Tanzania’s food inflation remained a key economic pressure point in October 2025, rising to 7.4% year-on-year from 7.0% in September, far outpacing the headline inflation rate of 3.5%. The Food and Non-Alcoholic Beverages Index increased from 120.50 in October 2024 to 129.47 in October 2025, marking a 9-point jump over 12 months, cementing food as the primary driver due to its heavy 28.2% weight in the NCPI basket. Although several staple items recorded monthly price drops—including dried beans (-3.1%), dried peas (-3.1%), finger millet (-2.5%), poultry meat (-2.7%), and maize grains (-1.3%)—providing short-term relief and contributing to the -0.2% monthly CPI decline, elevated annual food inflation highlights persistent structural challenges. With food prices rising nearly four times higher than non-food inflation (1.9%), Tanzania’s price stability remains sensitive to supply disruptions, weather variability, and seasonal demand cycles, underscoring the urgency of strengthening agriculture systems and food supply chains.

The Food and Non-Alcoholic Beverages inflation rate for October 2025:

• 7.4% (Year-on-year)
• Up from 7.0% in September 2025
• This means prices for food items increased significantly compared to the same period last year and contributed strongly to overall headline inflation.

Food Inflation Index Movement (2024–2025)

The index increased from:

• 120.50 in October 2024
• To 129.47 in October 2025

This shows a clear 9-index-point rise over 12 months.

Table 1: Food Inflation Index Movement (2020 = 100)

Although the index dropped slightly from September to October (129.70 → 129.47), the annual rate still increased due to the comparison base from last year.

Contribution of Food to Headline Inflation

Food has the largest weight in the NCPI basket (28.2%), making it the primary inflation driver.

• Headline inflation: 3.5%
• Food inflation alone: 7.4%
• Food prices are rising more than twice the pace of average inflation.

Food Items with Significant Monthly Price Decline

Despite high annual inflation, between September and October 2025 many food items registered lower month-to-month prices, contributing to a -0.2% monthly CPI reduction.

Table 2: Declining Food Prices (Monthly Changes)

These reductions helped slow down short-term inflation pressure.

Why Food Inflation Is Rising

Key contributors based on index movement:

1. Weather-related seasonal effects – influencing cereal and vegetable prices.
2. Transport cost fluctuations – though fuel declined in October, earlier increases influenced food supply chains.
3. High demand during specific periods – food consumption patterns typically fluctuate seasonally.

Food Inflation vs Non-Food Inflation

Food inflation is nearly four times higher than non-food inflation.
This highlights the continued vulnerability of Tanzania’s price stability to food supply shocks.

Implications of October 2025 Food Inflation for the Tanzanian Economy

The October 2025 National Consumer Price Index (NCPI) from the National Bureau of Statistics (NBS) highlights food and non-alcoholic beverages inflation at 7.4%, up from 7.0% in September, with the index rising from 120.50 in October 2024 to 129.47. As the heaviest-weighted category (28.2%) in the NCPI basket, food inflation—nearly four times the 1.9% non-food rate—remains the dominant driver of the overall 3.5% headline inflation, exerting outsized pressure on economic stability. Monthly price declines in staples like dried beans (-3.1%), peas (-3.1%), and maize grains (-1.3%) offered short-term relief, contributing to a -0.2% overall CPI drop. However, structural vulnerabilities in agriculture, which employs 65% of the workforce and contributes 25-30% to GDP, amplify these trends. Below, I outline key implications, integrating NBS data with recent economic analyses.

1. Erosion of Household Purchasing Power and Widening Inequality

• Core Impact: High food inflation disproportionately burdens low-income households, who spend over 50% of budgets on food, reducing real disposable income and exacerbating food insecurity. With 26% of Tanzanians below the poverty line (2024 estimates), the 7.4% rise could push 1-2 million more into vulnerability, slowing progress toward the Third National Five-Year Development Plan (FYDP III) poverty reduction targets.
• Relief from Monthly Declines: Reductions in cereals (e.g., finger millet -2.5%) and proteins (poultry meat -2.7%) eased short-term pressures, potentially stabilizing urban food markets. Yet, annual trends signal persistent strain, as supply disruptions from upcountry regions have tripled some grocery prices in cities like Dar es Salaam.
• Broader Tie-In: This dynamic hampers consumption-driven growth, with private consumption accounting for 70% of GDP. Women and rural families, often subsistence farmers, face compounded effects, widening gender and urban-rural divides.

2. Strain on the Agriculture Sector and Rural Livelihoods

• Sectoral Vulnerabilities: Agriculture's 6.3% contribution to Q2 2025 GDP growth masks inflation's toll—rising input costs (e.g., transport, despite October's fuel dip) and weather shocks (El Niño floods in early 2025) inflate production expenses, squeezing smallholder margins. A recent study reveals agriculture's true revenue contribution is 20-25% higher than official figures, underscoring its underappreciated role, but food price volatility discourages investment in irrigation or storage.
• Export-Import Dynamics: Elevated domestic prices may boost farmer incomes short-term but risk export bans on staples like maize to curb local shortages, as seen in 2024. Cross-border trade reports highlight potential for 10-15% agri-export growth in 2025 if stabilized, yet inflation could deter regional partners like Kenya.
• Employment Risks: With 65% workforce engagement, persistent 7.4% inflation could lead to underemployment in rural areas, where post-harvest losses (up to 30%) already compound issues.

3. Moderation of Overall GDP Growth and Fiscal Pressures

• Growth Drag: Tanzania's economy is projected to expand 6% in 2025, with agriculture driving a quarter of this via better harvests. However, food inflation at twice the headline rate could shave 0.5-1% off growth by curbing domestic demand and raising fiscal costs for subsidies (e.g., fertilizer programs costing TZS 500 billion in FY2025/26).
• Inflation Spillover: The non-core index (26.1% weight, including food) at 7.3% annual rise indicates volatility spilling into energy and transport, indirectly hiking manufacturing costs. Yet, core inflation's stability at 2.1% suggests contained broader pressures, supporting 6%+ growth if food eases.
• Fiscal Implications: Government revenue from agri (e.g., cashew, tobacco) remains robust, but higher social spending on food aid could widen the budget deficit beyond 3.5% of GDP.

4. Monetary Policy and Supply-Side Responses

• BoT's Balancing Act: The Bank of Tanzania (BoT) views food inflation as transient, keeping the policy rate at 6% to support 12% credit growth for agri-SMEs. The October 2025 Monetary Policy Report notes easing food pressures in Zanzibar (to 4.0%), projecting national stability within 3-5% targets via improved supply chains.
• Policy Levers: Seasonal harvests (e.g., maize in Q4 2025) could further moderate prices, as monthly declines suggest. Initiatives like the Southern Agricultural Growth Corridor (SAGCOT) aim to boost productivity by 20% by 2026, addressing root causes like climate sensitivity.
• Risks: If global factors (e.g., Black Sea grain disruptions) persist, food inflation could exceed 8%, prompting tighter policy and higher borrowing costs.

5. External and Sustainability Factors

• Global Linkages: Tanzania's shilling stability (2% appreciation vs. USD in 2025) cushions import reliance for rice and wheat, but commodity price hikes (wheat +5% globally) fuel domestic inflation. Sustainable trends, like climate-resilient seeds adopted by 30% of farmers, offer long-term buffers.
• Opportunities: High food prices incentivize value addition (e.g., processing for export), potentially adding TZS 1 trillion to agri-GDP by 2026. Eco-friendly practices could attract green FDI, aligning with FYDP III's sustainability goals.

Summary Table: Key Implications of Food Inflation

In summary, while October's 7.4% food inflation underscores supply vulnerabilities threatening inclusive growth, monthly easing and policy buffers position Tanzania for resilience. Addressing structural issues—like 30% post-harvest losses—through FYDP III investments could cap food inflation below 6% in 2026, sustaining 6%+ GDP expansion. Monitor the December 8, 2025, NCPI release for harvest impacts. For more, see BoT's October Monetary Policy Report.