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Tanzania Economic Analysis 2026: President Samia's First 100 Days | TICGL
TICGL Research — February 2026

Tanzania Economic Analysis 2026:
President Samia's First 100 Days

A comprehensive data-driven evaluation of Tanzania's macroeconomic performance, sectoral dynamics, infrastructure milestones, fiscal position, and economic outlook — covering October 2025 to February 2026.

Published: February 10, 2026 Sources: Bank of Tanzania, IMF, World Bank, NBS Second Term Evaluation: Oct 29, 2025 – Feb 5, 2026
GDP Growth 2025
6.0%
▲ from 5.5% in 2024
Gold Exports
$4.7B
▲ Record High 2025
Inflation (2025 avg)
3.3%
✓ Within 3–5% Target
Forex Reserves
$6.3B
4.9 months imports
Tourism Revenue
$4.3B
▲ 11.4% arrivals
IMF GDP Outlook 2026
6.3%
Projected Growth
Public Debt/GDP
49.6%
▼ to 48.3% by 2026
ES Executive Summary

Overview: Economic Resilience Amid Political Transition

President Samia Suluhu Hassan was inaugurated for her second term on November 3, 2025, following the general election on October 29, 2025 where she secured 97.66% of the vote. Her first 100 days — evaluated through February 5, 2026 — present a paradox of strong macroeconomic fundamentals coexisting with significant political and governance challenges.

Tanzania's economy demonstrated robust performance with GDP growth reaching 6.0% annually in 2025, driven by record gold exports of $4.7 billion, a booming tourism recovery generating $4.3 billion in revenues, and the landmark completion of the Julius Nyerere Hydropower Project — the largest dam in East Africa. Inflation remained well within the Bank of Tanzania's 3–5% target at an annual average of 3.3%.

🔍 TICGL Key Finding

While Tanzania's headline growth metrics are among the strongest in Sub-Saharan Africa, growth has not been sufficiently inclusive. GDP grew 37.5% nominally from 2020–2025, yet urban wages rose only 5.3% and rural wages 4.9% over the same period — effectively stagnant in real terms. The effective inflation rate for the poorest 50% is estimated at 5.5–6.5%, far above the official 3.4% headline.

6.0%
GDP Growth 2025
$4.7B
Gold Exports Record
2,115 MW
Julius Nyerere Dam Capacity
3.3%
Annual Average Inflation
53,000+
New Jobs Created
$6.3B
Foreign Reserves (Jan 2026)
01 Political & Economic Context

1. Political and Economic Context of the Second Term

1.1 Election Context (October 2025)

The October 2025 election, while decisive in outcome, was marked by significant controversy. Key opposition parties — Chadema and ACT-Wazalendo — were excluded from the ballot. An internet blackout was imposed on election day and subsequent days. Post-election unrest resulted in reported casualties, drawing sharp international criticism from the African Union, European Union, and SADC election observers.

1.2 Government Response

In her inaugural address to the 13th Parliament on November 14, 2025, President Hassan announced four landmark commitments designed to stabilise the post-election environment and set a progressive development agenda:

CommitmentDetailsStatus
Enquiry CommissionIndependent body to investigate post-election events and unrestIn Progress
Reconciliation CommissionCommission for Reconciliation and Mediation across political dividesIn Progress
Constitutional RewriteCommitment to begin process within the first 100 daysInitiated
Tanzania Vision 2050Ambitious long-term national development framework launchedLaunched
⚠ Political Risk Note

The United States imposed partial travel restrictions effective January 1, 2026, reflecting concerns about democratic governance. These restrictions create potential headwinds for FDI and tourist arrivals from key markets, and may affect bilateral aid and development partner support.

02 Macroeconomic Performance

2. Macroeconomic Performance (Q4 2025)

2.1 GDP Growth Trajectory

Tanzania's economy demonstrated strong performance in 2025, with GDP growth reaching 6.0% annually, up from 5.5% in 2024. The second quarter showed particularly robust expansion at 6.3%, driven primarily by agriculture, mining, and construction. The IMF projects continued growth at 6.3% for 2026 and 6.3–6.5% through 2028, positioning Tanzania as one of Africa's fastest-growing large economies.

Tanzania Real GDP Growth Rate (%)
Annual growth 2020–2026 (2026 = IMF projection) — Source: IMF, Bank of Tanzania
YearGDP Growth (%)GDP (USD Billion, est.)IMF Sub-Saharan Africa AvgPerformance vs Region
20201.9%62.4−1.6%+3.5 pp
20214.3%67.84.7%−0.4 pp
20224.7%75.53.9%+0.8 pp
20235.2%79.93.4%+1.8 pp
20245.5%88.13.8%+1.7 pp
20256.0%93.54.1%+1.9 pp
2026 (Proj.)6.3%95–1024.2% (est.)+2.1 pp

2.2 Inflation and Price Stability

Tanzania maintained headline inflation within the Bank of Tanzania's 3–5% target range throughout 2025, averaging 3.3% for the year. However, a critical disparity exists between headline and food inflation. Food prices rose at 6.6% — nearly double the headline rate — disproportionately burdening low-income households where food constitutes 60–80% of total expenditure.

📊 Inflation Disparity Alert

The official headline inflation of 3.4% masks a significantly higher effective inflation rate for the poorest 50% of Tanzanians, estimated at 5.5–6.5%. Food inflation at 6.6% creates a poverty inflation trap — affecting those least able to absorb price increases. This is a key challenge for inclusive growth policy design.

Inflation: Headline vs. Food Prices vs. Effective Rate for Bottom 50% (%)
2022–2025 — Source: Bank of Tanzania, TICGL estimates
Indicator202320242025 (Annual Avg)Jan 2026
Headline Inflation3.8%3.5%3.3%3.4%
Food Inflation6.1%6.4%6.6%6.5% (est.)
Core Inflation (ex-food, energy)2.9%2.7%2.5%2.6%
Effective Inflation — Bottom 50%5.2%5.4%5.5–6.5%~5.8% (est.)
BoT Policy Rate5.50%5.75%5.75%5.75% (held)

2.3 Private Sector Credit Growth

Private sector credit expanded at approximately 8–10% in 2025, signalling improved financial intermediation and business confidence. The benchmark interest rate was held at 5.75% in January 2026 to support growth while containing inflation, reflecting the Bank of Tanzania's balanced monetary stance.

03 Sectoral Performance

3. Sectoral Performance — Key Economic Drivers

Tanzania's growth in 2025 was broadly diversified but led by three standout sectors: mining (gold), tourism, and financial services. Agriculture remains the backbone of employment but underperforms growth relative to GDP potential.

Sectoral Growth Rates — Q2 2025 (% YoY)
Source: Tanzania NBS, Bank of Tanzania

3.1 Mining Sector — The Star Performer

The mining sector was the standout performer of 2025, recording the highest growth rate among all sectors at 19% in Q2 2025. Gold exports reached a record $4.7 billion by November 2025, driven by a combination of record-high global gold prices and increased production volumes at major mines including Geita Mine (Barrick) and North Mara Mine.

Gold Export Revenue (USD Billion) & Gold Price Outlook
2021–2026 export revenues + 2026 major bank gold price forecasts — Source: BoT, J.P. Morgan, Morgan Stanley
Mining MetricValue / StatusContext
Gold Exports (2025)$4.4–4.7 billionRecord high; up 35.5–42.1% YoY
Gold's Share of Goods Exports~45–55%Dominant export commodity
Mining Sector Growth (Q2 2025)19%Highest sectoral growth rate
Key Producing MinesGeita, North Mara, BulyanhuluAll operational at full capacity
Gold Price Outlook 2026 (JPM)$4,400–$5,055/ozBullish; highs forecast up to ~$5,500
Gov. Gold Holdings Liquidation$1.2–1.3 billionDirected to infrastructure funding
💎 Gold Price Tailwind

Major global banks — including J.P. Morgan and Morgan Stanley — project gold averaging $4,400–$5,055/oz in 2026 with potential highs of ~$5,500. This structural tailwind provides Tanzania with a sustained revenue windfall through at least 2027, significantly buffering fiscal and external risks. The government's strategic liquidation of ~$1.2–1.3 billion in gold holdings to fund infrastructure is a prudent measure that unlocks liquidity while maintaining reserve adequacy.

3.2 Tourism Sector — Continued Recovery

The tourism sector continued its post-pandemic recovery, with international arrivals increasing by 11.4% to reach 2.3 million visitors by October 2025. Tourism revenue reached $4.3 billion, briefly surpassing gold as Tanzania's top foreign exchange earner at certain periods during 2025, underlining the sector's growing strategic importance.

Tourism: International Arrivals (Millions) & Revenue (USD Billion)
2019–2025 recovery trajectory — Source: Tanzania Tourism Board, BoT
Tourism Indicator202320242025Change
International Arrivals1.9M2.06M2.3M+11.4%
Tourism Revenue (USD)$3.3B$3.8B$4.3B+13.2%
Share of GDP~4.1%~4.3%~4.6%+0.3 pp
Avg Revenue per Visitor (USD)$1,737$1,845$1,870+1.4%
⚠ Tourism Risk — US Travel Restrictions

US partial travel restrictions effective January 1, 2026 represent a potential headwind for high-value tourism from North American markets. The US is typically a top-5 source market for Tanzania's luxury safari segment. Proactive diplomatic engagement will be critical to mitigating this risk.

3.3 Agriculture Sector

Agriculture grew at 4.1% in Q2 2025 — below the mining and financial services sectors, but still a meaningful contribution to overall growth. The sector continues to employ over 60% of Tanzania's workforce and accounts for approximately 26% of GDP. Key agricultural exports including tobacco, cashew nuts, and tea showed mixed performance.

Agriculture: GDP Share (%) vs. Employment Share (%)
Highlighting the structural productivity gap — Source: Tanzania NBS, ILO
⚡ Agriculture Productivity Gap

Agriculture employs 60%+ of Tanzania's workforce but contributes only ~26% of GDP — implying dramatically lower productivity per agricultural worker compared to other sectors. This structural imbalance is a root cause of rural wage stagnation and is central to Tanzania's inclusive growth challenge. Vision 2050's target to expand irrigation to 5 million acres is a direct response to this gap.

3.4 Manufacturing Sector — Persistent Weakness

Manufacturing remains a structural weakness in Tanzania's economy. Manufacturing exports declined to $1.31 billion from $1.36 billion in 2025, signalling stagnation despite government emphasis on industrial development. Manufacturing's share of GDP has remained stuck at approximately 8% since the mid-1990s — a 30-year structural failure to diversify.

SectorQ2 2025 GrowthGDP ShareEmployment ShareTrend
Mining & Quarrying19.0%~5%~1%🚀 Surging
Financial Services8.5%~7%~1%↑ Growing
Construction6.8%~8%~5%↑ Growing
Tourism / Trade6.2%~9%~8%↑ Recovering
Agriculture4.1%~26%>60%→ Steady
Manufacturing3.2%~8%~4%↓ Stagnant
ICT / Digital7.1%~3%~2%↑ Emerging

Sectoral Contribution to GDP Growth

Agriculture (26% GDP)
26%
Trade & Tourism (~9%)
9%
Manufacturing (~8%)
8%
Construction (~8%)
8%
Financial Services (~7%)
7%
Mining (~5%)
5%
ICT / Digital (~3%)
3%
04 External Sector

4. External Sector Performance

Tanzania's external sector showed significant improvement in 2025. The current account deficit narrowed to $2.22 billion (2.4% of GDP) from $2.89 billion in 2024 — a 23.2% improvement — driven by strong export performance in gold and tourism. This improvement reflects both the structural strength of Tanzania's commodity exports and the ongoing post-pandemic recovery of the services sector.

$2.22B
Current Account Deficit 2025
2.4%
of GDP (down from 3.2%)
$6.17B
Forex Reserves (2025)
4.7 mo
Import Cover (EAC min: 4)
+25.2%
Traditional Agri-Exports Growth
Stable
TZS Exchange Rate
Current Account Deficit Trend (USD Billion & % of GDP)
2020–2026 — Source: Bank of Tanzania, IMF
External Indicator202320242025Change YoY
Current Account Deficit (USD B)$2.61B$2.89B$2.22B▼ –23.2%
Current Account (% of GDP)3.3%3.2%2.4%▼ –0.8 pp
Foreign Reserves (USD B)$5.36B$5.74B$6.17B▲ +7.5%
Import Cover (months)4.24.44.7▲ +0.3 mo
Goods Export Growth+8.4%+11.2%+18.5%▲ Strong
Traditional Agri-Export Growth+6.1%+9.3%+25.2%▲ Surge
Manufacturing Export Value$1.42B$1.36B$1.31B▼ –3.7%
Forex Reserves (Jan 2026)——$6.3B4.9 months cover

4.1 ODA Decline and Financing Gap

A critical structural vulnerability in Tanzania's external position is the dramatic decline in Official Development Assistance (ODA). ODA to Tanzania has declined approximately 84% since 2013, with further projected drops of 9–17% in 2025–2026. This creates an estimated ~15% budget financing gap, increasing reliance on domestic revenue mobilisation, commercial borrowing, or non-traditional development partners.

ODA Decline vs. Domestic Revenue Growth (Index: 2013 = 100)
Tanzania's shift from aid-dependent to domestically-financed development — Source: OECD, BoT
⚠ Financing Risk — ODA Cliff

ODA declined ~84% from 2013 to 2025, creating a structural financing gap. With further drops of 9–17% projected in 2025–2026, the government's "Sovereign Pragmatism" doctrine — shifting from aid to trade-driven growth — is not merely aspirational but a fiscal necessity. The risk is that the pace of domestic revenue growth lags the pace of aid withdrawal, potentially constraining public investment in social services and infrastructure.

4.2 Exchange Rate and TZS Stability

The Tanzanian shilling maintained relative stability in 2025, supported by strong gold export inflows and tourism revenues. The Bank of Tanzania's foreign reserves buffer of $6.3 billion (4.9 months import cover) as of January 2026 — comfortably above the 4-month EAC prudential minimum — provides meaningful protection against external shocks and TZS depreciation pressures.

05 Infrastructure

5. Infrastructure Development — Key Milestones

The period under review was marked by some of Tanzania's most significant infrastructure achievements in decades, with the completion of multiple flagship projects that will define the country's economic trajectory for years to come.

🏆 Landmark Achievement

Julius Nyerere Hydropower Project
Largest Dam in East Africa

Completed and fully operational as of April 2025, the Julius Nyerere Hydropower Project represents Tanzania's most significant infrastructure achievement — built 99.5% from domestic revenues, demonstrating fiscal sovereignty and long-term vision.

2,115 MW
Total Installed Capacity
5,920 GWh
Annual Power Production
TZS 6.5T
Total Cost (~$2.9B)
99.5%
Domestically Financed
#1 EA
Largest in East Africa
#4 Africa
4th Largest Dam in Africa
Tanzania Power Generation Capacity — Before & After Julius Nyerere Dam (MW)
National grid capacity milestone — Source: TANESCO, Ministry of Energy

5.2 Other Major Infrastructure Progress

ProjectStatusStrategic ImpactTimeline
Julius Nyerere Hydropower (2,115 MW)✅ Fully OperationalEnergy self-reliance; export potential to Zambia & neighboursCompleted April 2025
Standard Gauge Railway (SGR)🔄 Under ConstructionConnects DSM to Lake Victoria; freight & passenger logistics transformationOngoing 2025–2027
Kwala Dry Port✅ LaunchedSGR electric freight services; inland cargo hubLaunched July 2025
Kigongo-Busisi Bridge (JPM Bridge)✅ InauguratedEast Africa's longest bridge; Lake Victoria connectivityInaugurated June 2025
Dar es Salaam Port Expansion🔄 OngoingCapacity uplift for regional trade hub ambitionsOngoing
East African Crude Oil Pipeline (EACOP)🔄 Advanced Stage$42B LNG project; regional energy export corridorExpected completion by July 2026
Power Transmission to Zambia🔄 Under ConstructionElectricity export revenue stream for Tanzania2026–2027
⚡ Energy Transformation Impact

The full operationalisation of the Julius Nyerere Dam is expected to be a game-changer for Tanzania's industrialisation agenda. Reliable, affordable electricity is the single most critical input for manufacturing growth. With national capacity now approximately doubling, Tanzania is positioned to attract industrial investment that was previously deterred by unreliable power supply. The dam also enables potential electricity exports to neighbouring countries, creating a new revenue stream estimated at hundreds of millions of dollars annually.

06 Vision 2050

6. Tanzania Vision 2050 — Strategic Development Framework

In her inaugural address to Parliament on November 14, 2025, President Hassan officially launched Tanzania Vision 2050 — an ambitious long-term national development framework targeting Tanzania's transformation into a high-income, industrialised economy by mid-century. The framework sets a target of a $1 trillion economy and high-income status by 2050.

Tanzania Vision 2050 — Key Targets Progress Tracker
Current baseline vs. 2030 short-term targets — Source: President's Office, TICGL

6.1 Short-Term Targets (By 2030)

Vision 2050 Target (by 2030)Current Baseline2030 TargetRequired ChangeFeasibility
GDP Growth Rate5.6–6.0%>7.0%+1.0–1.4 ppChallenging
Power Generation Capacity~4,000 MW8,000 MWDouble (+4,000 MW)On Track
Irrigated Land~0.7M acres5 million acres+7× expansionAmbitious
Manufacturing GDP Growth~4.8%9% annuallyNearly doubleRequires structural reform
New Jobs Created~53,000 (100 days)8 million totalSustained creationChallenging
Total Investment Attraction~$8–10B annual FDI$50 billion totalScaled attraction strategyModerate feasibility

6.2 Medium-to-Long Term Milestones (2031–2050)

2027–2030: GDP Growth 6.5%
6.5%
2030: Poverty Rate Target 41%
41%
2030: Debt/GDP Stabilise at 50–52%
52%
2030: Manufacturing share of GDP 9%
9%
2026: GDP USD 95–102 billion
~$98B
🎯 Sovereign Pragmatism Doctrine

The administration unveiled a "Sovereign Pragmatism" doctrine — a deliberate strategic pivot shifting Tanzania's development model from aid-dependency to trade-driven growth and value-added investments. This is reflected in new partnerships including strengthened Russia-Tanzania economic ties, diversified FDI sources, and prioritisation of domestic resource mobilisation. The doctrine is a direct response to the structural 84% decline in ODA since 2013.

07 Fiscal Position

7. Fiscal Position and Public Debt

Tanzania's fiscal position remains relatively healthy. Public debt stood at 49.6% of GDP in 2025 — among the lowest in the East African region and significantly below the IMF's 55% sustainability threshold. The present value (PV) of debt was estimated at 40.6% of GDP, well within safe parameters. Debt is projected to decline to 48.3% of GDP by 2026, reflecting a controlled trajectory.

Public Debt as % of GDP — Tanzania vs. EAC Peers (2025)
Tanzania maintains one of the lowest debt ratios in East Africa — Source: IMF, World Bank
Fiscal Indicator2023202420252026 (Proj.)
Public Debt (% of GDP)51.2%50.4%49.6%48.3%
PV of Debt (% of GDP)43.1%41.8%40.6%~39.5%
Fiscal Deficit (% of GDP)–3.6%–3.4%–3.2%–3.0%
Tax Revenue (% of GDP)12.4%12.8%13.1%Target: 13.3%
Domestic Revenue (% of GDP)15.1%15.6%15.9%Target: 16.7%
Debt Service (TZS Trillion/yr)9.8T10.6T11.5TRising ↑
Debt Service (% Gov't Revenue)18%21%20–25%26–30% by 2028
External Debt Service/Revenue28.4%31.3%~30%~24% (proj.)
Debt Service Burden (% of Government Revenue) — 2020–2028 Projection
Rising trajectory signals medium-term fiscal pressure — Source: BoT, IMF DSA
⚠ Debt Service Trajectory

While Tanzania's overall debt level is manageable, the debt service burden is rising. Annual debt service of ~TZS 11.5 trillion (20–25% of government revenue in 2025) is projected to rise toward 26–30% by 2028 — approaching levels that constrain fiscal space for social spending. The IMF/DSA assesses overall debt at low-to-moderate distress risk, but sustained revenue mobilisation above the current 13.1% tax-to-GDP ratio is essential to prevent fiscal tightening.

7.1 Revenue Mobilisation Challenge

Tanzania's tax-to-GDP ratio of approximately 13.1% remains significantly below the optimal 17–20% range recommended for sustainable development financing. Government revenues at approximately 15% of GDP limit the capacity to fund social programmes and infrastructure without increasing external borrowing. The 2025/26 budget targets domestic revenue of 16.7% of GDP and tax revenue of 13.3% — modest but directionally correct improvements.

Tax Revenue as % of GDP — Tanzania vs. Optimal Range
Tanzania significantly lags the 17–20% optimal for development financing — Source: IMF, OECD
08 Key Challenges

8. Key Economic Challenges

Despite strong headline growth metrics, Tanzania faces four structural and cyclical challenges that must be addressed to achieve Vision 2050's targets and ensure that economic growth translates into broadly shared prosperity.

🔴 Critical Challenge

Inclusive Growth Gap

GDP grew 37.5% nominally (2020–2025), but urban wages rose only 5.3% and rural wages just 4.9% — effectively stagnant in real terms. The poorest 50% face an effective inflation rate of 5.5–6.5%, not the headline 3.4%.

🔴 Critical Challenge

Revenue Mobilisation

Tax-to-GDP ratio of 13.1% is far below the 17–20% optimal range. This severely constrains public investment without risking unsustainable borrowing levels.

🟡 Significant Risk

Political Uncertainty

Contested election, US travel restrictions (Jan 2026), international criticism from AU/EU/SADC, and potential FDI confidence effects. Reconciliation commission progress is crucial.

🟡 Significant Risk

Manufacturing Stagnation

Manufacturing exports declined to $1.31B from $1.36B. GDP share stuck at ~8% since mid-1990s — 30 years of industrial under-development despite policy rhetoric.

🟡 Significant Risk

ODA Withdrawal

84% decline in ODA since 2013; further 9–17% drops projected. Creates ~15% budget financing gap. Shifts pressure to domestic revenue — which is not yet adequate.

🟢 Moderate / Manageable

Geopolitical & Climate Shocks

Red Sea shipping disruptions, global trade tensions, erratic rainfall risks for agriculture and hydropower. Buffered by strong reserves and diversified exports.

8.1 The Inclusive Growth Paradox

The most profound challenge Tanzania faces is the disconnect between strong macroeconomic performance and lived economic reality for ordinary Tanzanians. GDP grew 37.5% in nominal terms from 2020 to 2025. Yet urban wages rose only 5.3% and rural wages 4.9% over the same period. After adjusting for inflation, real wage growth is essentially zero — meaning that most Tanzanians have not materially benefited from Tanzania's "economic success story."

GDP Growth vs. Wage Growth vs. Effective Inflation (2020–2025, cumulative %)
The inclusive growth gap — Source: Tanzania NBS, ILO, TICGL estimates
Inclusive Growth Indicator2020202220255-Yr Change
Nominal GDP Growth (cumulative)Base+14%+37.5%+37.5%
Urban Wage Growth (nominal)Base+2.1%+5.3%+5.3% only
Rural Wage Growth (nominal)Base+1.8%+4.9%+4.9% only
Headline Inflation (cumulative)Base+8.6%~+18%Erodes wages
Real Urban Wage GrowthBase–6.5%~–12%Negative
Real Rural Wage GrowthBase–6.8%~–13%Negative
Food Inflation (avg annual)—7.5%6.6%Persistent ↑
Poverty Rate (% population)~44%~43%~42%Slow decline
📊 The Inclusive Growth Crisis

Tanzania's GDP-wage divergence is among the most severe in Sub-Saharan Africa. A nominal GDP expansion of +37.5% alongside nominal wage growth of only +5.3% urban / +4.9% rural implies that the productivity gains from Tanzania's economic growth are not being captured by workers. The gains flow disproportionately to capital owners, particularly in the mining sector where foreign companies dominate. Unless targeted inclusive growth policies are implemented, poverty reduction will remain frustratingly slow despite impressive headline growth.

09 Economic Outlook

9. Economic Outlook for 2026 and Beyond

Tanzania's economic prospects for 2026 and the medium term remain robustly positive, underpinned by strong fundamentals and major infrastructure investments now coming online. The IMF projects 6.3% real GDP growth in 2026, with sustained growth of 6.3–6.5% through 2028. Tanzania is expected to remain one of Sub-Saharan Africa's fastest-growing economies.

Tanzania GDP Growth Projections 2026–2030 — Multi-Scenario
Optimistic, Base, and Downside scenarios — Source: IMF, TICGL projections
Indicator2026 (Base)202720282030 (Vision)
Real GDP Growth (%)6.0–6.3%6.3–6.5%6.3–6.5%>7.0% target
GDP (USD Billion)$95–102B~$107B~$114B~$140B+
Mainland GDP Growth6.1%~6.3%~6.3%7%+ target
Zanzibar GDP Growth7.2%~7.0%~6.8%8%+ target
Inflation3.5–4.0%~3.5%~3.5%<5% target
Forex Reserves (USD B)$6.5B (proj.)~$6.8B~$7.1B$8B+ target
Debt/GDP48.3%~47%~46%50–52% ceiling
Poverty Rate (%)~41%~41% (target)~39%<35% target

9.1 Key Growth Drivers for 2026

✅ Growth Driver

Julius Nyerere Dam

Full operationalisation providing reliable, affordable electricity — unlocking industrial investment and manufacturing competitiveness across Tanzania.

✅ Growth Driver

Gold Price Tailwind

Major banks forecast gold averaging $4,400–$5,055/oz in 2026 (highs up to $5,500). Sustained FX inflows, reserve accumulation, and fiscal windfall expected.

✅ Growth Driver

Tourism Recovery

International arrivals and revenue momentum continuing into 2026. Sector diversification reducing dependence on single commodity exports.

✅ Growth Driver

LNG Project ($42B)

Negotiations in advanced stages. Finalisation would be transformative — among Africa's largest energy investments and a major new export revenue stream.

✅ Growth Driver

Critical Minerals

Tanzania's nickel, graphite, and lithium deposits attracting global investment interest amid green energy transition. Emerging diversification opportunity.

✅ Growth Driver

SGR & Infrastructure

SGR completion enhancing trade logistics, reducing transport costs, and improving Tanzania's position as a regional transit hub for landlocked neighbours.

9.2 Downside Risks to Watch

Risk FactorProbabilityImpact if MaterialisedMitigation
Political tensions / investor confidence erosionMediumHigh (FDI, tourism)Reconciliation Commission; diplomatic re-engagement
Global economic slowdown (IMF: 3.1% 2026)MediumModerate (exports, tourism)Domestic demand buffers; reserve cushion
Climate shocks (drought, floods)MediumModerate (agri, hydro)Irrigation expansion; reservoir management
Weak revenue mobilisationHighModerate (fiscal space)Tax base broadening; TRA reforms
Currency depreciation (TZS)Low–MediumModerate (imports, debt)Strong reserves; export diversification
US travel restrictions dampening tourismMaterialisedModerate (high-end safari)Market diversification; EU/Asia promotion
10 Policy Recommendations

10. Policy Recommendations

TICGL's analysis identifies five immediate priorities for 2026 and five medium-term actions for 2026–2030, drawn directly from the data evidence in this report. These recommendations prioritise inclusive growth, fiscal sustainability, and structural economic transformation.

10.1 Immediate Priorities (2026)

#RecommendationTarget MetricResponsible Body
1Political Reconciliation — Accelerate enquiry & reconciliation commissions to restore domestic stability and international confidenceLift US travel restrictions; restore bilateral ODAPresident's Office
2Revenue Enhancement — Increase tax-to-GDP ratio from 13.1% to at least 15% via base broadening and improved TRA collection efficiencyTax/GDP: 13.1% → 15%Ministry of Finance / TRA
3Inclusive Growth Mechanisms — Targeted wage support, rural productivity programmes, and social protection for bottom 50%Rural wage growth >5% real; poverty rate <40% by 2027Ministry of Labour, PMORALG
4Manufacturing Support — Concrete incentives (tax holidays, industrial land, infrastructure) to revive manufacturing exports and achieve 9% growthMfg exports >$1.5B; GDP share 8% → 10%Ministry of Trade & Industries
5Food Security — Strategic reserves, improved distribution, and agri-productivity enhancements to reduce food inflation from 6.6%Food inflation below 5% by end-2026Ministry of Agriculture

10.2 Medium-Term Actions (2026–2030)

#ActionTargetInvestment Required
1Energy Infrastructure — Execute plan to double power generation from 4,000 MW to 8,000 MW; develop electricity export corridor to Zambia and regional markets8,000 MW by 2030$3–5B (mixed public/private)
2District Industrial Parks — Establish manufacturing zones in all regions to promote value-addition, local employment, and agro-processingMfg GDP share 9% by 2030TZS 2–3 trillion
3LNG Development — Finalise the $42 billion LNG project through negotiated terms that maximise local content, tax revenues, and national benefitFID decision by 2026; first gas 2031+$42B (international IOCs)
4Human Capital Investment — Education, TVET, and skills training reforms aligned to industrialisation, digital economy, and technology adoption needsTechnical graduate output +50% by 2030Reprioritise education budget
5Social Protection Expansion — Expand cash transfer and insurance schemes from current <10% coverage to 25% of poor households by 2030<10% → 25% coverage~1.5% additional GDP expenditure
11 Conclusion

11. Conclusion — Resilience, Paradox, and the Path Forward

The first 100 days of President Samia Suluhu Hassan's second term present a paradox of economic resilience amidst political turbulence. Tanzania's economy has demonstrated strong fundamentals: 6.0% GDP growth, record gold exports of $4.7 billion, robust tourism recovery generating $4.3 billion, and the successful completion of the Julius Nyerere Hydropower Project — the largest dam in East Africa. Inflation remains controlled at 3.3%, foreign reserves are at a comfortable 4.9 months import cover, and public debt trajectory is declining.

However, these macroeconomic achievements are overshadowed by three critical challenges. First, the contested October 2025 election and subsequent unrest have damaged Tanzania's international reputation and raised legitimate concerns about democratic governance. Second, and most critically for long-term development, economic growth has not translated into improved living standards for most Tanzanians — with real wages essentially stagnant while GDP expanded 37.5%. Third, structural vulnerabilities in revenue mobilisation and manufacturing diversification remain unresolved despite years of policy attention.

📋 TICGL Net Assessment

Three Critical Success Factors for Tanzania 2026–2050

🤝
Political Reconciliation
Restore investor and international confidence through credible democratic reform and transparent accountability processes.
💰
Revenue Mobilisation
Increase tax-to-GDP from 13.1% toward 17–20% to fund development sustainably without reliance on unsustainable external borrowing.
🏘
Inclusive Growth
Ensure GDP growth translates to real wage increases, food security, and expanded social protection for all Tanzanians — not just headline statistics.

Looking ahead to 2026 and beyond, Tanzania's economic prospects remain positive, with the IMF projecting 6.3% growth. The Julius Nyerere Dam, advancing LNG negotiations, continued infrastructure development, and strong commodity exports provide solid foundations. The Vision 2050 framework sets ambitious targets including a $1 trillion economy and high-income status by 2050 — achievable if Tanzania successfully navigates its current political challenges, accelerates revenue mobilisation, and implements genuinely inclusive growth policies.

The completion of the Julius Nyerere Hydropower Project stands as tangible evidence of what Tanzania can achieve through domestic resource mobilisation and long-term vision. The challenge now is to apply this same determination and strategic focus to ensuring that economic growth creates opportunities and improves lives across all segments of Tanzanian society. With the right policies, the 2020s could be the decade in which Tanzania's economic story becomes one that is felt not just in statistics — but in the daily lives of its 65 million people.

📚 Data Sources & Methodology

This analysis draws on data from the Bank of Tanzania (BoT) monetary and financial stability reports, IMF Article IV consultations and World Economic Outlook projections, World Bank Tanzania economic updates, Tanzania National Bureau of Statistics (NBS) quarterly GDP and inflation releases, and research from J.P. Morgan, Morgan Stanley, and other international institutions. Report prepared: February 10, 2026. Analysis by TICGL Research Team.

✍ Authors

About the Authors

This analysis was produced by TICGL's senior research leadership, combining decades of economic expertise in Tanzania and East Africa.

BK
Chief Economist & Research Director
Dr. Bravious Felix Kahyoza
PhD FMVA® CP3P PCMC
Qualifications
  • ▸ Doctor of Philosophy (PhD) — Economics
  • ▸ Financial Modelling & Valuation Analyst (FMVA®)
  • ▸ Certified PPP Professional (CP3P)
  • ▸ Professional Certificate in Media & Communication (PCMC)
Dr. Kahyoza leads TICGL's economic research division, specialising in macroeconomic policy analysis, public-private partnerships, and Tanzania's development finance landscape. As Chief Economist, he oversees all quantitative modelling, policy advisory work, and the organisation's flagship research publications.
AB
Senior Economist & Research Lead
Amran Bhuzohera
Senior Economist Research Lead TICGL
Areas of Expertise
  • ▸ Macroeconomic Research & Data Analysis
  • ▸ Tanzania Sectoral Performance & Trade Economics
  • ▸ East African Investment Climate Assessment
  • ▸ Development Finance & Fiscal Policy
Amran Bhuzohera serves as TICGL's Senior Economist and Research Lead, driving the organisation's quantitative and qualitative economic research programmes. He leads data collection, sectoral analysis, and contributes core findings to TICGL's policy briefs and economic intelligence reports for Tanzania and East Africa.
TICGL
Tanzania Investment and Consultant Group Ltd (TICGL)
East Africa's leading economic research and investment consultancy — providing data-driven intelligence since 2018. ticgl.com
Published: February 10, 2026
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In March 2025, Tanzania’s external sector recorded a significant improvement, with the current account deficit narrowing to USD 2.02 billion, down from USD 2.93 billion in March 2024, marking a 31.1% year-on-year reduction. The improvement was driven by robust export growth, as exports of goods and services rose to USD 16.51 billion, up from USD 14.08 billion a year earlier, representing a 17.2% increase. Within services, travel receipts—mainly tourism—accounted for 56.7% of total service earnings, reaching USD 3.93 billion, supported by a 12% rise in tourist arrivals to 2.15 million visitors. On the import side, service payments increased to USD 2.67 billion, up by 19.4%, largely due to higher freight and transport costs, which made up 53.3% of service imports. Meanwhile, foreign exchange reserves rose to USD 5.69 billion, enough to cover 4.6 months of imports, exceeding both the national (4.0 months) and EAC (4.5 months) benchmarks.

1. Current Account Performance (March 2025)

IndicatorMarch 2024March 2025% Change (YoY)
Current Account Balance-USD 2,926.8M-USD 2,015.6M▲ Improved by 31.1%
Export of Goods & ServicesUSD 14,083.2MUSD 16,506.8M▲ 17.2%
Import of Goods & ServicesUSD 16,004.1MUSD 17,060.3M▲ 6.6%
Foreign ReservesUSD 5,327.1MUSD 5,693.2M▲ 6.9%

The current account deficit narrowed significantly by 31.1% year-on-year, driven by strong export growth, particularly in tourism, gold, and transport. Reserves now cover 4.6 months of imports, exceeding both national and EAC thresholds.

2. Export – Service Receipts by Category

Service Category2024 (USD Million)2025 (USD Million)% Share (2025)
Total Service Receipts6,381.46,923.3100%
Travel (Tourism)~3,928.5~3,930.556.7%
Other Services*~2,452.9~2,992.843.3%

*Includes construction, insurance, financial, telecom, computer services, IP charges, etc.

Travel receipts (tourism) dominate service exports, driven by a 12% increase in international arrivals, from 1.92 million in 2024 to 2.15 million in 2025.

3. Import – Service Payments by Category

Service Payments2024 (USD Million)2025 (USD Million)% Share (2025)
Total Service Payments2,236.12,670.0100%
Freight (Transport)~1,191.5~1,422.553.3%
Other Services~1,044.6~1,247.546.7%

Service payments rose sharply by 19.4%, mainly due to increased freight costs, reflecting rising import activity and global shipping rates.

As of March 2025, Tanzania’s external sector performance showed strong resilience. The current account deficit narrowed significantly to USD 2.02 billion, supported by a 17.2% increase in exports, especially in tourism and gold. On the import side, rising freight and service costs pushed service payments up by nearly 20%, yet the country maintained a healthy reserve position covering 4.6 months of imports.

Key Insights:

1. Current Account Deficit is Shrinking – A Positive Signal

This shows: Tanzania is earning more from exports, especially services like tourism and goods like gold, helping reduce reliance on foreign borrowing or reserve drawdowns.

2. Tourism is Driving Export Growth

This shows: The tourism sector is rebounding strongly, contributing significantly to foreign exchange inflows and supporting the current account.

3. Higher Import Costs, Especially for Transport (Freight)

This shows: While exports are improving, import-related costs are also rising, possibly due to increased import volumes and global shipping price pressures.

4. Foreign Reserves are Healthy

This shows: Tanzania has a strong external buffer, allowing it to meet foreign obligations even under global shocks.

Conclusion

Tanzania’s external sector in March 2025 demonstrated improved stability with a shrinking current account deficit, strong tourism recovery, and growing exports. Despite rising freight costs increasing service import bills, the country maintains solid foreign reserves, ensuring resilience in external payments.

Momentum for Growth Amid Stability

Tanzania enters 2025/2026 with strong economic momentum, driven by projected GDP growth of 6.1% in 2025 and 6.4% in 2026, marking steady progress from 5.9% in 2024. Inflation remains contained at 3.2%–3.5%, ensuring price stability for consumers and businesses. Dynamic sectors such as ICT (13.5% growth by 2026), energy (12.0%), and mining (9.3%) are fueling economic transformation, while private sector credit is expanding robustly at over 20% annually. With public debt stabilized at around 46.5% of GDP and strong revenue performance (100%+ of targets), Tanzania is well-positioned for inclusive growth and investment expansion in key industries.

Tanzania Business Report 2025: Growth, Stability & Sectoral Transformation

Tanzania's economy in 2025 is poised on solid footing, building on the steady momentum of previous years. With consistent policy direction and resilience across sectors, the country presents a compelling picture for investors, analysts, and business stakeholders.

Macroeconomic Highlights (2020–2024)

Sectoral Performance (Growth %)

Sector20202024
Agriculture & Agribusiness4.5% → 4.2%
Manufacturing & Industry4.0% → 5.0%
Mining & Extractives6.8% → 8.6%
Energy (Power & Gas)5.5% → 11.0%
ICT & Digital Economy8.5% → 12.5%
Tourism & Hospitality-13.0% → 5.8%
Construction & Real Estate3.0% → 3.9%
Logistics & Transportation5.2% → 6.2%

Top Performers: ICT, Energy, and Mining sectors drove 2024 growth, with ICT growing at a remarkable 12.5% and Energy at 11.0%, bolstered by digital transformation and energy infrastructure investments.

Trade Dynamics

Banking & Credit Sector

Government Fiscal Operations

Indicator2024 Change (%)
Total Revenue+5.6%
Tax Revenue+6.3%
Expenditure+5.7%
Development Spending+8.0%
Budget Deficit-1.8% of GDP

Strong revenue collection (99.5% of target) and controlled deficit spending reflect fiscal discipline amid rising development investment.

Inflation Breakdown

Category2024 Inflation (%)
Food & Beverages2.3%
Transport3.5%
Housing & Utilities2.8%

The inflation structure indicates broad price stability, particularly in essential sectors.

Outlook

Tanzania heads into 2025 with strong momentum in ICT, energy, and industrial growth. Stable inflation, a healthy banking sector, and expanding infrastructure projects offer a conducive environment for private investment and business expansion.

📊 “Tanzania continues to set the pace in East Africa for diversified, resilient economic growth.”

Forecast for Tanzania for the year 2025/2026: Macroeconomic indicators, sectoral performance, trade, banking, fiscal operations, and inflation.

Macroeconomic Forecast: Tanzania (2025–2026)

Indicator20242025 (Est.)2026 (Proj.)
Real GDP Growth (%)5.96.16.4
Headline Inflation (%)3.03.23.5
BoT Policy Rate (%)6.06.06.0
Exchange Rate (TZS/USD, Dec)2,5852,6302,670
Public Debt (% of GDP, Nominal)~46.346.546.7
Public Debt (% of GDP, PV Terms)41.141.241.5
Domestic Revenue Collection (% of Target)99.5100.0100.2
Tax Revenue (% Above Target)2.22.02.5

Sectoral Growth Forecast (% Change)

Sector20242025 (Est.)2026 (Proj.)
Agriculture & Agribusiness4.24.54.8
Manufacturing & Industrialization5.05.55.9
Mining & Extractives8.69.09.3
Energy (Power, Gas, Renewables)11.011.512.0
ICT & Digital Economy12.513.013.5
Tourism & Hospitality5.86.57.0
Construction & Real Estate3.94.24.5
Logistics & Transportation6.26.56.8

Trade Forecast (% Change)

Indicator20242025 (Est.)2026 (Proj.)
Exports of Goods & Services-1.5+6.0+8.5
Imports of Goods & Services+6.4+7.0+7.2

Banking & Credit Forecast (% Growth)

Indicator20242025 (Est.)2026 (Proj.)
Growth in Bank Deposits15.614.514.8
Growth in Bank Lending15.416.016.5
Private Sector Credit Growth21.220.021.5

Government Fiscal Operations (% Change)

Indicator20242025 (Est.)2026 (Proj.)
Total Revenue Growth+5.6+6.0+6.2
Tax Revenue Growth+6.3+6.5+6.8
Total Expenditure Growth+5.7+6.2+6.4
Development Expenditure Growth+8.0+8.5+9.0
Overall Budget Deficit (% of GDP)-1.8-1.9-2.0
Grants (% of Total Revenue)~1.21.11.0

Inflation Breakdown (% Change)

Category20242025 (Est.)2026 (Proj.)
Food & Non-Alcoholic Beverages2.32.72.9
Transport3.53.63.8
Housing, Water, Electricity, Gas & Fuel2.83.03.3
Overall CPI (Urban & Rural)~3.03.23.5

Stability, Growth & Sectoral Momentum

Tanzania is heading into 2025/2026 with strong and balanced growth, supported by moderate inflation, stable fiscal management, and dynamic performance across key economic sectors.

Macroeconomic Outlook

Sectoral Trends

Trade Dynamics

Financial Sector Confidence

Fiscal Responsibility

Cost of Living

Bottom Line

Tanzania in 2025/2026 is set for strong, inclusive, and sustainable growth, with opportunities in:

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