What is Tanzania's inflation rate in June 2026?

Tanzania's annual headline inflation rate for June 2026 stood at 4.0 percent, down from 4.2 percent in May 2026, according to the National Bureau of Statistics.

What is driving Tanzania's inflation in June 2026?

Transport costs rose 13.6 percent year-on-year, driven by motorcycle (bodaboda) fares, diesel and bus fares, while food inflation eased to 4.1 percent from 5.6 percent in May 2026.

What is Tanzania's core inflation rate?

Tanzania's core inflation rate, which excludes volatile unprocessed food and energy prices, rose to 3.7 percent in June 2026 from 3.4 percent in May 2026.

How much did tourism earn Tanzania in 2025?

Tanzania's tourism sector earned USD 4,410.6 million in 2025, up 13 percent from USD 3,903.1 million in 2024. Zanzibar separately recorded USD 1,190.8 million in 2025, up 19.3 percent from USD 997.8 million in 2024.

How many tourists visited Tanzania in 2025?

Tanzania recorded 2,294,495 international tourist arrivals in 2025, up 7.1 percent from 2,141,895 in 2024. Zanzibar recorded 654,880 arrivals in 2025, up 9 percent from 601,006 in 2024.

Which countries send the most tourists to Tanzania?

The United States (12.4%), Italy (11.8%), France (7.0%), Kenya (6.4%) and the United Kingdom (6.0%) were the leading source markets for Tanzania mainland in 2025. For Zanzibar, Italy (18.8%), France (10.6%), the United Kingdom (7.7%) and the United States (6.6%) led.

What is Tanzania's tourism forecast for 2030 and 2031?

Under TICGL's base-case scenario (6 percent annual arrivals growth), Tanzania could receive approximately 3.07 million tourists in 2030 and 3.25 million in 2031, with tourism earnings potentially reaching USD 6.8 billion and USD 7.4 billion respectively. These are indicative research projections, not official government forecasts.

How much do tourists spend per night in Tanzania?

In 2025, overall average expenditure was USD 289 per person per night in mainland Tanzania (up 19 percent from USD 243 in 2024) and USD 274 per person per night in Zanzibar (up 9 percent from USD 251 in 2024).

Why did Dangote choose Lamu, Kenya instead of Tanga, Tanzania for its refinery?

Dangote cited Mombasa/Lamu's deeper port, Kenya's larger economy and higher fuel consumption, direct co-investment from Kenya's National Infrastructure Fund, and Lamu's position on the LAPSSET corridor to South Sudan and Ethiopia. A diplomatic misstep, where Kenya's President announced Tanga as the site before Dodoma's approval, was the proximate trigger.

How big is the Dangote refinery project?

The planned East African refinery is a 700,000-barrel-per-day facility estimated at USD 15-20 billion, Dangote's largest refining investment outside Nigeria, to be financed through internal cash flow, bonds and a planned IPO.

What is Tanzania's FDI registration-to-disbursement gap?

It is the difference between FDI pledges Tanzania approves and the capital actually disbursed. Tanzania's realisation rate has fallen from about 73% in 2015 to an estimated 15% in 2025, even as the registered pipeline grew from USD 2.1 billion to USD 10.95 billion, producing an annual disbursement gap of roughly USD 9.3 billion.

What is Tanzania getting from Dangote instead of the refinery?

On 29 June 2026, President Samia Suluhu Hassan secured Dangote's commitment to a parallel pipeline: a 2,000 MW coal-fired power plant, a urea fertiliser complex, port development, a 40-km port-access road, an 812-km Mtwara-Mbamba Bay transport corridor, a proposed special economic zone, and an invitation for Tanzania to take an equity stake in the Lamu refinery itself.

How does Tanzania compare to Kenya and Rwanda on investment climate?

Tanzania's FDI realisation rate (~15-20%) and approval time (~240 days) both lag Kenya (~45%, ~90 days) and Rwanda (~68%, ~28 days). Tanzania's World Bank B-READY score of 52.1 is also below Kenya's 58.8 and well below Rwanda's 72.6.

What are Tanzania's main economic policy gaps delaying the $1 trillion vision?

The five critical policy gaps are: (1) a narrow tax base with tax-to-GDP at 13.1% vs the 18% needed, (2) private sector crowding-out by government borrowing and SOE dominance, (3) slow industrialisation with manufacturing at only 8.1% of GDP, (4) an informal economy comprising 45–55% of economic activity, and (5) a wage bill growing faster than development expenditure.

When will Tanzania realistically reach $1 trillion GDP?

TICGL's central estimate is 2058–2062 — approximately 8 to 12 years after the Dira 2050 target. At current 5.9% real growth, the milestone arrives around 2065. Under an accelerated 8% reform scenario, the timeline advances to 2054–2056.

What is Tanzania's Dira 2050?

Dira 2050 is Tanzania's National Development Vision targeting a $1 trillion GDP, $7,000 per capita income, and upper-middle-income status by 2050, built on three pillars: a strong economy, human capability, and environmental sustainability.

How many hours per day do Dar es Salaam workers lose to traffic congestion?

Workers in Dar es Salaam lose an average of 2.48 to 5.0 hours per day to congestion-related travel delays, depending on their residential zone. Workers on the Tegeta corridor can spend up to 5 hours daily in transit.

What is the daily economic cost of traffic congestion in Dar es Salaam?

The World Bank / DMDP reference estimate is TZS 4 billion per day (approximately USD 1.8 million). TICGL's mid-scenario estimate reaches TZS 7.2 billion per day. Annualised, the productivity loss exceeds TZS 1.2 to 2.0 trillion per year.

What is the Travel Time Index for Dar es Salaam?

The measured Travel Time Index (TTI) for Dar es Salaam is 2.19, meaning peak-hour journeys take 2.19 times longer than off-peak journeys — a congestion surcharge of 119% on every peak-hour commute.

Which corridors in Dar es Salaam have the worst traffic congestion?

The worst corridors include Morogoro Road (Kimara–CBD), the Tegeta–CBD route via Sam Nujoma/Ali Hassan Mwinyi Road, Kilwa Road (Mbagala–CBD), and Nyerere/Mandela Road (Ukonga–CBD). The Tegeta corridor is among the most severe, with peak journey times of 120–135 minutes for a 25 km trip.

Why did Tanzania's wage bill increase by 31.4% in 2026/27?

Tanzania's wage bill rose from TZS 7.71 trillion to TZS 10.13 trillion in FY2026/27 — an increase of TZS 2.42 trillion. This is the single largest expenditure increase in the entire budget. The increase could reflect new public sector recruitment, salary adjustments for existing staff, or a combination of both. The budget speech does not disaggregate the increase clearly between new hires and pay rises.

How many new jobs could Tanzania's wage bill increase fund?

If the entire TZS 2.42 trillion increase went toward new hires at average public sector salary levels, it could fund approximately 170,000 to 320,000 new positions — depending on the grade and sector. However, if a significant share of the increase covers salary adjustments for existing staff rather than new recruitment, the actual number of new jobs would be substantially lower.

Could Tanzania's wage bill increase cause inflation?

A TZS 2.42 trillion increase in the wage bill injects additional purchasing power into the economy. If this is not matched by a corresponding increase in the supply of goods and services, upward price pressure is likely — particularly in food, housing, and transport in urban centres where public servants are concentrated.

What is the new betting tax in Tanzania's 2026/27 budget?

The FY2026/27 budget introduces a 5% excise duty on the value of betting stakes placed through land-based and online sports betting, casinos, slot machines, and virtual games. It is expected to raise approximately TZS 74.5 billion, with 10% of the new collection allocated to the Gaming Board of Tanzania for regulation and supervision.

How big is Tanzania's betting industry?

Tanzania's betting market generated an estimated USD 72.41 million in gross gaming revenue in 2025 and is projected to grow significantly by 2030. Around 56% of Tanzanian adults — roughly 39.5 million people — engage in betting activity, with youth aged 18-35 accounting for about 74% of bettors.

Why does Tanzania's youth see betting as employment?

Survey data shows that around 45% of bettors cite financial supplementation as their main motivation, closely tied to youth unemployment rates of roughly 26%. With limited formal job opportunities, many young Tanzanians treat betting platforms, agent shops, and related activities as a primary or supplementary source of income.

What is Tanzania's presumptive tax rate for 2026/27?

Tanzania's presumptive tax rate for eligible small businesses has increased from 3.5% to 4.5% of turnover in the FY2026/27 budget, a 28.6% increase in the effective rate.

What is the new threshold for presumptive tax in Tanzania?

The turnover threshold for eligibility under the presumptive tax regime has been raised from TZS 100 million to TZS 200 million, doubling the pool of businesses that can use this simplified tax system.

Will the presumptive tax increase push small businesses into informality?

There is a real risk. A 28.6% increase in the effective tax rate raises the cost of formal participation, and businesses operating near the margin may choose to under-declare turnover or exit the formal system entirely to avoid the higher charge.

Tanzania Inflation Report June 2026: NCPI Rises to 125.04 as Headline Inflation Eases to 4.0%

Executive Summary

Headline inflation eased to 4.0% in June 2026, down from 4.2% in May 2026, as the National Consumer Price Index (NCPI) rose from 124.90 to 125.04 (2020 = 100).
Food and non-alcoholic beverages inflation fell sharply to 4.1% from 5.6% in May — the single largest driver of the headline slowdown, even though several staples (sorghum, lentils, cassava) still recorded monthly increases.
Core inflation, which strips out volatile food and energy prices, rose to 3.7% from 3.4%, suggesting underlying price pressure is building even as headline inflation cools.
Transport remains the fastest-inflating major group at 13.6% year-on-year, pushed by a 7.6% monthly jump in motorcycle (bodaboda) fares, plus rising diesel, bus and taxi fares.
Energy, Fuel and Utilities inflation accelerated to 6.3% from levels seen in May, with gas (+4.3%) and kerosene (+4.5%) both climbing on a monthly basis.
Tanzania's inflation for June 2026 remains within the Bank of Tanzania's medium-term target band, but the widening gap between easing food inflation and rising core and transport inflation is a signal worth watching for FY2026/27 fiscal and monetary planning.

Related TICGL Study

What's Next for Tanzania's Economy? The Policy Gaps Keeping $1 Trillion Out of Reach by 2050

This June 2026 inflation data feeds directly into TICGL's long-run growth diagnostic — read how price stability, structural transformation and policy gaps interact to shape Tanzania's path to a trillion-dollar economy.

Read the full study

01What the June 2026 NCPI Release Covers

The National Consumer Price Index (NCPI) tracks the changing cost of a fixed basket of 383 goods and services — 132 food and non-alcoholic beverage items and 251 non-food items — priced across all 26 regional headquarters on the Tanzanian mainland. Weights are drawn from the 2017/18 Household Budget Survey, with 2020 as both the base and index reference period. The index is compiled following the UN's Classification of Individual Consumption by Purpose (COICOP 2018) across 13 divisions, and elementary aggregates use a geometric mean of price relatives while higher-level aggregates apply the Lowe (Laspeyres-type) index formula.

383

Goods & services in the basket

132

Food & non-alcoholic beverage items

251

Non-food items

Mainland regions covered

2020

Index & base reference period

02Headline Inflation: The 13-Month Trend

The chart below plots the NCPI level against the annual headline inflation rate from June 2025 through June 2026. The index climbed steadily from 120.18 to 125.04 over the year, while the inflation rate fluctuated in a comparatively narrow band of 3.2% to 4.2% before easing to 4.0% in the latest release.

NCPI Level vs. Headline Inflation Rate — June 2025 to June 2026 2020 = 100

Source: NBS NCPI Press Release, Chart 1, June 2026 (Ref: AC 334/376/01/380).

Table A — Monthly NCPI level and annual inflation rate, June 2025–June 2026
Month	NCPI (2020=100)	Annual Inflation Rate (%)

03Food vs. Core vs. Headline: A Diverging Picture

June 2026 tells a split story. Food inflation fell hard — from 5.6% to 4.1% — pulling the headline rate down with it. But core inflation, which excludes unprocessed food, energy and utilities, moved the other way, rising from 3.4% to 3.7%. That divergence matters: it suggests that once volatile food and fuel effects are stripped out, the underlying pace of price increases across the wider economy is quietly accelerating.

Headline vs. Food vs. Core Inflation, May 2026 → June 2026

Source: NBS NCPI Press Release, Sections 2.1–2.3, June 2026.

04Inflation by Consumption Group (COICOP)

Table 1 of the NBS release breaks the NCPI into 13 COICOP divisions. Transport (+13.6% y/y) and Energy, Fuel & Utilities (+6.3% y/y) are by far the fastest-moving categories, while Insurance & Financial Services (+0.2%) and Recreation, Sport & Culture (+0.5%) barely moved over the year.

12-Month Inflation Rate by COICOP Group — June 2026

Weights shown in Table B reflect each group's share of total household expenditure used to compile the NCPI.

Table B — NCPI by main group, weight and index values (2020=100)
#	Main Group	Weight (%)	Jun 2025	May 2026	Jun 2026	1-Month Change	12-Month Change

05Core, Non-Core, Goods, Services & Energy Indices

Beyond the 13 main groups, NBS publishes supplementary indices that help policymakers separate volatile price swings from underlying trends. The Services Index rose 5.4% year-on-year — faster than the Goods Index at 3.3% — indicating that labour- and rent-linked costs are rising faster than tradable goods prices.

Supplementary Indices — 12-Month Change

Weight Share of Core vs. Non-Core

Table C — Supplementary index aggregations, June 2026
Index	Weight (%)	Jun 2025	May 2026	Jun 2026	1-Month Change	12-Month Change

06What Pushed Prices Up Between May and June 2026

Month-on-month, the NCPI rose only marginally — from 124.90 to 125.04 — but the release names specific items behind that movement. On the food side, sorghum grains (+5.1%), dried lentils (+3.8%) and sorghum flour (+4.5%) led the increases. On the non-food side, motorcycle/bodaboda fares (+7.6%), kerosene (+4.5%) and gas (+4.3%) were the standout movers.

Top Monthly Price Movers — Food vs. Non-Food Items (May → June 2026)

All values are month-on-month percentage changes for individual items within the NCPI basket.

Full list of food items contributing to the June 2026 increase

Sorghum grains +5.1%Sorghum flour +4.5%Dried lentils +3.8% Dried peas +3.6%Poultry live +3.7%Dried sardines +3.5% Fresh cassava +2.9%Fresh fish +2.7%Flour of cassava +1.9% Soft drinks +1.7%Wheat flour +1.3%Irish/round potatoes +0.7% Bottled drinking water +0.6%Raw milk of cattle +0.3%Dried cowpeas +0.3% Pasta products +0.2%Meat of poultry +0.1%

Full list of non-food items contributing to the June 2026 increase

Motorcycle/bodaboda fare +7.6%Kerosene +4.5%Gas +4.3% Charcoal +3.0%Bus fare +3.1%Diesel +2.6% Taxi fare +2.6%Clothing materials +1.1%Products/materials for dwelling maintenance +1.0% Footwear (children) +0.3%Footwear (women) +0.2%Actual rentals paid by tenants +0.2% Footwear (men) +0.1%

07Why This Matters for Business and Investment in Tanzania

For businesses operating in or entering Tanzania, three signals in this release are worth flagging. First, easing food inflation is good news for household purchasing power and consumer-facing sectors such as retail and FMCG. Second, rising core inflation — now at its highest point in the 13-month window shown here — suggests that non-food, non-energy cost pressures (rent, services, wages) are building steadily, which matters for pricing and wage-planning decisions. Third, transport inflation at 13.6% is a direct cost pressure on logistics, distribution and last-mile delivery across Tanzania's regions, and is closely tied to fuel and bodaboda fare movements that also touch informal-sector incomes.

08NCPI Release Schedule

NBS publishes the NCPI monthly. The next three scheduled releases are set out below.

Table D — Upcoming NCPI release dates
Reference Month	Release Date
July 2026	10th August 2026
August 2026	08th September 2026
September 2026	08th October 2026

09Muhtasari kwa Kiswahili

Mfumuko wa bei nchini Tanzania umepungua hadi asilimia 4.0 mwezi Juni 2026, kutoka asilimia 4.2 mwezi Mei 2026, kulingana na Ofisi ya Taifa ya Takwimu (NBS). Kiwango cha mfumuko wa bei za vyakula kimeshuka kwa kasi hadi asilimia 4.1 kutoka asilimia 5.6, ikichangia kwa kiasi kikubwa kupungua kwa mfumuko wa bei kwa ujumla. Hata hivyo, mfumuko wa bei msingi (Core Inflation) umepanda hadi asilimia 3.7 kutoka asilimia 3.4, ikionesha kuwa shinikizo la bei kwenye bidhaa na huduma zisizo za vyakula na nishati linaendelea kuongezeka.

Sekta ya usafirishaji (Transport) imeendelea kuongoza kwa kasi ya mfumuko wa bei ya asilimia 13.6 kwa mwaka, ikichagizwa na ongezeko la nauli za bodaboda (+7.6% kwa mwezi), mafuta ya dizeli, na nauli za mabasi na teksi. Bei za nishati, gesi na mafuta ya taa pia ziliongezeka kwa kasi mwezi Juni 2026. Takwimu hizi ni muhimu kwa wafanyabiashara, wawekezaji, na watunga sera wanapopanga bajeti na mikakati ya bei kwa mwaka wa fedha 2026/27.

Source: National Bureau of Statistics (NBS), United Republic of Tanzania — "National Consumer Price Index (NCPI) for June, 2026," Press Release Ref: AC 334/376/01/380, dated 8th July 2026. All figures, tables and item-level price movements are drawn directly from this NBS publication. Analysis, charts and commentary are produced by TICGL Economic Research and do not constitute financial or investment advice.

Table 1 — Tanzania Tourism Headline Indicators, 2024 vs 2025
Indicator	2024	2025	Change
International arrivals (URT)	2,141,895	2,294,495	+7.1%
Tourism earnings, URT (USD million)	3,903.1	4,410.6	+13.0%
Zanzibar arrivals	601,006	654,880	+9.0%
Zanzibar tourism earnings (USD million)	997.8	1,190.8	+19.3%
Avg. expenditure per person/night, URT (USD)	243	289	+19.1%
Avg. expenditure per person/night, Zanzibar (USD)	251	274	+9.0%
Average length of stay, URT (nights)	10	9	−1 night
Average length of stay, Zanzibar (nights)	7	6	−1 night
Package tour share, URT	56.3%	58.8%	+2.5 pts
Package tour share, Zanzibar	61.8%	67.2%	+5.4 pts

Table 2 — Top 15 Source Markets, Tanzania Mainland, 2024 vs 2025 (%)
Country	2024 (%)	2025 (%)
United States	15.1	12.4
Italy	11.6	11.8
France	7.2	7.0
Kenya	8.8	6.4
United Kingdom	6.3	6.0
Germany	4.8	4.8
Zambia	3.2	4.7
Netherlands	—	3.8
Spain	5.3	3.6
DR Congo	3.0	3.2
China	3.0	3.1
South Africa	3.1	2.4
India	—	2.2
Canada	2.1	2.0
Zimbabwe	2.3	2.0

Table 3 — Top 15 Source Markets, Zanzibar, 2024 vs 2025 (%)
Country	2024 (%)	2025 (%)
Italy	19.9	18.8
France	12.3	10.6
United Kingdom	9.0	7.7
United States	7.2	6.6
Germany	7.0	6.4
Netherlands	2.3	5.6
Spain	7.5	5.1
South Africa	5.9	3.3
Poland	—	2.3
Australia	2.3	2.3
Kenya	3.6	2.0
Belgium	1.2	1.8
Greece	—	1.7
Canada	1.4	1.7
Austria	1.5	1.7

Table 4 — Average Length of Stay, URT vs Zanzibar, 2020–2025 (nights)
Year	URT	Zanzibar
2020	10	7
2021	10	8
2022	9	7
2023	10	6
2024	10	7
2025	9	6

Table 5 — Tourism Earnings by Purpose of Visit, URT, 2025 (USD million)
Purpose of visit	Package	Non-package	Total
Leisure and holidays	3,023.3	899.1	3,922.4
Visiting friends & relatives	4.0	91.4	95.4
Other	26.0	48.0	74.1
Business	3.1	45.9	49.0
Total tourism earnings	3,056.5	1,084.4	4,140.9

Table 6 — Zanzibar Tourism Earnings by Purpose of Visit, 2025 (USD million)
Purpose of visit	Package	Non-package	Total
Leisure and holidays	702.6	486.4	1,188.9
Visiting friends & relatives	0.4	1.1	1.5
Business	0.2	0.0	0.3
Other	0.0	0.1	0.1
Total earnings	703.2	487.6	1,190.8

Table 7 — Forecast International Arrivals, 2026–2031 (scenario analysis)
Year	Low (4% CAGR)	Base (6% CAGR)	High (8% CAGR)
2026	2,386,275	2,432,165	2,478,055
2027	2,481,726	2,578,095	2,676,299
2028	2,580,995	2,732,781	2,890,403
2029	2,684,235	2,896,748	3,121,635
2030	2,791,604	3,070,553	3,371,366
2031	2,903,268	3,254,786	3,641,075

Table 8 — Forecast Tourism Earnings, URT, 2026–2031 (USD million, scenario analysis)
Year	Low (6% CAGR)	Base (9% CAGR)	High (12% CAGR)
2026	4,675.2	4,807.5	4,939.9
2027	4,955.7	5,240.2	5,532.7
2028	5,253.0	5,711.8	6,196.6
2029	5,568.2	6,225.9	6,940.2
2030	5,902.3	6,786.2	7,773.0
2031	6,256.4	7,396.9	8,705.8

Table 9 — Top Areas for Improvement Cited by Visitors, 2025 (%)
Area	URT (%)	Zanzibar (%)
Roads and infrastructure	35.3	29.6
Airport and hotel facilities	8.5	7.7
Traffic jams	7.0	5.3
Visa and airport procedures	4.9	6.1
Security and safety	3.2	5.6
Social services	3.6	3.8
Customer service quality	3.5	4.5
Conservation measures	3.1	4.8

Factor Dangote cited	Kenya / Lamu advantage	Tanzania / Tanga position
Port depth & scale	Mombasa handles 45m+ tonnes/year, Africa's largest & deepest regional port	Comparatively shallower, smaller facility at Tanga
Market size	Larger population, higher per-capita fuel consumption, bigger economy	Smaller anchor demand base
Government co-investment	Kenya's National Infrastructure Fund pledged direct equity & de-risking (~KSh 21.5bn seed)	No equivalent co-investment vehicle activated in time
Corridor access	Lamu sits on LAPSSET, opening South Sudan & Ethiopia markets	Tanga cannot easily reach these markets
Pipeline proximity (EACOP)	Dangote stated crude can arrive by ship, reducing pipeline-terminus dependence	Assumed EACOP-hosting advantage did not materialise as decisive

Component	Scale / detail
Coal-fired power plant	2,000 MW — a potentially transformative addition against Tanzania's current ~4,522 MW installed capacity
Urea fertiliser complex	Extends Dangote's African fertiliser strategy into a market still heavily import-dependent for fertiliser
Port development + access road	40-km concrete access road to relieve congestion around Tanzania's principal ports
Transport corridor	812-km Mtwara–Mbamba Bay corridor to move raw materials and finished goods more efficiently
Special economic zone	Proposed trade/economic zone tied to the pipeline
Lamu refinery equity stake	Open invitation for the Tanzanian government to acquire equity in the Lamu refinery itself

Indicator	Tanzania (2025)	Regional benchmark
Registered FDI pipeline	USD 10.95bn	Five-fold growth since 2015
Actual FDI inflows	~USD 1.66-1.72bn	Grew only ~8% in real terms since 2015
Realisation rate	~15%	Mature peer economies: 45-65%
Avg. investment approval time	~240 days	Rwanda: ~28 days; Kenya: ~90 days
World Bank B-READY score (2024)	52.1	Rwanda: 72.6; Kenya: 58.8; Ethiopia: 54.3

Country	2024 Actual FDI (USD bn)	Est. realisation rate	Avg. approval time	B-READY score
Tanzania	1.72	~20%	~240 days	52.1
Kenya	0.70	~45%	~90 days	58.8
Ethiopia	3.90	~42%	~180 days	54.3
Rwanda	0.90	~68%	~28 days	72.6

Dangote's stated reason	Underlying TICGL systemic gap
Mombasa's port is deeper and larger than Tanga	Infrastructure/industrialisation deficit — ports, power and logistics investment lagging Dira 2050 targets
Kenya has a bigger economy, higher fuel consumption	Smaller realised private-sector base; Tanzania's own private investment share of GDP (~22%) below the 30-35% needed for scale
Kenya offered public co-investment/de-risking via the National Infrastructure Fund	Tanzania's PPP framework exists on paper, but no project has yet reached financial close
Diplomatic friction over the Tanga announcement	Policy predictability and inter-governmental coordination — a governance-adjacent, not purely economic, factor
Feasibility/soil studies already advancing at Lamu	Tanzania's land-acquisition and title process (18-24 months) is the single largest driver (≈28%) of its FDI disbursement gap

1. What Is M3, and Why Should Anyone Outside a Bank Care?

A 60-second primer before the data

Extended broad money supply (M3) is the broadest official measure of "money" circulating in Tanzania's economy. It is built up in layers:

M1 — Narrow money

Cash in people's hands plus money sitting in current/cheque accounts — the most liquid, immediately spendable money. TZS 31.2 trillion in April 2026.

M2 — Broad money

M1 plus savings and time deposits in Shillings — money that's still yours, just slightly less instantly spendable. TZS 50.1 trillion.

M3 — Extended broad money

M2 plus foreign currency deposits held in Tanzanian banks. The full picture of money in the system. TZS 65.1 trillion.

Economists watch M3 growth because, over time, money supply, prices, output and the speed at which money changes hands are mathematically linked:

M × V = P × Y

Money Supply × Velocity = Price Level × Real Output

In plain terms: if the amount of money in an economy grows much faster than the amount of goods and services actually being produced (real GDP), and the speed at which money changes hands doesn't fall enough to offset it, the extra money has to show up somewhere — usually in higher prices (inflation) or a weaker currency. This is precisely the tension Tanzania's numbers now show.

2. The Numbers: How Fast Is Money Supply Actually Growing?

M3 has grown every single month for over a year

TZS 53.3tn

M3 stock, April 2025

TZS 65.1tn

M3 stock, April 2026

+22.0% ▼ from 23.2%

M3 growth y/y, April 2026

+24.7%

Full-year 2025 M3 growth

Chart 1 — M3 Money Supply Stock & Growth Trend (April 2025 – April 2026)

Loading chart…

Source: Bank of Tanzania and banks, BOT Monthly Economic Review, May 2026, Table A3.

M3 has risen in every one of the last 13 months without a single monthly decline — from TZS 53.3 trillion in April 2025 to TZS 65.1 trillion in April 2026, an increase of nearly TZS 12 trillion in a single year. Growth has moderated slightly from its 2025 peak (23.2% in March 2026) to 22.0% in April, but it remains far above Tanzania's long-run average.

Chart 2 — Long-Term M3 Growth vs. Real GDP Growth (2018 – 2025)

Loading chart…

Source: Bank of Tanzania, Ministry of Finance and Planning, BOT Monthly Economic Review, May 2026, Table A1.

This chart is the single most important one in this article. From 2018 to 2024, M3 growth and GDP growth moved in a broadly reasonable relationship to each other — money supply grew faster than output, as is normal in a financially deepening economy, but not dramatically so. In 2025, that relationship broke: M3 growth more than doubled to 24.7 percent while real GDP growth edged up only modestly to around 6.0 percent.

3. What's Actually Driving the Growth

It's not foreign money flooding in — it's domestic credit creation

This is the most important, and most under-reported, detail in the entire money supply story. M3 growth can come from two very different sources, with very different implications:

Net Foreign Assets (NFA) — money entering the system via foreign currency inflows (exports, remittances, FDI, reserves). NFA actually fell 0.7 percent year-on-year to TZS 14.6 trillion in April 2026.
Net Domestic Assets (NDA) — money created domestically through bank lending to the private sector and government. NDA surged 30.7 percent year-on-year to TZS 50.5 trillion — the overwhelming driver of the entire M3 increase.

In other words: Tanzania's money supply boom is homegrown, generated almost entirely by the banking system extending credit faster than the economy is growing — not by dollars flowing in from abroad. That distinction matters because credit-driven money growth carries a more direct inflation and currency risk than reserve-backed money growth.

Chart 3 — Composition of M3 Growth: NFA vs. NDA

Loading chart…

Source: Bank of Tanzania, Table 2.2.1.

Table 1 — M3 and Its Main Components (TZS billions)
Component	Apr 2025	Apr 2026	Growth y/y
Net foreign assets	14,658.6	14,553.0	-0.7%
Net domestic assets	38,679.1	50,538.9	+30.7%
— of which: claims on private sector	38,755.8	47,919.3	+23.6%
Extended broad money (M3)	53,337.7	65,091.9	+22.0%

4. The Widening Money-vs-GDP Gap

Why a persistent gap of this size is the metric to watch

The gap in one line

In 2025, Tanzania's money supply grew roughly four times faster than its real economy (24.7% vs. ~6.0%). A one-off gap of this size can reflect healthy financial deepening — more people opening bank accounts, more businesses accessing formal credit for the first time. A persistent gap of this size, repeated for a second year running, is different: it means the banking system is creating purchasing power faster than the economy can produce goods and services to absorb it.

Tanzania has genuine grounds for the "financial deepening" explanation — private sector credit to GDP has climbed from just 14.3 percent in 2018 to 21.6 percent in 2025, still low by regional and global standards, meaning there is real room for credit to keep expanding as more of the economy is formally banked. But the rate of that expansion in the last 12–18 months has been unusually fast, and TICGL's view is that both explanations — genuine deepening and an overheating credit cycle — are probably true at the same time, in different parts of the economy.

Chart 4 — Private Sector Credit to GDP Ratio, Tanzania (2018–2025)

Loading chart…

Source: Bank of Tanzania, BOT Monthly Economic Review, May 2026, Table A1.

5. The First Warning Sign: Core Inflation Starts to Accelerate

Core inflation jumped from 2.2% to 3.1% in a single month (April 2026)

Textbook monetary theory does not predict inflation to arrive instantly or mechanically — it typically shows up with a lag, and Tanzania's April 2026 inflation figures should not be read as pure proof of a money-supply-driven price spiral (much of the April jump was explicitly attributed by the Bank of Tanzania to fuel price pass-through from the Middle East conflict). But the direction is consistent with what a persistently high M3-vs-GDP gap would predict: both headline inflation (4.0%, up from 3.2%) and, more tellingly, core inflation (3.1%, up from 2.2%) — which strips out volatile food and energy prices — rose sharply in the same month.

Core inflation is the more important of the two for this story, because it is less exposed to one-off external shocks like oil prices and more reflective of underlying domestic demand pressure — exactly the channel through which excess money supply growth would be expected to show up first.

Chart 5 — M3 Growth vs. Core & Headline Inflation (Apr 2025 – Apr 2026)

Loading chart…

Source: NBS & Bank of Tanzania computations, BOT Monthly Economic Review, May 2026.

TICGL read: One month of rising core inflation alongside high M3 growth is not proof of causation. But it is exactly the pattern that would justify the Monetary Policy Committee watching money supply and credit growth closely over the next two to three quarters, rather than treating April's inflation uptick as a one-off, purely fuel-driven event.

6. Impact on Credit & Financial Deepening: Not All Sectors Are Growing Equally

Trade, mining and transport are absorbing most of the new credit

The domestic credit expansion behind M3 growth is highly uneven across sectors. Private sector credit grew 23.6 percent year-on-year overall, but that average hides very different stories sector by sector:

Chart 6 — Annual Credit Growth by Economic Activity, April 2026

Loading chart…

Source: Banks & Bank of Tanzania, Table 2.2.2.

Trade credit grew fastest at 44.2 percent — much of this is working-capital financing for import-heavy, fast-turnover businesses, which tends to translate quickly into consumer prices if it isn't matched by proportional output growth. Manufacturing credit, by contrast, grew just 4.2 percent — meaning the credit boom is disproportionately financing trade and consumption-adjacent activity rather than the kind of productive capacity expansion (factories, processing plants) that would grow real GDP fast enough to close the money-vs-output gap discussed in Section 4.

7. Impact on the Exchange Rate

So far, the Shilling has absorbed the money growth without visible strain

A textbook concern with rapid domestic money creation is currency depreciation — more Shillings chasing the same pool of foreign currency should, all else equal, weaken the exchange rate. So far, that hasn't happened in a disorderly way: the Shilling actually appreciated 2.7 percent year-on-year against the US Dollar on the official interbank market in April 2026, helped by record gold export receipts and strong tourism inflows offsetting the domestic credit expansion (see TICGL's companion analysis, "Why TZS Still Ranks Among Africa's 'Weakest' Currencies in 2026", linked below).

This is an important nuance: fast M3 growth has not yet translated into currency weakness, precisely because export receipts (gold, tourism) have been strong enough to supply the foreign currency side of the equation even as domestic credit expanded rapidly. That balance is exactly what TICGL flags as the thing to watch — if gold prices or tourism receipts soften while domestic credit growth stays this high, the currency channel is where the pressure would most likely surface next.

8. The Fiscal Link: Government Domestic Borrowing

Overdraft utilisation is rising, a signal worth tracking

Part of domestic credit expansion also reflects government financing needs. Domestic debt reached TZS 39.3 trillion at the end of April 2026, up 2.3 percent from March — an increase the Bank of Tanzania attributed mainly to utilisation of the government's overdraft facility, which rose from 13.3 percent to 15.0 percent of the domestic debt stock in a single month. Government borrowing from the banking system is one of the channels through which net domestic assets — and therefore M3 — expand, alongside private sector lending.

TZS 39.3tn

Domestic debt stock, April 2026

15.0%

Share of domestic debt from overdraft, up from 13.3%

5.06%

Treasury bill weighted average yield, April 2026

5.75%

Central Bank Rate, held since Q1 2026

9. TICGL Risk Assessment

Rating the plausibility and severity of each transmission channel

Table 2 — Where Excess Money Growth Could Show Up Next
Channel	Current status	TICGL risk rating
Core inflation	Rose from 2.2% to 3.1% in one month (April 2026)	Watch closely
Headline inflation	4.0%, still within EAC/SADC target bands	Contained for now
Exchange rate (TZS/USD)	Appreciating 2.7% y/y, supported by gold & tourism	Low, conditional on export receipts holding
Asset / credit bubble risk (trade-sector concentration)	Trade credit growth of 44.2% vs. manufacturing at 4.2%	Watch closely
Government crowding-out via overdraft use	Overdraft share of domestic debt up from 13.3% to 15.0% in a month	Watch closely
Banking sector liquidity stress	Reverse repo demand fell to TZS 379.7bn from TZS 585.7bn (improving)	Low

10. TICGL Analytical Take

The money-vs-GDP gap is the single number to track. A widening gap between M3 growth (22-25%) and real GDP growth (~6%) sustained into 2027 would be a far more reliable early warning of future inflation than any single month's headline CPI print.
Financial deepening and overheating can — and probably do — coexist. Tanzania's private credit-to-GDP ratio (21.6%) is still low by international standards, meaning structural credit expansion is healthy and needed. But the pace of the last 18 months looks faster than the pace of genuine new-customer financial inclusion alone would explain.
Export receipts are currently masking the pressure. Gold and tourism inflows have let Tanzania run rapid domestic credit growth without currency strain so far. This is a favourable but not guaranteed condition — it depends on global gold prices and travel demand remaining strong.
Sectoral credit allocation matters as much as the aggregate number. Credit flowing disproportionately into trade rather than manufacturing or agro-processing raises the odds that new money shows up in consumer prices rather than in expanded productive capacity — a theme consistent with TICGL's broader research on Tanzania's industrialisation gap under FYDP IV.

11. Frequently Asked Questions

What is Tanzania's M3 money supply and how big is it?

M3 (extended broad money supply) is the broadest measure of money circulating in Tanzania's economy — currency plus all bank deposits, including foreign currency deposits. It reached TZS 65.1 trillion in April 2026, up 22.0 percent from a year earlier.

Why is Tanzania's M3 growing faster than GDP?

M3 grew 24.7 percent in 2025 versus real GDP growth of about 6.0 percent — a gap driven almost entirely by rapid domestic credit expansion (net domestic assets up 30.7 percent y/y) rather than foreign currency inflows (net foreign assets fell 0.7 percent).

Does fast M3 growth cause inflation in Tanzania?

It's a contributing risk factor rather than an automatic cause. Headline inflation rose to 4.0 percent in April 2026 (from 3.2 percent) and core inflation rose to 3.1 percent (from 2.2 percent) — both still within target bands, but the direction is consistent with what a persistent money-vs-GDP gap would predict.

What is driving Tanzania's rapid credit and money supply growth?

Private sector credit grew 23.6 percent year-on-year, led by trade (44.2%), mining and quarrying (39.7%), and transport and communication (39.7%). Private credit to GDP has risen from 14.3 percent in 2018 to 21.6 percent in 2025.

TERI

Tanzania Economic Research Institute (TERI) — a TICGL research initiative

Analysis prepared using data from the Bank of Tanzania Monthly Economic Review, May 2026, and Ministry of Finance and Planning.

Primary data source: Bank of Tanzania, Monthly Economic Review — May 2026 (ISSN 0856-6844), Tables 2.2.1, 2.2.2, A1 and A3. Figures are provisional (p) where noted in original BOT tables and subject to revision in subsequent BOT publications.

1. The Ranking: Africa's Weakest Currencies, June 2026

Where TZS sits, and who ranks weaker

Multiple currency trackers publishing "weakest African currencies" surveys in June 2026 — compiled using Forbes calculator data by Business Insider Africa and Tuko.co.ke — place the Tanzanian Shilling 7th weakest on the continent, requiring roughly 2,600–2,635 units per US Dollar. Six African currencies now require more than 2,000 units per dollar, led by São Tomé & Príncipe's dobra and Sierra Leone's leone.

Table 1 — Africa's 10 "Weakest" Currencies by Units per US Dollar, June 2026
Rank	Country	Currency	Units per USD
1	São Tomé & Príncipe	Dobra (STD)	≈ 22,282
2	Sierra Leone	Leone (SLL)	≈ 20,970
3	Guinea	Guinean Franc (GNF)	≈ 8,764
4	Madagascar	Malagasy Ariary (MGA)	≈ 4,176
5	Uganda	Ugandan Shilling (UGX)	≈ 3,651
6	Burundi	Burundian Franc (BIF)	≈ 2,983
7	Tanzania	Tanzanian Shilling (TZS)	≈ 2,600 – 2,635
8	D.R. Congo	Congolese Franc (CDF)	≈ 2,308
9	Malawi	Malawian Kwacha (MWK)	≈ 1,734
10	Rwanda	Rwandan Franc (RWF)	≈ 1,465

Sources: Forbes currency calculator data compiled by Business Insider Africa and Tuko.co.ke (June 2026); Trading Economics; Wise.com; Exchange-Rates.org. Nominal per-USD figures vary slightly by source and by day; TICGL uses a representative mid-June 2026 range.

Chart 1 — Africa's Weakest Currencies vs. TZS: Units per US Dollar, June 2026

Loading chart…

Note: São Tomé, Sierra Leone and Guinea are truncated on this chart for readability (values in the tens of thousands). See Table 1 for full figures.

Why this ranking gets attention: Headlines built on this list travel fast because "weakest currency" sounds alarming. But nominal exchange-rate level is a poor proxy for currency health — Japan's yen trades above 140/USD and South Korea's won above 1,300/USD, and neither is considered "weak" in the crisis sense. What actually matters is covered in Sections 2–6 below.

2. What Bank of Tanzania's Official Data Actually Shows

The IFEM rate: stable, and appreciating year-on-year

On the Interbank Foreign Exchange Market (IFEM) that the Bank of Tanzania tracks and publishes monthly, the Shilling averaged TZS 2,612.46 per US Dollar in April 2026, compared with TZS 2,684.41 per USD in April 2025 — an annual appreciation of 2.7 percent. That is an improvement on the 2.5 percent appreciation recorded in March 2026, and a sharp turnaround from the 3.9 percent depreciation recorded in the same month a year earlier (April 2025). This is the opposite direction of travel implied by a "weakest currencies" headline.

Chart 2 — Official TZS/USD Exchange Rate, End of Period (Apr 2025 – Apr 2026)

Loading chart…

Source: Bank of Tanzania / Ministry of Finance, BOT Monthly Economic Review, May 2026, Table A10 (national debt end-of-period exchange rate).

Behind this stability: gold export receipts rose to USD 5,268.9 million (year ending April 2026) from USD 3,821.2 million a year earlier — a 38 percent jump that materially eased dollar demand pressure — while tourism receipts grew 9.5 percent to USD 4,385.3 million on a 21.7 percent rise in international arrivals. The Bank's own intervention was light: it sold just USD 15.3 million on the IFEM in April 2026 "to maintain orderly market conditions" — not the scale of intervention associated with a currency under real stress.

3. Reconciling Two Different Stories

Why official and market-tracker numbers diverge

Cross-checking independent trackers as at late June 2026: Trading Economics quoted USD/TZS around 2,625 on 3 June 2026 (Shilling down 1.16% over the prior month, but still up 1.87% over the trailing 12 months — consistent with BOT's appreciation story); Wise.com recorded a June 2026 weekly range of TZS 2,596–2,634 per USD with a six-month average of TZS 2,571; and Exchange-Rates.org noted the Shilling had eased about 6.1 percent year-to-date against the Dollar by 20 June 2026 on the specific rate series it tracks.

The gap between these figures is real and worth understanding rather than dismissing. Tanzania runs a managed, not fully liberalised, exchange rate. That means:

BOT's figure is a monthly average of the interbank rate, smoothing out day-to-day spikes that trackers like Wise or Trading Economics quote in real time.
Different reference dates. BOT's most recent published figure is for April 2026; independent trackers quote rates through late June 2026 — two months of additional currency movement not yet captured in BOT's own release cycle.
Retail/parallel spread. Rates used by international remittance and travel platforms often reflect a small retail markup over the pure interbank mid-rate BOT publishes.

Table 2 — TZS/USD: Comparing Sources, 2026
Source	Period	Rate (TZS/USD)
Bank of Tanzania (IFEM avg.)	April 2026	2,612.46
Bank of Tanzania (end of period)	April 2026	2,602.00
Trading Economics	3 Jun 2026	2,625.00
Wise.com (weekly high)	23 Jun 2026	2,634.05
Wise.com (weekly low)	25 Jun 2026	2,596.00
Wise.com (6-month avg.)	Jan–Jun 2026	2,571.25
Exchange-Rates.org	20 Jun 2026	2,630.99
Forbes Advisor / Xe	25 Jun 2026	2,617.80

TICGL read: None of these figures point to a currency in freefall. The spread across sources (roughly TZS 2,570–2,635) is a normal band for a managed float, not evidence of a parallel-market crisis of the kind seen in some of the currencies ranked weaker than TZS on Table 1.

4. Five Reasons TZS Ranks "Weak" in Nominal Terms

None of these, on their own, signal instability

No currency redenomination

Unlike Ghana (2007) or Zimbabwe, Tanzania has never redenominated the Shilling by dropping zeros. Decades of cumulative — even if moderate — inflation since the 1970s compound into a nominally large units-per-dollar figure today, independent of current-year stability.

Larger economy, larger money stock

Extended broad money (M3) reached TZS 65.1 trillion in April 2026, up 22 percent year-on-year. A bigger, faster-growing economy naturally circulates more local-currency units, which mechanically raises the units-per-dollar figure over time even without depreciation.

Nominal ranking ignores the growth rate

"Weakest currency" lists rank the level of the exchange rate, not its trend. Uganda, Burundi and several currencies ranked "less weak" than TZS by level have depreciated far faster in percentage terms over the past year than the Shilling has.

Import-dependent economy

Refined petroleum products make up about 14.4 percent of goods imports. As a net commodity importer, Tanzania's dollar demand is structurally higher than gold- and tourism-export receipts alone would otherwise imply — a genuine, if moderate, source of currency pressure.

Regional company, not global outlier

TZS sits in a cluster of East/Central African currencies (Uganda, Burundi, DR Congo, Rwanda, Malawi) that all require 1,000+ units per dollar for similar structural reasons. This is a regional pattern, not a Tanzania-specific weakness signal.

✓

What would actually be alarming

A widening gap between the official and black-market rate, rapidly falling reserves, or double-digit annual depreciation — none of which currently apply to TZS based on the data in this review.

5. TZS vs. Regional Peer Currencies

A closer look at East & Central African currencies

Chart 3 — TZS vs. Selected East & Central African Currencies: Units per USD, June 2026

Loading chart…

Source: Business Insider Africa / Tuko.co.ke (Forbes calculator), June 2026.

Within its immediate regional cluster, TZS sits between Rwanda/Malawi/DR Congo (nominally "stronger" by level) and Uganda/Burundi/Madagascar (nominally "weaker"). What distinguishes Tanzania is the combination of a diversified export base (gold, tourism, agriculture, manufactured goods) and a managed float backed by adequate reserves — a combination several of its lower-ranked regional peers lack.

6. The Real Risk to Watch: The Current Account & Global Oil Prices

Not the ranking — the trajectory

Tanzania's current account deficit widened to USD 2,651.8 million in the year ending April 2026, from USD 2,107.1 million a year earlier — a 25.6 percent deterioration — as import growth (15.5%) outpaced export growth (13.5%). This is financed comfortably today by gold and tourism inflows, but it is the genuine leading indicator for currency pressure, not the nominal exchange-rate ranking.

The transmission channel is direct: global crude oil prices jumped from USD 95.58/barrel in March 2026 to a monthly average of USD 103.91/barrel in April 2026 (intraday high USD 117.80), driven by Middle East tensions. Since refined petroleum makes up roughly 14.4 percent of Tanzania's goods imports, a sustained oil-price shock raises dollar demand mechanically — the more credible path to future TZS depreciation than the current nominal ranking implies.

The offsetting cushion

Gross official reserves stood at USD 5,722.5 million in April 2026 (up from USD 5,307.7 million a year earlier), covering 4.4 months of projected imports — within national and EAC benchmarks. Combined with record gold exports, this gives Bank of Tanzania meaningful room to defend orderly market conditions even if oil prices stay elevated through the rest of 2026.

Chart 4 — Current Account Balance & Foreign Exchange Reserves (Year Ending April, 2021–2026)

Loading chart…

Source: Bank of Tanzania, Tables A5 & A10, BOT Monthly Economic Review, May 2026.

7. Supporting Context: Inflation, Policy Rate & Credit Growth

The macro backdrop shaping currency conditions

Currency stability doesn't happen in isolation — it reflects the wider monetary and price environment. Three data points from the May 2026 BOT review matter most for the TZS story:

4.0% ▲

Headline inflation, April 2026 (from 3.2% in March)

5.75%

Central Bank Rate, held since Q1 2026

23.6%

Private sector credit growth, y/y

22.0%

Broad money (M3) growth, y/y

Chart 5 — Twelve-Month Inflation Trend: Headline, Core, Food & Energy (Apr 2025 – Apr 2026)

Loading chart…

Source: National Bureau of Statistics & Bank of Tanzania computations, BOT Monthly Economic Review, May 2026.

Why this matters for the Shilling

At its April 2026 meeting, the Monetary Policy Committee held the CBR at 5.75 percent and narrowed the policy corridor from 200 to 150 basis points to sharpen transmission — a stance consistent with defending currency stability without over-tightening credit. Inflation at 4.0 percent remains inside EAC/SADC convergence bands, meaning Tanzania is not fighting the kind of runaway domestic inflation that typically forces rapid currency depreciation elsewhere on the "weakest currencies" list (e.g., Sierra Leone, Guinea). Meanwhile, credit growth of 23.6 percent — led by trade (44.2%), mining (39.7%) and transport (39.7%) — signals an economy still expanding fast enough to keep attracting the dollar inflows that support the currency.

Chart 6 — 7-Day IBCM Rate vs. the CBR Corridor (May 2024 – April 2026)

Loading chart…

Source: Bank of Tanzania, BOT Monthly Economic Review, May 2026, Chart 2.2.1.

8. Budget, Debt & External Reserves Snapshot

The fiscal and external-debt picture underpinning currency confidence

Central government revenue continues to outperform target — TZS 3,836.8 billion collected in March 2026, 8.5 percent above target — while the national debt stock reached USD 51,067.2 million at end-April 2026, of which 70.4 percent was external debt, still dominated by concessional multilateral creditors (58.3 percent of the external stock). A well-managed debt profile and a revenue base that consistently beats target both support investor and creditor confidence in the currency's medium-term stability.

Chart 7 — External Debt Stock by Creditor Category, April 2026

Loading chart…

Source: Ministry of Finance & Bank of Tanzania, Table 2.6.2.

Chart 8 — Foreign Exchange Reserves vs. Months of Import Cover

Loading chart…

Source: Bank of Tanzania, Chart 2.7.1.

Table 3 — Key External Sector Indicators, Year Ending April 2026
Indicator	2025	2026 (provisional)	Change
Total exports (goods & services)	USD 16,625.0m	USD 18,876.7m	+13.5%
Total imports (goods & services)	USD 17,270.5m	USD 19,944.6m	+15.5%
Current account balance	-USD 2,107.1m	-USD 2,651.8m	Widened 25.6%
Gross official reserves	USD 5,307.7m	USD 5,722.5m	+7.8%
Gold exports	USD 3,821.2m	USD 5,268.9m	+37.9%
External debt stock	USD 33,764.5m	USD 35,949.6m	+6.5%

9. TICGL Analytical Take

Reading the "weakest currency" narrative correctly

Separate the level from the trend. Investors, importers and policymakers should track the direction of the IFEM rate and reserve cover month to month — not headline rankings built purely on nominal exchange-rate level, which say little about near-term risk.
Watch the current account, not the currency table. A 25.6 percent widening of the current account deficit in a single year is the metric most likely to translate into real TZS pressure if it persists — particularly if global oil prices stay elevated on Middle East tensions.
Gold and tourism are doing the heavy lifting. Both sectors are cyclical and exposed to global demand and price swings. A structurally sound export base still needs diversification beyond these two pillars to keep underwriting currency stability through future shocks — a theme consistent with TICGL's broader research on Tanzania's industrialisation gap.
Reserve adequacy remains the key buffer. At 4.4 months of import cover, Tanzania has room to absorb short-term shocks without disorderly currency moves, but this buffer would erode if the current account deficit trend continues unaddressed.

10. Frequently Asked Questions

Why does the Tanzanian Shilling rank among Africa's weakest currencies?

As of June 2026, TZS trades at roughly TZS 2,600–2,635 per US Dollar, ranking 7th weakest in Africa on a nominal units-per-dollar basis, behind São Tomé, Sierra Leone, Guinea, Madagascar, Uganda and Burundi. This reflects currency history (no redenomination) and the size of Tanzania's money stock — not an indicator of acute currency crisis.

Is the Tanzanian Shilling actually losing value?

Not on Bank of Tanzania's own official interbank (IFEM) data: TZS averaged 2,612.46 per USD in April 2026, up 2.7 percent year-on-year. Independent trackers quote day-specific rates in the 2,600–2,635 range through June 2026 and describe modest year-to-date softening — a gap explained by averaging methods, reference dates and retail spreads, not a currency collapse.

What is the difference between a "weak" currency and a "depreciating" currency?

A currency's nominal exchange rate level reflects history and structure; a depreciating currency is one losing value over time. TZS requires many units per dollar (nominal characteristic) but has been broadly stable to appreciating year-on-year on official data — unlike several African currencies experiencing double-digit annual depreciation.

What could cause the Tanzanian Shilling to weaken further?

The most plausible risk is Tanzania's widening current account deficit (USD 2,651.8 million, year ending April 2026), driven by import growth outpacing exports. A sustained rise in global oil prices linked to Middle East tensions would raise the fuel import bill and could pressure the Shilling, even as gold and tourism receipts currently offset this.

How does Tanzania defend the Shilling's exchange rate?

Through light IFEM interventions (USD 15.3 million sold in April 2026) backed by gross official reserves of USD 5,722.5 million, covering about 4.4 months of projected imports — in line with national and EAC benchmarks.

TERI

Tanzania Economic Research Institute (TERI) — a TICGL research initiative

Analysis prepared using data from the Bank of Tanzania Monthly Economic Review, May 2026; Ministry of Finance and Planning; National Bureau of Statistics; Tanzania Revenue Authority; and independent currency-market trackers (Trading Economics, Wise.com, Exchange-Rates.org, Forbes Advisor, Business Insider Africa / Tuko.co.ke).

Primary data source: Bank of Tanzania, Monthly Economic Review — May 2026 (ISSN 0856-6844). Supplementary sources: Business Insider Africa / Tuko.co.ke, "Top 10 African Countries With Weakest Currencies as of June 2026"; Trading Economics, Tanzania Shilling currency data; Wise.com and Exchange-Rates.org historical USD/TZS rates; Forbes Advisor currency converter. Figures are provisional (p) where noted in original BOT tables and subject to revision in subsequent BOT publications.

Scenario	Avg Real Growth	GDP 2030	GDP 2040	GDP 2050	Year $1T Reached	Policy Gaps Closed	Status
Current Trend	5.9%	$122B	$215B	$380B	~2065	None / minimal	15 yrs late
FYDP IV Target	7.0%	$129B	$253B	$497B	~2060	1–2 gaps partially	~10 yrs late
TICGL Central Estimate	7.5%	$132B	$272B	$561B	~2058–2062	2–3 gaps partially	8–12 yrs late
Reform Acceleration	8.0%	$135B	$292B	$631B	~2054–2056	3–4 gaps closed	4–6 yrs late
East Africa Frontier	9.0%	$141B	$335B	$793B	~2052	4–5 gaps closed	~2 yrs late
Dira 2050 Required	10.2%	$149B	$391B	$1,000B	2050	All 6 gaps closed	On Target

Year	Population (M)	GDP @5.9% ($B)	GDP @7.5% TICGL ($B)	GDP @10.2% ($B)	Per Capita @10.2%	Per Capita @7.5%	vs $7,000 Target
2025	67.5	$91.8	$91.8	$91.8	$1,360	$1,360	19%
2030	77.5	$122	$132	$149	$1,922	$1,703	27%
2035	90.1	$163	$186	$243	$2,697	$2,065	39%
2040	104.8	$217	$263	$397	$3,788	$2,510	54%
2045	117.2	$290	$371	$648	$5,530	$3,165	79%
2050	130.0	$387	$523	$1,000	$7,692	$4,023	110% / 57%
2055	137.0	$517	$737	—	—	$5,380	77%
2058–2062	142.0	~$617	~$940–$1,000B	—	—	~$6,900	~$1T TICGL est.

Policy Gap	Budget 2026/27 Response	Key Measure	TICGL Gap Assessment
Gap 1: Narrow Tax Base	Partial — mostly depth not breadth	Digital payment mandate (TWIGA), 374 fees abolished (MKUMBI I)	Promising start, not transformative
Gap 2: Industrialisation	Partial — tariff protection & energy	JNHPP commissioning (2,115 MW), edible oil tariff (35%), SGR operational	Infrastructure good; SEZ policy missing
Gap 3: Private Sector Crowding-Out	Minimal — PPP still at 0 financial close	PPP Framework mentioned; no specific project at financial close	Unaddressed — critical gap
Gap 4: Informal Economy	Meaningful — digital mandate enforced	Transport, schools, hospitality & agri digital payment mandate	Best measure in budget — if enforced
Gap 5: Wage Bill / Fiscal Composition	None — worsened in 2026/27	Wage bill +31.4%; capital spend –1.9%; no structural reform signal	Gap widened this year
Gap 6: Human Capital Skills	Partial — VETA & student loans	TZS 1.58T education spending; 284,487 student loans; VETA expansion	Investment up, curriculum reform needed

Dar es Salaam, Tanzania's commercial capital and fastest-growing city in East Africa, faces a deepening urban mobility crisis. Severe traffic congestion on its primary road corridors imposes significant time losses on the city's workers, traders, and business operators, translating into measurable productivity deficits and economic costs. Workers in Dar es Salaam lose an average of 2.48 to 5.0 hours per day to congestion-related travel delays, with a city-wide productivity cost estimated at approximately TZS 4 billion per day — equivalent to roughly 6 percent of the city's annual GDP. The paper identifies major congestion corridors, disaggregates the impact by worker category, and proposes evidence-based policy responses aligned with Tanzania's Fourth Five-Year Development Plan (FYDP IV) and Development Vision 2050.

Abstract TICGL / TERI Research Series · Dar es Salaam · 2025

Zone	Key Residential Areas	Economic Destinations	Primary Corridor
Northern	Tegeta, Wazo, Bunju, Mbezi Beach, Kawe, Goba, Mwenge, Kinondoni	CBD, Masaki, Msasani, Mikocheni	Sam Nujoma / Ali Hassan Mwinyi Road
Western	Kimara, Ubungo, Sinza, Kijitonyama, Mbezi Luis	CBD, Kariakoo, Posta, Ubungo	Morogoro Road
South-Western	Tabata, Segerea, Ukonga, Gongo la Mboto, Pugu, Buguruni, Vingunguti	CBD, Kariakoo, Industrial areas	Nyerere Road / Mandela Road
Southern	Mbagala, Chamazi, Tandika, Temeke, Mtoni	CBD, Kariakoo, Port/Kurasini	Kilwa Road / Bandari Road
Kigamboni	Kigamboni, Mjimwema	CBD, Kurasini, Port	Ferry / Bridge link
Port-Industrial	Kurasini, Bandari	CBD, Kariakoo, Industrial zones	Kilwa Road / Nyerere Road link

Origin	Destination	Distance (km)	Off-Peak (min)	Peak (min)	Excess Time (min)
Tegeta	Kariakoo / CBD	24–27	45–50	120–135	75–85
Tegeta	Masaki / Msasani	20–22	40–45	95–115	55–70
Kimara	Posta / CBD	20–22	35–45	75–100	40–55
Mbagala	Kariakoo / CBD	18–20	35–45	80–105	45–60
Ukonga	Kariakoo / CBD	15–18	30–40	70–95	40–55
Goba / Mbezi Luis	Mwenge	12–15	25–35	60–80	35–45
Kigamboni	Posta / CBD	22–25	40–50	90–120	50–70
Temeke	Kilwa Rd / CBD	14–17	30–40	70–90	40–50
Segerea / Tabata	Nyerere Rd / CBD	12–15	25–35	60–80	35–45

Worker Category	Daily Hrs Lost	Monthly Hrs Lost (26 days)	Annual Hrs Lost (312 days)	% of Annual Working Hrs
Formal Salaried Employees	2.0 – 3.0	52 – 78	624 – 936	31 – 47%
Self-Employed Traders	1.5 – 2.5	39 – 65	468 – 780	23 – 39%
SME Owners / Professionals	1.5 – 3.0	39 – 78	468 – 936	23 – 47%
Transport / Logistics Operators	2.0 – 4.0	52 – 104	624 – 1,248	31 – 62%
Average across categories	2.48 – 3.0	64 – 78	774 – 936	39 – 47%

Parameter	Low Estimate	Mid Estimate	High Estimate	Basis
Daily excess time lost (hrs)	2.0	2.5	5.0	Measured range from Dar studies
Mean hourly wage (TZS)	1,800	2,378	4,200	NBS / World Bank 2025 data
Daily monetary loss (TZS)	3,600	5,945	21,000	Hours lost × hourly wage
Monthly loss (TZS, 26 days)	93,600	154,570	546,000	Daily × 26
Annual loss (TZS, 312 days)	1,123,200	1,854,840	6,552,000	Daily × 312
Annual loss (USD equivalent)	$430	$710	$2,510	At TZS 2,610 / USD (2025)

Sector	Primary Congestion Impact	Key Productivity Loss Channel	Severity
Retail / Trading	Late opening; delayed stock pickup from wholesale markets	Fewer customer transactions per day; reduced daily turnover	High
Construction / Engineering	Delayed material delivery; worker lateness affecting site start time	Reduced site working hours; project schedule overruns; cost escalation	High
Hospitality / Food Service	Delayed food supply delivery; staff late arrival; reduced breakfast/lunch service	Lost covers; food waste; reduced revenue per seat per day	Medium–High
Healthcare	Patient late arrival; staff commute delays; ambulance response time degraded	Reduced patient throughput; emergency response risk	High
Financial / Professional Services	Client appointments missed or shortened; staff unreliable attendance	Fewer billable hours; lower client satisfaction; reduced deal flow	Medium
Logistics / Transport	Fewer delivery cycles per vehicle per day; higher fuel burn	Revenue loss per vehicle; higher operating cost; supply chain disruption	Very High
Manufacturing / Industrial	Raw material delivery delay; shift start disruption	Reduced output per shift; energy and idle cost increase	Medium–High

Job Category	Estimated Avg Monthly Salary (TZS)	Annual Cost per Employee (TZS)	New Jobs if All TZS 2.42T Goes Here	Likely Sector
Lower-grade / support staff	500,000	6,000,000	~403,000	Clerical, security, sanitation
Skilled technician / nurse / primary teacher	700,000–900,000	9,600,000	~252,000	Health, education, agriculture
Mid-level professional (most common grade)	1,000,000–1,300,000	~14,400,000	~168,000	All sectors — most likely mix
Senior professional / specialist	2,000,000–3,000,000	30,000,000	~80,000	Technical, managerial roles
Senior management / director grade	4,000,000+	55,000,000+	~44,000	Ministry/agency leadership

Condition	If Met	If Not Met	Current Evidence
Clear disaggregation of new hires vs salary adjustments	Allows public accountability and FYDP IV tracking	Impossible to assess value for money	Not clearly disclosed
Recruitment concentrated in health, education, agriculture	Human capital investment — high developmental return	Administrative expansion with low productivity return	Partially indicated
Wage bill increase does not grow faster than revenue in future years	Fiscal sustainability maintained	Structural deficit risk in outer years	Requires monitoring
Capital investment restored to ≥35% of total budget within 2 years	FYDP IV investment trajectory preserved	Development spending crowded out year-on-year	Currently declining
Bank of Tanzania monitors wage-driven demand pressure quarterly	Early inflation warning enables monetary response	Price pressures become entrenched	Standard BOT mandate
New hires are deployed and functioning within FY2026/27	Service delivery impact visible to citizens	Ghost worker and deployment delay risk	Implementation dependent

Indicator	Figure	Significance
Total regular bettors	~39.5 million (≈56% of adults)	More than half the adult population participates
Active football bettors	~23.7M – 24.9M	60–63% of all bettors — football dominates
Bettors aged 18–35	~74% of total	An overwhelmingly youth-driven market
Male share of bettors	~72%	Strongly skewed toward young men
Urban concentration	~70%	Dar es Salaam, Mwanza, Arusha lead activity
Low-income bettors (under TZS 300,000/month)	Majority of urban bettors	Betting is concentrated among economically vulnerable groups
Mobile/app-based betting	91–94% of bettors	Digital infrastructure makes betting frictionless
Market GGR (2025)	USD 72.41 million	Baseline for growth projections
Market GGR projected (2030)	USD 623 million	Roughly an 8.6x increase over five years
Gaming tax revenue (2024/25)	~TZS 261 billion	Up from TZS 33.6 billion in 2016/17
Estimated sector contribution to GDP	~0.5%	A measurable, growing share of the formal economy
Estimated formal jobs supported	~30,000	Agents, shops, platform staff, marketing

The Demographic Engine Behind the Growth

What makes betting different from most consumption taxes is its demographic foundation. Tanzania's population is young and growing, with the 18–35 cohort — already 74% of bettors — expanding in absolute numbers every year. Combined with persistently high youth unemployment (~26%) and continued expansion of mobile money and internet access (already covering 91–94% of bettors), the conditions that have driven betting's growth are not temporary. If anything, they are intensifying: more young people entering adulthood each year, a labour market that has not yet absorbed them, and ever-easier digital access to betting platforms.

From a pure revenue-planning perspective, this makes betting one of the most predictable growth tax bases available to the Treasury — arguably more predictable than agriculture (weather-dependent), mining (commodity-price-dependent), or manufacturing (investment-dependent). A government searching for domestic revenue sources that can reliably expand year-on-year, in a context where Official Development Assistance is falling by over 39%, has strong fiscal incentive to return to this base repeatedly.

What Further Measures Might Look Like

Based on the trajectory observed — and consistent with patterns in other markets — future revenue measures targeting betting could plausibly include: incremental increases to the stake-based excise rate in future budgets (following the same annual-adjustment logic already applied to other excise categories); extension of the gaming tax framework to capture currently unlicensed or offshore platforms, which the current 5% measure does not directly reach; and additional earmarked allocations — beyond the 10% GBT share — toward youth programmes, sports development, or responsible-gambling infrastructure, financed from the same growing base.

For TICGL, the policy question is not whether more betting-related revenue measures will appear — the fiscal logic strongly suggests they will — but whether each successive measure is paired with a genuine improvement in either (a) regulatory protection for the millions of young bettors documented in this analysis, or (b) progress on the youth employment conditions that make betting so central to this demographic in the first place. A tax base that keeps growing because young people have no better economic options is not, ultimately, a sustainable foundation for either fiscal policy or youth welfare — even if it looks attractive on a revenue projection.

Annual Turnover (TZS)	Old Tax (3.5%)	New Tax (4.5%)	Additional Annual Cost (TZS)	Increase
15,000,000	525,000	675,000	150,000	+28.6%
30,000,000	1,050,000	1,350,000	300,000	+28.6%
50,000,000	1,750,000	2,250,000	500,000	+28.6%
100,000,000	3,500,000	4,500,000	1,000,000	+28.6%
150,000,000 (newly eligible)	N/A — was full income tax	6,750,000	—	New Tier
200,000,000 (new ceiling)	N/A — was full income tax	9,000,000	—	New Tier

Executive Summary

What's Next for Tanzania's Economy? The Policy Gaps Keeping $1 Trillion Out of Reach by 2050

01What the June 2026 NCPI Release Covers

02Headline Inflation: The 13-Month Trend

NCPI Level vs. Headline Inflation Rate — June 2025 to June 2026 2020 = 100

03Food vs. Core vs. Headline: A Diverging Picture

Headline vs. Food vs. Core Inflation, May 2026 → June 2026

04Inflation by Consumption Group (COICOP)

12-Month Inflation Rate by COICOP Group — June 2026

05Core, Non-Core, Goods, Services & Energy Indices

Supplementary Indices — 12-Month Change

Weight Share of Core vs. Non-Core

06What Pushed Prices Up Between May and June 2026

Top Monthly Price Movers — Food vs. Non-Food Items (May → June 2026)

Full list of food items contributing to the June 2026 increase

Full list of non-food items contributing to the June 2026 increase

07Why This Matters for Business and Investment in Tanzania

08NCPI Release Schedule

09Muhtasari kwa Kiswahili

Explore More Tanzania Economic Research from TICGL

Is Tanzania's Economy Growing?

What Opportunities and Risks Define Doing Business in Tanzania in 2026?

Why Tanzania's Economic Growth Has Not Been Sufficiently Inclusive

Tanzania Business Intelligence Dashboard

Invest in Tanzania — TICGL Advisory

Join TICGL as a Researcher

TICGL Dashboard

Executive Summary

Companion Research: What's Next for Tanzania's Economy?

1. Global Tourism Context, 2025

Chart 1 — Global International Tourist Arrivals, 2016–2025 (millions)

Chart 2 — Global Tourism Revenues, 2019–2025p (USD trillions)

2. Tanzania's Arrivals & Earnings Trend, 2015–2025

Chart 3 — International Tourist Arrivals in Tanzania, 2015–2025 (thousands)

3. The Tourism–Economy Nexus: Tanzania's "Safari Dividend"

Chart 4 — Decomposing 2025 Earnings Growth (URT)

Chart 5 — Avg. Expenditure per Person/Night, URT, 2019–2025 (USD)

4. Source Markets: Who Is Visiting Tanzania

Chart 6 — Top 15 Source Markets, Tanzania Mainland (URT), 2025 (%)

Chart 7 — Top 15 Source Markets, Zanzibar, 2025 (%)

5. Purpose of Visit, Travel Arrangement & Length of Stay

Chart 8 — Purpose of Visit, URT vs Zanzibar, 2025 (%)

Chart 9 — Package Tour Share Trend, URT vs Zanzibar, 2019–2025 (%)

6. Expenditure Patterns & Foreign Exchange Contribution

Chart 10 — Independent vs Package Expenditure per Person/Night, URT, 2019–2025 (USD)

7. Zanzibar: A Distinct Economic Engine

8. TICGL Forecast: Arrivals & Earnings to 2030/2031

Chart 11 — Forecast: Tanzania International Arrivals, 2019–2031 (millions, scenario analysis)

Chart 12 — Forecast: Tanzania Tourism Earnings, 2024–2031 (USD billion, scenario analysis)

9. Constraints & Areas Needing Investment

10. Outlook & Policy Implications

11. Frequently Asked Questions

How much did tourism earn Tanzania in 2025?

How many tourists visited Tanzania in 2025?

Which countries send the most tourists to Tanzania?

What is Tanzania's tourism forecast for 2030 and 2031?

How much do tourists spend per night in Tanzania?

Related TICGL Research & Tools

Muhtasari kwa Kiswahili

Why Did Dangote Choose Kenya Over Tanzania for Its $20 Billion Refinery — And What Does It Mean for Investors?

On this page

Executive Summary

1. Background: How the Refinery Decision Unfolded

1.2 Why Kenya Won on Dangote's Own Stated Terms

Mombasa vs Tanga: Port Throughput Gap

1.3 The Emerging Tanzania Consolation Package

2. Systemic Investment-Climate Challenges — the TICGL Lens

2.1 A Narrow, Shallow Tax Base

Tax-to-GDP Ratio: Tanzania vs Regional Benchmarks

2.2 An Industrialisation and Infrastructure Deficit

Manufacturing Share of GDP

Installed Power Capacity (MW)

2.3 Private-Sector Crowding-Out

Private Investment as % of GDP: Actual vs Required

2.4 The FDI Registration-to-Disbursement Gap

Registered FDI Pipeline vs Actual Inflows (USD Billion)

FDI Realisation Rate Trend

Six Structural Drivers of the Gap

What Drives Tanzania's FDI Disbursement Gap?

2.5 Regional Benchmarking: Tanzania vs Kenya vs Rwanda vs Ethiopia