3.1 Inflation Developments
Headline, food, and non-food price dynamics in Zanzibar — March 2025 to March 2026
Headline Inflation Eases to 4.9% Mar 2026
Zanzibar's annual headline inflation declined to 4.9% in March 2026, from 5.1% recorded in the corresponding month of 2025, driven primarily by a significant fall in non-food price pressures.
The month-on-month headline rate edged up marginally to 0.3% in March 2026, compared to 0.2% in March 2025. The annual decrease was mainly attributable to a sharp decline in non-food inflation, which fell to 0.9% from 4.1% a year earlier, reflecting substantially lower prices in the housing, water, electricity, gas, and other fuels category.
Inflation Trend — Headline, Food & Non-Food Mar 2025 – Mar 2026
The divergence between falling non-food inflation and rising food inflation is a defining feature of Zanzibar's price environment in 2026.
Source: Office of the Chief Government Statistician, Zanzibar; Bank of Tanzania computations.
Inflation by Expenditure Category March 2026
Full breakdown of annual and monthly price changes across all consumer expenditure categories, using July 2022 = 100 base.
| Category | Weight (%) | MoM Mar-25 | MoM Feb-26 | MoM Mar-26 | Annual Mar-25 | Annual Feb-26 | Annual Mar-26 |
|---|---|---|---|---|---|---|---|
| All Items (Headline) | 100.0 | 0.2% | 0.5% | 0.3% | 5.1% | 4.8% | 4.9% |
| Food & Non-Alcoholic Beverages 🍽️ | 41.9 | 0.0% | 0.0% | 0.7% | 7.0% | 9.2% | 9.9% |
| Alcoholic Beverages & Tobacco | 0.2 | -1.3% | 0.0% | 0.0% | -0.3% | 3.1% | 4.4% |
| Clothing & Footwear | 6.3 | 1.7% | 0.3% | 0.2% | 4.2% | 3.1% | 1.6% |
| Housing, Water, Electricity & Fuels 🏠 | 25.8 | 0.0% | 2.0% | -0.2% | 4.9% | -0.2% | -0.4% |
| Furnishings & Household Equip. | 4.8 | 0.2% | 0.2% | -0.4% | 3.4% | 2.8% | 2.3% |
| Health | 1.3 | 0.0% | 0.0% | 0.0% | -0.4% | 1.4% | 1.4% |
| Transport 🚗 | 9.1 | 0.5% | 0.4% | -0.1% | 1.5% | 2.2% | 1.7% |
| Information & Communication | 4.2 | -0.3% | 0.0% | -0.3% | 2.8% | -0.1% | -0.2% |
| Recreation, Sport & Culture | 1.1 | 0.3% | 0.0% | -0.2% | 3.6% | 4.1% | 3.6% |
| Education | 1.6 | 0.0% | 0.0% | -0.3% | 2.6% | 1.9% | 1.6% |
| Restaurants & Accommodation 🏨 | 1.4 | 0.0% | 0.0% | -0.3% | 0.6% | 7.1% | 6.8% |
| Insurance & Financial Services | 0.5 | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Personal Care & Misc. Goods | 1.7 | 0.5% | 0.6% | 0.3% | 3.6% | 2.2% | 2.0% |
| Food Sub-total | 40.5 | 0.0% | 0.0% | 0.8% | 6.4% | 9.3% | 10.1% |
| Non-Food Sub-total | 59.5 | 0.3% | 0.9% | -0.2% | 4.1% | 1.4% | 0.9% |
Source: Office of the Chief Government Statistician, Zanzibar. Base: July 2022 = 100.
Retail Pump Prices of Petroleum Products TZS per Litre
Zanzibar's fuel prices have remained elevated but relatively stable through early 2026, with the Strait of Hormuz crisis introducing upside risk going forward.
Source: Office of the Chief Government Statistician, Zanzibar; BOT computations. Chart 3.1.2.
3.2 Government Budgetary Operations
Revenue performance, expenditure structure, and fiscal balance — March 2026
Government Resources — March 2026 Above Target
Zanzibar's government mobilised total resources of TZS 225.3 billion in March 2026, exceeding the monthly target by 1.4%, supported by strong tax administration and enhanced taxpayer compliance.
* All tax categories performed above target except income tax, which fell slightly short of its monthly estimate.
Revenue by Category — Actuals vs Estimates Mar 2026
| Revenue Category | 2025 Actuals (TZS B) | 2026 Estimates (TZS B) | 2026 Actuals (TZS B) | vs Estimate |
|---|---|---|---|---|
| Tax on Imports | 27.7 | 30.9 | 32.2 | ▲ +4.2% |
| VAT & Excise Duties (Local) | 40.0 | 51.9 | 56.5 | ▲ +8.9% |
| Income Tax | 35.0 | 46.5 | 41.1 | ▼ -11.6% (below target) |
| Other Taxes | 32.1 | 45.6 | 45.9 | ▲ +0.7% |
| Non-Tax Revenue | 16.5 | 13.7 | 13.7 | ◆ On target |
| Grants | 2.8 | 23.5 | 36.0 | ▲ +53.2% |
| Total Resources | 154.1 | 222.1 | 225.3 | ▲ +1.4% above target |
Source: Ministry of Finance and Planning, Zanzibar. Figures in billions of TZS.
TZS Billions. Source: Ministry of Finance and Planning, Zanzibar.
Government Expenditure — March 2026 TZS 398B Total
Total government spending reached TZS 398 billion in March 2026, with development expenditure dominating at 61.8% of total spending — a signal of Zanzibar's ambition to scale infrastructure investment, with 83.9% locally financed.
| Expenditure Category | 2025 Actuals (TZS B) | 2026 Estimates (TZS B) | 2026 Actuals (TZS B) | Share of Total |
|---|---|---|---|---|
| Wages & Salaries | 74.2 | 67.5 | 67.5 | 17.0% |
| Other Recurrent Expenditure | 37.9 | 84.6 | 84.6 | 21.2% |
| Development Expenditure 🏗️ | 125.0 | 211.8 | 245.9 | 61.8% |
| Total Expenditure | 237.1 | 364.0 | 398.0 | 100% |
Source: Ministry of Finance and Planning, Zanzibar. Figures in billions of TZS.
Source: Ministry of Finance and Planning, Zanzibar. All values in billions of TZS.
3.3 External Sector Performance
Current account, exports, imports, and Zanzibar's tourism-powered trade surplus — Year ending March 2026
Current Account Surplus Grows 27.9% USD 903.6M
Zanzibar's current account surplus expanded significantly to USD 903.6 million in the year ending March 2026, from USD 706.5 million in the corresponding period of 2025 — a growth of 27.9%, primarily driven by booming services receipts from tourism activities.
| Account Component | Mar-25 (Monthly) | Feb-26 (Monthly) | Mar-26 (Monthly) | Year 2025 (USD M) | Year 2026p (USD M) | % Change |
|---|---|---|---|---|---|---|
| Goods Account (Net) | -43.7 | -57.5 | -58.5 | -484.4 | -569.4 | ▲ Wider deficit +17.5% |
| — Goods Exports | 2.1 | 7.1 | 7.8 | 34.1 | 81.9 | ▲ +140% |
| — Goods Imports (fob) | 45.8 | 64.6 | 66.3 | 518.4 | 651.3 | ▲ +25.6% |
| Services Account (Net) 🌴 | 92.3 | 134.0 | 96.7 | 1,174.5 | 1,434.0 | ▲ +22.1% |
| — Services Receipts | 100.2 | 144.2 | 108.9 | 1,274.2 | 1,551.4 | ▲ +21.8% |
| — Services Payments | 7.9 | 10.2 | 12.2 | 99.7 | 117.5 | ▲ +17.8% |
| Primary Income (Net) | 0.5 | 1.4 | 1.1 | 14.5 | 34.1 | ▲ +135% |
| Secondary Income (Net) | 0.1 | 0.3 | 0.2 | 1.8 | 4.9 | ▲ +172% |
| Current Account Balance | 49.1 | 78.1 | 39.5 | 706.5 | 903.6 | ▲ +27.9% |
Source: Tanzania Revenue Authority, banks, and Bank of Tanzania computations. Table 3.3.1. p = provisional data.
Tourism Performance — A Record-Breaking Year 942,639 Arrivals
Zanzibar recorded 942,639 tourist arrivals in the year ending March 2026 — an increase of 22.8% year-on-year — driven by targeted tourism investments, improved connectivity, and Zanzibar's growing profile as a premium Indian Ocean destination.
Estimated arrivals based on BOT MER data and OCGS Zanzibar records. Year to March 2026 figure: 942,639 (confirmed).
Exports of Goods — Cloves & Non-Traditional Exports Year Ending Mar 2026
Zanzibar's goods export performance was exceptional in the year to March 2026, driven primarily by a dramatic recovery in clove exports — both in volume and, crucially, in price, which surged 47.5% year-on-year.
| Export Category | Unit | Mar-25 (Monthly) | Feb-26 (Monthly) | Mar-26 (Monthly) | Year 2025 (USD '000) | Year 2026p (USD '000) | % Change |
|---|---|---|---|---|---|---|---|
| TRADITIONAL EXPORTS | |||||||
| Cloves — Value | USD '000 | 129.4 | 4,806.2 | 5,127.0 | 3,888.8 | 37,319.9 | +859% (cyclical) |
| Cloves — Volume | '000 Tonnes | 0.1 | 0.7 | 0.7 | 0.9 | 5.7 | +533% |
| Cloves — Unit Price | USD/tonne | 3,486 | 6,860 | 6,845 | 4,413 | 6,507 | ▲ +47.5% |
| NON-TRADITIONAL EXPORTS | |||||||
| Seaweeds — Value | USD '000 | 293.8 | 52.6 | 21.3 | 3,748.8 | 4,173.4 | +11.3% |
| Seaweeds — Volume | '000 Tonnes | 0.5 | 0.1 | 0.0 | 6.7 | 7.5 | +12.1% |
| Manufactured Goods | USD '000 | 1,182.6 | 841.6 | 925.2 | 14,005.8 | 20,649.5 | ▲ +47.4% |
| Fish & Fish Products | USD '000 | 57.6 | 65.3 | 71.9 | 1,754.4 | 1,856.0 | +5.8% |
| Other Exports | USD '000 | 388.7 | 1,325.9 | 1,663.2 | 10,667.4 | 17,886.9 | ▲ +67.7% |
| Sub-total (Non-Traditional) | USD '000 | 1,922.7 | 2,285.3 | 2,681.6 | 30,176.4 | 44,565.8 | ▲ +47.7% |
| Grand Total (All Goods) | USD '000 | 2,052.1 | 7,091.5 | 7,808.6 | 34,065.2 | 81,885.7 | ▲ +140% |
Source: Tanzania Revenue Authority and Bank of Tanzania computations, Table 3.3.2.
Imports of Goods — Growth Driven by Capital Investment Year to Mar 2026
Total goods imports grew 25.6% to USD 651.3 million in the year to March 2026, with capital goods imports more than doubling — a positive indicator of accelerating domestic investment in Zanzibar's infrastructure and productive capacity.
Scale proportional to USD 651M total. Source: Bank of Tanzania, Table 3.3.3.
| Import Category | Mar-25 (Monthly) | Feb-26 (Monthly) | Mar-26 (Monthly) | Year 2025 (USD M) | Year 2026p (USD M) | % Change |
|---|---|---|---|---|---|---|
| Capital Goods 🏗️ | 2.7 | 19.5 | 22.6 | 63.1 | 150.3 | ▲ +138% |
| — Machinery & Mechanical Appliances | 0.7 | 5.3 | 5.6 | 23.3 | 46.6 | +99.6% |
| — Industrial Transport Equipment | 0.8 | 8.0 | 10.3 | 20.8 | 51.9 | +149.5% |
| Intermediate Goods | 32.8 | 35.7 | 34.9 | 386.5 | 404.0 | +4.5% |
| — Industrial Supplies | 6.7 | 16.7 | 17.9 | 113.7 | 181.9 | +60.0% |
| — Fuel & Lubricants ⛽ | 16.8 | 10.7 | 9.6 | 162.7 | 110.6 | ▼ -32.0% |
| Consumer Goods | 5.0 | 9.4 | 8.8 | 68.9 | 96.9 | +40.7% |
| Total Imports (fob) | 40.4 | 64.6 | 66.3 | 518.4 | 651.3 | ▲ +25.6% |
Source: Tanzania Revenue Authority and Bank of Tanzania computations, Table 3.3.3. Values in USD millions.
Zanzibar External Sector — Multi-Year Comparison Quick Reference
Key external sector metrics across three consecutive periods to illustrate Zanzibar's improving external position.
| Indicator | Year 2024 (USD M) | Year 2025 (USD M) | Year 2026p (USD M) | 2025→2026 |
|---|---|---|---|---|
| Exports of Goods & Services | 1,308.3 | 1,308.3 | 1,633.3 | ▲ +24.8% |
| — Goods Exports | — | 34.1 | 81.9 | ▲ +140% |
| — Services Receipts (Tourism) | — | 1,274.2 | 1,551.4 | ▲ +21.8% |
| Imports of Goods & Services | 618.1 | 618.1 | 768.7 | ▲ +24.4% |
| — Goods Imports (fob) | — | 518.4 | 651.3 | ▲ +25.6% |
| Goods & Services Balance | 690.1 | 690.1 | 864.6 | ▲ +25.3% |
| Primary Income (Net) | — | 14.5 | 34.1 | ▲ +135% |
| Secondary Income (Net) | — | 1.8 | 4.9 | ▲ +172% |
| Current Account Surplus | — | 706.5 | 903.6 | ▲ +27.9% |
| Tourist Arrivals | — | ~767,000 | 942,639 | ▲ +22.8% |
Source: Tanzania Revenue Authority, banks, and Bank of Tanzania computations. Tables 3.3.1–3.3.3.
TICGL Synthesis: Zanzibar's Economic Outlook
Key strengths, risks, and forward-looking signals for investors and policymakers
Strengths, Risks & Watch Points — 2026
All data is sourced from the Bank of Tanzania Monthly Economic Review, April 2026 (Section 3.0: Economic Performance in Zanzibar, covering data through March 2026). Tables and sections referenced: Table 3.1.1 (Inflation Developments), Chart 3.1.1 (Annual Inflation Rates), Chart 3.1.2 (Retail Pump Prices), Chart 3.2.1 (Government Resources), Chart 3.2.2 (Government Expenditure), Table 3.3.1 (Current Account), Table 3.3.2 (Exports of Goods), Table 3.3.3 (Imports of Goods). Statistical data from Office of the Chief Government Statistician (OCGS), Zanzibar. Analysis and editorial commentary by TICGL Economic Research, May 2026. This page is for informational purposes only and does not constitute financial or investment advice.