DAR ES SALAAM: TANZANIA’S economic landscape has undergone a notable shift since President Samia Suluhu Hassan assumed office on March 19, 2021.
Navigating the turbulent waters of a post-pandemic world and grappling with the ripple effects of global conflicts, the nation has demonstrated remarkable resilience, extending its two-decade macroeconomic success story.
Economic growth has maintained a positive trajectory. After a slight dip to 4.5 per cent in 2021, the economy rebounded, achieving 5.1 per cent growth in both 2022 and 2023.
Projections indicate a further increase to 5.6 per cent in 2024, demonstrating the economy’s resilience and potential for sustained growth.
President Samia Suluhu Hassan has spearheaded strategic policy adjustments to improve the business environment, unlocking foreign investment and driving growth.
These adjustments include streamlining bureaucratic processes, enhancing transparency and investing in crucial infrastructure projects.
The Standard Gauge Railway (SGR), the Julius Nyerere Hydropower Project and the expansion of Dar es Salaam Port are prime examples, aimed at boosting regional trade and ensuring reliable power to fuel the growing economy.
The impact of these efforts is vividly reflected in the FDI inflow data, which shows a consistent upward trend, contrasting with declines observed elsewhere.
The Tanzania Investment Report 2024 reveals a significant rebound from the 943.8 million US dollars dip in 2020, caused by the Covid-19 pandemic’s global impact, to 1.19 billion US dollars in 2021, 1.4 billion US dollars in 2022 and a notable 1.65 billion US dollars in 2023.
This steady upward trajectory underscores investor confidence. The 2023 figure is particularly significant, representing a 14.7 per cent increase from the previous year.
This growth is especially noteworthy given the global context: According to the World Investment Report 2024, global FDI flows declined by 2 per cent to 1.3 trillion US dollars in 2023 amid an economic slowdown and rising geopolitical tensions.
Many African nations also witnessed a downturn, making Tanzania’s performance even more striking.
The Tanzania Investment Report, compiled by the Bank of Tanzania (BoT), Tanzania Investment Centre (TIC) and the National Bureau of Statistics (NBS), attributes these achievements to a combination of factors: Tanzania’s stable political environment, consistent economic growth, controlled inflation and a narrowing current account deficit have collectively created a favourable investment climate.
The government’s strategic policy reforms, targeted investment promotion initiatives and commitment to improving the business environment have been crucial in fostering this growth.
The tourism industry, a key foreign exchange earner contributing 17.2 per cent to the economy, has demonstrated remarkable resilience and growth following the severe disruptions of the Covid-19 pandemic.
ALSO READ: Revenues surge by 78pc
Data from the National Bureau of Statistics (NBS) reveals a clear upward trend in tourist arrivals, signalling a strong recovery and Tanzania’s increasing popularity as a top travel destination. From 620,867 arrivals in 2020, numbers surged to 922,692 in 2021, representing a 48.61 per cent increase.
This positive momentum continued into 2022, with arrivals reaching 1,454,920, marking an impressive 57.68 per cent growth.
The following years maintained this trajectory, with 1,806,359 arrivals in 2023 and a projected 2,141,895 arrivals in 2024. While the percentage increase has moderated, the absolute numbers continue to climb, showcasing the sustained growth of Tanzania’s tourism sector.
The agriculture sector, employing approximately 66 per cent of the workforce and contributing 26.5 per cent to the economy, has also experienced growth, thanks to significant reforms and initiatives aimed at boosting output and ensuring food security.
The cornerstone of these efforts is the “Agenda 10/30” strategy, launched by President Samia Suluhu Hassan in 2022, which targets a 10 per cent annual growth rate in the agricultural sector by 2030 from the 4.2 per cent in 2023 up from 3.3 per cent in 2022.
This ambitious plan encompasses a wide range of measures, including expanding irrigation, increasing the use of improved agricultural inputs, promoting mechanisation, establishing “block farms” to aggregate smallholder farmers and increasing agricultural exports.
The government has also demonstrated its commitment by significantly increasing budgetary allocations to the sector.
Additionally, there is a growing emphasis on integrating technology and modernisation into agriculture, including agricultural digitalisation, improved seed varieties and modern farming techniques.
Recognising the importance of smallholder farmers, initiatives are being implemented to provide them with access to inputs, credit and markets.
The government’s determined efforts to transform its agricultural sector are showing promise, with the potential to improve food security, boost agricultural exports, create employment opportunities and contribute to overall economic growth.
Tanzania’s economic resurgence is undeniably robust, a testament to strategic policy adjustments amidst global uncertainties.
The robust growth of the economy, complemented by a thriving tourism sector, consistent rises in Foreign Direct Investment (FSIs) and transformative agricultural reforms, showcases the nation’s commitment to diversification.
These converging positive trends paint a compelling picture: Tanzania is not just navigating global challenges, but actively capitalising on its strengths to build a diversified and resilient economy, promising sustained prosperity for its people.
I congratulate the honourable Dr. Samia Suluhu the president. United Republic of Tanzania, for her efforts to make sure that Tanzanians have a better life in their country. My only concern is about misuse of public funds by district officials (DEDs). Many funds meant for development at district level are still being chewed by the so called “Mchwa” in these offices. I have also not heard the discussion by the parliament on CAG report. These are areas that we Tanzanians need to see her excellency take stern measures to ensure accountability.