Economy

For a long time the Tanzanian economy had suffered several blows with severe destabilizing effects. They included the oil price destabilisation, collapse of commodity prices, drought, breakup of the East African Community and the Ugandan war. These blows coupled with a socialist policy regime culminated in severe economic crisis. Several adjustments were implemented in the early 1980's but by mid 1990 fiscal instability was still severe. The implementation of the 'Privatisation Programme' concentrated on large and monopolistic enterprises, whose privatisation had to be preceded by formulation of a legal and regulatory framework.

In early 1996, the Government committed itself to a shadow programme monitored by the IMF and from September 1996 a three-year Enhanced Structural Adjustment Facility (ESAF) underpinned by a Policy Framework Paper (PFP) was instituted. To-date, Tanzania has made significant progress in restoring macro economic stability. Overall fiscal balance (including grants) has resulted in a surplus of around 0.8 to 1.2 percent of GDP and inflation was brought down from more than 30 percent in 1995 to 6.6 percent in early 2000. Since then foreign reserves have increased from 1.5 months of merchandise imports in 1995 to 4.5 months currently. The Government recognises the need for a robust high growth to fight the nation-wide poverty. Higher (6-8 percent) and sustained growth is necessary. While growth is necessary, it is important that it be broad-based and centred on improving the livelihoods of the poor. The Government is committed to consolidating and intensifying the macroeconomic progress achieved to-date.

Growth between 1991-2002 featured a pickup in industrial production and a substantial increase in output of minerals, led by gold. Oil and gas exploration and development played an important role in this growth. Recent banking reforms have helped increase private sector growth and investment. Continued donor support and solid macroeconomic policies should support continued real GDP growth of 5% and above in 2004.

Economic Statistics

GDP - real growth rate: 6.1% (2002 est.)

GDP - composition by sector: agriculture: 48.1% industry: 15.4% services: 36.5% (2001 est.)

Population below poverty line: 36% (2002 est.)

Labor force: 13.495 million

Labor force - by occupation: agriculture 80%, industry and services 20% (2002 est.)

Industries: agricultural processing (sugar, beer, cigarettes, sisal twine), diamond and gold mining, oil refining, shoes, cement, textiles, wood products, fertilizer, salt

Agricultural products: coffee, sisal, tea, cotton, pyrethrum (insecticide made from chrysanthemums), cashew nuts, tobacco, cloves, corn, wheat, cassava (tapioca), bananas, fruits, vegetables; cattle, sheep, goats

Export partners: India 15.2%, Japan 12.4%, Netherlands 9.2%, UK 6.8%, Belgium 6.5%, Kenya 5.9%, Germany 4.8% (2002)

Import partners: South Africa 12.7%, China 7.9%, Kenya 6.6%, India 6.3%, UK 6%, Japan 4.5%, US 4%, Australia 4% (2002)

Exchange rates: Tanzanian shillings per US dollar - 1,110.00 (2004), 876.41 (2001), 800.41 (2000), 744.76 (1999), 664.67 (1998)

Fiscal year: 1 July - 30 June