Located in East Africa, Tanzania has changed and developed rapidly over the past 50 years. With a new leader nicknamed as “the bulldozer” for his proactive road-building drive, and various businesses springing about. Tanzania’s economy seems to be sustaining long-term growth with the exception of some external shocks.
The very important sectors, that contribute greatly to the wellness and security of Tanzania’s economy would definitely be tourism, mining, and agriculture. All these industries have managed to develop into more than a primary sector and now have a more competitive service industry.
For a long time, many African countries solely relied on agriculture to build their economy. In more rural regions in Tanzania such as Tabora, this is still very much a reality. 30% of the country’s GDP comes from agriculture with more than 60% of job opportunities from the same sector as well.
According to Tanzania Invest, the main exported cash crops in the whole country would be tobacco, cotton, sisal, cashew nuts, coffee, tea, and cloves. Focus on exporting these goods the most has led to crop production increasing by 44% from 2008-2013. According to Tanzania invest, Tobacco is the most exported cash crop generating USD 318M in 2015 followed by cashew nuts- USD 201M and then coffee at USD 162M.
There are also various governmental agricultural groups that have been formed in order to improve food security and agricultural productivity. The most notable are SAGCOT- Southern Agricultural Growth Corridor of Tanzania and TADB- Tanzania Agriculture Development Bank.
More than 80% of the total primary energy supply in Tanzania comes from biomass- mainly charcoal and burning firewood. While petroleum is merely 9% and electricity 4.5%, however, the recent discovery of natural gas might indeed change these statistics, because Tanzania has now entered the world energy map.
Although coal is heavily utilized in Tanzania, compared to other African countries such as South Africa and Zimbabwe. The coal reserves are not that abundant at 1.9bn. This, however, is only 25% of the discovered reserves in Tanzania, government funded projects are now beginning to explore other possible reserves.
Tanzania is also a net importer of petroleum products, having imported around 4.6 billion of petroleum products.
The banking sector of Tanzania sought liberation from the government in the 90’s, in order to sustain the country’s economic growth.
As of March 2015, there are now 56 licensed banks and other financial institutions in Tanzania compared to the 38 that was present during 2009. The Bank of Tanzania recently released its monetary policy and goals for 2016-17. It hopes to achieve 7.3% of real GDP growth whilst also remaining in the single digit range of inflation.
Data collected by Tanzania Invest shows that the BOT total assets came to TZS19, 522.92 billion for 2013-14; data for 2015-16 is still being gathered. Although inflation has always been somewhat of a problem for Tanzania, data shows that it has reduced over the recent years from 6.5% in 2013 to 4.3% in 2015.
Due to the creation of recent real estate space, the real estate and housing sector has benefited greatly from this. The current real estate projects have brought many opportunities for foreign investment and as well as local.
The rapid growing demand for the housing sector is driven by the even more rapid growth of the population that is at a current estimate of 53.47 million. This number is expected to more than double by 2050. The current housing demand in Tanzania stands at 200,000 annually with a current housing shortage of 3 million houses.
In Tanzania, mining comprises of metals, industrial minerals, and fuel minerals. In 2014, it was found that mining contributed 3.7% to the annual GDP. This is due to the high global demand for the industrial minerals that include:
According to Tanzania’s development and vision plan, by 2025 Mining’s contribution to the nation’s annual GDP should rise to 10% minimum. The total of diamond exports alone came to USD 61.7M while this was the amount of all the other industrial minerals combined.
The 4th largest producer of Gold in Africa happens to be….Tanzania! This gold is mainly exported to South Africa, India, Switzerland and Australia.
Moreover, recently there was a discovery of massive Uranium deposits in Mkuju. The Russian prime minister, Dennis Manturov hopes to begin operating the mine in 2018.
Surpassing the agriculture sector three times over, tourism is now Tanzania’s biggest contributor to the GDP of the economy- bringing in a whopping number of USD 1 billion! With several luxury hotels in the mainland and Zanzibar, great hospitality and a peaceful democratic government, it is no surprise why Tanzania has become an ideal oasis globally.
In 2015, it was revealed that the service sector in Tanzania has managed to contribute 49% to the overall GDP. This was a shock to many as the service sector in Africa is often overlooked in general, but no more.
In fact, an analysis by All Africa show that 21% of the formal employment is in the service sector, with this number likely to double because of the huge formal sector in the country.
Greener pastures lay ahead
Overall, throughout the years Tanzania’s economy has developed greatly and different sectors seem to only be improving. Although infrastructure could be greatly improved, the direction the country is headed as a whole is a good one.