Tanzania Budget Growth and Opportunities

BUDGET OVERVIEW

Despite the economic challenges born from Russia’s war on Ukraine, an increase in commodity prices, and a stronger American dollar, the Tanzanian economy performed satisfactorily in 2022. President Samia Suluhu Hassan’s administration looks to sustain the growth nurtured throughout the implementation of the country’s 3rd Five-Year Development Plan (FYDP III) 2021/22 – 2025/26, while tackling the obstacles facing the economy. Real GDP growth was 4.7% compared to 4.9% in 2021. The growth of the GDP was mostly driven by agriculture (15.6%), construction (11.8%), and manufacturing activities (8.1%). In 2023, the GDP is projected to grow by 5.2% - catalyzed by growth of credit to the private sector, improving business and investment conditions, and the continued rebounding of the tourism sector.

KEY SECTOR HIGHLIGHTS

- Agriculture – the 29.2% increased budget allocation to the Ministry of Agriculture should allow for reduced farming costs through subsidies, agricultural infrastructure development, improved productivity, seed production, and irrigation research.

- Energy – strategic priorities include the National Grid Stabilization Project, the finalization of LNG project negotiations and the beginning of preparations for its implementation, and the improvement of the infrastructure for receiving, unloading, storage, and delivery of fuel in the Ports of Dar es Salaam, Mtwara, and Tanga.

- Mining – several signed framework agreements and issued special mining licenses mean that there will be an uptake of mining activity in Tanzania in the medium term. The value of mineral exports rose by 20.1% in Q1 of 2023, compared to its corresponding period in the year before. New mining projects include gold, nickel, graphite, and rare earth minerals.

- Infrastructure – various airport modernization projects are underway, with a focus on Dar es Salaam, Dodoma, and Southern Highlands Airports (Songwe and Njombe). The Ministry of Works & Transport has started the process of obtaining contractors for Engineering, Procurement, Construction and Financing (EPC + F) for construction of approximately 2,035 kilometers of roads.

Tanzania’s budget growth is expected to create new potential opportunities for U.S. companies with expertise in areas such as agricultural equipment, agribusiness, airport design and construction, LNG energy infrastructure, and mining technology and equipment.

For additional business insights and to analyze your company’s prospects in this growing region, contact Commercial Specialist Andrew Mahiga, at the U.S Commercial Service, U.S Embassy, Dar es Salaam, andrew.mahiga@trade.gov