
• Reduced transport costs (SGR) and digital access lower prices and improve livelihoods.

Support for Low-Income Tanzanians

The 2025/2026 budget emphasizes inclusive growth to address poverty (26.4% abject poverty, 8.0% extreme poverty in 2018):

• Education: Sustained or increased funding for fee-free education (TZS 444.7 billion in 2024/2025) and student loans (TZS 636.0 billion) to enhance access and skills for low-income households.
• Healthcare: Investments in universal health insurance, medicines (TZS 414.7 billion in 2024/2025), and facilities (TZS 47.2 billion) reduce healthcare costs.
• Subsidies: Likely continuation of fertilizer (TZS 708.6 billion historically) and fuel subsidies to lower farming and transport costs.
• Water and Energy: Expanded water projects (TZS 378.7 billion in 2024/2025) and rural electrification (TZS 2.2 trillion energy budget) support small businesses and living standards.
• Social Safety Nets: Productive Social Safety Nets (PSSN) cash transfers reduce malnutrition and poverty, with plans for expansion.
• Job Creation: Infrastructure (SGR, JNHPP) and SIDO programs create jobs and support entrepreneurship for low-income groups.

Projected Impact: These measures could reduce extreme poverty below 8.0% by improving incomes, access to services, and affordability, aligning with the Third Five-Year Development Plan (FYDP III) goal of 8 million jobs by 2026.

Fiscal and Macroeconomic Stability

• Revenue: Domestic revenue target of TZS 38.9 trillion (16.7% of GDP) reduces reliance on external loans (TZS 16.02 trillion, 28.4% of budget).
• Debt: Public debt at 46.5% of GDP (2024, projected to remain sustainable) and external debt at USD 34.1 billion (March 2025) support fiscal stability.
• Inflation: Target of 3.0–5.0% protects low-income purchasing power, despite currency depreciation risks (TZS 2,585/USD in 2024).
• Trade: Exports projected to grow by 6.0% in 2025 (minerals, agriculture, tourism), narrowing the trade deficit (USD 5,157.2 million in 2024) and stabilizing reserves (USD 5.7 billion).

Projected Performance of 2025/2026 Budget

The 2025/2026 budget is poised to achieve 6.0% GDP growth if:

• Revenue Targets Are Met: Exceeding TZS 38.9 trillion (16.7% of GDP) enables robust development spending (TZS 16.4 trillion).
• Strategic Projects Advance: Completion of SGR and JNHPP reduces costs, boosting productivity.
• Global Conditions Support Exports: Stable commodity prices and tourism demand (TZS 359.9 billion allocation) drive growth.
• Inclusive Policies Succeed: Subsidies, social spending, and job creation uplift low-income productivity.

Comparative Budget Performance:

• 2024/2025: TZS 49.35 trillion achieved 5.5% growth despite revenue shortfalls (89.6% of TZS 50.29 trillion), with strong social spending (e.g., TZS 444.7 billion for education) supporting low-income citizens.
• 2025/2026: TZS 56.49 trillion (11.6% increase) targets 6.0% growth with higher domestic revenue (16.7% vs. 15.0% of GDP) and development spending (TZS 16.4 trillion vs. TZS 15.75 trillion), enhancing inclusivity via sustained subsidies and services.

Challenges:

• Revenue Risks: TRA’s 2024/2025 shortfall (89.6%) and ongoing tax administration issues may persist.
• External Pressures: Currency depreciation (TZS 2,585/USD) and global shocks could raise import costs.
• Implementation: Delays in projects (e.g., SGR) could limit growth impact.

Tanzania’s Budget and Economic Performance: Key Figures (2024–2026)

Tanzania’s external sector showed robust improvement in April 2025, with the current account deficit narrowing by 18.6% to USD 2,224.9 million from USD 2,733.4 million in April 2024, driven by a 7.3% increase in services receipts to USD 6,940.8 million, led by tourism (USD 3,842.6 million, 56.0%) due to 2,162,487 arrivals. Services payments rose 22.8% to USD 2,842.6 million, primarily for transport (USD 1,444.2 million, 53.3%), reflecting higher freight costs. Supported by USD 5.3 billion in reserves, this performance underscores Tanzania’s growing role as a tourism and trade hub. The following table summarizes these key figures.

1. Current Account Performance

The current account balance reflects the net flow of goods, services, primary income (e.g., investment income), and secondary income (e.g., remittances). A narrowing deficit indicates improved external sector performance, driven by export growth outpacing imports.

Key Figures:

• Current Account Deficit (Year ending April 2025): USD -2,224.9 million
• Current Account Deficit (Year ending April 2024): USD -2,733.4 million
• Improvement: Deficit narrowed by USD 508.5 million, or 18.6% year-on-year.
• Reason for Improvement: Higher export earnings outpacing growth in imports.

Analysis:

• Deficit Reduction: The 18.6% improvement in the current account deficit (from USD -2,733.4 million to USD -2,224.9 million) reflects robust export performance, particularly in services, and a relatively moderate increase in imports. TICGL confirm this trend, noting a 31.1% deficit reduction to USD 2,021.5 million in the year ending January 2025, driven by strong export earnings from gold, agriculture, and tourism. The Monthey Economic Review highlights stable foreign exchange reserves of USD 5.3 billion (4.3 months of import cover, previous responses), supporting external balance stability.
• Export-Driven Growth: The narrowing deficit aligns with a 15.1% increase in total exports of goods and services to USD 16,093.1 million in the year ending January 2025, with services exports (e.g., tourism) playing a significant role. Gold exports (USD 3,369.7 million, 36.8% of goods exports) and tourism receipts (USD 3,842.6 million, see below) were key drivers.
• Import Dynamics: Imports of goods and services grew moderately to USD 17,511.8 million in the year ending February 2025 from USD 16,040.6 million in 2024, driven by industrial transport equipment and freight payments, but tempered by lower imports of petroleum, machinery, and wheat. The Monthey Economic Review notes a 3.9% annual TZS depreciation to TZS 2,684.41/USD (previous responses), which may have increased import costs but was offset by export growth.
• Macro Context: The deficit reduction supports Tanzania’s macroeconomic stability, with inflation at 3.2% in February 2025 and GDP growth projected at 6% in 2025. The IMF’s Extended Credit Facility (ECF, USD 1,046.4 million) and foreign exchange interventions (USD 6.25 million sold in April 2025, previous responses) further bolster external balances.

Insights:

• The 18.6% deficit reduction reflects a strong recovery in services exports, particularly tourism, which grew due to a 11.5% increase in tourist arrivals (2,162,487 in April 2025 vs. 1,938,875 in April 2024). This aligns with TICGL reporting 2,106,870 arrivals in the year ending November 2024.
• The moderate import growth (see below) suggests effective management of import bills, particularly for petroleum, amid favorable global commodity prices.
• The deficit, at approximately 2.8% of GDP (based on 2024 GDP of USD 79.2 billion), is sustainable, below the 4.2% projected for 2025, supported by reserves and IMF financing.

2. Exports – Services Receipts by Category

Services receipts are a critical component of Tanzania’s export earnings, driven by tourism and transport, reflecting the country’s role as a regional tourism hub and trade gateway.

Key Figures:

• Total Services Receipts (Year ending April 2025): USD 6,940.8 million
• Total Services Receipts (Year ending April 2024): USD 6,466.0 million
• Growth: +7.3% (USD +474.8 million)
• Breakdown by Category:

Analysis:

• Travel (Tourism, 56.0%, USD 3,842.6 million): Tourism is the largest contributor to services receipts, driven by a 11.5% increase in international arrivals (2,162,487 in April 2025 vs. 1,938,875 in April 2024). TICGL confirm this trend, with arrivals reaching 2,106,870 in the year ending November 2024, boosting travel receipts to USD 3,680 million. The Monthey Economic Review notes tourism’s role as a top foreign exchange earner, supported by Tanzania’s rich wildlife and Vision 2025’s focus on tourism. The sector contributes ~10% to GDP and is projected to reach 19.5% by 2025/26.
• Transport Services (35.2%, USD 2,444.6 million): Receipts from freight and passenger movement grew by 6.5% from ~USD 2,296.0 million in 2024, reflecting Tanzania’s role as a trade hub via Dar es Salaam port, serving six landlocked neighbors. TICGL report transport earnings at USD 2,720 million in November 2024, driven by improved infrastructure (e.g., TAZARA Railway upgrades). The Monthey Economic Review highlights increased trade with neighboring countries (previous responses).
• Other Services (8.8%, USD 653.6 million): This category, including construction, insurance, financial, ICT, government, IP rights, and professional services, grew modestly. Web TICGL note steady growth in ICT and financial services, aligning with the Monthey Economic Review’s emphasis on financial sector digitalization (e.g., mobile money transactions up 26.73%).
• Growth Context: The 7.3% increase in services receipts aligns with a 14% rise in services exports to USD 6,980 million in November 2024, driven by global tourism recovery and regional trade. The African Continental Free Trade Agreement (ratified 2022) and agreements with Angola and the UAE bolster export growth.

Insights:

• Tourism’s 56.0% share underscores its critical role in foreign exchange earnings, supported by a record 2,162,487 arrivals, approaching pre-pandemic levels (1,527,230 in 2019). Investments in tourism infrastructure (e.g., World Bank’s REGROW Project) drive this growth.
• Transport services benefit from Tanzania’s strategic port and railway upgrades (e.g., USD 1.4 billion for TAZARA), enhancing regional trade with landlocked neighbors.
• The modest growth in “Other Services” reflects emerging sectors like ICT, supported by digital payment growth (84% of SMEs adopted digital payments).

3. Imports – Services Payments by Category

Services payments represent expenditures on foreign services, primarily driven by transport costs linked to goods imports, reflecting Tanzania’s import-dependent economy.

Key Figures:

• Total Services Payments (Year ending April 2025): USD 2,842.6 million
• Total Services Payments (Year ending April 2024): USD 2,314.6 million
• Growth: +22.8% (USD +528.0 million)
• Breakdown by Category:

Analysis:

• Transport Services (53.3%, USD 1,444.2 million): The largest category, transport payments grew by 13.2% from ~USD 1,276.2 million in 2024, driven by freight costs linked to goods imports (USD 1,377.9 million in February 2025). TICGL note a 15.8% increase in services payments to USD 2,605.7 million in February 2025, with freight accounting for 53.3%. The Monthey Economic Review attributes this to increased imports of industrial transport equipment (previous responses), reflecting manufacturing and construction activity (GDP contributions of 9% and 16%).
• Travel (19.0%, USD 540.6 million): Payments for Tanzanians traveling abroad for tourism, business, or education grew moderately. TICGL indicate stable travel payments, with services payments rising to USD 2,533.8 million in January 2025, driven by business travel and education abroad. The Monthey Economic Review notes foreign exchange pressures from import payments (previous responses), including travel.
• Other Services (27.7%, USD 857.8 million): This category, including telecom, insurance, royalties, business services, and construction, remained stable (~0% growth). TICGL highlight increased payments for telecom and business services, but overall moderation due to lower global commodity prices. The Monthey Economic Review supports this with stable non-tax revenue (TZS 347.8 billion), indicating controlled service imports.
• Growth Context: The 22.8% increase in services payments outpaced services receipts (7.3%), contributing to the current account deficit. TICGL note a moderate rise in total imports to USD 17,511.8 million in February 2025, driven by industrial supplies but offset by lower petroleum imports.

Insights:

• Transport payments’ dominance (53.3%) reflects Tanzania’s reliance on imported goods, with freight costs tied to Dar es Salaam port’s role as a regional hub. The 13.2% growth aligns with increased construction and manufacturing.
• Stable “Other Services” payments suggest cost management in non-essential services, supported by favorable global prices and BoT’s exchange rate interventions.
• Travel payments (19.0%) indicate growing outbound activity, but their smaller share compared to tourism receipts (USD 3,842.6 million) highlights a net positive services balance.

Conclusion

Tanzania’s external sector performance in April 2025 showed significant improvement, with the current account deficit narrowing by 18.6% to USD 2,224.9 million from USD 2,733.4 million, driven by a 7.3% rise in services receipts to USD 6,940.8 million, led by tourism (USD 3,842.6 million, 56.0%) and transport (USD 2,444.6 million, 35.2%). Services payments grew faster at 22.8% to USD 2,842.6 million, primarily due to transport costs (USD 1,444.2 million, 53.3%), reflecting increased goods imports. The tourism sector, bolstered by 2,162,487 arrivals, and regional trade via improved infrastructure (e.g., TAZARA upgrades) were key drivers, supported by reserves of USD 5.3 billion and IMF financing.

The following table summarizes these key figures.

Tanzania’s affordable cost of living, with 2025 monthly expenses of 1,240,012.4 TSh for a single person and 4,293,375 TSh for a family of four (excluding rent), alongside low rents like 1,039,418.93 TSh for a city-center 1-bedroom apartment, offers a strong foundation for economic development by 2030. These cost advantages can attract investment, boost tourism, and spur entrepreneurship. However, the significant affordability gap, where the average monthly net salary of 693,333.33 TSh falls short of these costs, threatens living standards and widens income disparities. By implementing targeted policies, such as wage increases, childcare subsidies, and infrastructure investments, Tanzania can bridge this gap to achieve inclusive and sustainable economic growth by 2030.

1. Capitalizing on Affordable Cost of Living for Economic Development by 2030

Tanzania’s low cost of living in 2025 provides a competitive advantage that can drive economic development by 2030 through strategic initiatives in investment, tourism, and entrepreneurship:

• Attracting Foreign Investment and Remote Workers:
  Affordable living costs, such as 1,039,418.93 TSh for a city-center 1-bedroom apartment (range: 300,000–2,685,704 TSh) and 454,074.67 TSh outside city centers, position Tanzania as an attractive destination for foreign businesses and digital nomads by 2030. For instance, a tech startup could house employees at low costs, with utilities for an 85m² apartment averaging 168,125 TSh (range: 63,750–300,000 TSh). Scaling up foreign direct investment (FDI) in sectors like technology and manufacturing can create high-paying jobs, boosting economic growth.
  Example: By 2030, a remote worker earning a global salary could live on 1,694,087.07 TSh (single-person costs 1,240,012.4 TSh + rent 454,074.67 TSh), with surplus income fueling local economies through spending on services like dining (6,500 TSh per meal).
• Boosting Tourism and Hospitality:
  Low dining and leisure costs, such as 6,500 TSh for an inexpensive meal (range: 3,000–15,000 TSh) and 12,000 TSh for a cinema ticket (range: 10,000–25,000 TSh), make Tanzania a compelling tourist destination. Affordable transportation, with a one-way ticket at 725 TSh (range: 600–2,000 TSh), enhances access to sites like Zanzibar and Serengeti. By 2030, investments in tourism infrastructure (e.g., hotels, transport networks) can significantly increase foreign exchange earnings, contributing to GDP growth.
  Example: A tourist spending 50,000 TSh on a mid-range meal for two and 45,000 TSh on a monthly transport pass generates consistent revenue for local businesses, supporting job creation.
• Fostering Entrepreneurship:
  Low operational costs, including groceries (e.g., 2,700 TSh/kg for rice, 2,408.33 TSh/kg for bananas) and utilities (27,928.57 TSh for a mobile plan with 10GB+ data), enable entrepreneurs to launch ventures with minimal capital. By 2030, supporting micro-enterprises like food stalls or retail through low-cost inputs can drive economic diversification. For instance, a food stall sourcing 10kg of rice for 27,000 TSh and 5kg of chicken for 67,000 TSh keeps startup costs low.
  Example: A small business with monthly costs of 200,000 TSh (groceries, utilities, transport) can scale profitably in urban markets, contributing to local economic resilience.

2. Addressing the Affordability Gap by 2030

The average monthly net salary of 693,333.33 TSh in 2025 falls significantly below the estimated costs of 1,240,012.4 TSh for a single person (shortfall: 546,679.07 TSh) and 4,293,375 TSh for a family of four (shortfall: 3,600,041.67 TSh with one earner, 2,906,708.34 TSh with two earners). Including rent exacerbates this gap:

• Single Person: Total costs with rent outside city centers (1,240,012.4 TSh + 454,074.67 TSh = 1,694,087.07 TSh) result in a shortfall of 1,000,753.74 TSh.
• Family of Four: Total costs with a 3-bedroom apartment outside city centers (4,293,375 TSh + 934,804.40 TSh = 5,228,179.40 TSh) result in a shortfall of 4,534,846.07 TSh (one earner) or 3,841,512.74 TSh (two earners).

This gap limits purchasing power, lowers living standards, and widens income inequality, as only high earners can afford premium services like international schools (23,750,000 TSh/year). By 2030, addressing this gap is critical to ensuring inclusive growth.

3. Policy Recommendations to Reduce Income Disparities and Enhance Living Standards by 2030

To bridge the affordability gap and achieve sustainable economic growth by 2030, Tanzania can implement the following policies:

• Increase Minimum Wages and Job Creation:
  Gradually raising the minimum wage to approach 1,240,012.4 TSh for singles or promoting dual-income households (e.g., two earners at 693,333.33 TSh = 1,386,666.66 TSh) can reduce the shortfall. By 2030, investments in high-growth sectors like manufacturing and tourism can create jobs paying above the current average, such as 1,000,000 TSh for factory workers, enabling singles to cover living costs.
  Impact: Reducing the 546,679.07 TSh shortfall for singles increases disposable income, boosting spending on non-essentials like 42,500 TSh for jeans or 158,571.43 TSh for a fitness club, stimulating retail growth.
• Subsidize Childcare and Education:
  High childcare costs, such as 756,250 TSh/month for preschool (range: 375,000–1,300,000 TSh), burden families. By 2030, government subsidies or public preschool programs could lower costs to 200,000 TSh/month, freeing up 556,250 TSh for families. This would enhance labor force participation, particularly for women, and build human capital for a skilled workforce.
  Impact: Reducing childcare costs lowers the family shortfall from 3,600,041.67 TSh to 2,843,791.67 TSh, improving affordability and supporting economic productivity.
• Improve Infrastructure for Cost Efficiency:
  Expanding affordable transportation (e.g., maintaining 725 TSh one-way tickets) and utilities (168,125 TSh for an 85m² apartment) can lower living costs by 2030. For example, reliable electricity could reduce utility bills to 100,000 TSh, saving 68,125 TSh/month. Affordable internet (98,222.22 TSh for 60 Mbps) can support remote work, increasing income opportunities.
  Impact: Lowering utility costs by 68,125 TSh reduces the single-person shortfall to 478,554.07 TSh, enhancing affordability and economic participation.
• Promote Affordable Housing:
  By 2030, subsidizing rentals (e.g., capping 1-bedroom apartments at 300,000 TSh in city centers) or reducing mortgage rates (current: 14.6%, range: 10–25%) to 5% for apartments at 2,500,000 TSh/m² outside city centers can improve housing access. This encourages homeownership and wealth accumulation.
  Impact: Reducing rent to 300,000 TSh lowers single-person total costs to 1,540,012.4 TSh, cutting the shortfall to 846,679.07 TSh.

4. Economic Development Outcomes by 2030

By leveraging low costs and addressing income disparities by 2030:

• Increased Consumer Spending: Reducing the shortfall boosts spending on non-essentials (e.g., 15,000 TSh for a bottle of wine, 77,500 TSh for Nike shoes), driving growth in retail and service sectors.
• Human Capital Growth: Affordable childcare and education enhance workforce skills, supporting industries like technology and tourism, critical for long-term GDP growth.
• Sustainable Growth: Attracting FDI and tourism, combined with higher wages, can reduce the 14.6% mortgage rate and expand housing markets, fostering economic resilience and inclusivity.

The table retains the key economic figures from research data, including the average monthly net salary (693,333.33 TSh), living costs (1,240,012.4 TSh for singles, 4,293,375 TSh for families), housing (1,039,418.93 TSh for city-center 1-bedroom rent), and other expenses like groceries (2,700 TSh/kg for rice), transport (725 TSh one-way ticket), utilities (168,125 TSh), and childcare (756,250 TSh/month). The "Notes" column is revised to emphasize long-term economic implications and opportunities for 2030, highlighting affordability advantages and challenges like income disparities.

The Tanzania Investment Centre (TIC) Quarterly Bulletin for January to March 2025 (Q3 2024/25) reports a significant 46.72% increase in capital inflow compared to the same period in the previous year (Q3 2023/24), with total capital attracted reaching USD 2,164.7 million compared to USD 1,475.43 million in Q3 2023/24. This growth, coupled with the registration of 199 investment projects expected to generate 24,444 jobs, underscores Tanzania’s robust economic development trajectory. Below, TICGL analyze the sectors driving this capital increase, supported by figures from the document, and explain how they contribute to economic diversification, a critical factor in reducing reliance on traditional sectors and fostering sustainable growth.

Sectors Driving the Capital Inflow Growth

The bulletin highlights notable increases in capital, project numbers, and job opportunities in specific sectors during Q3 2024/25, The key sectors driving the 46.72% capital increase include:

1. Agriculture:
   • Capital Increase: The bulletin notes a “notable increase” in capital in the agriculture sector, though exact capital figures per sector are not provided in the text. However, the sector’s prominence is evident from the number of projects and jobs.
   • Projects and Jobs: Agriculture saw an increase in registered projects and job opportunities. For context, the document highlights specific agricultural projects like the Bugwema Irrigation Scheme (USD 14.89 million, 2,500+ household jobs) and the Usariver Agricultural SEZ, indicating significant investment interest.
   • Figure Reference: Figure 4.2 shows a rise in the number of agricultural projects and jobs compared to Q3 2023/24, suggesting a substantial contribution to the capital inflow.
2. Energy:
   • Capital Increase: The energy sector recorded a significant increase in capital, driven by projects like solar and clean energy initiatives (e.g., inbound missions from China and India focusing on energy).
   • Projects and Jobs: The sector also saw an increase in registered projects and job creation. Figure likely reflects this growth in project numbers.
   • Example Projects: Missions from Japan (energy, February 13, 2025) and India (clean energy, March 28, 2025) indicate targeted investments.
3. Economic Infrastructure:
   • Capital Increase: This sector experienced a notable rise in capital, likely driven by projects like the East Africa Commercial & Logistics Center (EACLC) with an investment exceeding USD 200 million and infrastructure-focused missions (e.g., UAE’s logistics hub interest).
   • Projects and Jobs: The bulletin notes an increase in project numbers and jobs, with Figure 4.2 illustrating this trend.
   • Significance: The EACLC, with its 75,000 square meters and four functional areas (commercial trading, logistics, business district, leisure), is a flagship project enhancing Tanzania’s role as a regional trade hub.
4. Services:
   • Capital Increase: The services sector, encompassing tourism, real estate, and other services, also contributed to the capital surge. Inbound missions from Japan (real estate, February 2025) and Poland (tourism, January 16, 2025) highlight this focus.
   • Projects and Jobs: Figure shows growth in service-related projects and jobs, reflecting investments in tourism and hospitality.
5. Manufacturing:
   • Capital Increase: Despite a slight decrease in the number of projects, the manufacturing sector recorded a 45.87% increase in capital, making it a significant driver of the overall 46.72% capital growth.
   • Projects and Jobs: Figure indicates a slight dip in project numbers but a substantial increase in capital, suggesting larger-scale investments. Examples include Chinese investments in motorcycle assembly, tire manufacturing, and steel production.
   • Specific Investments: The bulletin lists 19 inbound missions from China alone, many focusing on manufacturing sectors like tea processing, building materials, and stainless steel.

Quantitative Breakdown

• Total Capital (Q3 2024/25): USD 2,164.7 million.
• Previous Year (Q3 2023/24): USD 1,475.43 million.
• Increase in Capital: USD 2,164.7M – USD 1,475.43M = USD 689.27 million, equivalent to a 46.72% increase.
• Projects Registered: 199 projects (94 foreign-owned, 66 locally owned, 39 joint ventures).
• Jobs Created: 24,444 jobs.
• Expansion Projects: 9 projects with USD 100.09 million in capital and 1,542 jobs.
• Sectoral Contribution:
  • Agriculture, Energy, Economic Infrastructure, and Services: Increased in projects, jobs, and capital.
  • Manufacturing: 45.87% capital increase, despite fewer projects.

Contribution to Economic Diversification

Economic diversification reduces Tanzania’s reliance on traditional sectors like agriculture and mining, fostering resilience and sustainable growth. The sectors driving the capital inflow contribute to diversification as follows:

1. Agriculture:
   • Diversification Impact: Investments like the Bugwema Irrigation Scheme (USD 14.89 million) and the Usariver Agricultural SEZ modernize agriculture, shifting from subsistence to commercial farming. The Usariver project focuses on horticulture for export, enhancing foreign exchange earnings.
   • Economic Benefits: These projects create over 2,500 household jobs (Bugwema) and boost food security, reducing dependence on rain-fed agriculture. The allocation of 30,000 hectares in Mkulazi for the “Mkulazi Agricultural City” (USD 570 million) supports large-scale agribusiness, diversifying agricultural output.
   • Figure Impact: The increase in agricultural projects supports value-added activities like processing, reducing reliance on raw commodity exports.
2. Energy:
   • Diversification Impact: Investments in solar and clean energy (e.g., Chinese solar project) reduce dependence on traditional energy sources like hydropower, enhancing energy security.
   • Economic Benefits: Energy projects support industrial growth by ensuring reliable power for manufacturing and infrastructure projects like the EACLC. This enables Tanzania to attract more industries, diversifying from agriculture-based revenue.
   • Figure Impact: The rise in energy sector capital reflects investments in renewable energy, aligning with global sustainability trends.
3. Economic Infrastructure:
   • Diversification Impact: The EACLC (USD 200 million+) integrates wholesale, logistics, warehousing, and e-commerce, positioning Tanzania as a regional trade hub. The Standard Gauge Railway (SGR) in Morogoro enhances trade connectivity, opening markets for diverse sectors like horticulture and manufacturing.
   • Economic Benefits: The EACLC is expected to create jobs and boost trade across East Africa, while the SGR supports faster transport of perishable goods, diversifying market access. These projects reduce reliance on traditional trade routes and ports.
   • Figure Impact: Figure shows 73 projects in Dar es Salaam, where EACLC is located, indicating infrastructure’s role in capital attraction.
4. Services:
   • Diversification Impact: Investments in tourism and real estate (e.g., Japanese and Polish missions) diversify Tanzania’s economy by capitalizing on its tourism potential and urban development needs.
   • Economic Benefits: Tourism projects create jobs and foreign exchange, while real estate investments (supported by the 2023 Land Policy) stimulate construction and housing markets, broadening economic activity.
   • Figure Impact: Figure shows increased service sector projects, reflecting growth in non-traditional sectors.
5. Manufacturing:
   • Diversification Impact: The 45.87% capital increase in manufacturing supports industrial growth in areas like tea processing, motorcycle assembly, and steel production. This shifts Tanzania from raw material exports to value-added manufacturing.
   • Economic Benefits: Manufacturing projects create high-skill jobs (e.g., 1,542 jobs from expansion projects) and increase export revenues. The Kibaha Textile SEZ (USD 78.85 million, 38,400 jobs) exemplifies large-scale industrial diversification.
   • Figure Impact: Figure highlights manufacturing’s capital growth, underscoring its role in economic transformation.

Broader Economic Development Impact

• Job Creation: The 24,444 jobs across these sectors reduce unemployment and increase household incomes, boosting domestic consumption and tax revenues.
• FDI and Domestic Investment: The 62.5% increase in joint ventures (39 projects) indicates growing local participation, fostering inclusive growth. Figure shows 94 foreign-owned and 66 locally owned projects, balancing FDI and domestic investment.
• Regional Distribution: Figure shows Dar es Salaam (73 projects), Pwani (48), and Arusha (16), ensuring economic activity spreads beyond urban centers, promoting balanced development.
• Policy Support: The Tanzania Investment and Special Economic Zones Authority Act and the 2023 Land Policy create a conducive environment, encouraging diverse investments. The EACLC’s alignment with the Belt & Road Initiative enhances global trade linkages.

Conclusion

The 46.72% increase in capital inflow to USD 2,164.7 million in Q3 2024/25 was driven by agriculture, energy, economic infrastructure, services, and manufacturing, as evidenced by Figure and specific project data. These sectors contribute to economic diversification by modernizing agriculture, enhancing energy security, improving trade infrastructure, expanding service industries, and boosting manufacturing. Projects like the EACLC (USD 200 million+), Kibaha Textile SEZ (USD 78.85 million), and Bugwema Irrigation Scheme (USD 14.89 million) exemplify this shift, creating jobs, increasing exports, and reducing reliance on traditional sectors. These investments, supported by reforms like TISEZA and the 2023 Land Policy, position Tanzania as a diversified, resilient economy and a leading investment destination in Africa.

This table will provide a clear, concise overview of the figures that illustrate Tanzania’s economic development during Q3 2024/25, as requested, with an emphasis on the 46.72% capital inflow increase and other key metrics.

Explanation of the Table

This table captures key figures from the bulletin that highlight Tanzania’s economic development in Q3 2024/25, focusing on investment, job creation, and sectoral contributions. Figures contribute to economic development:

• Capital Inflow (USD 2,164.7 million, 46.72% increase): Reflects strong investor confidence, driven by agriculture, energy, infrastructure, services, and manufacturing. This supports economic growth by increasing available capital for development projects.
• Projects and Jobs (199 projects, 24,444 jobs): The high number of projects and jobs boosts employment, household incomes, and tax revenues, fostering inclusive growth.
• Sectoral Growth: Manufacturing’s 45.87% capital increase and projects like the EACLC (USD 200 million+) and Kibaha Textile SEZ (USD 78.85 million) drive industrial and trade diversification.
• Agricultural Investments: Projects like Bugwema (USD 14.89 million) and Mkulazi (USD 570 million) modernize agriculture, enhancing food security and exports.
• Regional Balance: The distribution of projects across Dar es Salaam, Pwani, and Arusha promotes equitable economic development.
• 2024 Achievements: The record 901 projects and 212,293 jobs highlight a landmark year, driven by reforms like the Investment Act 2022 and the National Investment Campaign.

The "Tanzania Investment Centre Quarterly Bulletin January to March 2025" highlights a remarkable 71% increase in registered investment projects from 2023 to 2024, with the number of projects rising from 526 in 2023 to 901 in 2024. This surge, described as making 2024 the "best year ever" for investment in Tanzania since the TIC’s establishment in 1997, has significantly driven economic growth by boosting job creation, increasing capital inflows, and fostering sectoral diversification. Below, TICGL analyze the impact on economic growth, focusing on job creation and capital inflow, using figures from the bulletin.

1. Job Creation

The 71% increase in registered projects has led to a record-breaking number of jobs, significantly contributing to Tanzania’s economic growth by enhancing employment, household incomes, and domestic consumption.

• Total Jobs Created in 2024: The 901 registered projects in 2024 are expected to generate 212,293 jobs, a substantial increase compared to previous years, though specific job figures for 2023 are not provided in the document. This number is described as the highest in TIC’s history, underscoring the scale of employment impact.
• Q3 2024/25 Specifics: In Q3 2024/25 alone, 199 projects were registered, expected to create 24,444 jobs. This includes 9 expansion projects generating 1,542 jobs, indicating that the momentum from 2024’s project surge continued into the third quarter.
• Sectoral Job Contributions:
  • Manufacturing: Despite a slight decrease in project numbers, manufacturing saw a 45.87% increase in capital, contributing high-skill jobs. The Kibaha Textile Special Economic Zone (SEZ) alone is expected to create 38,400 jobs with a capital investment of USD 78.85 million.
  • Agriculture: Projects like the Bugwema Irrigation Scheme (USD 14.89 million) are projected to create over 2,500 household jobs, while the Mkulazi Agricultural City (USD 570 million, 30,000 hectares) supports large-scale job creation.
  • Economic Infrastructure: The East Africa Commercial & Logistics Center (EACLC) in Ubungo, Dar es Salaam (USD 200 million+), is expected to create numerous jobs across trade, logistics, and services.
• Economic Impact: The creation of 212,293 jobs in 2024 reduces unemployment, increases household purchasing power, and boosts tax revenues, which fuel public investments in infrastructure and services. For context, Tanzania’s GDP growth is partly driven by increased labor force participation, with employment in diverse sectors like manufacturing and agriculture reducing reliance on informal jobs. The bulletin’s emphasis on projects like the Vikapu Bomba initiative, empowering over 300 rural women in Iringa and Njombe, highlights inclusive growth, further amplifying economic benefits.

2. Capital Inflow

The 71% increase in projects has significantly boosted capital inflows, providing the financial resources needed for infrastructure, industrial expansion, and economic diversification.

• Capital Inflow in Q3 2024/25: The bulletin reports a 46.72% increase in capital inflow in Q3 2024/25, reaching USD 2,164.7 million compared to USD 1,475.43 million in Q3 2023/24, an absolute increase of USD 689.27 million. While this figure is specific to Q3, it reflects the broader trend of increased investment activity driven by the 901 projects registered in 2024.
• Domestic Investment Surge: Domestic projects increased by 74%, from 182 in 2023 to 321 in 2024, spurred by the National Investment Campaign and a reduced investment threshold of USD 50,000 for domestic investors. This contributed significantly to capital inflows, as locally owned projects (66 in Q3 2024/25) and joint ventures (39, up 62.5% from 24 in Q3 2023/24) added to the capital pool.
• Foreign Direct Investment (FDI): The bulletin notes 94 foreign-owned projects in Q3 2024/25, supported by 73 inbound missions from countries like China, India, and Japan. For example, Chinese investments in manufacturing (e.g., motorcycle assembly, tea processing) and India’s focus on clean energy have driven significant capital inflows.
• Key Projects:
  • EACLC: Over USD 200 million invested in a logistics and trade hub, positioning Tanzania as a regional trade leader.
  • Mkulazi Agricultural City: USD 570 million for agricultural modernization.
  • Kibaha Textile SEZ: USD 78.85 million for industrial growth.
  • Expansion Projects: USD 100.09 million for 9 expansion projects in Q3 2024/25.
• Economic Impact: The increased capital inflow supports infrastructure development, such as the Standard Gauge Railway (SGR) in Morogoro, which enhances trade connectivity, and digital platforms like the Tanzania Electronic Investment Window (TeIW), which streamlines investment processes. These investments drive GDP growth by funding productive sectors, with the 46.72% capital increase signaling Tanzania’s attractiveness as an investment destination.

3. Broader Economic Growth Impacts

• Sectoral Diversification: The 901 projects span agriculture, manufacturing, energy, infrastructure, and services, reducing reliance on traditional sectors like mining. For instance, manufacturing’s 45.87% capital increase and agriculture’s modernization through projects like Usariver SEZ diversify Tanzania’s economic base, enhancing resilience.
• Regional Development: Figure shows 73 projects in Dar es Salaam, 48 in Pwani, and 16 in Arusha, promoting balanced growth across regions. The new TIC office in Njombe further decentralizes investment services, boosting regional economies.
• Policy Reforms: The Tanzania Investment and Special Economic Zones Authority Act (2025) and the 2023 Land Policy have facilitated the project surge by improving the investment climate. The lower domestic investment threshold (USD 50,000) and land access for non-citizens have attracted both local and foreign capital.
• Global Integration: Participation in the Belt & Road Initiative via projects like the EACLC and events like the Tanzania-Japan Trade and Investment Forum enhance Tanzania’s role in global trade, driving export-led growth.

Conclusion

The 71% increase in registered investment projects from 526 in 2023 to 901 in 2024 has profoundly impacted Tanzania’s economic growth by creating 212,293 jobs and driving a 46.72% capital inflow increase to USD 2,164.7 million in Q3 2024/25. Job creation has reduced unemployment, increased household incomes, and stimulated consumption, while capital inflows have funded transformative projects like the EACLC (USD 200 million+), Kibaha Textile SEZ (USD 78.85 million), and Mkulazi Agricultural City (USD 570 million). These investments, supported by reforms like the 2023 Land Policy and TISEZA Act, have diversified Tanzania’s economy across agriculture, manufacturing, and infrastructure, positioning it as a regional economic powerhouse. The regional spread of projects and inclusive initiatives like Vikapu Bomba further ensure equitable growth, enhancing Tanzania’s economic resilience and global competitiveness.

The "Tanzania Investment Centre Quarterly Bulletin January to March 2025" reports that in Q3 2024/25, Dar es Salaam attracted 73 projects, Pwani 48 projects, and Arusha 16 projects, as part of the 199 total investment projects registered nationwide. This distribution, with significant investments in both urban and less urbanized regions, contributes to balanced economic development across Tanzania by promoting job creation, capital inflow, infrastructure development, and sectoral diversification in multiple regions. Below, TICGL analyze how this regional spread fosters equitable economic growth, using figures from the bulletin.

1. Overview of Regional Investment Distribution

• Total Projects in Q3 2024/25: 199 projects, generating USD 2,164.7 million in capital inflow (46.72% increase from USD 1,475.43 million in Q3 2023/24) and 24,444 jobs.
• Key Regions (Page 21, Figure 4.4):
  • Dar es Salaam: 73 projects (36.7% of total projects).
  • Pwani: 48 projects (24.1% of total projects).
  • Arusha: 16 projects (8.0% of total projects).
  • Other Regions: The remaining 62 projects (31.2%) are distributed across other regions, though specific counts for other regions are not detailed in the text but implied in Figure.
• Investment Types: The 199 projects include 94 foreign-owned, 66 locally owned, and 39 joint ventures, indicating diverse investment sources across regions.

This distribution shows a concentration in Dar es Salaam, the economic hub, but also significant activity in Pwani and Arusha, suggesting efforts to spread economic opportunities beyond the capital.

2. Contribution to Balanced Economic Development

Balanced economic development involves reducing regional disparities, ensuring equitable access to economic opportunities, and fostering growth in both urban and rural areas. The distribution of projects in Dar es Salaam, Pwani, and Arusha contributes to this goal as follows:

a. Dar es Salaam (73 Projects)

• Economic Role: As Tanzania’s commercial capital, Dar es Salaam is a hub for trade, logistics, and services. Its 73 projects reflect its attractiveness to investors due to infrastructure like the Dar es Salaam Port and urban markets.
• Key Projects and Figures:
  • East Africa Commercial & Logistics Center (EACLC): Investment exceeding USD 200 million, creating jobs in trade, logistics, and services. The EACLC, with 75,000 square meters, enhances Tanzania’s role as a regional trade hub.
  • Capital Contribution: Dar es Salaam’s high project count likely accounts for a significant portion of the USD 2,164.7 million capital inflow, though region-specific capital is not isolated in the document.
  • Job Creation: The 73 projects contribute substantially to the 24,444 jobs in Q3 2024/25. For example, service and manufacturing projects in Dar es Salaam, such as those from Chinese investors (e.g., motorcycle assembly), create high-skill jobs.
• Impact on Balanced Development:
  • Dar es Salaam’s investments drive national economic growth by attracting foreign direct investment (FDI) and supporting infrastructure like the EACLC, which benefits other regions through improved trade networks.
  • The concentration of projects ensures economies of scale in the urban center, generating tax revenues that can be redistributed to less developed regions.
  • However, over-reliance on Dar es Salaam could exacerbate urban-rural disparities, making investments in other regions critical for balance.

b. Pwani (48 Projects)

• Economic Role: Pwani, a coastal region near Dar es Salaam, is emerging as an industrial and agricultural hub, benefiting from proximity to the port and infrastructure like the Standard Gauge Railway (SGR).
• Key Projects and Figures:
  • Kibaha Textile Special Economic Zone (SEZ): Investment of USD 78.85 million, expected to create 38,400 jobs. This project boosts textile manufacturing and exports.
  • Agricultural Investments: Pwani’s projects include agricultural initiatives, contributing to the sector’s increased project numbers and jobs.
  • Job Contribution: Pwani’s 48 projects significantly add to the 24,444 jobs, with the Kibaha SEZ alone accounting for a substantial share.
• Impact on Balanced Development:
  • Pwani’s high project count (second only to Dar es Salaam) indicates growing investment in a semi-urban region, reducing pressure on Dar es Salaam and spreading economic activity.
  • The Kibaha SEZ creates thousands of jobs, particularly for local communities, enhancing household incomes and reducing regional poverty.
  • Investments in Pwani strengthen regional connectivity, as the SGR and port access facilitate trade, benefiting neighboring regions like Morogoro.

c. Arusha (16 Projects)

• Economic Role: Arusha, a northern region, is a tourism and agricultural hub, known for its proximity to national parks and horticulture potential.
• Key Projects and Figures:
  • Usariver Agricultural SEZ: A 209-acre project focused on horticulture, aimed at boosting export earnings. While specific capital figures are not provided, it aligns with agriculture’s increased capital in Q3 2024/25.
  • Tourism Investments: Arusha’s projects include service sector investments, supported by inbound missions like Poland’s tourism focus (January 16, 2025).
  • Job Contribution: Arusha’s 16 projects contribute to the 24,444 jobs, with tourism and agriculture creating both direct and indirect employment.
• Impact on Balanced Development:
  • Arusha’s investments promote economic activity in a non-coastal, northern region, reducing geographic disparities.
  • The Usariver SEZ enhances export-oriented agriculture, increasing foreign exchange earnings and supporting rural economies.
  • Tourism projects leverage Arusha’s natural assets, creating jobs for local communities and fostering sustainable growth.

d. Other Regions

• Distribution: The remaining 62 projects (31.2% of 199) are spread across other regions, though specific regions are not detailed. Examples include:
  • Morogoro: Benefits from the SGR and projects like the Mkulazi Agricultural City (USD 570 million, 30,000 hectares).
  • Njombe: Supported by a new TIC office serving the Nyasa Zone and initiatives like Vikapu Bomba, empowering 300+ rural women.
  • Geita: Hosts projects like the Lech Company Limited honey processing initiative.
• Impact on Balanced Development:
  • Investments in regions like Morogoro and Njombe ensure rural areas benefit from economic growth, addressing urban-rural disparities.
  • The TIC office in Njombe decentralizes investment services, making it easier for investors to operate in southern regions, fostering regional equity.
  • Small-scale projects like Vikapu Bomba and Lech Company enhance inclusive growth, particularly for women and rural communities.

3. Mechanisms Supporting Balanced Development

• Policy Reforms: The Tanzania Investment and Special Economic Zones Authority Act (2025) and the 2023 Land Policy facilitate investments across regions by improving land access and streamlining permits. The Tanzania Electronic Investment Window (TeIW) ensures equitable access to investment processes nationwide.
• Infrastructure Connectivity: The SGR and EACLC (Page 3) connect Dar es Salaam, Pwani, and Morogoro, enabling other regions to benefit from urban investments through improved trade routes.
• Regional TIC Offices: The Njombe office and plans for further decentralization bring investment services closer to rural investors, encouraging projects in underserved areas.
• Sectoral Diversification: Figure shows increased projects in agriculture, manufacturing, and services across regions, ensuring diverse economic activities. For example, Pwani’s manufacturing (Kibaha SEZ) and Arusha’s agriculture (Usariver SEZ) complement Dar es Salaam’s trade focus.

4. Quantitative Impact

• Capital Inflow: The USD 2,164.7 million in Q3 2024/25 is distributed across regions, with Dar es Salaam’s 73 projects likely attracting the largest share due to projects like the EACLC (USD 200 million+). Pwani’s 48 projects, including Kibaha SEZ (USD 78.85 million), and Arusha’s 16 projects add to this total.
• Job Creation: The 24,444 jobs are spread across regions, with Pwani’s Kibaha SEZ (38,400 jobs) and Arusha’s Usariver SEZ contributing significantly. Dar es Salaam’s service and manufacturing projects further boost employment.
• Project Distribution: The 73, 48, and 16 projects in Dar es Salaam, Pwani, and Arusha, respectively, account for 68.8% of the 199 projects, with the remaining 31.2% ensuring other regions are not neglected.
• Annual Context: In 2024, 901 projects created 212,293 jobs, with regional distribution (e.g., Morogoro, Njombe) amplifying the impact of Q3’s 199 projects.

5. Challenges and Opportunities

• Challenges: Dar es Salaam’s dominance (36.7% of projects) could lead to urban congestion, requiring more incentives for rural investments. Regions with fewer projects (e.g., beyond the top three) need targeted promotion.
• Opportunities: The TIC’s regional expansion and projects like Mkulazi in Morogoro can further balance growth. Inclusive initiatives like Vikapu Bomba ensure marginalized groups benefit, enhancing social equity.

Conclusion

The regional distribution of 73 projects in Dar es Salaam, 48 in Pwani, and 16 in Arusha in Q3 2024/25, alongside 62 projects in other regions, contributes to balanced economic development by spreading investment, jobs, and infrastructure across Tanzania. Dar es Salaam’s EACLC (USD 200 million+) drives national trade, Pwani’s Kibaha SEZ (USD 78.85 million, 38,400 jobs) boosts industrial growth, and Arusha’s Usariver SEZ enhances agricultural exports. Other regions like Morogoro (Mkulazi, USD 570 million) and Njombe (Vikapu Bomba, 300+ women) ensure rural inclusion. Supported by reforms like the TISEZA Act and infrastructure like the SGR, this distribution reduces regional disparities, creates 24,444 jobs, and leverages USD 2,164.7 million in capital, fostering equitable and sustainable economic growth across Tanzania.

The Chama Cha Mapinduzi (CCM) Manifesto for the 2025 General Election, launched on May 30, 2025, aims to transform Tanzania’s economy by 2030 through ambitious targets like creating 350,000 jobs in Zanzibar, constructing a 1,108-km Tanga–Arusha–Musoma railway, and boosting per capita income. Building on past successes, such as a 44% increase in irrigated farmland (681,383 to 983,466 hectares) from 2020–2024 and 304 investment projects worth USD 3.74 billion in Zanzibar from 2015–2020, the manifesto leverages Tanzania’s 5.3% GDP growth in 2023 and projected 6% in 2025. However, with public debt at 41.1% of GDP in 2024 and ambiguous targets like 300,000 units for the blue economy, its realism hinges on addressing funding gaps and structural challenges to achieve inclusive growth.

1. Overview of the CCM Manifesto 2025–2030

The CCM Manifesto, launched on May 30, 2025, outlines nine strategic priorities, including economic transformation, job creation, infrastructure development, and inclusive growth. Key economic targets include:

• Creating 350,000 new jobs in Zanzibar by 2030.
• Increasing per capita income in Zanzibar (in USD, not quantified) and enhancing trade and industrial contributions to GDP.
• Promoting investment through infrastructure projects like the 1,108-km Tanga–Arusha–Musoma railway and Bagamoyo port.
• Advancing the blue economy in Zanzibar, targeting a contribution of 300,000 units (jobs or output, unclear) by 2030.
• Training 2,500 cooperative societies in Zanzibar to boost productivity.
• Providing affordable loans, such as two cows per youth annually in Zanzibar.

These targets build on the 2020–2025 manifesto’s achievements, such as increasing irrigated farmland from 681,383 to 983,466 hectares (+44%) and food security from 114% to 128%. The manifesto aligns with NDV 2050’s goal of achieving a USD 1 trillion GDP and USD 12,000 per capita GDP by 2050, requiring over 8% annual growth.

2. Current Economic Situation (as of May 31, 2025)

Tanzania’s economy is a lower-middle-income economy with a GDP per capita of USD 1,149 in 2024. Key economic indicators include:

• GDP Growth: Real GDP grew by 5.3% in 2023, driven by agriculture, construction, and manufacturing, and is projected at 5.6%–5.7% for 2024 and 6% for 2025. Zanzibar’s GDP growth was stronger at 7% in 2024 and is projected at 6.8% in 2025.
• Inflation: Inflation remained low at 3.8% in 2023, projected to decline to 3.3% in 2024 and rise slightly to 3.4% in 2025, supported by stable food and energy prices. In March 2025, inflation was 3.3%, with food inflation at 5.4%.
• Public Debt: Public debt is at 41.1% of GDP in 2024, posing a moderate risk, with foreign exchange shortages noted as a challenge to growth.
• FDI and Trade: Foreign direct investment (FDI) is growing, with 304 investment projects worth USD 3.74 billion in Zanzibar from 2015–2020, creating 16,866 jobs. Recent agreements, such as the Tanzania–Czech Republic Double Taxation Agreement and the Tanzania–UAE Business Council, aim to boost investment in manufacturing and technology.
• Poverty and Employment: The national poverty rate fell from 34.4% in 2007 to 26.4% in 2018, and extreme poverty dropped from 12% to 8%. However, youth unemployment remains a concern, with the private sector employing 70% of youth.

The economy benefits from stable macroeconomic conditions and a reputation for peace, attracting FDI in mining, energy, and tourism. However, challenges include a narrow tax base, foreign exchange shortages, and slow structural transformation, with reliance on low-productivity sectors like subsistence agriculture.

3. Historical Economic Performance

Historical data provides context for assessing the manifesto’s realism:

• GDP Growth: Tanzania has sustained an average GDP growth of 5.5% over the past decade, making it one of Africa’s fastest-growing economies. From 2019 to 2020, real GDP grew by 4.8%, reaching USD 89.5 billion. Zanzibar’s per capita income rose from TZS 942,000 in 2010 to TZS 2,323,000 in 2018.
• Job Creation: The 2020–2025 manifesto targeted 8 million new jobs nationally, with industrial jobs increasing from 306,180 in 2020 to 500,000 by 2025. Zanzibar’s 2015–2020 investments created 16,866 jobs.
• Agricultural Transformation: Irrigated land expanded by 44% (681,383 to 983,466 hectares) from 2020–2024, and food security improved from 114% to 128% (Page 13). The 2022/23 budget allocated TZS 954 billion to agriculture, aiming for 10% sectoral growth by 2030.
• Infrastructure: Past achievements include progress on the Standard Gauge Railway (SGR) and port upgrades, with a goal to increase electricity capacity to 10,000 MW by 2025.

These achievements suggest CCM’s capacity to deliver on economic promises, but slow poverty reduction (26.4% in 2018) and reliance on public investment indicate challenges in achieving inclusive growth.

4. Realism of the Manifesto’s Economic Proposals

To evaluate the manifesto’s realism, we assess its key proposals against current conditions, historical trends, and feasibility:

a. Job Creation (350,000 Jobs in Zanzibar, Potential 8.5 Million Nationally)

• Realism: The target of 350,000 jobs in Zanzibar by 2030 is ambitious but plausible, given past performance (16,866 jobs from 2015–2020 investments). Zanzibar’s focus on tourism (targeting 5 million tourists by 2025, generating USD 6 billion) and the blue economy (300,000 units contribution) supports job creation in high-potential sectors. Nationally, an unconfirmed X post suggests a target of 8.5 million jobs, building on the 2020–2025 goal of 8 million. Achieving this requires scaling private sector-driven growth, as 70% of youth are already employed by the private sector.
• Challenges: Youth unemployment remains high, and the manifesto lacks specific national job targets. Structural transformation from low-productivity sectors like subsistence agriculture (25% of GDP) to industry and services is slow. External risks, such as foreign exchange shortages, could limit private sector investment.
• Support: Initiatives like training 2,500 cooperatives and providing livestock loans (two cows per youth annually) in Zanzibar enhance employability and income generation. Recent agreements with the UAE and Czech Republic signal continued FDI growth.

b. Investment Projects

• Realism: The manifesto’s focus on infrastructure (e.g., 1,108-km Tanga–Arusha–Musoma railway, Bagamoyo port) and the blue economy (Mangapwani port) is likely to attract FDI, building on Zanzibar’s USD 3.74 billion from 2015–2020. Tanzania’s stable growth (5.5% average over 10 years) and strategic location make it a regional FDI hub. Projects like the USD 1.4 billion Tanzania–Zambia railway upgrade and the Kabanga Nickel Project underscore investor confidence.
• Challenges: Funding for large-scale projects is unclear, and public debt (41.1% of GDP) could strain resources. Regulatory challenges, such as land tenure and transparency, deter some investors.
• Support: The manifesto’s alignment with NDV 2050 and recent economic diplomacy (e.g., Tanzania–Mozambique Joint Economic Commission) strengthens the investment climate.

c. Per Capita Income

• Realism: The manifesto’s goal to increase Zanzibar’s per capita income builds on a rise from TZS 942,000 in 2010 to TZS 2,323,000 in 2018. Nationally, GDP per capita grew from USD 981 to USD 1,218 between 2015 and 2021. Initiatives like cooperative training and youth loans (Pages 58) could boost household incomes, particularly in rural areas (70% of the population).
• Challenges: The lack of a quantified target for per capita income limits measurability. Poverty reduction has been slow (26.4% in 2018), and income inequality persists.
• Support: The 35.1% minimum wage increase for public servants (from TZS 370,000 to TZS 500,000 in 2025) reflects efforts to improve incomes.

d. GDP Growth

• Realism: The manifesto does not specify 2030 GDP growth targets but aligns with external projections of 6% for Tanzania and 6.8% for Zanzibar in 2025. Achieving NDV 2050’s 8%+ annual growth requires sustained investment in agriculture (targeting 10% sectoral growth by 2030) and industry. Historical growth (5.3% in 2023, 4.8% in 2020) supports the feasibility of mid-term targets.
• Challenges: Geopolitical tensions, climate shocks, and a narrow tax base could hinder growth. The manifesto’s reliance on public investment may not sufficiently drive private sector-led growth, as noted by the World Bank.
• Support: Agricultural investments (TZS 954 billion in 2022/23) and tourism growth (18% of GDP) provide a strong foundation.

5. Critical Evaluation of Realism

The manifesto’s economic proposals are realistic in several respects:

• Track Record: CCM’s 2020–2025 achievements, such as irrigation expansion (+44%) and food security gains (128% sufficiency), demonstrate implementation capacity. Zanzibar’s historical FDI (USD 3.74 billion, 16,866 jobs) supports the feasibility of investment-driven growth.
• Policy Continuity: The manifesto builds on existing frameworks like FYDP III and NDV 2050, leveraging Tanzania’s stable growth (5.5% average) and low inflation (3.3% in 2025).
• Sectoral Focus: Prioritizing agriculture, tourism, and the blue economy aligns with Tanzania’s economic strengths (agriculture: 25% of GDP; tourism: 18%).

However, challenges threaten realism:

• Ambiguity: Targets like 300,000 units for the blue economy and per capita income increases lack clarity, complicating monitoring.
• Funding Gaps: Large-scale projects (e.g., 1,108-km railway) require significant funding, and public debt (41.1% of GDP) could limit resources.
• Structural Barriers: Slow structural transformation and reliance on subsistence agriculture (25% of GDP) hinder inclusive growth. Youth unemployment and regulatory challenges (e.g., land tenure) persist.
• External Risks: Foreign exchange shortages and geopolitical tensions could disrupt FDI and growth.

6. Conclusion

The CCM Manifesto for 2025 has the potential to drive economic transformation by 2030, but its success will depend on effective implementation and addressing challenges. The manifesto’s targets, such as creating 350,000 jobs in Zanzibar and infrastructure projects like the 1,108-km Tanga–Arusha–Musoma railway, are supported by historical achievements (e.g., 16,866 jobs from USD 3.74 billion in Zanzibar investments) and current growth projections (6% for Tanzania, 6.8% for Zanzibar in 2025). Initiatives like training 2,500 cooperatives and boosting agricultural investment (TZS 954 billion in 2022/23) promote inclusive growth. However, vague targets, funding uncertainties, and structural issues, such as slow economic transformation and a public debt of 41.1% of GDP, demand careful management. With Tanzania’s stable growth (5.5% average) and strategic reforms, the manifesto holds realistic potential to achieve economic change by 2030, provided implementation is strong and external risks are mitigated.

Key figures related to the economic proposals in the Chama Cha Mapinduzi (CCM) Manifesto for the 2025 General Election, launched on May 30, 2025, as requested in the question about its realism in bringing economic change to Tanzania by 2030. The table focuses on job creation, investment, per capita income, GDP growth, and related metrics, incorporating figures from the manifesto and relevant external sources to reflect the current economic situation (as of May 31, 2025, 11:05 AM EAT) and historical data. The figures are selected to assess the manifesto’s potential to drive economic transformation.

Notes:

1. Scope: The table includes key figures from the manifesto (e.g., 350,000 jobs in Zanzibar, 1,108-km railway) and external sources (e.g., 6% GDP growth for Tanzania in 2025, 3.3% inflation in March 2025) to evaluate the manifesto’s realism in driving economic change by 2030. Historical data (e.g., 304 investment projects worth USD 3.74 billion, 44% irrigation growth) provides context for feasibility.
2. Zanzibar Focus: The manifesto provides specific targets for Zanzibar, such as 350,000 jobs and 2,500 cooperatives, but lacks quantified national targets for per capita income and GDP growth, supplemented by external projections.
3. Ambiguity: The “300,000” figure for the blue economy lacks clear units (jobs or output), and per capita income targets are qualitative. National job creation targets (e.g., 8.5 million) are mentioned in external sources but not confirmed in the manifesto.
4. Current Context: As of May 31, 2025, 11:05 AM EAT, Tanzania’s stable growth (5.3% in 2023, 6% projected for 2025) and low inflation (3.3%) support the manifesto’s feasibility, though challenges like public debt (41.1% of GDP) and foreign exchange shortages persist.
5. Alignment with NDV 2050: The figures align with NDV 2050’s goals of achieving over 8% annual GDP growth, with manifesto initiatives like infrastructure and job creation supporting prosperity and inclusivity.

The Chama Cha Mapinduzi (CCM) Manifesto for the 2025 General Election presents a robust plan to strengthen Tanzania’s economy, ensuring it is inclusive, competitive, and sustainable, in alignment with the National Development Vision 2050. With a focus on economic empowerment, the manifesto targets the creation of 350,000 new jobs in Zanzibar by 2030, building on past achievements like a 44% increase in irrigated farmland (from 681,383 to 983,466 hectares) and a rise in food security from 114% to 128% between 2020 and 2024. By promoting private sector investment, advancing the blue economy, and providing affordable loans to youth and cooperatives (e.g., training 2,500 cooperatives in Zanzibar), CCM aims to foster equitable growth. Infrastructure projects, such as the 341-km Mwanza–Isaka Standard Gauge Railway, enhance competitiveness, while sustainable initiatives like national food and fuel reserves ensure long-term stability, aligning with NDV 2050’s vision of a prosperous and self-reliant Tanzania.

Strengthening the Economy: Key Strategies

The CCM Manifesto prioritizes building a robust, inclusive, and competitive economy through targeted interventions across various sectors. The document highlights the following strategies:

• Economic Growth Targets: The manifesto aims to increase Tanzania’s Gross Domestic Product (GDP) and per capita income. For Zanzibar, it specifically targets an increase in per capita income in US dollars by 2030. While exact figures for per capita income growth are not specified, the manifesto emphasizes annual GDP growth, with Zanzibar’s economy projected to grow through sectors like the blue economy, industry, agriculture, and services.
• Investment Promotion: The manifesto commits to increasing investment projects to boost economic output. This includes attracting private sector investments in key sectors such as the blue economy, industry, and agriculture, with a specific focus on Zanzibar’s trade value enhancement and industrial contribution to GDP.
• Inflation Control: To ensure economic stability, the manifesto pledges to reduce inflation rates annually, particularly in Zanzibar, to maintain affordability and enhance purchasing power. This is critical for inclusivity, ensuring that economic growth benefits all citizens, including low-income groups.
• Job Creation: The manifesto sets a target of creating at least 350,000 new jobs in Zanzibar by 2030, spanning both formal and informal sectors. This focus on employment aims to empower youth and reduce unemployment, fostering inclusive growth.
• Agricultural Productivity: The manifesto highlights past achievements (2020–2024) and future plans to enhance agricultural output. For instance, irrigated farmland increased from 681,383 hectares in 2020 to 983,466 hectares in 2024, and food security improved from 114% to 128% sufficiency over the same period. Future plans include expanding irrigation and fertilizer use to sustain food security and boost exports.
• Blue Economy and Industrial Growth: In Zanzibar, the manifesto emphasizes the blue economy, targeting a contribution of 300,000 units (likely economic output or jobs, though units are unclear due to repetition in the document) by 2030. It also aims to increase the industrial sector’s contribution to GDP.

Inclusivity in Economic Growth

Inclusivity is a core pillar of the manifesto, ensuring that economic benefits reach all segments of society, particularly marginalized groups such as youth, women, and low-income communities. Key initiatives include:

• Economic Empowerment through Loans and Technology: The manifesto pledges to provide affordable loans and promote technology adoption to enhance economic participation (Page 56). For example, in Zanzibar, it plans to offer loans for livestock (e.g., two cows per youth per region annually) to boost income-generating activities.
• Support for Cooperatives and Training: The manifesto commits to training cooperative societies to improve their productivity and market access, with a target of supporting 2,500 cooperatives in Zanzibar. This empowers small-scale producers and entrepreneurs, ensuring broader economic participation.
• Job Opportunities for Youth: The focus on creating 350,000 jobs in Zanzibar by 2030 targets youth, a demographic critical to inclusive growth. The manifesto also plans to enhance employability through skill-building programs for graduates and private sector partnerships.
• Digital Transformation: By promoting digital technologies, such as e-governance and digital content for cultural products, the manifesto aims to expand economic opportunities in rural areas and for youth, ensuring access to information and markets.

Competitiveness and Sustainability

The manifesto emphasizes competitiveness and sustainability to ensure long-term economic resilience:

• Competitiveness through Infrastructure and Technology: Investments in modern infrastructure, such as the Standard Gauge Railway (e.g., Mwanza–Isaka, 341 km; Tabora–Kigoma, 506 km) and new ports like Bagamoyo, aim to enhance trade and connectivity, making Tanzania’s economy more competitive regionally and globally. The manifesto also promotes emerging technologies like artificial intelligence, blockchain, and satellites to improve productivity.
• Sustainable Economic Practices: The manifesto prioritizes sustainable sectors like the blue economy and green initiatives, such as planting trees to create a “green Zanzibar”. It also plans to establish a national food reserve and a fuel reserve in Zanzibar to mitigate price fluctuations and ensure resource availability.
• Private Sector Collaboration: The manifesto encourages private sector investment in key industries, such as the blue economy and manufacturing, to drive sustainable growth. This reduces reliance on public funding and fosters economic resilience.

Alignment with National Development Vision 2050

The NDV 2050 envisions a Tanzania that is prosperous, equitable, and self-reliant, with a strong economy, social equity, and sustainable development. The CCM Manifesto aligns with these goals as follows:

• Prosperity and Economic Growth: The manifesto’s focus on GDP growth, investment promotion, and job creation (e.g., 350,000 jobs in Zanzibar) directly supports NDV 2050’s goal of a prosperous economy. The emphasis on sectors like agriculture (e.g., irrigation expansion from 681,383 to 983,466 hectares) and the blue economy aligns with the vision’s aim to diversify economic activities.
• Equity and Inclusivity: NDV 2050 prioritizes equitable development, which the manifesto addresses through affordable loans, cooperative training, and youth employment initiatives. The commitment to empower marginalized groups, such as youth and women, ensures that economic growth benefits all citizens, aligning with the vision’s social equity objectives.
• Sustainability: The manifesto’s focus on sustainable practices, such as the blue economy, green initiatives, and food and fuel reserves, mirrors NDV 2050’s emphasis on sustainable development. Investments in renewable energy, like large-scale gas storage in Zanzibar, further support environmental sustainability.
• Self-Reliance: By promoting local production (e.g., clove and coconut production in Zanzibar) and reducing import dependency through food security measures (128% sufficiency in 2024), the manifesto supports NDV 2050’s goal of self-reliance.

Figures Supporting Economic Strategies

The manifesto provides specific figures to illustrate past achievements and future targets:

• Agricultural Growth: Irrigated land increased by 44% (from 681,383 to 983,466 hectares) between 2020 and 2024, and food security rose from 114% to 128% sufficiency.
• Job Creation: A target of 350,000 new jobs in Zanzibar by 2030, with specific initiatives like providing loans for two cows per youth annually.
• Infrastructure Development: Investments in railway projects (e.g., Mwanza–Isaka, 341 km) and port development (e.g., Bagamoyo) to enhance trade.
• Cooperative Support: Training for 2,500 cooperative societies in Zanzibar to boost productivity.
• Blue Economy: A target contribution of 300,000 units (likely economic output or jobs) by 2030 in Zanzibar.

Challenges and Considerations

While the manifesto’s strategies are ambitious, some challenges remain:

• Clarity of Targets: Some figures, such as the repeated “300,000” for the blue economy, lack clear units (e.g., jobs, economic output, or investment), which may complicate implementation and monitoring.
• Resource Mobilization: The manifesto does not detail funding sources for large-scale projects like railways and ports, which could strain public finances if private sector investment falls short.
• Regional Disparities: While Zanzibar-specific targets are clear, the manifesto could provide more detailed plans for equitable resource distribution across mainland Tanzania’s diverse regions.

Conclusion

The CCM Manifesto for 2025 proposes a multi-faceted approach to strengthen Tanzania’s economy by focusing on GDP growth, investment, job creation, and agricultural productivity, with specific targets like 350,000 jobs in Zanzibar and increased irrigated land (983,466 hectares by 2024). It ensures inclusivity through affordable loans, cooperative training, and youth empowerment, while promoting competitiveness via infrastructure and technology investments. Sustainability is addressed through the blue economy, green initiatives, and resource reserves. These strategies align closely with NDV 2050’s goals of prosperity, equity, and self-reliance, though clearer metrics and funding plans could enhance implementation. By building on past achievements (e.g., 44% irrigation growth, 128% food security), the manifesto lays a strong foundation for sustainable and inclusive economic growth.

Table summarizing key figures related to economic growth and inclusivity from the Chama Cha Mapinduzi (CCM) Manifesto for the 2025 General Election, as outlined in the provided document. These figures highlight past achievements (2020–2024) and future targets (2025–2030) to strengthen Tanzania’s economy, ensuring it is inclusive, competitive, and sustainable, with alignment to the National Development Vision 2050.

Notes:

1. Clarity of Figures: Some figures, such as the “300,000” for the blue economy, lack clear units (e.g., jobs, economic output, or investment), which may require further clarification for precise analysis.
2. Scope: The table focuses on economic growth and inclusivity metrics, with an emphasis on quantifiable data from the manifesto. Some targets (e.g., GDP and per capita income growth) are mentioned but not quantified with specific figures.
3. Zanzibar Focus: Many specific figures pertain to Zanzibar, reflecting the manifesto’s dedicated section for the region. Mainland Tanzania’s targets are less detailed in the provided document excerpt.
4. Alignment with NDV 2050: The figures support the manifesto’s alignment with NDV 2050 by targeting prosperity (e.g., GDP growth, job creation), equity (e.g., cooperative training, youth loans), and sustainability (e.g., blue economy, food security).