Tanzania Investment and Consultant Group Ltd

| Economic Research Centre

Tanzania's Vision 2050 With Ambitions and Challenges Ahead
December 12, 2024  
Tanzania Vision 2050 outlines an ambitious roadmap to propel the nation into a high-income economy by 2050, anchored on transformative sectors such as industry, agriculture, energy, infrastructure, ICT, and human capital development. By leveraging its resources, enhancing innovation, and addressing systemic challenges, Tanzania aims to achieve inclusive growth, sustainability, and global competitiveness, setting a precedent […]

Tanzania Vision 2050 outlines an ambitious roadmap to propel the nation into a high-income economy by 2050, anchored on transformative sectors such as industry, agriculture, energy, infrastructure, ICT, and human capital development. By leveraging its resources, enhancing innovation, and addressing systemic challenges, Tanzania aims to achieve inclusive growth, sustainability, and global competitiveness, setting a precedent for African development in the 21st century.

Tanzania Vision 2050: High-Level Targets with Figures

Tanzania Vision 2050 outlines a transformative agenda aimed at achieving a high-income status and sustainable economic and social development by 2050.

  1. Economic Transformation:
    • Aim for an average annual GDP growth rate exceeding 8%.
    • Increase GDP per capita from the current levels to $12,000 by 2050, classifying Tanzania as a high-income country.
  2. Industrialization and Employment:
    • Transition from an agriculture-dominant economy to an industrialized one, with industry contributing over 40% to GDP.
    • Create 30 million jobs, targeting skilled and technology-oriented sectors.
  3. Agricultural Modernization:
    • Achieve 100% mechanization in agriculture, reducing reliance on manual labor.
    • Increase agricultural productivity to ensure self-sufficiency and export competitiveness.
  4. Infrastructure Development:
    • Establish Tanzania as a regional transport and logistics hub by developing modernized ports, airports, and rail systems.
    • Target an investment of over $200 billion in infrastructure projects by 2050.
  5. Energy Access:
    • Expand electricity access to 100% of the population.
    • Shift to renewable energy sources to provide 50% of energy needs, promoting environmental sustainability.
  6. Human Capital and Social Development:
    • Raise the literacy rate to 100% through universal education.
    • Increase life expectancy to 80 years, supported by comprehensive healthcare reforms.
  7. Digital Economy:
    • Ensure 90% internet penetration and build a robust digital ecosystem to support innovation and technology-driven growth.
    • Achieve a 15% contribution of the ICT sector to GDP.
  8. Environmental Sustainability:
    • Plant over 10 million hectares of forests to combat deforestation.
    • Reduce carbon emissions by 50%, in line with global environmental commitments.

These ambitious targets reflect Tanzania's aspirations to be a prosperous, inclusive, and sustainable nation by 2050.

How transformative sectors could contribute to Tanzania's Vision 2050 targets and What will be potential challenges.

1. Contribution of Transformative Sectors to Vision 2050 Goals

The transformative sectors include industry, agriculture, energy, infrastructure, human capital development, and ICT. Their potential contributions to the Vision 2050 goals can be estimated as follows:

a) Industry (40% GDP Contribution by 2050)

  • Current Contribution: Industry contributes 28% to GDP as of 2024, primarily through manufacturing, mining, and construction.
  • Potential Contribution: With strategic investments in industrial parks, export zones, and skills development, this sector could contribute 35%-40% to GDP by 2050.
  • Enablers: Modernizing industrial processes, attracting foreign direct investment (FDI), and leveraging regional markets like the East African Community (EAC).

b) Agriculture (100% Mechanization and Productivity Growth)

  • Current Contribution: Agriculture accounts for about 24% of GDP but employs 65% of the workforce.
  • Potential Contribution: Modernization and mechanization could increase agricultural GDP contribution to 30%-35%, supporting exports and reducing rural poverty.
  • Enablers: Access to mechanized tools, irrigation infrastructure, and extension services.

c) Energy (100% Access and 50% Renewable Energy)

  • Current Status: Only 42% of the population has access to electricity, with renewables making up about 14% of the energy mix.
  • Potential Contribution: Universal access to energy could add 5%-7% to annual GDP growth by powering industrial and ICT sectors.
  • Enablers: Expanding solar, wind, and hydropower investments, reducing dependency on fossil fuels.

d) Infrastructure (Regional Hub Development)

  • Current Status: The logistics performance index (LPI) ranks Tanzania at 95th globally (2023), with ongoing improvements in the Dar es Salaam Port and Standard Gauge Railway (SGR).
  • Potential Contribution: Modern infrastructure could improve trade efficiency, contributing 10%-15% to GDP by 2050.
  • Enablers: Continued public-private partnerships (PPPs) and infrastructure financing.

e) ICT (15% GDP Contribution by 2050)

  • Current Contribution: The ICT sector contributes 7% to GDP, driven by mobile banking and telecommunications.
  • Potential Contribution: The sector could grow to 15% with widespread internet penetration and digital services.
  • Enablers: Expansion of fiber optic networks and policies supporting tech startups.

f) Human Capital Development

  • Current Status: Literacy stands at 78%, with skills gaps in technical and vocational areas.
  • Potential Contribution: Investments in education and healthcare could raise GDP productivity by 20%-25%.
  • Enablers: Universal primary and secondary education, technical training, and healthcare access.

2. Challenges in Achieving Vision 2050 Targets

a) Financing Gaps

  • Estimated investments of $200 billion for infrastructure, energy, and industrial development may face financing shortfalls.
  • Current annual FDI inflows (~$1.2 billion) need to increase significantly.

b) Governance and Policy Coordination

  • Weak institutional capacity and bureaucratic delays can hinder project implementation.
  • Corruption and inconsistent policy enforcement remain critical risks.

c) Technology Adoption

  • ICT adoption is constrained by low internet penetration (45%) and high costs of digital devices.
  • Limited digital skills among the workforce slow progress.

d) Climate Change

  • Vulnerabilities in agriculture due to erratic rainfall and rising temperatures threaten food security.
  • Dependence on hydropower exposes the energy sector to drought risks.

e) Demographic Pressure

  • Tanzania’s population is projected to exceed 85 million by 2050, increasing demand for jobs, education, and services.

f) Inequality and Inclusion

  • Regional disparities in development could limit rural areas' contributions to Vision 2050.
  • Gender inequality and youth unemployment (over 12%) present barriers.

Conclusion

With robust policy implementation and investment, the transformative sectors could collectively contribute 70%-80% of the economic and social targets by 2050. However, addressing challenges such as financing, governance, technology adoption, and climate resilience is crucial. Success will require multi-stakeholder collaboration, including government, private sector, and international partners, to build a sustainable foundation for Vision 2050.

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