Economy of Tanzania: Wikis


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Economy of Tanzania
Currency Tanzanian shilling (TZS)
Fiscal year 1 July - 30 June
Trade organisations African Union
World Trade Organisation
Statistics [1]
GDP ranking 104th (2004) [2]
GDP $23.71 billion (2004)
GDP growth 5.8% (2004)
GDP per capita $700 (2004)
GDP by sector Agriculture (43.2%), Industry (17.2%)

Services (39.6%) (2004)

Inflation 5.4% (2004)
Pop below poverty line 36% (2002)
Labour force 19 million (2002)
Labour force by occupation Agriculture (80%), Industry and Services (20%) (2002)
Unemployment N/A (2004)
Main industries Agricultural processing (sugar, beer, cigarettes, sisal twine), diamond, gold and iron mining, soda ash, oil refining, shoes, cement, apparel, wood products, fertilizer, salt
Trading Partners [3]
Exports $1.248 billion (2004)
Export - Commodities gold, coffee, cashew nuts, manufactures, cotton
Main partners India 10.2%, Netherlands 6.8%, Japan 6.1%, UK 5.3%, the People's Republic of China 5.2%, Kenya 4.8%, Germany 4.4% {2004)
Imports $1.972 billion (2004)
Imports - Commodities consumer goods, machinery and transportation equipment, industrial raw materials, crude oil
Main Partners South Africa 13.1%, the People's Republic of China 8.8%, India 6.6%, Zambia 5.4%, UAE 5.4%, U.S. 4.8%, UK 4.8%, Kenya 4.3% {2004)
Public finances [4]
Public debt 5% of GDP (2004)
Revenues $1.985 billion (2004)
Expenses $2.074 billion (2004)
Economic aid $1.2 billion (2001)



Significant measures have been taken to liberalize the Tanzanian economy along market lines and encourage both foreign and domestic private investment. Beginning in 1986, the Government of Tanzania embarked on an adjustment program to dismantle socialist economic controls and encourage more active participation of the private sector in the economy. The program included a comprehensive package of policies which reduced the budget deficit and improved monetary control, substantially depreciated the overvalued exchange rate, liberalized the trade regime, removed most price controls, eased restrictions on the marketing of food crops, freed interest rates, and initiated a restructuring of the financial sector.

Current GDP per capita of Tanzania grew 59% in the Nineties.

As of October 2003, a new, 3-year Poverty Reduction and Growth Facility (PRGF) was in negotiation. In June 2003, the Tanzanian Government successfully completed a previous three-year PRGF arrangement with the International Monetary Fund, the successor program to the ESAF. From 1996-1999, Tanzania had an ESAF agreement. Tanzania also embarked on a major restructuring of state-owned enterprises. The program has so far divested 335 out of some 425 parastatal entities. Overall, real economic growth has averaged about 4% a year, much better than the previous 20 years, but not enough to improve the lives of average Tanzanians. Also, the economy remains overwhelmingly donor-dependent. Moreover, Tanzania has an external debt of $7.9 billion. The servicing of this debt absorbs about 40% of total government expenditures. Tanzania has qualified for debt relief under the enhanced Heavily Indebted Poor Countries (HIPC) initiative. Debts worth over $6 billion were canceled following implementation of the Paris Club VII Agreement.

Macro-economic trend

This is a chart of trend of gross domestic product of Tanzania at market prices estimated by the International Monetary Fund with figures in millions of Tanzanian Shillings. See [5]

Year Gross Domestic Product US Dollar Exchange
1980 45,749 8.21 Shillings
1985 115,006 17.87 Shillings
1990 830,693 195.04 Shillings
1995 3,020,501 536.40 Shillings
2000 7,267,133 800.43 Shillings
2005 13,713,477 1,127.10 Shillings


A market near Arusha.

Agriculture dominates the economy, providing more than 60% of GDP and 80% of employment. Cash crops, including coffee, tea, cotton, cashews, sisal, cloves, and pyrethrum, account for the vast majority of export earnings. The volume of all major crops--both cash and goods, which have been marketed through official channels--have increased over the past few years, but large amounts of produce never reach the market. Poor pricing and unreliable cash flow to farmers continue to frustrate the agricultural sector.


Accounting for only about 10% of GDP, Tanzania's industrial sector is one of the smallest in Africa. It has been hit hard recently by persistent power shortages caused by low rainfall in the hydroelectric dam catchment area, a condition compounded by years of neglect and bad management at the state-controlled electric company. Management of the electric company was contracted to the private sector in 2003.

The main industrial activities include producing raw materials, import substitutes, and processed agricultural products. Foreign exchange shortages and mismanagement continue to deprive factories of much-needed spare parts and have reduced factory capacity to less than 30%.

External trade and investment

Tanzanian exports in 2006

Tanzania's past record of political instability has discouraged foreign direct investment. Government steps to improve that climate include redrawing tax codes, floating the exchange rate, licensing foreign banks, and creating an investment promotion center to cut red tape. Tanzania has mineral resources and a largely untapped tourism sector, which might make it a viable market for foreign investment.

The stock market capitalisation of listed companies in Tanzania was valued at $588 million in 2005 by the World Bank.[1]


Zanzibar's economy is based primarily on the production of cloves (90% grown on the island of Pemba), the principal foreign exchange earner. Exports have suffered from the downturn in the clove market. Tourism is an increasingly promising sector, and a number of new hotels and resorts have been built in recent years.

The Government of Zanzibar has been more aggressive than its mainland counterpart in instituting economic reforms and has legalized foreign exchange bureaus on the islands. This has loosened up the economy and dramatically increased the availability of consumer commodities. Furthermore, with external funding, the government plans to make the port of Zanzibar a free port. Rehabilitation of current port facilities and plans to extend these facilities will be the precursor to the free port. The island's manufacturing sector is limited mainly to import substitution industries, such as cigarettes, shoes, and process agricultural products. In 1992, the government designated two export-producing zones and encouraged the development of offshore financial services. Zanzibar still imports much of its staple requirements, petroleum products, and manufactured articles.

See also


  1. ^ World Bank

External links

Government ministries, agencies and sites



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