Central bank assures stability amidst election season jitters

“The Bank of Tanzania is working to ensure that money remains both available and stable in value, an essential foundation for business profitability and economic growth,” he said.

According to him, the BoT’s approach is aimed at supporting business owners by sustaining financial and economic stability across the country.

Mr Tutuba said thatStrong performance indicators as production rises, demand for raw materials also increases, which stimulates further supply of goods and services, creating a cycle of positive economic activity.

As of August 2025, Tanzania’s nominal GDP was estimated at $85.98 billion, translating into a per capita GDP of about $1,280. In purchasing power parity (PPP) terms, GDP stood at about $293.59 billion.

Growth, he added, is being driven by both domestic and foreign investment, reflecting rising investor confidence.

Key infrastructure projects such as the Standard Gauge Railway (SGR) and port upgrades are playing a major role, while agriculture continues to perform strongly. In addition, gold exports are generating higher revenues, supported by favourable international prices.

Private sector confidence rising

Institute of Management and Entrepreneurship Development CEO, Dr Donath Olomi, noted that over the past two decades, Tanzania’s investment environment has undergone a remarkable transformation.

“In the early 2000s, economic growth averaged around 5–6 percent. Today, growth continues, but there is a sense that it should be accelerating even faster, closer to 10 percent,” he said.

He explained that to attract greater private sector participation, government has rolled out tax incentives and non-tax-related support measures. Significant progress has also been made in infrastructure, reducing the cost of doing business and easing the movement of goods across the region.

“While taxation remains a common concern among businesses, it is important to recognise the progress achieved. The domestic market has expanded, regional trade has increased, household incomes have risen, and demand for goods and services has grown substantially,” Dr Olomi said.

The cement industry, he pointed out, illustrates this change. Two decades ago, Tanzania had only three cement factories. Today, the number has increased significantly, supported by infrastructure development and strong demand across sectors.

“Perhaps most notably, the business acumen of Tanzanians has improved dramatically. The level of entrepreneurial knowledge, access to markets, and understanding of operations are far beyond what they were twenty years ago,” he said.

Despite this, he observed, the question remains why Tanzania’s economy has not yet reached double-digit growth, given its abundant natural resources, human capital and geographic advantage. Achieving that goal, he argued, will require bolder decisions, deeper reforms, and more consistent implementation.

Broad-based sectoral growth

Repoa director and senior researcher, Dr Donald Mmari, said several sectors are currently expanding. “In agriculture, production is increasing to meet the needs of a growing population. The transport sector, including roads and railways, continues to contribute significantly to GDP,” he said.

He also cited banking and finance, ICT, and informal services as key drivers of current momentum.

Economist Renatus Mbamilo added that between 2021 and 2024, Tanzania’s economy showed resilience with an average growth rate of five percent, although performance was uneven across sectors.

“The strongest momentum came from services such as financial services (10.5 percent), mining (9.9 percent), electricity (9.3 percent), ICT (9.0 percent), and other services (9.2 percent). These anchored much of the growth,” he said.

Tourism also rebounded strongly after the Covid-19 downturn, with accommodation and restaurants growing by an average of 7.7 percent.

By contrast, labour-intensive sectors such as agriculture (3.9 percent) and construction (3.8 percent) lagged behind, reflecting persistent structural challenges. Manufacturing grew at a moderate 4.6 percent, underscoring the unfinished task of driving industrialisation.

“With ongoing government strategies and investments, there is potential for agriculture, construction, and manufacturing to achieve stronger growth in the coming years,” Mr Mbamilo said.

Re-balancing the economy

He warned, however, that uneven growth trends highlight the urgency of addressing productivity gaps in agriculture, manufacturing and construction. “These are the backbone sectors for jobs and livelihoods, and they cannot continue lagging behind,” he said.

Raising agricultural productivity through technology, irrigation and value-chain development, he argued, is vital for inclusive growth, given the sector’s 65 percent share of employment.

“Stabilising energy and water supply will strengthen industrial competitiveness, while targeted incentives for manufacturing can accelerate industrialisation and reduce import dependence,” he added.

At the same time, he said, it is important that high-growth sectors such as mining and ICT translate their gains into broader job creation and fiscal revenues. Diversification, he stressed, will be essential for Tanzania to achieve sustained and inclusive development.

“Tanzania’s economy has shown resilience with 5 percent average growth between 2021 and 2024, but the uneven sectoral performance tells a bigger story: services and extractive are powering ahead, while agriculture, construction, and manufacturing, which are the backbone of jobs, are lagging,” he said.

Looking ahead

University of Dar es Salaam Associate Professor Abel Kinyondo said that GDP reflects not only production but also investment, consumption, government spending and trade. Seasonal factors such as tourism also play a role.

“Gross Domestic Product captures more than just production; it includes investment, consumption, government expenditure, and trade, all of which can be influenced by seasonal trends like a surge in tourism,” he said.

Independent analyst Christopher Makombe echoed this view, saying that infrastructure development and favourable commodity markets remain critical to Tanzania’s growth momentum.

“With stable monetary policy, increased production, and strategic investments, Tanzania is on a path to sustainable economic development,” he said.

Stability amidst uncertainty

With elections approaching, economists agree that political jitters are inevitable. However, the consensus among experts is that the country’s strong policy framework, combined with major infrastructure projects and an increasingly dynamic private sector, provides a buffer against volatility.

As the central bank continues to keep inflation under control and preserve the shilling’s stability, analysts argue that Tanzanian businesses can look ahead with cautious confidence, knowing that the foundations of the economy remain firm.