Tanzania’s Economic Transformation: Aiming for Prosperity in Africa

Tanzania is on track to become one of Africa’s wealthiest countries, having doubled its wealth in 15 years. The economy is diversifying significantly, with growth in manufacturing, tourism, and agriculture. Recent foreign investments highlight its attractive investment climate, yet risks from regional conflicts and global economic factors remain.

Tanzania is emerging as a prominent contender to become one of Africa’s three richest nations within a five-year horizon, having made remarkable progress in economic development over the past 15 years. Its economy is significantly driven by sectors such as manufacturing, tourism, agriculture, and financial services, reflecting a transformation towards a more diversified economic model.

The World Economic Forum has highlighted that Tanzania’s wealth doubled between 2000 and 2015, with the wealth per capita increasing from £194 to £372. During this period, the population meeting basic consumption needs rose by 6%, while those living in extreme poverty declined by 2%. This economic shift is attributed to the strategic policies implemented by both former President John Pombe Magufuli and current President Samia Suluhu Hassan.

According to Tenda Msinjili, head of the banking and finance department at Clyde & Co. in Tanzania, the nation has built a reputation for peace and stability, making it an appealing destination for foreign investment. In 2023, Tanzania attracted £1 billion in foreign direct investment, reflecting the growing confidence among investors.

Global Finance reported that Tanzania is attracting investors keen to capitalize on sectors such as mining, energy, agriculture, tourism, and manufacturing. This momentum stems from policies ensuring contract protection, dispute resolution, infrastructure enhancement, and the exploitation of abundant natural resources, including gold, diamonds, gas, and uranium.

In terms of economic performance, Tanzania’s GDP achieved a growth rate of 4.8% in 2020, reaching £69.3 billion and establishing itself as the second largest economy in East Africa, following Kenya. The finance minister forecasted a growth of approximately 6% in 2025, with the economy projected to expand to £105 billion by 2028, as per the International Monetary Fund.

Despite this progress, officials Mwigulu Nchemba and Emmanuel Tutuba have acknowledged potential risks that could hinder growth, including regional conflicts, fluctuations in commodity prices, global economic downturns, and climate-related natural disasters. Tanzania’s primary export partners include India, the United Arab Emirates, South Africa, Kenya, and Rwanda, while its main import partners are China, India, the UAE, the Democratic Republic of the Congo, and Saudi Arabia.

Tanzania is on a promising trajectory to become one of Africa’s wealthiest nations, driven by significant economic reforms and a diversified economy. The country has attracted substantial foreign investment and demonstrated consistent GDP growth, setting ambitious targets for the future. However, ongoing challenges, including regional stability and climate impacts, remain critical considerations for continued success.

Original Source: www.express.co.uk