Context

Tanzania is one of East Africa’s most politically stable countries, a factor which has proven critical to securing the country’s strong economic performance.

Despite these gains, Tanzania’s faces challenges that need to be addressed in order to generate broad-based inclusive growth for the majority of the country’s 55 million people. World Bank data shows that while poverty rates have dropped from 60 percent in 2005 to 47 percent in 2016, estimates are that around 22 percent of the population live in extreme poverty, that is, on less than US$0.60 per day. Other challenges include a growing rate of youth unemployment with requires solutions   and skills to meet the needs of around 800,000 young people who enter the job market very year.

According to the African Development Bank economic growth has slowed since the last quarter of 2016, following real GDP growth of at least 7% between 2013 and 2016. Growth in the first two quarters of 2017 averaged 6.8% and was estimated at 6.5% for the full year. Construction, mining, transport, and communications were key growth drivers in 2017. Growth is projected to remain robust at 6.7% in 2018 and 6.9% in 2019, representing one of the best performances in East Africa. A tightening trade deficit, with a drop in imports outweighing a decline in exports, is likely to support growth. Public investment, particularly with ongoing implementation of larger infrastructure projects, is expected to boost growth. However, uncertainty in the business environment, combined with stalling private-sector credit growth, could hinder private-sector investment.

DFID Tanzania Strategy

Women and girls: The UK is helping 285,000 additional girls and women take control of decisions about when they have children and how many. The UK will help provide a future for Tanzanian children by improving the quality of their education and tackling high rates of malnutrition.

Economic development: The UK is helping over 750,000 farmers get their produce to markets, providing improved energy access to over 400,000 people, and increasing the capacity of Dar es Salaam port by two thirds. This will help Tanzania create jobs and expand international trade.

Building institutions: The UK is supporting the more efficient use of public funds and building the capacity of the government to deliver services such health and education. The UK will help Tanzania to increase its tax revenue by around 15% a year and to fight organised crime and corruption.

World Bank Doing Business

Tanzania initiated a number of reforms in 2016 which have helped to boost business confidence and have contributed to an improvement in its Doing business ranking for 2018. Tanzania now ranks 137 (out of 190 economies) in the ease of doing business. The Distance to Frontier indicator rose from 53.93 in 2017 to 54.04 in 2018.  In 2018 one reform is reported – Dealing with Construction Permits: Tanzania made dealing with construction permits easier by implementing a one-stop shop and streamlining the building permit process. However there was also a report of regression in Registering Property: Tanzania made registering property more expensive by increasing the land and property registration fee.