VISION 2050: Clear path toward a trillion-dollar economy by 2050

MWANZA: ACCORDING to Vision 2050, by the year 2050, Tanzania aims to attain upper-middle-income country status, with a Gross Domestic Product (GDP) of approximately one trillion US dollars and an average per capita income of 7,000 US dollars per year.

This is a major economic and social goal that requires significant reforms in the economic, investment and business sectors, which are fundamentally the main engines of modern economic growth.

To achieve these targets, Tanzania must increase its economic growth rate from the current average of 5–6 per cent to at least 7–8 per cent per year over the next three decades.

One key area that requires attention is improving the investment climate in order to attract both domestic and foreign capital.

Currently, Foreign Direct Investment (FDI) in Tanzania is estimated at between 1 and 1.5 billion US dollars per year, a level that is insufficient for an economy aiming to reach one trillion dollars.

To raise this figure to at least 5 to 10 billion US dollars annually, there must be a reduction in bureaucracy in business registration, strengthening of the legal framework that protects investors, assurance of stable tax and trade policies and the establishment of fast mechanisms for resolving commercial disputes.

The experience of countries such as Vietnam shows that such reforms can significantly increase the inflow of foreign investment within a short period. At the same time, Tanzania needs to undertake an industrial transformation by moving toward a valueadded economy.

At present, a large share of exports consists of raw materials or low-value products, which reduces national earnings.

To change this direction, it is important to invest in Special Economic Zones (SEZs), provide tax incentives for investors in processing industries and strengthen linkages between the agricultural and industrial sectors.

For example, processing crops such as cotton, cashew nuts, or coffee within the country could increase export value by more than two or three times, thereby raising national revenue by billions of dollars each year.

In addition, access to capital for the private sector should be given high priority. Currently, credit to the private sector in Tanzania is below 20 per cent of GDP, while in developed countries it often exceeds 50 per cent, this indicates a major financial gap that is hindering business growth.

The government and financial institutions should expand inclusive financial services, strengthen the stock and capital markets and establish businessfriendly credit systems for small and medium-sized enterprises.

Given that this sector contributes more than 30 per cent of GDP and provides over 80 per cent of employment, investment in it is crucial for raising citizens’ incomes.

In the current era, digital transformation is unavoidable in promoting business and investment.

The global economy is increasingly shifting toward digital systems where much of commerce takes place online.

Tanzania, like other countries around the world, must further expand access to high-speed internet, especially in rural areas, facilitate digital payment systems and promote the growth of e-commerce.

At present, fewer than half of Tanzanians have access to internet services, a situation that limits economic opportunities.

By 2050, it is important for this level to rise to at least over 90 per cent in order to enable digital competitiveness and economic inclusion. Modern infrastructure is another important pillar in promoting trade.

Although Tanzania has already begun investing in major projects such as the Standard Gauge Railway (SGR), ports and roads, there is still a need to increase investment in order to reduce transport costs.

Currently, these costs in Africa account for 30 to 40 per cent of the value of goods, a figure that is high compared to the global average.

Reducing these costs will help improve the competitiveness of Tanzanian products in international markets and attract more investors.

Likewise, Tanzania should make full use of opportunities in regional and international markets such as the East African Community (EAC) and the African Continental Free Trade Area (AfCFTA), which covers more than 1.3 billion people and a combined GDP of 3 trillion US dollars.

To benefit from these markets, it is important to remove non-tariff trade barriers, simplify crossborder trade and increase the production of competitive goods for the African market.

Increasing exports within Africa could boost foreign exchange earnings and reduce dependence on overseas markets. A skilled and innovative human resource base is another key pillar of successful investment and trade.

According to Vision 2050, by that year Tanzania will have a large youth population that can become a productive workforce if properly empowered.

Therefore, it is essential to invest in technical education, technology and modern skills, as well as promote research and innovation.

Currently, investment in research and development stands at below 0.5 per cent of GDP, a level that should be increased to stimulate innovation and technological advancement.

Good governance and accountability are also fundamental to investment success, as investors require legal certainty, transparency in decision-making and protection of their assets.

The government should strengthen the fight against corruption, improve public services and ensure the proper use of national resources.

Studies show that countries with high levels of transparency and accountability attract more investment and experience stronger economic growth.

Overall, achieving a one-trillion-dollar economy by 2050 depends on Tanzania’s ability to implement these reforms effectively and consistently.

The investment and business sectors must be given top priority in national policies and development plans.

If these steps are taken seriously, Tanzania can build a competitive, inclusive and sustainable economy that benefits all its citizens.

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Stakeholders’ views Prof Odass Bilame from University of Dodoma (UDOM) said it is possible for Tanzania to attain upper-middle-income country status, with a GDP of approximately one trillion US dollars and an average per capita income of 7,000 US dollars annually.

“What is needed is political will so that we can get there. Everyone must participate in productive activities and service delivery, and the issue of employment must be given priority by the government because that is what will drive economic growth,” Prof Bilame explained.

A Mwanza resident, Mr John Masanja, said for Tanzania to achieve this goal, it is important for the government to invest in productive agriculture, which will drive inclusive economic growth by 2050.