Country profiles series - Tanzania

Country profiles series - Tanzania
Country profiles series - Tanzania

Shortly after achieving independence from Britain in the early 1960s, Tanganyika and Zanzibar merged to form the United Republic of Tanzania in 1964.

While Tanzania is one of the world's poorest economies in terms of per capita income, it has achieved high growth rates based on its vast natural resource wealth which includes extensive arable land and natural gas – GDP growth in 2009-14 was an impressive 6-7% per year. This growth is projected to be sustainable; from 2015 to 2019, the Economist Intelligence Unit anticipates Tanzania’s GDP to continue to grow by 7.1 per cent on average per year.

Tanzania has largely completed its transition to a market economy, though the government retains a presence in sectors such as telecommunications, banking, energy, and mining.

The economy remains dependent on agriculture, which accounts for more than one-quarter of GDP, provides 85% of exports, and employs about 80% of the workforce.

Six sectors have contributed to the rapid economic growth over the past decade, including:

  • Construction
  • Communication
  • Electricity
  • Manufacturing
  • Health
  • Administration and support

The World Bank, the IMF, and bilateral donors have provided funds to rehabilitate Tanzania's aging infrastructure, including rail and port, which provide important trade links for inland countries. Recent banking reforms have helped increase private-sector growth and investment, and the government has increased spending on agriculture to 7% of its budget.

The financial sector in Tanzania has also expanded in recent years and foreign-owned banks account for about 48% of the banking industry's total assets.

Competition among foreign commercial banks has resulted in significant improvements in the efficiency and quality of financial services, though interest rates are still relatively high, reflecting high fraud risk.

As a politically stable free market economy, Tanzania is in a strong position to trade with Britain. The UK is the largest foreign investor in Tanzania with 36% market share followed by followed by American and China.

UK companies already operating in Tanzania include BG Group, Standard Chartered, Barclays Bank, PwC, Deloitte, Unilever, GlaxoSmithKline, Diageo etc.

The leading British exports are:

  • Commercial and road vehicles
  • Building and construction equipment
  • Industrial raw materials
  • All other consumer goods

Strengths of the Tanzania market

  • Efficient air transport
  • English is the business language
  • Politically stable
  • Free market economy
  • The Dar es Salaam port serves eight land locked countries
  • Abundant natural resources
  • 44 million hectares of arable fertile land
  • Strategic location in east Africa

Challenges of the Tanzania market

  • Unreliable and expensive power
  • Underdeveloped transport system
  • Bureaucracy
  • Ranks low on the ease of doing business rankings
  • Widespread corruption – particularly in customs and tax authorities
  • Limited availability of skilled labour
  • Lack of technological resources
  • Complex land laws

According to the World Bank, Tanzania’s main challenges include addressing infrastructure bottlenecks, improving the business environment, increasing agricultural productivity and value addition, improving service delivery to build a healthy and skilled workforce, and managing urbanisation.

Tanzania’ youthful labour force is growing by approximately 800,000 every year and the government needs to increase the private sector’s role in employment creation.

And despite good progress in the late 2000s, the current level of tax revenues in Tanzania remains one of lowest in the world. The Government collected US$6 billion worth of revenues or approximately 12 % of GDP in 2014, enough to cover almost three-quarters of government expenditure, but insufficient to fund much needed investments in infrastructure and social services, partly due to Tanzania’s rapidly growing population.

Reforms of the tax system are vital for the country to secure the funds it needs to finance its economic and social development.

Key sectors


Recent exploration activity in Tanzania’s deep offshore waters has led to the discovery of 46.5 trillion cubic feet of natural gas. More is expected as drilling continues.

Opportunities exist in:

  • Oil and gas exploration
  • Development and construction of Liquefied Natural Gas (LNG) plants

There are also untapped sources and opportunities for renewable energy including geothermal, wind

  • Biomass
  • Solar
  • Natural gas
  • Coal


Tanzania has the largest gold reserves in Africa, behind South Africa. Gold exploration is intensifying.

In addition to gold, opportunities exist for the mining of:

  • Coal
  • Uranium
  • Nickel
  • Iron ore
  • Tanzanite gemstone

Information and Communications Technology (ICT)

The ICT sector has grown by more than 10% per year over the last 5 years. However, Tanzania has a limited fibre-optic network and affordable telecom service. Demand for communication services like fixed-line, broadcast and data are growing at a rate of more than 50% per year.

Opportunities for UK companies include:

  • Extending the fibre-optic network
  • Provision of ICT hardware
  • Education and training
  • Systems to support information flows


Agriculture remains the biggest sector in the Tanzanian economy, accounting for about half of national income. There is a huge availability of arable land and labour force.

Opportunities exist in:

  • Agro-processing
  • Machinery manufacturing
  • Irrigation infrastructure development
  • Production of flowers, fruits and vegetables
  • Production of traditional ‘cash crops’ such as coffee, tea, pyrethrum, cashew, sugar, cotton and sisal


Education is a continuously developing sector and contributes significantly to the Tanzanian economy. There is a need to develop the sector to meet worldwide standards.

Opportunities exist for the:

  • Construction and operation of education establishments
  • Supply of learning materials
  • Provision of corporate training

Financial services

The financial sector is one of the fastest growing sectors in Tanzania. There are a number of local and international banks being established within the economy.

Opportunities are available throughout the sector.


This sector is steadily growing and becoming more sensitive.

There is demand for:

  • Security services
  • Patrol vessels
  • Basic utility and training aircraft
  • Improved maritime situational awareness
  • Training on military skills
  • Training for criminal investigation and prosecution