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)

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

*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 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

• The current account deficit narrowed from USD 2.93 billion (March 2024) to USD 2.02 billion (March 2025) — an improvement of 31.1%.

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

• Service receipts rose to USD 6.92 billion, with tourism (travel services) accounting for 56.7%.
• Tourist arrivals increased from 1.92 million (2024) to 2.15 million (2025) — a 12% 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)

• Service payments jumped by 19.4%, from USD 2.24 billion to USD 2.67 billion, mainly due to rising freight/transport costs (53.3% of service imports).

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

• Foreign reserves increased to USD 5.69 billion, covering 4.6 months of projected imports, above both:
  • The national benchmark (4.0 months)
  • The EAC benchmark (4.5 months)

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)

• Real GDP Growth climbed from 4.5% in 2020 to 5.9% in 2024, indicating a gradual post-pandemic recovery and strong domestic activity.
• Headline Inflation remained moderate, ending 2024 at 3.0%, reinforcing price stability.
• The Exchange Rate (TZS/USD) depreciated slightly from 2,323 (2022) to 2,585 by Dec 2024, reflecting manageable currency pressures.
• Public Debt rose to ~46.3% of GDP in nominal terms but remains sustainable with a PV (Present Value) ratio of 41.1%.

Sectoral Performance (Growth %)

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

• Exports of Goods & Services rebounded strongly in 2023 (+39.0%) but contracted -1.5% in 2024.
• Imports continued a positive trend, expanding by 6.4% in 2024, suggesting increased domestic demand.

Banking & Credit Sector

• Commercial Bank Deposits rose 15.6%, indicating confidence in the financial system.
• Lending Growth improved to 15.4%, with Private Sector Credit jumping 21.2%, reflecting a pro-business credit environment.

Government Fiscal Operations

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

Inflation Breakdown

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)

Sectoral Growth Forecast (% Change)

Trade Forecast (% Change)

Banking & Credit Forecast (% Growth)

Government Fiscal Operations (% Change)

Inflation Breakdown (% Change)

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

• GDP growth is projected to accelerate to 6.1% in 2025 and 6.4% in 2026, indicating a robust economic recovery driven by infrastructure investments, digital economy growth, and regional trade.
• Inflation remains under control (around 3.2%–3.5%), which supports consumer purchasing power and business planning.
• The exchange rate will depreciate slowly, suggesting external stability but continued pressure from imports and global currency trends.
• Public debt remains sustainable, with only slight increases, showing effective debt management and continued investor confidence.

Sectoral Trends

• Top performing sectors will be:
  • ICT & Digital Economy: Growth will hit 13.5% in 2026, fueled by digital infrastructure, mobile usage, and e-services.
  • Energy Sector: Rapid growth (12% by 2026) shows Tanzania’s push in electricity and gas infrastructure.
  • Mining and Manufacturing: Ongoing reforms and mineral demand will sustain strong growth above 9% and 5.9% respectively.
• Agriculture, though steady, is growing slower — indicating the need for modernization and value chain development.
• Tourism is on the rebound, projected to reach 7% growth, reflecting increased travel and hospitality recovery.

Trade Dynamics

• Exports are projected to recover strongly (+6.0% in 2025 and +8.5% in 2026) after the 2024 dip — thanks to minerals, agriculture, and tourism.
• Imports will continue rising moderately, reflecting strong domestic demand for capital goods, industrial inputs, and consumer goods.

Financial Sector Confidence

• Commercial bank deposits and lending remain strong, growing above 14% annually, showing business confidence and expanding access to finance.
• Private sector credit growth above 20% indicates strong investment appetite and supportive banking environment.

Fiscal Responsibility

• The government will maintain a manageable budget deficit (~2% of GDP) while increasing both revenue and development spending.
• Grants are declining (only ~1% of revenue by 2026), signaling greater self-reliance in public finances.

Cost of Living

• Inflation is mild across food, housing, and transport — a positive sign for households and business cost planning.

Bottom Line

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

• Digital economy
• Energy infrastructure
• Export diversification
• Tourism revival
• Financial sector expansion