Tanzania (United Republic of)

Strong growth driven by exports and investments

Growth will remain strong in 2026, driven by gold exports and investment. New mines are expected to start production between late 2026 and 2028. They are spread across the country; Tanzania's mining economy is unique in that it relies on a vast network of small mines and benefits from rich and diverse mineral resources. While gold accounts for 80% of mining, followed by coal (6%) which is consumed for electricity production or exported, significant deposits of graphite, copper, nickel, lithium, and cobalt are beginning to be exploited, such as the graphite mines in Nachu and Ruangwa (southeast). These projects, which are highly attractive to foreign investors (Australia, Canada and the UK), are supported by the government through the simplification of mining licence issuances (2024), exemption from customs duties on equipment and a generous budget for the Ministry of Minerals. In return, the state receives a 16% free and non-transferable stake in any company holding a license, which must also reserve a portion of its production for local processing industries.

To facilitate the transport of these resources, attract more investors, and strengthen its role as a regional hub, Tanzania is developing its rail infrastructure towards Burundi (SGR project), Zambia (with the rehabilitation of TAZARA), and within the country, from Dar es Salaam to Mwanza (in the north, on the shores of Lake Victoria) and Kigoma (in the west, on the shores of Lake Tanganyika), road infrastructure with the 600 km Tanga–Arusha–Musoma highway connecting the port of Tanga (northeast) to Lake Victoria (northwest), ports, with the port of Bagamoyo, set to become the largest in East Africa, financed by China (80%) and Oman (20%), and the modernisation of the ports of Zanzibar (a semi-autonomous archipelago) and Dar es Salaam (construction of two new quays), and energy following the announcement in early 2025 of an ambitious five-year plan to expand the electricity grid and develop solar, wind and hydroelectric power plants – a plan financed by the government and, for one-third, by multilateral partners and development banks. Last, the East African Crude Oil Pipeline, financed by Total Energies (62%), the national energy companies of Tanzania and Uganda (30%) and CNOOC (8%, China), could be completed in 2026 after nearly 10 years of work.

Last, private consumption will grow modestly in line with the development of tourism and a slight improvement in agricultural yields (coffee, tobacco, cashews, etc.), made possible by increased use of fertilisers, despite climate risks and rising food inflation, factors that limit the increase in household purchasing power. The key interest rate could be lowered slightly in the coming months if fuel prices continue to fall but will certainly remain above 5% to keep inflation under control.

Maintaining budgetary stability and enhancing attractiveness for FDI

The 2025 fiscal year (1 July 2024 – 30 June 2025) ended with a larger-than-expected public deficit, but one that remains moderate. An amendment was adopted in February 2025 to increase spending on education, climate change adaptation and health, which was severely affected by the end of the US aid program (USAID), and to settle arrears related to infrastructure construction. However, spending continued to rise in March, reflecting the acceleration of investment projects. The targets of the IMF's Extended Credit Facility program have been revised downward accordingly. Extended for an additional six months thanks to the effective implementation of structural reforms (increased transparency in monetary policy and public spending, reduction of arrears), it is expected to end in May 2026.

The deficit is expected to narrow slightly during fiscal year 2026. Expenditures will continue to rise as a result of civil service salary increases, higher debt servicing costs, the organisation of presidential elections (October 2025) and public investment in energy, logistics, and sports infrastructure—including the Arusha stadium (northeast) that will host the 2027 African Cup of Nations. This would be offset by higher corporate tax revenues, the extension of the VAT base to online purchases, increased customs duties on imports of furniture, ice cream, and e-cigarettes, and exports of plywood, as well as the introduction of a tourist tax. The debt-to-GDP ratio is therefore expected to remain at a moderate level. Eighty-five percent of Tanzania's debt is held by domestic (40%) or multilateral (45%) creditors at concessional rates. The remainder is held by foreign public banks specialising in export support (China, India and South Korea).

The current account deficit is expected to remain moderate in 2026, with exports and imports—a significant portion of which is attributable to construction projects—growing at the same pace. This deficit is financed by surpluses in the capital account, generated by subsidies for investment projects from multilateral institutions (the IMF and the World Bank) and in the financial account, which is recording a growing volume of FDI and project loans. Foreign exchange reserves will remain stable, just below four months of imports. As part of the floating exchange rate regime for the shilling, the central bank could intervene again to curb volatility and prevent its depreciation.

The re-election of Samia Suluhu on 29 October 2025 feeds discontent

The death of President Magufuli in 2021, the year after his contested re-election, propelled his Vice President, Samia Suluhu, to power. Initially perceived to be in favour to greater democratic openness—notably with the reopening of media outlets banned by her predecessor and the lifting of the ban on political rallies for opposition parties— the president ultimately returned to political censorship and the misuse of the justice system to silence the opposition, as in the case of Tundu Lissu, the main opposition leader who was imprisoned in February 2025 for treason and faces the death penalty. President Suluhu's re-election in October 2025 (with 97,66% of the vote) was a foregone conclusion but was followed by violent clashes between police and protesters, causing hundreds of civilian deaths. It heralds the continuation of uninterrupted electoral victories for the Revolutionary Party (Chama cha Mapinduzi, CCM) since the introduction of a multi-party system in 1992.

Although Tanzania maintains good relations with the West—particularly with its Commonwealth partners, Canada and Australia being major partners in the mining sector—the country is more oriented toward Asia. Its ties with China have been historically close since independence in 1964, both diplomatically and economically: Beijing is financing major projects such as the modernisation of the TAZARA railway, the construction of the port of Bagamoyo, and hydroelectric power plants and road infrastructure. India—with which a military cooperation agreement was signed in 2023—and the UAE are also important partners: they are the leading markets for Tanzanian exports and major investors, particularly in the expansion of the port of Dar es Salaam. Last, Tanzania has recently moved closer to Russia, which is investing in uranium mining and processing. Construction of the first plant dedicated to this purpose is expected to begin in 2026.

From a regional perspective, Tanzania is seeking to strengthen its role as a hub for all countries in southeastern Africa. It is a founding member of the East African Community, a free trade area for goods, people and capital, which promotes economic and political integration among its eight members. However, this desire for openness is marred by the ban on foreigners operating small businesses in 15 sectors of activity, which entered into effect at the end of July 2025. Tanzania is also part of the Southern African Development Community (SADC), which brings together 16 countries and aims to promote economic cooperation, political stability, and regional security. Within this framework, it has staged military interventions in support of the Congolese government against the M23 group and is working closely with the Mozambican government under a bilateral agreement on security in the border province of Cabo Delgado. The landlocked neighbouring countries of Uganda, Rwanda, Burundi, Zambia and Malawi use the port of Dar es Salaam, although the port of Mombasa in Kenya is still the region's main outlet.

Last updated: October 2025October 2025