Tanzania is poised for economic growth.
Tanzania has enjoyed relative freedom from internal strife since independence, but domestic stability has not translated into economic prosperity. On a per capita basis, Tanzania is one of the poorest countries in the world: Nearly 68% of the country’s population falls below the poverty line. However, Tanzania’s macroeconomic performance is strong, with a relatively high rate of annual GDP growth at 6% to 8% annually, coupled with a low inflation rate.
An aging and crumbling infrastructure plagues Tanzania, but it has committed to improvement. In 2013, the country completed the world’s largest Millennium Challenge Compact grant, worth $698M, aimed at benefitting more than 5 million people by investing in the country’s infrastructure improvement projects.
- Tanganyika (today's mainland Tanzania) designated as a British Mandate by the League of Nations.
- Tanganyika gains independence from Britain with Julius Nyerere serving as the prime minister. Zanzibar gains independence two years later.
- Tanganyika and Zanzibar merge to form the United Republic of Tanzania. Julius Nyerere is inaugurated as the President of the unified country.
- Tanzanian constitution is amended to allow multi-party politics.
- Statoil and Exxon Mobil discover major gas reserves off the coast of Tanzania.
- Tanzania completes the world’s largest Millennium Challenge Compact Grant, worth $698M.
- John Magufuli is elected president and declares a war on corruption and waste.
Demographic + Economic Overview
Tanzania’s population includes more than 120 different indigenous African ethnic groups. Unlike many African countries, Tanzania does not have one single politically or culturally dominant ethnic group. While Kiswahili and English are the official languages, Arabic is also widely spoken in Zanzibar, where the population is almost entirely Muslim. The literacy rate among adults is nearly 71%.
- Income Level Classification:
- Lower Middle
- Higher Middle
Despite being one of the world’s poorest economies, the Tanzanian economy has grown substantially in recent years, driven by information and communications, construction, manufacturing and other services. The World Bank forecasts GDP growth in Tanzania to remain above 7% in the medium-term forecast, supported by public investments in infrastructure that will allow significant trading links to other inland countries. While agriculture remains the mainstay of the economy, the industrial and services sectors are projected to drive growth in the medium term.
Tanzania’s economy depends heavily on agriculture, which provides 85% of exports, employs approximately 80% of the workforce, and accounts for more than 25% of the country’s GDP. The country’s financial sector has expanded in recent years, with foreign-owned banks accounting for nearly half of the banking industry’s total assets. Tanzania’s natural resources (gold, diamonds, other minerals, and natural gas) and tourism also help to boost its economy.