In December 2024, Tanzania’s external sector showed resilience, with total exports rising by 9.8% to USD 14.72 billion, driven by gold (USD 3.49 billion, +4.3%) and tourism (USD 3.10 billion, +15.1%). Meanwhile, total imports increased by 7.2% to USD 17.85 billion, with petroleum imports (USD 4.08 billion, +10.2%) remaining the largest contributor to trade costs. As a result, the trade deficit narrowed to USD 3.13 billion, improving Tanzania’s external position. Foreign reserves stood at USD 5.5 billion, covering 4.5 months of imports, ensuring currency stability. To sustain this progress, Tanzania must diversify exports, attract more FDI (USD 1.83 billion, +8.2%), and reduce reliance on imported petroleum
Tanzania’s external sector performance in December 2024 reflected strong export growth, increased foreign exchange inflows, and a narrowing trade deficit, supported by higher commodity prices and improved tourism earnings. However, import growth and external debt obligations remained key challenges.
1. Balance of Payments (BoP) and Foreign Reserves
Implication:
✅ Higher reserves provide a cushion against external shocks and currency depreciation.
⚠️ A persistent BoP deficit means Tanzania still relies on external borrowing and capital inflows to maintain reserves.
2. Exports Performance
Tanzania’s total exports of goods and services increased by 9.8% to USD 14.72 billion in the year ending December 2024, compared to USD 13.41 billion in December 2023.
Key Export Categories
| Export Category | Value (USD Billion) | Annual Growth (%) |
| Gold | 3.49 | +4.3% |
| Tourism Receipts | 3.10 | +15.1% |
| Manufactured Goods | 1.92 | +8.7% |
| Cashew Nuts | 0.98 | +12.5% |
| Tobacco | 0.79 | +11.4% |
| Horticulture (Fruits & Vegetables) | 0.51 | +13.6% |
| Other Exports | 3.93 | +6.9% |
| Total Exports | 14.72 | +9.8% |
Key Observations:
✅ Tourism earnings (USD 3.10 billion, up 15.1%) indicate a full post-pandemic recovery, supported by increased international arrivals.
✅ Gold remains Tanzania’s top export (USD 3.49 billion, 23.7% of total exports), benefiting from strong global prices.
⚠️ The export base is still concentrated in commodities, increasing vulnerability to price fluctuations.
3. Imports Performance
Key Import Categories
| Import Category | Value (USD Billion) | Annual Growth (%) |
| Petroleum Products | 4.08 | +10.2% |
| Machinery & Equipment | 2.81 | +9.5% |
| Industrial Raw Materials | 2.45 | +6.8% |
| Consumer Goods | 2.17 | +4.2% |
| Transport Equipment | 1.92 | +5.3% |
| Wheat & Edible Oils | 1.14 | +8.7% |
| Other Imports | 3.28 | +5.1% |
| Total Imports | 17.85 | +7.2% |
Key Observations:
✅ Increased imports of machinery (USD 2.81 billion, +9.5%) and raw materials (USD 2.45 billion, +6.8%) suggest industrial expansion.
⚠️ High petroleum import costs (USD 4.08 billion, +10.2%) increase trade deficit risks, making energy diversification crucial.
4. Trade Balance and Current Account Deficit
Implication:
✅ Narrowing deficits indicate improved external stability, reducing pressure on foreign reserves.
⚠️ The trade deficit remains large, requiring further efforts to boost export diversification.
5. Foreign Direct Investment (FDI) and Capital Flows
Implication:
✅ Higher FDI supports long-term economic growth, while increased remittances help stabilize the current account.
⚠️ Reliance on capital inflows means external shocks (e.g., global interest rate changes) could impact Tanzania’s financial position.
Key Takeaways:
📌 Exports grew by 9.8% (USD 14.72 billion), led by gold (USD 3.49 billion) and tourism (USD 3.10 billion), reducing the trade deficit.
📌 Imports increased by 7.2% (USD 17.85 billion), mainly in petroleum (USD 4.08 billion) and machinery (USD 2.81 billion), reflecting industrial growth.
📌 Foreign reserves remain strong at USD 5.5 billion (4.5 months of imports), supporting exchange rate stability.
📌 FDI inflows (USD 1.83 billion) and remittances (USD 589.2 million) improved, enhancing external financial stability.
To further strengthen external sector resilience, Tanzania should expand non-traditional exports, attract more FDI, and promote energy diversification to reduce petroleum import costs
1. Tanzania’s Export Growth is Strong, But Still Reliant on Commodities
Implication:
✅ Strong export growth helped narrow the trade deficit, reducing external vulnerabilities.
⚠️ The export base is still commodity-driven (gold, cashew nuts, tobacco), making Tanzania vulnerable to price fluctuations.
🔹 Tanzania must diversify its exports beyond raw commodities by increasing value addition (e.g., processed agricultural goods and finished manufactured products).
2. Imports Growth Reflects Economic Expansion, But High Energy Costs Are a Concern
Implication:
✅ Higher imports of machinery and industrial inputs suggest economic expansion and manufacturing growth.
⚠️ Heavy dependence on petroleum imports increases trade deficit risks, highlighting the need for energy diversification (e.g., renewable energy investment).
3. Trade Deficit is Narrowing, Improving Tanzania’s External Position
Implication:
✅ The narrowing trade and current account deficits indicate improved economic resilience and reduced pressure on foreign reserves.
⚠️ Tanzania must continue promoting exports and attracting FDI to sustain this positive trend.
4. Foreign Exchange Reserves Remain Stable, Supporting Currency Stability
Implication:
✅ Adequate reserves ensure Tanzania can manage external shocks (e.g., exchange rate volatility, rising global interest rates).
⚠️ Sustaining reserve levels requires continued export growth and careful debt management.
5. Increased FDI and Capital Inflows Boost External Stability
Implication:
✅ FDI growth supports economic expansion and job creation, while rising remittances strengthen household incomes.
⚠️ Tanzania must continue improving its investment climate to attract long-term capital flows.
Key Takeaways and Policy Actions Needed
📌 Exports grew by 9.8%, narrowing the trade deficit, but reliance on commodities remains a risk.
📌 Imports rose by 7.2%, mainly in petroleum and machinery, supporting industrial expansion but increasing energy dependence.
📌 Foreign reserves remain strong at USD 5.5 billion (4.5 months of import cover), stabilizing exchange rate risks.
📌 FDI and remittances increased, strengthening Tanzania’s external financial position.
🔹 What Needs to Be Done?
✅ Diversify export products and markets to reduce commodity reliance.
✅ Expand energy investments to reduce petroleum import costs.
✅ Strengthen policies to attract FDI in manufacturing, agribusiness, and technology.
✅ Boost domestic industries to reduce import dependence.
Overall, Tanzania’s external sector performance in December 2024 shows resilience, but efforts to strengthen export diversification and reduce reliance on external borrowing are crucial for long-term stability
Msimamo wa kifedha wa Benki Kuu ya Tanzania kwa Novemba 2024 unaonyesha juhudi za taasisi hiyo kusawazisha kati ya msaada wa kifedha na uthabiti wa kiuchumi. Kupungua kwa mali jumla kwa 2.5%, hasa kutokana na kupungua kwa akiba ya fedha taslimu na ongezeko kubwa la mikopo kwa serikali, kunaonyesha majibu ya benki kuu dhidi ya changamoto za kiuchumi na kifedha zilizopo. Ifuatayo ni uchambuzi wa kina wa taarifa ya kifedha na takwimu muhimu.
1. Total Assets (Mali Jumla)
Novemba 2024: TZS 25,388,447,414
Oktoba 2024: TZS 26,040,992,974
Mabadiliko: Imepungua kwa TZS 652,545,560 (~2.5%)
Kupungua huku kunatokana na mabadiliko katika vipengele vya mali, hususan:
2. Major Asset Components (Vipengele Vikuu vya Mali)
a. Hati za Nje Zinazoweza Kuuzwa Sokoni
b. Fedha Taslimu na Sawa na Taslimu
Kupungua huku kwa kiasi kikubwa kunaonyesha changamoto za ukwasi, zinazoweza kusababishwa na:
c. Mikopo kwa Serikali
Ongezeko hili linaonyesha utegemezi mkubwa wa serikali kwa ufadhili wa benki kuu ili kufidia mapungufu ya bajeti, kusaidia miradi ya maendeleo, au kudhibiti madeni.
3. Jumla ya Madeni
Novemba 2024: TZS 22,685,046,183
Oktoba 2024: TZS 23,185,162,980
Mabadiliko: Imepungua kwa TZS 500,116,797 (~2.2%)
Kupungua huku kunatokana na kupungua kwa madeni ya kifedha ya sarafu za kigeni, ishara ya usimamizi bora wa wajibu wa nje.
4. Vipengele Vikuu vya Madeni
a. Fedha Katika Mzunguko
Ongezeko hili dogo linaonyesha mahitaji thabiti ya fedha ndani ya nchi, yakichochewa na sababu za msimu na shughuli za kiuchumi.
b. Madeni ya Kifedha ya Sarafu za Kigeni
Kupungua huku kunaonyesha:
c. Amana za Mabenki na Taasisi Zisizo za Kibenki
5. Equity Position (Nafasi ya Hisa)
Novemba 2024: TZS 2,703,401,231
Oktoba 2024: TZS 2,855,829,994
Mabadiliko: Imepungua kwa TZS 152,428,763 (~5.3%)
Mgawanyo:
6. Notable Trends and Observations
a. Changamoto za Ukwasi:
Kupungua kwa TZS 1.15 trilioni katika fedha taslimu kunaonyesha changamoto kubwa za ukwasi, labda kutokana na hatua za sera au mahitaji ya kifedha.
b. Utegemezi wa Kifedha:
Ongezeko la TZS 470 bilioni la mikopo kwa serikali linaonyesha shinikizo za bajeti na utegemezi wa serikali kwa ufadhili wa benki kuu.
c. Shughuli Thabiti za Ndani:
Ongezeko dogo la fedha katika mzunguko linaonyesha mahitaji thabiti ya fedha kwa shughuli za kiuchumi zinazoendelea.
d. Usimamizi wa Madeni ya Nje:
Kupungua kwa TZS 476 bilioni kwa madeni ya sarafu za kigeni kunaonyesha usimamizi bora wa madeni ya nje, kupunguza utegemezi kwa ufadhili wa nje.
e. Changamoto za Hisa:
Kupungua kwa asilimia 5.3 ya hisa kunaonyesha hali ngumu ya kifedha, labda kutokana na faida ndogo au marekebisho ya akiba ili kuhimili changamoto za kiuchumi.
Hitimisho
Taarifa ya kifedha ya Novemba 2024 inaonyesha Benki Kuu ikijaribu kusawazisha vipaumbele vingi: kusaidia shughuli za serikali, kudumisha ukwasi, na kusimamia wajibu wa nje. Licha ya kupungua kwa mali jumla na hisa, hatua za benki kuu zinaonyesha dhamira ya kudumisha uthabiti wa uchumi na kushughulikia changamoto za kifedha.
Growth, Challenges, and Future Prospects
Introduction
The banking and finance sector in Tanzania has transformed significantly over the past two decades, with growth fueled by regulatory changes, digital innovations, and increased foreign investment. By 2023, the sector included 49 licensed banks and a growing number of microfinance institutions, collectively managing assets of TZS 43 trillion (USD 18 billion), which represents about 20% of Tanzania’s GDP. This article explores the sector's current landscape, the challenges it faces, and its projected growth through 2030.
Sector Growth and Digital Transformation
Tanzania’s financial landscape has embraced digital banking, with mobile money playing a pivotal role. From 25.8 million accounts in 2019, mobile money has surged by 116.2%, reaching over 55.8 million accounts by 2024. Monthly transactions now exceed 310.9 million, driven by platforms like M-Pesa, Tigo Pesa, and Airtel Money. Mobile banking has also greatly improved financial inclusivity, raising the rate of financial access to 70% in 2024, up from just 16% in 2009.
While financial access is extensive in urban areas (85%), it lags in rural areas at 55%, highlighting the need for further expansion efforts. Despite digital strides, many rural residents still lack sufficient banking services, with mobile banking being the only viable option for some remote regions.
The banking sector’s future promises numerous investment opportunities:
Future Outlook: Banking in Tanzania by 2030
By 2030, Tanzania’s banking sector aims to become more inclusive and competitive, with 90% of adults expected to have access to financial services. The number of mobile money accounts could reach 90 million, and microfinance institutions are projected to hold 30% of the sector’s total assets. Increased competition among banks, regulatory improvements, and enhanced digital literacy initiatives are essential to achieving this ambitious vision.
Despite its growth, Tanzania’s banking sector faces several challenges, particularly in compliance costs, financial literacy, and rural access. To achieve a more inclusive, competitive landscape, it’s crucial to streamline regulatory frameworks, promote incentives for rural financial inclusion, and invest in digital infrastructure. By addressing these challenges, Tanzania can position its banking sector as a leader in Sub-Saharan Africa, delivering on the promise of accessible and sustainable financial services for all.