BERF’s Work in Tanzania

BERF has yet to complete work in Tanzania

DFID Tanzania Strategy

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

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

Context

The Tanzanian economy has grown at around 7% per year for the last 15 years. But 25 million Tanzanians still live on less than $1.90 a day. 800,000 young Tanzanians enter the job market every year with few job opportunities. While most children go to school, the quality of education they receive is poor. With the UK as the largest provider of Foreign Direct Investment in Tanzania, DFID work to strengthen the economy will create further investment opportunities for British business. At the same time, a stronger economy will help to manage the stability, migration and security risks associated with a large, young and disillusioned population.

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. According to the African Development Bank eonomic 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 in 2017 and beyond. However, uncertainty in the business environment, combined with stalling private-sector credit growth, could hinder private-sector investment.

According to the World Bank, the economy has been aided by strong growth in agricultural and services sectors. Low inflation, a narrowing current account deficit, relatively stable currency and a healthy gross international reserves are viewed as further confirmation of the country’s economic achievements.

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.

Reforms to the tax system has helped to reduce corruption which is a burden for the poor and a waste of scarce resources.

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.