Economic Reforms
Since early 1986, The Government of Tanzania has launched a comprehensive economic reform and stabilisation programme. In pursuit of this, agricultural marketing has been liberalised, foreign exchange controls have been lifted, prices deregulated, enhanced private sector involvement in the economy through privatisation programme and a new investment code offering competitive incentives has been put in place. These comprehensive economic reforms have resulted into improved competitiveness, lower tariffs, increasing levels of foreign investment and trade, improved key economic indictors and rapid integration into world markets. To this end, the Government of Tanzania is currently embarking on a strenuous exercise to upgrade its institutions and bring them on par with international standards. The expectation is to enhance the country's competitive position for investment flows destined for the region and to meet the daunting challenges of globalisation.
Macro economic Performance
Tanzania’s 15 years track record of largely satisfactory reforms have consolidated a more favourable macroeconomic environment, which makes it one of the main incentives for foreign investors. The macroeconomic environment is characterised by an annual average economic growth of around 5.5%, decreasing inflation rates and stable external accounts. According to the World Bank estimates, GDP growth rate is expected to be around 5.7 between 1999 and 2003. The momentum of declining headline inflation gathered since 1994, when the annual average inflation rate was 33.1%, continued during 1999/2000. The annual average headline inflation likewise declined to 6.7% in 1999/2000, from an average of 10.9% registered during 1998/99, making it the lowest inflation rate achieved over the past twenty years. Price stability has been achieved owing to a rigorous monetary policy. Growth in GDP per capita for 1999 was only 2.5% while it is expected to increase by 3.4% between 1999 and 2003.
Trade Performance
Tanzania export trade is dominated by agricultural produce. The leading foreign exchange earners include coffee, tea, tobacco, cotton, sisal and cashew nuts, while major imports into Tanzania consist of machinery, industrial raw materials, building and construction equipment and consumer goods. Tanzania’s balance of payments recorded significant improvements during 1999/2000, largely due to increased foreign aid. During the same year, the merchandise account recorded a marginal improvement of 1.1 percent, recorded a deficit of US$ 758.9 million compared with a deficit of US$ 767.5 million in the previous year. In 1999 Tanzania increased its exports of goods and services by 4.7%. According to the World Bank estimates, exports are expected to grow by 5.7% between 1999 and 2003. Tanzania’s trade deficit is expected to be reduced significantly when the existing mining projects begin actual production.
General Economic Figures
BBP
US$ 10,2 (2004, EIU estimation),
US$ 9,6 million (2003, EIU estimation),
US$ 9,4 million (2002, EIU estimation)
