Mega investments to lift growth to 6.3pc

DODOMA: THE government has said major investments in mining, gas and energy projects are set to propel the country’s economic growth by 6.3 per cent this year.

Minister for finance, Ambassador Khamis Mussa Omar, said the growth momentum is being driven by large-scale projects, including the Liquefied Natural Gas (LNG) initiative and strategic mineral developments.

Opening a virtual meeting with experts from Fitch Ratings, the minister noted that the economy has continued to strengthen, rising from 5 per cent in 2024 to 5.9 per cent last year, with further improvement expected this year.

Recent assessments also indicate that Tanzania’s economic growth remains robust at around six per cent, underpinned by strong investment in the mining sector and major infrastructure projects.

Speaking on the country’s economic outlook, Ambassador Omar said discussions with Fitch Ratings highlighted rapid progress in the mining industry, with several large-scale projects nearing implementation and expected to make a significant contribution to economic growth.

He cited the over 500 million US dollar Nyanzaga Gold Project in Mwanza, as well as iron and aluminium projects in Liganga and Songea, among key investments set to strengthen the economy.

“The sector is attracting substantial investment that will provide a strong boost to our economy,” he said.

The minister said mining continues to play a central role in economic expansion, driven by growing investment in mineral extraction and value addition.

He also pointed to the Liquefied Natural Gas (LNG) project and a recently signed 442 million US dollar niobium mining project as strategic investments expected to further accelerate growth.

According to Ambassador Omar, the government is implementing reforms to improve the business environment, including acting on recommendations of the Tax Reforms Commission to enhance competitiveness, sustain investor confidence and support long-term economic growth.

When presented the 2026/27 National Development Plan and the State of the Economy Report in Parliament, Minister of State in the President’s Office (Planning and Investment), Prof Kitila Mkumbo, said the economy expanded by 5.9 per cent in 2025, up from 5.6 per cent in 2024, demonstrating resilience despite global economic uncertainties and geopolitical tensions.

The country’s Gross Domestic Product (GDP) rose to 234.1tri/- (91.8 billion US dollars) in 2025 from 212.0tri/- (81.2 billion US dollars) recorded in 2024.

Agriculture remained the largest contributor to GDP, accounting for 24.3 per cent, followed by construction (11.9 per cent), mining and quarrying (10.3 per cent), trade and repair services (8.6 per cent) and transport and storage (8.3 per cent).

The fastest-growing sectors were finance and insurance, which expanded by 15.7 per cent, followed by electricity and gas (11.8 per cent), mining (9.4 per cent), information and communication (8.8 per cent), arts and entertainment (8.5 per cent) and transport and storage (8.0 per cent).

Inflation remained stable at an average of 3.3 per cent in 2025, staying within the government’s medium-term target of 3.0 to 5.0 per cent and below the convergence thresholds set by both the East African Community (EAC) and the Southern African Development Community (SADC).

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The report also showed strong growth in foreign direct investment (FDI). According to the World Investment Report 2025, FDI inflows increased by 28.3 per cent to 1.72 billion US dollars in 2024 from 1.34 billion US dollars in 2023, with mining attracting the largest share, followed by finance and insurance, manufacturing and information and communication technology.

Looking ahead, the government targets 6.3 per cent economic growth in 2026, while keeping inflation within the target range, increasing domestic revenue collection and creating 1.7 million jobs. The objectives will be supported by sustained investment in infrastructure, industrialisation, energy development and reforms aimed at strengthening the country’s resilience to global economic challenges.