Zanzibar's economic performance in 2024 demonstrates resilience and recovery, particularly in the tourism sector, supported by stable inflation and improved agricultural outputs. The government's focus on enhancing revenue collection and infrastructure development reflects a strategic approach to boosting economic growth and ensuring sustainability. However, continued efforts are needed to address challenges such as trade imbalances and the need for diversified economic activities to strengthen the overall economy.

1. Economic Growth:

• Zanzibar’s economy is supported mainly by tourism, agriculture, and trade. The region has been experiencing a gradual recovery post-pandemic, particularly in the tourism sector, which is vital for local economic activity and job creation.

2. Tourism Sector:

• Tourism is the leading contributor to Zanzibar's economy. The region saw an increase in tourist arrivals in 2024, enhancing foreign exchange earnings and stimulating growth in related sectors such as hospitality, transport, and retail.
• As of 2024, tourist arrivals increased by 21.7% compared to the previous year, indicating strong recovery and growing international interest​.

3. Inflation Trends:

• Zanzibar has also witnessed stable inflation rates, mirroring trends seen on the mainland. In August 2024, the inflation rate in Zanzibar remained within target ranges, driven mainly by food prices.
• The twelve-month headline inflation was noted at around 3.1%, consistent with national trends, as food inflation contributed significantly to the overall price levels​.

4. Agricultural Performance:

• Agriculture, particularly the production of cloves, spices, and other crops, remains a critical part of Zanzibar’s economy.
• Clove production has been a significant focus, with efforts to boost yields and export quality contributing to economic performance. The value of agricultural exports is crucial for local income and foreign exchange​.

5. Trade Balance:

• Zanzibar continues to engage in trade with the mainland and international markets, exporting goods such as spices and seafood while importing food and other consumer goods.
• The trade balance for Zanzibar reflects the broader national trends, with efforts to enhance exports to improve the trade deficit.

6. Budgetary Operations:

• The local government has been focusing on improving revenue collection through enhanced tax compliance and the growth of economic activities, particularly in tourism and agriculture.
• Zanzibar’s government revenue has seen improvements, with increased local taxation and levies, which are crucial for financing public services and development initiatives​.

7. Development Initiatives:

• The government of Zanzibar has been investing in infrastructure development, particularly in transport and utilities, to support economic growth and improve the business environment.
• Projects aimed at enhancing tourism infrastructure, such as hotels, transport links, and service facilities, are ongoing to capitalize on the growing tourism sector.