Economy of Tanzania

Tanzania has a developing economy that is considered lower-middle income. Its economy is centered around manufacturing, tourism, agriculture, and financial services. Since 1985, Tanzania has been changing from a planned economy to a market economy. Even though the total amount of goods and services the country makes has gone up, the amount for each person dropped at first and only went back above the old level around 2007.

In 2022, the value of everything Tanzania makes was about USD 174.7 billion. This makes Tanzania have the second largest economy in East Africa, after Kenya, and the seventh largest in Sub-Saharan Africa.

Tanzania has had strong economic growth compared to the world, which is common for African countries. But in the last five years, according to the World Bank, growth has been the slowest since the year 2000. Looking ahead, things seem positive, with growth expected to be around 8 percent in 2020/21, helped by big spending on building new roads, schools, and other important places.

On 7 September 2021, the IMF agreed to give Tanzania US$567.25 million to help the country deal with the challenges of the COVID-19 pandemic. This money is meant to support health efforts and help the economy during this difficult time.

History

Tanzania has been changing its economy to work more like a market system. In 1986, the government started a plan to move away from strict controls and let businesses help grow the economy. This included changing money rules, lowering prices on some things, and letting people sell more crops.

The country's money growth improved, and Tanzania worked with groups like the International Monetary Fund to help during tough economic times. The country has also been selling some government-run businesses to private owners. Even with these changes, many people in Tanzania still face challenges, and the country depends on help from other nations.

Macro-economic trend

This is a chart showing how Tanzania's economy has grown over time, with numbers in millions of shillings.

As of 2025, the average pay for people living in cities in Tanzania was about TZS 494,812 (about $189), while people living in the countryside earned around TZS 367,034 ($140). In July 2025, the minimum pay for government workers went up from TZS 370,000 to TZS 500,000.

Tanzania has a big gap between the richest and poorest people. In 2023, the top 1% of people earned 17.90% of all the money, while the bottom half earned only 14.10%. The country’s economy grew by 5.5% in 2024. Except for a slow year in 2020 when it grew only 2%, the economy has been growing between 4.5% and 7.7% each year since 1999.

Year	Gross Domestic Product	US Dollar Exchange
1980	45,749	8/21
1985	115,006	17/87
1990	830,693	195/04
1995	3,020,501	536/40
2000	7,267,133	800/43
2005	13,713,477	1,127/10
2010	–	1,515/10

Year	GDP (in billion US$ PPP)	GDP per capita (in US$ PPP)	GDP (in billion US$ nominal)	GDP growth (real)	Inflation rate (in Percent)	Government debt (in % of GDP)
1980	21.9	1,475	11.1	3.3%	30.2%	n/a
1981	23.0	1,500	12.0	0.5%	25.7%	n/a
1982	24.5	1,539	12.6	0.6%	28.9%	n/a
1983	25.7	1,565	13.3	2.4%	27.1%	n/a
1984	27.7	1,601	13.7	3.4%	36.1%	n/a
1985	29.8	1,660	14.5	4.6%	33.3%	n/a
1986	31.2	1,726	15.0	6.6%	32.4%	n/a
1987	33.7	1,772	15.9	5.9%	29.9%	n/a
1988	35.3	1,840	16.5	4.4%	31.2%	n/a
1989	37.9	1,916	17.5	3.8%	25.8%	n/a
1990	39.3	2,003	18.4	7.0%	36.4%	n/a
1991	42.3	2,126	19.9	2.1%	25.2%	n/a
1992	44.3	2,229	22.4	0.6%	20.7%	n/a
1993	47.3	2,423	23.5	1.2%	26.1%	n/a
1994	49.9	2,694	24.0	1.6%	37.9%	n/a
1995	52.8	2,972	25.5	3.6%	26.8%	n/a
1996	56.3	3,144	27.7	4.5%	21.0%	n/a
1997	60.5	3,345	29.2	3.5%	16.1%	n/a
1998	64.1	3,550	31.2	3.7%	12.8%	n/a
1999	67.4	3,732	33.5	4.8%	7.9%	n/a
2000	70.2	3,978	36.9	4.9%	6.0%	n/a
2001	75.5	4,269	39.6	6.0%	5.1%	50.2%
2002	83.2	4,438	43.5	6.9%	4.6%	47.0%
2003	91.3	4,641	46.3	6.4%	4.4%	44.3%
2004	100.4	5,001	50.3	7.2%	4.1%	44.6%
2005	110.3	5,307	55.6	6.5%	4.4%	46.8%
2006	121.9	5,672	59.9	4.7%	7.3%	32.8%
2007	132.5	6,041	63.3	8.5%	7.0%	21.6%
2008	142.5	6,401	68.0	5.6%	10.3%	21.5%
2009	155.1	6,902	73.7	5.4%	12.1%	24.4%
2010	173.5	7,452	78.5	6.4%	7.2%	27.3%
2011	186.9	7,745	84.9	7.9%	12.7%	27.8%
2012	201.0	8,010	92.0	5.1%	16.0%	29.2%
2013	215.0	8,590	98.1	7.2%	7.9%	30.9%
2014	237.3	8,983	106.5	7.0%	6.1%	33.8%
2015	265.7	9,505	115.0	6.2%	5.6%	39.2%
2016	292.5	10,000	124.0	6.9%	5.2%	39.8%
2017	315.0	10,599	133.0	6.8%	5.3%	40.7%
2018	340.4	11,095	142.5	7.0%	3.5%	40.5%
2019	365.9	11,550	152.9	7.0%	3.4%	39.1%
2020	390.0	11,900	160.0	4.8%	3.3%	39.8%
2021	415.1	12,305	167.5	4.9%	3.7%	42.1%
2022	440.2	12,675	174.7	4.7%	4.4%	42.3%
2023	465.9	12,995	180.9	5.2%	4.0%	42.6%

Agriculture

Main article: Agriculture in Tanzania

Farmers clearing a rice field manually

Tanzania's economy relies a lot on farming. Farming makes up about 29% of the country's total money made, called gross domestic product. It also provides jobs for half of the people working in Tanzania and creates most of the things the country sells to other countries.

In 2018, Tanzania grew lots of important foods, such as:

5.9 million tons of maize;
5 million tons of cassava;
3.8 million tons of sweet potato;
3.4 million tons of banana;
3 million tons of rice;
3 million tons of sugarcane;

Tanzania also grew smaller amounts of other foods like beans, peanut, and orange. Because so much of the country depends on farming, bad weather or changes in prices can make life harder for many people.

Industry

Industries are a big and growing part of Tanzania's economy, making up 22.2 percent of the country's money (GDP) in 2013. This part of the economy includes mining, making things, electricity, natural gas, water, and building.

Mining

Mining added 3.3 percent to Tanzania's GDP in 2013. Most of the money from selling minerals comes from gold, which was 89 percent of the value in 2013. Tanzania also sells a lot of special stones, like diamonds and tanzanite. All the coal that Tanzania makes is used inside the country.

Tanzania also gets materials like Pozzolana, Salt, Gypsum, Kaolinite, Silver ore, Copper, Phosphate, Tanzanite, Tin, Graphite, and Bauxite.

Buzwagi Gold Mine

Gold mining in Tanzania began a long time ago, during the time when Germany ruled the area. The first gold mine, called the Sekenke Gold Mine, started in 1909. Later, new mines opened, like the Golden Pride mine in 1999 and the Buzwagi mine in 2009.

In 2012, a company found a lot of nickel, and plans were made to start mining it by the end of 2015. Chinese companies are also very interested in Tanzania's minerals and have made big plans to help develop them.

Electricity

The main company that gives electricity in Tanzania is called Tanzania Electric Supply Company Limited (TANESCO). In 2013, Tanzania made 6.013 billion kilowatt hours of electricity, which was a little more than in 2012. But only 15 percent of people in Tanzania could use electricity in 2011. Sometimes, there isn't enough electricity, especially when there is very little rain and the water-powered factories can't work well.

In 2013, most of Tanzania's electricity came from natural gas (49.7 percent), then from water power (28.9 percent), and some from coal and other places (20.4 percent). The government is building a big pipe for natural gas from Mnazi Bay to Dar es Salaam, which should be finished in 2015. This will help Tanzania make more electricity.

Songo Songo Gas Plant

Natural gas

Since 2010, people have found a lot of natural gas in Tanzania, about 25 to 30 trillion cubic feet. In 2013, the value of the natural gas made was US$52.2 million, which was more than the year before.

People started getting gas from the Songo Songo Island in 2004, and in 2013, they got over 35 billion cubic feet from there. There is also a newer place called Mnazi Bay that makes gas, and most of it is used to make electricity in Mtwara.

In 2024, Tanzania got permission to develop the Ntorya gas field for 25 years. This will help the country use its natural gas better, with plans to start selling gas soon and maybe make even more in the future.

External trade and investment

Tanzanian exports in 2006

Tanzania's stable government has helped attract foreign investment. The country is working to make it easier for businesses to invest by changing tax rules, allowing foreign banks, and setting up a special center to help investors.

Tanzania has valuable minerals and many places for tourists to visit, which could attract more foreign money. In 2005, the total value of companies listed on Tanzania's stock market was about $588 million, according to the World Bank.

Zanzibar

Zanzibar's economy mainly relies on growing cloves, especially on the island of Pemba, which is a big source of money for the island. However, the clove market has had some problems, affecting exports.

The government of Zanzibar has made changes to help the economy grow, like allowing more places to exchange money, which has made more goods available for people to buy. They also plan to turn the port of Zanzibar into a free port with help from other countries. Right now, Zanzibar makes some things like cigarettes, shoes, and processed foods, but it still needs to bring in many basic items, fuels, and other manufactured goods from other places.

Literature

Here are some books and articles about Tanzania's economy:

Paul Collier wrote a book called Labour and Poverty in Rural Tanzania. Ujamaa and Rural Development in the United Republic of Tanzania in 1991.
Klocke and Jerven wrote an article in 2025 titled The Growth, Inequality, and Poverty Nexus: Lessons from Long-term Trends in Tanzania, 1961–2017.