RMB’s economic growth outlook for Tanzania

Tanzania's economic growth outlook remains positive, with growth expected to average 6.2 per cent between 2017 and 2026, supported by infrastructure development and a growing consumer base, according to Deloitte. The country's growth curve has been fueled by various sectors, including agriculture, infrastructure, government spending, and consumer demand. In a recent interview on CNBC Africa, Country Risk Analyst at Rand Merchant Bank, Candy Mazzuchetti, provided insights into the key drivers of Tanzania's economic growth and the impact of government policies on sectors like mining and manufacturing. Mazzuchetti highlighted the importance of addressing corruption while also diversifying the economy to sustain high growth rates moving forward. Let's delve deeper into the factors shaping Tanzania's economic landscape. Tanzania's economic growth has been robust, averaging 7 percent over the last three years. However, Deloitte projects a slightly lower growth rate of 6.2 percent in the next decade. Mazzuchetti attributed this adjustment to changes in government policies, particularly in sectors like government administration and mining. The government's anti-corruption drive has led to policy shifts that may impact growth in the short term. Still, the country's strong agricultural base and infrastructure development continue to drive economic expansion. President Magufuli's focus on fighting corruption has had implications for sectors like mining and manufacturing. The government's efforts to ensure that Tanzania benefits from its natural resources have led to policy uncertainties that deter foreign investment. While the anti-corruption campaign is a crucial step, Mazzuchetti emphasized the need for a diversified approach to foster sustainable growth beyond addressing corruption. Balancing policy effectiveness with investment attractiveness will be key to maintaining Tanzania's growth trajectory. Inflation rates in Tanzania have been relatively stable, with the near-term target set at 5 percent. Recent figures show a slight decline in inflation to 5.1 percent in October, driven by moderation in both food and non-food components. Despite earlier challenges due to factors like drought, inflation is expected to remain within the 5 percent range towards the end of the year and into the next year. Mazzuchetti's analysis of inflation trends underscores the importance of monitoring macroeconomic indicators to ensure stable economic conditions. Looking ahead, Tanzania's economic growth outlook hinges on a delicate balance between addressing corruption, stimulating investment, and diversifying the economy. The country's resilience in the face of challenges like drought and policy changes underscores its potential for sustained growth. As the government navigates these complexities, stakeholders will closely watch for policy adjustments that support inclusive growth and long-term prosperity. In conclusion, Tanzania's economic trajectory showcases both opportunities and challenges as the country strives to maintain its growth momentum. By leveraging its core strengths in agriculture and infrastructure while fostering a conducive investment climate, Tanzania can further solidify its position as a key player in the East African economic landscape.