Tanzania

GDP growth continues to expand rapidly, with +5.8% projected in 2026 and 5.6% in 2027, making Tanzania one of the fastest growing emerging markets in Africa. Exports of minerals, mainly gold and cooper, together with agriculture, tourism and construction, are projected to continue boosting Tanzania’s economy. Tanzania’s balance between rich and diverse commodities, a growing export-oriented manufacturing base, improving infrastructure and fast-growing tourism appeal has supported growth in recent years. Agriculture activities continue to be the main contributor to the GDP, mainly through extensive employment. Exports of coffee and copper have been increasing. In one decade, their export value has doubled and copper is increasingly being refined in the country mainly to serve Asian countries, notably India. Risks to the outlook remain domestic with increased political and social tensions around the 2025 Presidential election that maintained President Samia Suluhu Hassan in office, as well as the worsening fiscal profile and climate risks.

Inflation in Tanzania is on an upward trend as government spending has been increasing. In 2026, y/y inflation is projected at 3.8%, above the 3.2% recorded in 2025. Tanzania was able to shelter itself from the global inflation surge, thanks to effective monetary policy – which maintained the key policy rate at 6% even though the government enacted some temporary subsidies for fuel and fertilizers – and a healthy reserves level at four months of imports. In July 2025, the Central Bank reduced its policy rate by 25bps, to 5.75%. In addition, food prices were also sheltered, thanks to Tanzania maintaining an impressive strategic grain reserve that reached 340,000 tons in 2024, which was key for supplying grain to neighboring countries. International reserves have also been surging, thanks to increased hard-currency revenue from exports. 

The financial account has remained solid, thanks to a healthy inflow of FDI valued at around 2% of GDP. However, following the opposition crackdown during the elections, risks emerged from hard currency inflows as the European Parliament announced intentions to suspend a EUR156mn aid program, pointing towards the possibility of more tense relations moving forward with Western partners, with potential ramifications for international investors if the situation does not improve. 

The undergoing diversification of the economy, supported by exports of commodities, manufacturing, as well as services, has experienced significant gains in recent years from tourism. 2025 is expected to have again been a ground-breaking year for, with tourism increasing by 4-5% y/y. In August 2025, five new special economic zones were launched dedicated to manufacturing, which has also become a growing industry. Domestically processed iron, steel and copper are among Tanzania’s largest manufactured exports, and the transformation of mining and metals remains a top priority for authorities in an effort of further diversify exports and reduce unemployment, which stands at around 10%, while youth unemployment stands between 15% to 25%.

Energy independence is among the leadership’s top priorities as Tanzania is currently an intensive importer of non-renewable energy. Crude oil remains its top import. In 2025, the country signed a deal with Rosatom, Russia’s nuclear energy company, to build a nuclear plant, diversifying its energy mix and becoming one of the first adopters of nuclear energy in Africa after South Africa and Egypt, which is currently building a plant. Other priorities include an LNG plan connected to Mozambique’s gas fields, as well as an oil pipeline bringing 200,000 barrels per day from Uganda’s, which should be operative in the next 24 months. A major change to Tanzania’s energy mix is the completion of the Juluis Nyem dam in 2025, which has a full capacity generating 1,175Mgw of power. Cross-border trains linking the economic hubs of the East Africa Community members, Tanzania’s natural region of trade and influence, have also been a focal point of the government’s priorities.