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Since 2000, Tanzania has seen an economic growth of an
average of 6.7 percent each year. This is well above average
for the region and one of the highest in Africa. National
poverty statistics show a decline of about 17 per cent from
2007 to 2013. However, around 22 per cent of the population
lives below the national poverty line (2015). Gross domestic
product (GDP) per capita is US $ 3,200 (2017).
According to
COUNTRYAAH, Tanzania today has a mixed economy with an active private
business sector. The state, on the other hand, maintains
presence in some sectors such as telecommunications,
banking, energy and mining.
Although Tanzania is on its way to the goal of becoming a
middle-income country, there is some distance left. Most
Tanzanians have made little sense of economic progress. High
unemployment among young people, poor quality of public
schools and low income in agriculture, as well as maternal
health are key challenges.
Tanzania has a broadly composed resource base.
Agriculture, tourism and mining are the most important
industries. The country has deposits of a number of
minerals, without particularly large reserves other than of
gemstones. Tanzania is, above all, an agricultural country,
and the economy has remained highly dependent on
agriculture. Most of the agriculture takes place on a
self-sufficiency level, but the country produces more
agricultural products for export, traditionally especially
coffee, in recent years also cashew nuts.
Tanzania has a number of scenic areas and wildlife
reserves that provide the basis for increased tourism; a
sector that has experienced significant growth since the
1980s. Particular attention is paid to the Serengeti,
Ngorongoro and Kilimanjaro areas in the north, as well as
Zanzibar. About a third of the country's land is national
parks, reserves or otherwise protected.
Economic development
After independence in 1964, the country tried to find its
own development model, partly based on the development of
public services to promote social development by expanding
public services such as health and education. This was
linked to the so-called ujamaa policy, which among other
things meant that the village population was moved together
to villages. The African socialism that Tanzania sought to
develop further entailed a leveling policy in which the
state was given a central role in economic development.
In the 1960s and 1970s, Tanzania was among the countries
in the south that could show the greatest progress in the
social field, while failing in the economy. After modest
economic growth in the 1970s, there was a setback in the
1980s, when the Ujamaa policy was abandoned, and the Social
Democratic redistribution policy was largely abandoned in
favor of a land-liberalized economy. This was done, among
other things, according to demands from the international
credit institutions and key aid providers, including Norway.
The reforms included the privatization of business
enterprises and smaller public subsidies for social
services.
In the 1990s, Tanzania was one of the countries in Africa
that was most successful in its economic restructuring,
albeit with setbacks in the social sectors as a result.
Growth from the 1990s continued in the 2000s, but to a
somewhat lower extent than necessary to achieve financial
goals and secure jobs for a rapidly growing number of job
seekers.
Assistance and financial cooperation
Tanzania has been one of the priority cooperation
countries for Norwegian assistance since 1966, and is the
country Norway has had the longest, continuous development
cooperation with at bilateral, state level. Since the late
1990s, development assistance has concentrated not least on
strengthening the political and economic development of the
country through reforms and mobilization of own resources,
among other things to reduce the strong dependence on
foreign aid.
Tanzania is a member of the regional economic cooperation
organizations COMESA and SADC, as well as from 2000 the
revitalized East African Community (EAC). Until its collapse
in 1977, the EAC was an important economic factor in the
region, where, among other things, important infrastructure
was coordinated. The new EAC extends cooperation to the
Customs Union and the Common Market.
Agriculture and fishing
Tanzania's economy still largely depends on agriculture,
which in 2017 accounted for 23.4 per cent of GDP and
employed about 67 per cent of the working population. The
topography and climatic conditions limit the opportunities
for agriculture, and only about 8 percent of the land area
is cultivated, of which only about 3 percent is artificial
water. Tanzania has irregular rainfall and is often haunted
by periods of drought.
Most of the farming is done on a self-sufficient level,
and the most important foods grown are maize, rice, millet,
sorghum, cassava, cooking bananas, potatoes and beans. The
most important agricultural products are coffee and cashews,
spices, tobacco, tea, cotton, sisal, pyrethrum, coconuts,
sugar and cardamom. Other sales items include sugar cane,
copra, peanuts, palm oil, cocoa, sesame seeds, sunflower
seeds and soybeans. Coffee was traditionally the most
important export product from agriculture, but was bypassed
in the 1990s by cashews. Rehabilitation of plantations has
led to increased tea production, but the revenues from all
these products fluctuate sharply, in line with prices in the
international markets. Tanzania was previously one of the
world's largest producers of sisal, but demand has declined
as artificial materials have taken over. Spice liqueur is
Zanzibar's most important export item; production takes
place substantially at Pemba.
Animal husbandry is also important, especially of cattle,
but also of goat and sheep. Tanzania is one of the largest
cattle producers in Africa.
Tanzania has a number of forest areas that are exploited
commercially, both with precious and planted species for
cellulose and fuel.
There is some fishing, mainly inland, but also in the
Indian Ocean. Some shellfish is exported.
Mining and energy
Tanzania has deposits of a number of minerals, but few of
significant economic value. Increased production of gold and
gemstones led to strong growth in the sector from the late
1990s. While gold production almost ceased in the 1970s, it
was revitalized, with new discoveries and investments,
including at Geita, in the 1990s. Around 2000, gold became
the country's most important export item. In the 1960s and
1970s, much of the sector's value creation consisted of
diamond mining, substantially north of Shinyanga south of
Lake Victoria, but this fell sharply in the 1980s, also due
to illegal extraction and smuggling, to increase again
throughout the 1990s..
Tanzania has large deposits of gemstones, and the Longino
ruby mine is the largest in the world. Sapphire is another
valuable stone of which there are large reserves, and
Tanzania is the only producer of tanzanite gemstone.
Phosphate, coal, iron ore, plaster, graphite, limestone,
kaolin, tin and salt are also extracted. Furthermore,
deposits of lead, silver, tungsten, magnesite, nickel,copper,
cobalt, uranium, titanium and vanadium. There are large
deposits of coal and pewter, but the recovery takes place
only on a smaller scale.
Inadequate electricity supply is a major obstacle to
economic development in Tanzania, which does not produce
enough power to meet the country's needs. Production takes
place essentially from hydropower, and subsequently from
thermal power plants and generators. High oil prices have
resulted in large additional costs and reduced power
production. Natural gas has been found at Songo Songo and
Mnazi Bay, off Dar es Salaam. Songo gas Songo has been
transported ashore since 2004 for production of electric
power. Oil exploration has not shown any viable deposits.
Industry
Tanzania is relatively little industrialized, and the
sector is essentially based on the processing of local raw
materials for local consumption, with a goal of production
for export. After focusing on industrial travel in the years
following independence, a number of production facilities
were closed in the 1980s due to increased energy costs and
currency shortages for imports of machinery and inputs. From
the 1990s, there has been growth in the industry again. In
2017, industry accounted for 28.6 per cent of GDP. Main
products are food, textiles, paper, cement, petroleum
products, fertilizers and iron. The majority of the industry
is located in the area of Dar es Salaam.
Foreign Trade
Tanzania exports significant commodities, in particular
gold and jewelery, cashew nuts and coffee, all of which are
subject to price fluctuations in the international markets.
In the 1990s, further focus was placed on the production of
new export goods, especially vegetables, fruits and flowers.
At the same time, the country relies heavily on oil imports
to meet some of its energy needs, which has contributed to
the trade deficit and a considerable foreign debt.
At the same time, Tanzania has long been one of the
countries that has been most dependent on foreign aid. For
decades, Norway and other Nordic countries have been among
the country's most important partners. From the 1990s,
regional cooperation with neighboring Kenya and Uganda,
through the East Africa Community, has been resumed - with
the establishment of a Customs Union and increased
intra-regional trade as a result.
Transport and Communications
Tanzania is a vast and partially sparsely populated
country, and parts of the country - especially the central
inland areas - have poor communications. The road network of
around 88,000 kilometers is of relatively poor condition.
Only a small part has a fixed deck. The main port cities of
the Indian Ocean are Dar-es-Salaam, Mtwara and Tanga. There
is a boat connection to neighboring countries on Lake
Victoria, Tanganyika and Lake Malawi. Dar-es-Salaam and
Tanga have inland railways and are linked to Kenya's railway
network.
The Tanzanian Railway also serves several states,
Burundi, Rwanda, Congo and Uganda, as well as Zambia. With
Chinese assistance, in the first half of the 1970s an 1860
kilometer long rail link (the Tanzam or Tazara line) was
built between the copper fields in Zambia and the shipping
port of Dar-es-Salaam. There are a number of airports and
landing strips. Major international airports are located in
Dar es Salaam and Arusha. |
