Tanzania

This page provides an overview of the key characteristics of Tanzania along its likely (or Current Path) development trajectory. The Current Path forecast from the International Futures forecasting (IFs) platform is a dynamic scenario that imitates the continuation of current policies and environmental conditions. The Current Path is therefore in congruence with historical patterns and produces a series of dynamic forecasts endogenised in relationships across crucial global systems. We use 2019 as a standard reference year and the forecasts generally extend to 2043 to coincide with the end of the third ten-year implementation plan of the African Union’s Agenda 2063 long-term development vision.

At 947 303 km², the United Republic of Tanzania is the 13th largest country in Africa. It borders Uganda to the north, Kenya to the north-east, Comoros and the Indian Ocean to the east, Mozambique and Malawi to the south, Zambia to the south-west, and Rwanda, Burundi, and the Democratic Republic of the Congo (DR Congo) to the west. Tanzania has an Indian Ocean coastline of approximately 1 424 km, and its territory includes the semi-autonomous region of Zanzibar. Mount Kilimanjaro, Africa's highest mountain, is in the mountainous and densely forested north-east of Tanzania. Three of Africa's Great Lakes are partly within Tanzania: Lake Victoria, Africa’s largest lake; Lake Tanganyika, the continent's deepest lake, and Lake Malawi. Tanzania’s eastern shore is hot and humid, and the Zanzibar Archipelago is just offshore.

Tanzania is a member of the Southern African Development Community (SADC), the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA). Recent years have seen the discovery of large gas reserves that could transform the Tanzanian energy sector on top of commencement of an oil pipeline from neighbouring Uganda to the port of Tanga. [1I Esau, Tanzania aims to fast-track approval of $30bn LNG project as critical talks start, Upstream, 9 November 2021]

There has been a regression in the quality of democracy in Tanzania and an increase in executive power that has closed civic space in recent years. After two decades of sustained economic growth, Tanzania graduated from low to lower middle-income country status in July 2020. 

In 1990, Tanzania had a population of 25.2 million people, which increased to 58.08 million by 2019. By 2043, the population is projected to increase by 48 million people to 106.2 million. The population is very youthful with 43.6% (25.3 million people) younger than 15 years of age. By 2043, the share of children of the total population will drop to 35.2%. However, the absolute number of children will increase to 37 million. This reflects fast population growth driven by historically high fertility rates.

Half of the Tanzanian population is younger than 17.8 years old. In fact, the country’s median age is 3 years lower than the average median age of Africa’s lower middle-income economies. Tanzania’s average life expectancy is also lower at 64.76 years, which is 2.7 years below the average of its income level peer group. Such relatively low life expectancy is the result of a high disease burden from both communicable and non-communicable diseases as well as low access to improved sanitation and safe water. It also contributes to Tanzania’s high fertility rate. In the Current Path forecast, however, life expectancy will reach 71.2 years in 2043.

Fertility rates have been declining over the past two decades from an average of 6.36 births per woman in 1990 to 4.85 births per woman in 2019. The Current Path forecast is that by 2043, average births per woman will drop to 3.24. As a result, the median age will increase to 22.37 years by 2043, and Tanzania’s working-age population will more than double from 32.78 million to 68.83 million people. The relatively large workforce and the fact that the ratio of people of working age relative to the dependent population continues to improve could position the country well to reap a demographic dividend thereafter, should other factors such as appropriate education also be in place. However, without sufficient and sustained economic growth, human capital investment and employment opportunities, Tanzania’s large youthful population could be a source of social and political instability.

Tanzania is still predominantly rural with two-thirds of the population (66.1%) living in the country’s rural areas. However, the trend is one of steady urbanisation with the share of the population living in towns and cities increasing and the share of people living in rural areas decreasing. Close to a third of the 19.7 million Tanzanians that live in urban areas live in Dar es Salaam, Tanzania’s largest city and port. [2Our World in Data, Share of the urban population who live in the largest city, 1960 to 2020] With average annual population growth rates surpassing 5% between 2018 and 2022, the Dar es Salaam metro area is one of the fastest growing urban agglomerations in the world. By 2043, Tanzania’s urban population will more than double and surpass 50 million people (51.3 million). By then, the country’s urbanisation rate will be close to 50% (48.3%). This is still below the anticipated average rate of 59.4% for its lower middle-income peer group on the continent. In Nigeria and Angola, for example, about 63% and almost 75% of the population, respectively, will live in urban areas by 2043.

On average, Tanzania is not as densely populated as many of its lower middle-income peer countries that are more or less comparable in population size, including Ghana, Egypt, Kenya, Senegal, Morocco and Côte d’Ivoire. However, Tanzania’s population density is slightly above the average for the group of Africa’s lower-middle-income economies.

The country’s population distribution is very uneven, and population density varies accordingly. Most people live on the northern border or along the eastern coast. The rest of the country is sparsely populated with the exception of the urban agglomeration of Mbeya in the south west, the capital of the Mbeya region.

Due to high natural population growth, average population density in Tanzania will almost double over the coming two decades: from 0.656 per hectare to approximately 1.199 per hectare in 2043. For both rural and urban areas, this will imply significant challenges in terms of land management, infrastructure development, (environmental) sustainability, etc.

Economic growth accelerated after the country adopted multiparty democracy, in 1992. Between 1990 and 2019, Tanzania’s GDP increased more than fourfold from US$13.9 billion to US$60.8 billion. The country’s GDP will grow substantially to US$258 billion in 2043 with average growth rates consistently exceeding 6% per annum. Such rapid expansion will push Tanzania’s GDP from its current eighth position to rank fifth among Africa’s 23 lower middle-income economies. In the Current Path forecast, the size of Tanzania’s economy will overtake that of Morocco and Côte d’Ivoire in size.

Although many of the charts in the sectoral scenarios also include GDP per capita, this overview is an essential point of departure for interpreting the general economic outlook of Tanzania.

In 2019, Tanzania’s GDP per capita ranked 20th out of 23 Africa’s lower middle-income countries at a value of US$3 056; more than US$3 000 below the group’s average, reflecting its recent (2020) graduation to low middle-income status. Tanzania’s per capita income will almost double to US$5 523 per capita by 2043, pushing it upward to rank 17th in the group. Whereas Tanzania’s GDP per capita was 44% of the average of the group in 2019, by 2043 it will improve to 60% given more rapid population growth. The group’s average GDP per capita comes from a higher baseline, and despite its slower growth rate will reach US$9 142 by 2043.

In 2019, Tanzania’s informal sector accounted for approximately 45% of GDP. Within IFs, Tanzania had the second largest informal sector in Africa. Only Zimbabwe’s informal sector at 52.8% accounted for a higher share of GDP in 2019. The average value for Africa’s lower middle-income economy is 29%.

Tanzania’s large informal sector is an inevitable burden on the formal economy because of low contributions to tax revenues and the subsequent negative impact on expenditure on public utilities. By 2043, the contribution of the informal sector to the country’s GDP will fall by ten percentage points to just over 35%, then it will be the largest informal sector in terms of its contribution to GDP in Africa.

In 2019, three-quarters of Tanzania’s labour force, or 27.7 million people, worked in the informal sector, and informal sector work is expected to remain the dominant way of making a living in Tanzania. The share of workers in the informal sector will drop to 65% over the coming decades but given the significant expansion of the labour force in the medium-term, about 58 million Tanzanians will still work in the informal sector. In 2043, Tanzania will have the fourth largest informal sector workforce on the continent, preceded only by Nigeria, Ethiopia and the DR Congo. Tanzania’s large informal sector cushions the effects of widespread poverty but constrains structural transition and improvements in productivity.

The IFs platform uses data from the Global Trade and Analysis Project (GTAP) to classify economic activity into six sectors: agriculture, energy, materials (including mining), manufactures, services and information and communications technology (ICT). Most other sources use a threefold distinction between only agriculture, industry and services with the result that data may differ.

In 2019, Tanzania’s service sector accounted for almost half of the country’s GDP (US$27.7 billion), followed by the agriculture sector which represented close to 30% (US$16.23 billion). The energy sector is particularly small — translating, among other issues, into low levels of electricity access and inhibiting growth in the manufacturing sector. The service sector will remain the most important contributor to Tanzania’s GDP by far. Its share is set to grow to almost 57% (valued at US$140.2 billion) by 2043. At the same time, the contribution of the agriculture sector will drop quite drastically to just over 10% (US$25 billion). The manufacturing sector, however, at 11.6% currently the third largest contributor to Tanzania’s GDP, will increase modestly by more than 6 percentage points to 18.5% in 2043. In the process, the contribution from manufacturing will increase from US$6.5 billion in 2019 to almost US$46 billion in 2043.

Tanzania’s expected trajectory roughly mirrors that of its lower middle-income peer group with the service sector representing both the current and future lion’s share of contribution to GDP, followed by agriculture and manufacturing, which are respectively losing and gaining ground. That said, Tanzania’s manufacturing sector is one of the smallest among its lower middle-income peers on the continent and contributed 7 percentage points less to GDP than the average for the group in 2019. With its large informal service sector and relatively small manufacturing sector, Tanzania’s growing ICT sector, forecast to increase to 8% of GDP in 2043, could improve productivity and enhance livelihoods in the larger economy. The Leapfrogging scenario emulates the impact of a more rapid reduction in size of the informal sector on the Tanzanian economy.

The data on agricultural production and demand in the IFs forecasting platform initialises from data provided on food balances by the Food and Agriculture Organization (FAO). IFs contains data on numerous types of agriculture but aggregates its forecast into crops, meat and fish, presented in million metric tons. Chart 9 shows agricultural production and demand as a total of all three categories.

Tanzania’s large agriculture sector contributed 12 percentage points more to GDP than the average for low middle-income countries in Africa in 2019, much of that consisting of subsistence farming with low yields, however. In 2019, close to 17 million hectares of land in Tanzania was used for crops and crop yields were only 3 tons per hectare compared to the average of more than 5 tons for its African income peer group. Tanzania’s agricultural production stood at 51.3 million metric tons in 2019, matching agricultural demand. However, the forecast is for a growing gap between demand and production, resulting in about 24 million metric tons of unmet demand in 2043. Agricultural demand is fuelled by Tanzania’s rapidly expanding population, a situation that increases food insecurity, which is already troubling. This trend is visible across Africa’s lower middle-income economies generally.

Because of widespread poverty and lack of access to calories, over 34% of Tanzanian children under five are stunted, and nearly 45% of women of reproductive age are anaemic, according to USAID. The agency lists four challenges: ‘Limited access to productive and financial resources, weak infrastructure, and poor policies reduce incentives to develop the agriculture sector. Private-sector investment in agriculture is constrained by limited access to long-term capital, low levels of capacity and business skills, and policies which discourage growth. Climate change poses significant risks of prolonged drought and unpredictable weather, threatening the livelihoods of subsistence farmers. Rapid population growth and agricultural expansion pose a threat to Tanzania’s natural resources that, when managed effectively, support livelihoods and agriculture.’ [3USAID, Agriculture and food security, 1 December 2021]

There are numerous methodologies for and approaches to defining poverty. We measure income poverty and use GDP per capita as a proxy. In 2015, the World Bank adopted the measure of US$1.90 per person per day (in 2011 international prices), also used to measure progress towards the achievement of Sustainable Development Goal (SDG) 1 of eradicating extreme poverty. To account for extreme poverty in richer countries occurring at slightly higher levels of income than in poor countries, the World Bank introduced three additional poverty lines in 2017:

• US$3.20 for lower middle-income countries 
• US$5.50 for upper middle-income countries
• US$22.70 for high-income countries.

As a lower middle-income country, the World Bank uses the US$3.20 per day benchmark to define extreme poverty in Tanzania. The country’s poverty burden is very high. In 2019, 39.15 million Tanzanians lived below the poverty line. This equals 67.4% of the population and is more than 17 percentage points above the average poverty rate for Africa’s lower middle-income economies. Over time, it is expected that the share of people living in extreme poverty will decrease. At the same time, however, the absolute number of poor people will continue to increase as population growth outpaces economic growth. In the Current Path forecast, 46.6 million Tanzanians will live below the poverty line in 2043. This is 43.9% of the population, a significant improvement compared to the 2019 poverty rate, yet far off the Sustainable Development Goals target of no poverty by 2030. In fact, Tanzania’s 2043 poverty rate will be more than 3 percentage points above the average for its lower middle-income peer economies on the continent. Tanzania has the fourth highest poverty rate after Benin, Zambia and Nigeria. By 2043, the country is set to improve its performance by two ranks.

The IFs platform forecasts six types of energy, namely oil, gas, coal, hydro, nuclear and other renewables. To allow comparisons between different types of energy, the data is converted into billion barrels of oil equivalent (BBOE). The energy contained in a barrel of oil is approximately 5.8 million British thermal units (MBTUs) or 1 700 kilowatt-hours (kWh) of energy.

Tanzania's total energy production was equivalent to about 45.6 million barrels of oil in 2019. By 2043, it is estimated to exceed 160 million barrels of oil equivalent. The country’s energy mix is heavily reliant on fossil fuels with 67.4% reliance on gas, followed by hydro at 15.2% and coal at 13%. The status quo is not expected to change dramatically over the coming decades. On the contrary, the country’s reliance on gas will increase with the latter accounting for 86.2% of the energy mix by 2043. Growth in renewable energy sources will be moderate with their share growing from 4.3% in 2019 to 5.6% in 2043. The contribution of renewables in Africa’s lower middle-income economies is 8.1% (average). Hydro will account for 15.2% in 2043 versus 3.1% in 2019 in Tanzania.

The Julius Nyerere Hydro Electric Power Project on the Rufiji River which is nearing completion will have an installed capacity of 2.1 GW. [4T Smith, Tanzania: Biggest hydro electric plant construction ongoing, ESI Africa, 7 September 2021]

Carbon is released in many ways, but the three most important contributors to greenhouse gases are carbon dioxide (CO2), carbon monoxide (CO) and methane (CH4). Since each has a different molecular weight, IFs uses carbon. Many other sites and calculations use CO2 equivalent.

Because of its low levels of development, Tanzania emitted only 5.71 million tons of carbon in 2019, making it the tenth largest emitter in Africa though with the 12th largest economy. Emissions will increase almost sixfold to 34.7 million tons of carbon by 2043.

The Stability scenario represents reasonable but ambitious reductions in risk of regime instability and lower levels of internal conflict. Stability is generally a prerequisite for other aspects of development and this would encourage inflows of foreign direct investment (FDI) and improve business confidence. Better governance through the accountability that follows substantive democracy is modelled separately.

The intervention is explained here in the thematic part of the website.

Tanzania has generally been an island of stability in a turbulent region compared to neighbouring Uganda, the DR Congo, Rwanda and Burundi. In the process, it has become host to a large refugee population from many of these countries. Tanzania has a large youth bulge and faces threats of terrorism from Islamist extremism. Recent events in northern Mozambique threaten stability while the complex relations between the semi-autonomous Zanzibar and the mainland threaten the political stability of the union. The Stability scenario reflects significant interventions in increasing regime stability, lowering levels of internal conflict, resulting in reduced military expenditure and larger inflows of FDI.

Tanzania scores slightly lower on the security dimension of governance compared to the average of lower middle-income economies in Africa (0.725 versus 0.716). In the Stability scenario, security in Tanzania will improve significantly, surpassing the average score of its fellow lower middle-income countries on the continent by 2043. Its score is set to improve from 0.725 in 2019 to 0.925 in 2043, surpassing the 2019 score of the current frontrunner, Tunisia (0.838).

In 2019, Tanzania had one of the lowest GDP per capita among Africa’s lower middle-income economies at a value of US$3 056. In the Stability scenario, the country’s GDP per capita will increase to US$5 668 by 2043, an increase of US$145 compared to the Current Path forecast. 

The World Bank elevated Tanzania to low middle-income development status in 2020. Therefore, the US$3.20 benchmark to define extreme poverty applies. Tanzania has a high poverty burden. In 2019, 39.15 million people were living below the US$3.20 poverty line. In the Stability scenario, about 44.6 million people will live in extreme poverty by 2043 representing a reduction of more than 2 million people compared to the Current Path forecast.

In 2019, 67.4% Tanzanians were living below the poverty line, a significantly higher share than the average of 50.1% in Africa’s lower middle-income economies. Extreme poverty in Tanzania will decline over the coming decades. The Stability scenario accelerates this positive trend: by 2043, about 42% of the population will live below the poverty line compared to 43.9% in the Current Path forecast.

This section presents the impact of a Demographic scenario that aims to hasten and increase the demographic dividend through reasonable but ambitious reductions in the communicable-disease burden for children under five, the maternal mortality ratio and increased access to modern contraception. 

The intervention is explained here in the thematic part of the website.

Demographers typically differentiate between a first, second and even a third demographic dividend. We focus here on the contribution of the size of the labour force (between 15 and 64 years of age) relative to dependants (children and the elderly) as part of the first dividend. A window of opportunity opens when the ratio of the working-age population to dependants is equal to or surpasses 1.7.

Increased access to modern contraception will have a dramatic impact on Tanzania’s total fertility rate, which was estimated at 4.85 children per fertile woman in 2019. In the Demographic scenario, fertility rates will decline much quicker than in the Current Path forecast dropping to 2.6 births per woman by 2043. On the Current Path, it would take the country 11 additional years to reach this level. A lower average fertility rate would slow down Tanzania’s population growth and translate into a smaller population by 5.8 million fewer people by 2043. In the Demographic scenario, Tanzania will be able to benefit from a demographic dividend as from 2041, on par with the average for its lower middle-income peer group on the continent and about ten years earlier than on the Current Path.

The infant mortality rate is the number of infant deaths per 1 000 live births and is an important marker of the overall quality of the health system in a country At 43.4 infant deaths per 1 000 live births, infant mortality in Tanzania is relatively high, although it has improved drastically since 1990 when it stood at 101.6. Tanzania performs better than the average for its lower middle-income peer group with an average of 46.4 deaths per 1 000 live births, roughly comparable to rates in Zimbabwe and Zambia. The Demographic scenario will reduce infant mortality rates in Tanzania to 20.2 deaths per 1 000 live births by 2043 compared to 24 deaths in the Current Path forecast.

In 2019, Tanzania’s GDP per capita of US$3 056 was relatively low. More specifically, it was 50% lower than the average GDP per capita of Africa’s 23 low middle-income countries which was US$6 989. Tanzania’s GDP per capita will increase to US$5 523 and US$5 732, respectively, in the Current Path forecast and in the Demographic scenario by 2043. In the latter, the gap between Tanzania’s GDP per capita and the average GDP per capita of its income peer group is set to become smaller but will remain significant at US$5 732 versus US$9 394.

Compared to the Current Path, the Demographic scenario will reduce the number of people living in extreme poverty (using US$3.20) by 5.3 million in 2043, translating to 41.2 million people living below the poverty line by 2043. This is the equivalent to 41.1% of the population compared to 43.9% on the Current Path, a significant improvement considering the 2019 baseline of 67.41% of people living below the US$3.20 poverty line.

This section presents reasonable but ambitious improvements in the Health/WaSH scenario, which include reductions in the mortality rate associated with both communicable diseases (e.g. AIDS, diarrhoea, malaria and respiratory infections) and non-communicable diseases (NCDs) (e.g. diabetes), as well as improvements in access to safe water and better sanitation. The acronym WaSH stands for water, sanitation and hygiene.

The intervention is explained here in the thematic part of the website.

In 2019, the life expectancy at birth for the average Tanzanian was 64.76 years, with women having almost four years higher life expectancy than men. At 67.47 years, the average life expectancy for Africa’s lower-income economies is about 2.7 years higher than Tanzania’s.

The country’s low life expectancy is attributed to a relatively high disease burden for both communicable and non-communicable diseases. The prevalence of HIV/AIDS among the adult population at 2.5% is above the average rate for Africa’s lower middle-income economies at 1.6%. However, it is significantly lower than prevalence rates in Eswatini, Lesotho, Zimbabwe or Zambia, which range from 17% (Eswatini) to 6.5% (Zambia).

Life expectancy in Tanzania will increase to 71.6 years in the Health/WaSH scenario by 2043 compared to 71.2 years on the Current Path. The Health/WaSH scenario will also significantly reduce deaths from communicable diseases by 2043 compared to the Current Path trajectory: from 198 000 in 2019 to 115 000 versus 153 000, respectively. The impact of the Health/WaSH scenario on deaths from non-communicable diseases that typically affects more elderly people is less pronounced.

The gap between Tanzania and its reference group will roughly remain in place. By 2043, the average life expectancy for Africa’s lower middle-income economies in the Health/WaSH scenario will be 74.1 years versus 71.6 for Tanzanians.

In 2019, at 43.4 deaths per 1 000 live births Tanzania’s infant mortality rate was the 24th worst in Africa. It was comparable with Uganda’s and Niger’s but slightly better than the average for Africa’s lower middle-income economies. The interventions in the Health/WaSH scenario reduce Tanzania’s infant mortality to 22 deaths per 1 000 live births in 2043 compared to 24 deaths in the Current Path forecast.

The Agriculture scenario represents reasonable but ambitious increases in yields per hectare (reflecting better management and seed and fertiliser technology), increased land under irrigation and reduced loss and waste. Where appropriate, it includes an increase in calorie consumption, reflecting the prioritisation of food self-sufficiency above food exports as a desirable policy objective.

The intervention is explained here in the thematic part of the website.

The data on yield per hectare (in metric tons) is for crops but does not distinguish between different categories of crops.

In 2019, yields in Tanzania stood at 3.08 metric tons per hectare, which is relatively low compared to the average of 5.08 metric tons per hectare of the average for Africa’s lower middle-income peer group. In the Current Path forecast, yields in Tanzania will increase modestly to 3.6 tons by 2043. In the Agriculture scenario, yields will more than double over the same time period and amount to 7.36 metric tons per hectare. The result is that instead of producing 70.7 million metric tons of crops in 2043, Tanzania would produce more than double that number at 144 million metric tons.

In 2019, total agricultural demand in Tanzania hardly exceeded production measured in million metric tons. However, growth in demand is forecast to outpace production which will trigger greater import dependence in the future. In 2019, net agricultural imports accounted for just over 2% of agricultural demand. On the Current Path, imports are expected to account for 23.5% by 2043. The Agriculture scenario will free Tanzania from import dependence already in 2028. By 2043, the country will be producing 179.5 million metric tons of crops, meat and fish, and therefore exceed the expected demand of almost 107 million metric tons by far. Whereas Tanzania will export total agriculture goods worth US$43 million in 2043 in the Current Path forecast, exports will be worth US$42.8 billion in 2043 in the Agriculture scenario.

The Agriculture scenario will increase the GDP per capita to US$6 409 by 2043 compared to the Current Path value of US$5 523 — a 16% improvement. Despite this boost, Tanzania’s GDP per capita will remain below the average of its lower middle-income peers in Africa, which will reach US$9 582 in the Agriculture scenario.

The positive impact of the interventions in the Agriculture scenario on poverty is very significant: by 2043, only 26.8% of Tanzania’s population will be living in extreme poverty compared to 43.86% in the Current Path forecast. The interventions in the Agriculture scenario will reduce the number of Tanzanians living in extreme poverty from 39.15 million in 2019 to 28.34 million by 2043. This is a large improvement compared to the Current Path forecast, in which the number of people living in extreme poverty will increase by 7.4 million people. The interventions in the Agriculture scenario will enable Tanzania to achieve a poverty rate below the average of its income peer group already by 2036. In the Agriculture scenario, in Africa’s lower middle-income economies, 33.49% of the population will live below the poverty line by 2043 compared to 38.32% in the Current Path forecast.

The Education scenario represents reasonable but ambitious improved intake, transition and graduation rates from primary to tertiary levels and better quality of education. It also models substantive progress towards gender parity at all levels, additional vocational training at secondary school level and increases in the share of science and engineering graduates.

The intervention is explained here in the thematic part of the website.

In the Education scenario, the mean years of education increases from 6.4 years in 2019 to 8.2 years in 2043. This represents an improvement of 0.5 years compared to the Current Path forecast of 7.7 years. Tanzania performs significantly worse than its income peer group with an average mean of 7.2 years of education in 2019 that could increase to 8.8 years by 2043 in the Education scenario.

Turning to gender issues, according to USAID: ‘While primary school enrolment among girls and boys is nearly equivalent, only one in three girls who start secondary school will finish their lower secondary education. Causes of low secondary enrolment and retention among girls include economic hardship, early marriage and/or teen pregnancy, and school related gender-based violence.’ [5USAID, Tanzania: Education, 1 December 2021]

Tanzania’s primary test score in 2019 was roughly on par with the average for Africa’s low middle-income countries but will be 8% below that average in 2043 as education expenditure per learner remains flat due to the ongoing increase in the number of learners that enter the system. The Education scenario will change this trajectory, improving average test scores for primary learners by 17% above the Current Path forecast in 2043.

The average test scores for secondary learners in Tanzania was 5% below the average for Africa’s low middle-income countries and will increase by more than 19% above the Current Path forecast by 2043.

Tanzania’s GDP per capita is expected to increase to US$5 523 on the Current Path compared to US$5 748 in the Education scenario. Tanzania’s GDP per capita will lag behind the average GDP per capita for Africa’s lower middle-income economies. The latter will reach US$9 451 by 2043 in the Education scenario.

In the Education scenario, 40.13% of Tanzania’s population will live in extreme poverty by 2043, down from 67.41% in 2019. This translates to 42.44 million poor people in 2043, 4.14 million less than in the Current Path forecast for 2043.

Compared to its income peer group, Tanzania’s percentage point gain from the Education scenario will be almost twice that of the average of Africa’s lower middle-income economies (3.73 versus 1.91 percentage points improvement, respectively).

The Manufacturing/Transfers scenario represents reasonable but ambitious manufacturing growth through greater investment in the economy, investments in research and development, and promotion of the export of manufactured goods. It is accompanied by an increase in welfare transfers (social grants) to moderate the initial increases in inequality that are typically associated with a manufacturing transition. To this end, the scenario improves tax administration and increases government revenues.

The intervention is explained here in the thematic part of the website.

Chart 30 should be read with Chart 8 that presents a stacked area graph on the contribution to GDP and size, in billion US$, of the Current Path economy for each of the sectors.

In the Manufacturing/Transfers scenario, the service sector will experience the largest gain in terms of its relative contribution to GDP. Its contribution is expected to increase by 0.59 percentage points in 2043. The service sector is followed by the manufacturing sector that will see its relative contribution to GDP increase by 0.49 percentage points in 2043. It needs to be noted, however, that the trend for both the relative contribution of services and manufacturing to GDP does not follow a linear development.

The value of the service sector is forecast to increase by US$18.2 billion in the Manufacturing/Transfers scenario compared to the Current Path forecast. The Manufacturing/Transfers scenario will increase the contribution from the manufacturing sector by US$6.82 billion in 2043 compared to the Current Path. The ICT sector will contribute an additional US$2.1 million in this scenario.

In the Manufacturing/Transfers scenario, government to household welfare transfers will increase from US$2.55 billion in 2019 to US$18.54 billion in 2043; more than a sixfold increase over the coming two decades. On the Current Path, government to household transfers will grow at a slower rate. The anticipated increase is close to fourfold, reaching US$12.54 billion in 2043. On both trajectories, Tanzania’s level of government to household transfers is significantly lower than the average for its African income peer group which stood at US$114.23 billion in 2019 and will reach US$428.92 billion versus US$292.99 billion in the Manufacturing/Transfers scenario and the Current Path forecast, respectively.

Tanzania’s GDP per capita will increase by US$422 in the Manufacturing/Transfer scenario compared to the Current Path. In any case, Tanzania’s GDP per capita in 2043 will not match the average for Africa’s lower middle-income economies.

The Manufacturing/Transfers scenario will reduce the share of Tanzanians living below the poverty line from 67.41% in 2019 to 41.5% in 2043 compared to 43.86% in the Current Path forecast. This represents a 2.36 percentage point improvement that will translate to 2.58 million people escaping poverty in 2043 in the Manufacturing/Transfers scenario. Regardless, Tanzania will not be able to catch up with the projected 2043 average poverty rate of Africa’s lower middle-income economies in the Current Path forecast (38.32%).

The Leapfrogging scenario represents a reasonable but ambitious adoption of and investment in renewable energy technologies, resulting in better access to electricity in urban and rural areas. The scenario includes accelerated access to mobile and fixed broadband and the adoption of modern technology that improves government efficiency and allows for the more rapid formalisation of the informal sector.

The intervention is explained here in the thematic part of the website.

Fixed broadband includes cable modem Internet connections, DSL Internet connections of at least 256 KB/s, fibre and other fixed broadband technology connections (such as satellite broadband Internet, ethernet local area networks, fixed-wireless access, wireless local area networks, WiMAX, etc.).

Tanzania, like most African lower middle-income countries, had a very low fixed broadband rate of 4.87 per 100 people in 2019. In the Leapfrogging scenario, fixed broadband is set to increase almost tenfold to 50 subscriptions per 100 people by 2043 — still a very low number. On the Current Path, the subscription rate will increase to only 31. Regarding fixed broadband, Tanzania performs above the average of its African income peer group.

Mobile broadband refers to wireless Internet access delivered through cellular towers to computers and other digital devices.

In 2019, Tanzania had a mobile broadband subscription rate of 15.89 subscriptions per 100 people, a rate that is significantly lower than the average of 49.06 subscriptions per 100 people for Africa’s lower middle-income economies. In fact, Tanzania ranks second to last in this group. Only Comoros has a lower mobile broadband subscription rate.

The Leapfrogging scenario has the potential to allow Tanzania to catch up and even surpass the 2043 subscription rate of its peer group (in both scenarios). Mobile broadband in Tanzania will increase rapidly to 2027 when it will reach 108 subscriptions per 100 persons compared to 61 in the Current Path forecast. Thereafter, subscriptions increase more slowly as the saturation effect sets in, getting to 149.5 subscriptions per 100 people by 2043 compared to 147.9 subscriptions on the Current Path. In other words, mobile broadband subscriptions will increase either way but much more quickly in the Leapfrogging scenario.

Only 35.6% of Tanzania’s population had access to electricity in 2019. In fact, Tanzania ranks second to last on access to electricity in its African low middle-income peer group. At 66.28% in 2019, the latter has an average access rate that is almost twice as high. In the Current Path forecast, 69.4% of Tanzanians will have access to electricity by 2043. In the Leapfrogging scenario, access to electricity will expand faster reaching 82.8%% of the population by 2043. Tanzania will then rank 17 out of 23 among its peers for access to electricity but still lag behind the average. In the continent’s lower middle-income economies, 90.2% of the population would have access to electricity in the Leapfrogging scenario by 2043

In the Leapfrogging scenario, Tanzania’s GDP per capita will increase from US$3 056 in 2019 to US$5 899 — that would be 7% above the Current Path forecast of US$5 523. In the Leapfrogging scenario, Tanzania’s GDP per capita will still be about 63% below the average for Africa’s lower middle-income economies, which will reach US$9 619 by 2043. In the Current Path forecast, it will be 65% lower.

The interventions in the Leapfrogging scenario are projected to benefit poverty reduction efforts in Tanzania. The share of the population living below the US$3.20 poverty line will drop from 67.41% to 39.9% by 2043 compared to 43.9% on the Current Path trajectory, a gain of almost 4 percentage points. When assessing absolute numbers, the Leapfrogging scenario will reduce the number of people living in poverty to 42.28 million versus the projected 46.58 million in the Current Path forecast. In other words, 4.3 million Tanzanians will escape poverty in the Leapfrogging scenario and the country will bring its 2043 poverty rate close to the 2043 Current Path forecast for its income peer group (38.3%). The intervention in the Leapfrogging scenario, however, will bring Africa’s lower middle-income economies’ poverty rate down to 36%.

The Free Trade scenario represents the impact of the full implementation of the African Continental Free Trade Area (AfCFTA) by 2034 through increases in exports, improved productivity and increased trade and economic freedom.

The intervention is explained here in the thematic part of the website. 

The trade balance is the difference between the value of a country's exports and its imports. A country that imports more goods and services than it exports in terms of value has a trade deficit, while a country that exports more goods and services than it imports has a trade surplus.

In the Free Trade scenario, Tanzania’s exports will increase by 63% in 2043 and imports by 81% in value. Tanzania’s 2019 trade deficit stood at -8.09% of GDP. In the Free Trade scenario, that deficit will grow to -13.52% by 2026 before improving to -0.52% in 2037 and reaching -3.97% in 2043. The Current Path shows a similar trend that is however delayed by about 3 years.

The implementation of the AfCFTA in the Free Trade scenario reduces the short-term trade deficit for Tanzania versus the Current Path forecast. However, between 2039 and 2043, the trade deficit will be lower on the Current Path than in the Free Trade scenario.

The GDP per capita is projected to increase to US$5 523 on the Current Path and to US$6 254 in the Free Trade scenario — a gain of US$731 (or 32%). Tanzania’s GDP per capita will, however, continue to be much lower than the average GDP per capita of its income peer group which will reach US$10 050 in the Free Trade scenario.

In the Free Trade scenario, extreme poverty will decrease more rapidly, although only as from 2036. By 2043, 35.1% of people will live in extreme poverty in the Free Trade scenario compared to 43.9% in the Current Path forecast. The 8.8 percentage point difference translates to 9.4 million Tanzanians who will escape poverty in the Free Trade scenario. In that scenario, Tanzania will come very close to the 2043 average poverty rate of the average for low middle-income Africa at 34.2%.

The Financial Flows scenario represents a reasonable but ambitious increase in worker remittances and aid flows to poor countries, and an increase in the stock of foreign direct investment (FDI) and additional portfolio investment inflows to middle-income countries. We also reduced outward financial flows to emulate a reduction in illicit financial outflows.

The intervention is explained here in the thematic part of the website.

Compared to the average for Africa’s low middle-income countries of 1.67%, foreign aid accounts for a relatively high share of GDP in Tanzania at 5.68% in 2019. In fact, the country ranks sixth out of 23 lower middle-income economies on the continent in terms of aid receipts as a per cent of GDP.

In both scenarios, the contribution of foreign aid to GDP is projected to decline. By 2043, aid will constitute only 2.6% in the Financial Flows scenario compared to 2.53% in the Current Path forecast — a difference equivalent to US$336 million. The average for low middle-income Africa will account for 0.5% of GDP in both scenarios.

FDI inflows to Tanzania as a per cent of GDP have been on a steady upward trend since democratisation in 1992. However, they fell again during the global financial crisis in 2007/08 and the COVID-19 pandemic from 2020. FDI flows to Tanzania accounted for 4.24% of GDP in 2019, 1.65 percentage points above the average for Africa’s lower middle-income economies, mostly as investments in its gas endowments ramped up. The impact of the COVID-19 pandemic on FDI flows manifests in the sharp drop to 2.27% in 2020. In the Financial Flows scenario, FDI as a share of GDP is projected to recover and even surpass pre-pandemic levels. By 2043, FDI flows will account for 4.56% of Tanzania’s GDP compared to 4.24% in the Current Path forecast. The impact would be to increase the stock of FDI in Tanzania by US$15.6 billion in 2043. In Africa’s lower middle-income economies, FDI is set to account for 3.99% in the Financial Flows scenario and for 3.54% on the Current Path.

In 2019, remittance inflows to Tanzania accounted for 0.5% of GDP, more than 2 percentage points below the average for its income peer group. In both the Current Path forecast and the Financial Flows scenario, remittance as a per cent of GDP will increase to 0.94% in the Current Path forecast and to 1.04% in the Financial Flows scenario. In absolute terms, remittances will increase from US$0.31 billion in 2019 to US$2.75 billion by 2043, respectively, US$0.33 billion more than in the Current Path forecast. The group of Africa’s lower middle-income economies shows a different trend. On average, the absolute volume of remittances will increase, but their relative contributions to GDP will decrease from about 2.56% in 2019 to 2.03% in 2043 in the Current Path forecast and 2.27% in 2043 in the Financial Flows scenario.

In the Financial Flows scenario, Tanzania’s GDP per capita will increase to US$5 607. This represents a gain of US$84 compared to the Current Path forecast.

Trade openness will reduce poverty in the long term after initially increasing it due to the redistributive effects of trade. Most African countries export primary commodities and low-tech manufacturing products, and therefore a continental free trade agreement (AfCFTA) that reduces tariffs and non-tariff barriers across Africa will increase competition among countries in primary commodities and low-tech manufacturing exports. Countries with inefficient, high-cost manufacturing sectors might be displaced as the AfCFTA is implemented, thereby pushing up poverty rates. In the long term, as the economy adjusts and produces and exports its comparatively advantaged (lower relative cost) goods and services, poverty rates will decline.

The interventions in the Financial Flows scenario will reduce the share of Tanzanians living in extreme poverty to 42.39% by 2043 compared to 43.86% in the Current Path forecast. This translates to about 1.5 million people who will escape poverty in the Financial Flows scenario by 2043.

In any case, and in line with the lower baseline, future average poverty rates in Africa’s lower middle-income economies will be lower than Tanzania’s.

The Infrastructure scenario represents a reasonable but ambitious increase in infrastructure spending across Africa, focusing on basic infrastructure (roads, water, sanitation, electricity access and ICT) in low-income countries and increasing emphasis on advanced infrastructure (such as ports, airports, railway and electricity generation) in higher-income countries. 

Note that health and sanitation infrastructure is included as part of the Health/WaSH scenario and that ICT infrastructure and more rapid uptake of renewables are part of the Leapfrogging scenario. The interventions there push directly on outcomes, whereas those modelled in this scenario increase infrastructure spending, indirectly boosting other forms of infrastructure, including that supporting health, sanitation and ICT. 

The intervention is explained here in the thematic part of the website.

In 2019, only 20.68 million people in Tanzania had access to electricity, about 35.6% of the population. The interventions in the Infrastructure scenario increase the electricity access rate to 72.27% by 2043 compared to 69.4% in the Current Path forecast. This means that 3.05 million more Tanzanians will benefit from access to electricity by 2043: 76.75 million rather than 73.7 million.

Rural areas will benefit more from the interventions in the Infrastructure scenario than urban areas. Access rates in rural areas will increase from 59.2% to 85.9% by 2043 compared to an increase from 64.8% to 88.2% in urban areas.

Indicator 9.1.1 in the Sustainable Development Goals refers to the proportion of the rural population who live within 2 km of an all-season road and is captured in the Rural Access Index.

Investments in rural road infrastructure are associated with positive socio-economic impacts, such as increased rural incomes and poverty reduction, improving maternal health as well as paediatric health and increased agricultural productivity. In 2019, 60.78% of Tanzania’s rural population had access to an all-weather road. This is roughly on par with the average access rate for Africa’s lower middle-income economies at 61.43%. The Infrastructure scenario will improve rural road access by 0.58 percentage points compared to the Current Path. By 2043, 67% of the rural population will have access to an all-weather road compared to 66.4% in the Current Path forecast.

Improvements in the Infrastructure scenario will increase the GDP per capita from US$3 056 in 2019 to US$5 684 in 2043, US$161 above the Current Path forecast. Despite the increases in both scenarios, Tanzania’s GDP per capita will remain significantly below the average of its income peer group on the continent. By 2043, the latter will reach US$7 335 in the Infrastructure scenario, more than 22% higher than Tanzania’s GDP per capita in the Infrastructure scenario.

In the Infrastructure scenario, the share of Tanzanians living in extreme poverty will drop from 67.41% in 2019 to 42.19% in 2043. This is an improvement of 1.67 percentage points relative to the Current Path forecast of 43.86%. It means that 2.3 million additional people will escape poverty over the coming two decades via the interventions in the Infrastructure scenario. 

The Governance scenario represents a reasonable but ambitious improvement in accountability and reduces corruption, and hence improves the quality of service delivery by government.

The intervention is explained here in the thematic part of the website.

As defined by the World Bank, government effectiveness ‘captures perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government’s commitment to such policies’.

Chart 51 presents the impact of the interventions in the Governance scenario on government effectiveness.

In 2019, Tanzania’s score on the Government Effectiveness Index was above the average of its income peer group on the continent: 1.95 versus 1.89. Tanzania ranks 11th among its peers, with Cape Verde, Morocco and Tunisia being the frontrunners. In the Current Path forecast and the Governance scenario, Tanzania’s government effectiveness quality score will improve to 2.42 and to 2.5, respectively, by 2043.

These indices aside, Tanzania suffers from lower government capacity (it scores below average on the IFs government capacity index) than most of its peers translating into low quality of public services including in health, education and water. [6USAID, Democracy, human rights, and governance, 1 December 2021] Low government capacity is, in turn, a function of low levels of government revenues. As a per cent of GDP Tanzania has the third lowest government revenues (excluding aid) among Africa’s 23 low middle-income countries. Only São Tomé and Príncipe and Nigeria have lower revenues. In 2019, government revenue in Tanzania was 13.8% of GDP. Including aid, it accounted for 19.56% of the country’s economic output.

In the Governance scenario, the GDP per capita will increase to US$5 523 while the interventions in the Governance scenario will increase the GDP per capita from US$3 056 in 2019 to US$5 652 in 2043. In the Governance scenario, improvements in the GDP per capita for Tanzania will continue to lag behind improvements in the average GDP per capita for Africa’s lower middle-income economies which will reach US$9 391 in 2043. 

In the Governance scenario, Tanzania will reduce the share of the population living below the poverty line to 42.3% by 2043 compared to 43.9% in the Current Path forecast. Given fast population growth, the Governance scenario cannot reverse the increase in the number of Tanzanians living in poverty (44.9 million in 2043 versus 39.15 million in 2019), but on the Current Path as many as 46.5 million will face extreme poverty in 2043.

This section presents projections for carbon emissions in the Current Path for Tanzania and the 11 scenarios. Note that IFs uses carbon equivalents rather than CO2 equivalents.

Tanzania’s carbon emissions in the Combined Agenda 2063 scenario, which combines all the sectoral scenarios is in Chart 60. Among the sectoral interventions, the Agriculture scenario will release significantly more carbon than any other, resulting in additional emissions of over 5 million tons of carbon above the Current Path forecast. The Agriculture scenario is followed by the Free Trade and Manufacturing/Transfers scenarios. The Health/WaSH scenario will have the smallest impact on increasing carbon emissions, and the only scenario that will reduce emissions below the Current Path forecast is the Demographic scenario.