About Tanzania | About Tanzania prices | About Dar-es-salaam prices
Mainland Tanganyika and its island neighbor Zanzibar, located in eastern Africa, became independent in December 1961 and December 1963, respectively. In 1964 the two formed a union known as the United Republic of Tanzania. The president of Tanganyika, Mwalimu Julius Nyerere, became the first president of the Union... more

WTO: member
Status: Least Developed Country
ACP: member
Population: 33.7 million
Population growth rate: 2.6%
GDP growth rate (2000): 5%
Surface area (1997): 945.1 thousand sq. km
Population per sq. km (1997): 38
GNI per capita : 280 US$
GDP : 9.3 billion US$
Tanzania at a glance in detail

Following the Arusha Declaration in 1967, Tanzania launched a socialist development agenda with broad state controls. These policies provoked a long-term economic downswing and macroeconomic imbalances, resulting in a decline in living conditions for Tanzanians.

In 1986 the newly-appointed Mwinyi Government embarked on a broad-based Economic Recovery Program supported by the International Monetary Fund (IMF) and the World Bank. This was reinforced by an Economic and Social Action Program in 1989. Under these two programs, Government worked to dismantle the system of state controls and promote private sector expansion--including liberalizing the trade and exchange system, eliminating price controls and most state monopolies, and opening the financial sector to private sector participation. Rehabilitation of key infrastructure was also made a priority, particularly roads, railways, and ports.

The economy responded to these reforms, recovering at an annual growth rate of 4 percent over 1986-94. In 1995-96, however, Tanzania's progress was jeopardized by a significant deterioration in macroeconomic management, in part due to weakened commitment to reform during President Mwinyi's second term. The worsening macroeconomic situation led to deferment of World Bank and IMF programs and an interruption of balance of payment assistance from several donors.

The Mkapa Government , which came into power in November 1995, represented a break with the past and the President moved quickly to reach agreement with the IMF. The subsequent adherence to the IMF fiscal program has resulted in satisfactory economic performance.

Economy
Tanzania is one of the poorest countries of the world. Per capita income is estimated at about $250 per year. Covering an area of 945,000 square kilometers, it has a population of about 33 million growing at about 3 percent a year. The economy is heavily dependent on agriculture (primarily, coffee, cotton, tea, cashew nuts, sisal, maize, rice, wheat, cassava, and tobacco), which accounts for about 50 percent of GDP, provides 85 percent of exports, and is by far the largest employer. Topography and climatic conditions, however, limit cultivated crops to only a small fraction of the land area. Industry accounts for some 15 percent of GDP and is mainly limited to processing agricultural products and light consumer goods. The mining sector has good potential, but has yet to be fully developed. Tourism is one of Tanzania's dynamic sectors and has shown significant growth in recent years. The service sector and the informal sector are an increasingly important source of employment.

The Mkapa Government has focused on improving fiscal performance and instituting structural reforms. These encompass: (i) building administrative capacity for improving development management; (ii) maintaining a stable fiscal stance and using public resources more efficiently; (iii) promoting the private sector by deregulating investments, and divesting parastatals; (iv) providing greater support for primary education and basic health care, and reducing allocations for low priority activities; (v) supporting the development of basic infrastructure, especially to give impetus for rural agricultural development; and (vi) restructuring the financial sector to respond to the needs of the private sector.

Overall the Mkapa Government has sought to ensure macro stability maintenance, with increased allocations to social/priority sectors. The combination of government-led reform and development assistance has resulted in a real GDP growth rate averaging about 4 percent during the last four years. This is a strong result considering the severe weather conditions and reflects strengthened macroeconomic and structural fundamentals as well as a greater flexibility of the economy in responding to shocks. A large number of the distortions that existed in the 1990s have been dealt with - markets are freer and the public sector is smaller. Headline inflation is also down from over 30 percent (’95) to under 6 percent. Real GDP growth is projected at 5.6 percent for fiscal year 2001 (real GDP growth for FY00 put at 5.2% ), with the agriculture and tourism sectors as the driving forces.

Political Context
Tanzania continues to enjoy political stability, and has assumed a leadership role in regional cooperation under President Mkapa. After three decades of one-party rule, multi-party elections were held at the local level in late 1994, and presidential and parliamentary elections in late 1995. The ruling Chama cha Mapinduzi Party (CCM) won both presidential and parliamentary elections. Next elections are to be held in October 2000. Over the past five years, the government has made efforts to fulfill its election pledge to fight corruption and to continue policies emphasizing economic stability and liberalization aimed at growth and poverty reduction.

Development Picture/Donor Coordination
The Bank and other donors fully endorse Tanzania's economic and institutional reform effort, as evidenced by an expanded level of donor support. Numerous bilateral donors are very active in the social sectors, public sector capacity building, civil service reform and governance issues. There are also a large number of non-governmental organizations working in Tanzania. At the May 2000 meeting of multilateral and bilateral donors, held in Dar es Salaam, donors pledged about US$1 billion for the fiscal year. The next such meeting is planned for May 2001.

World Bank Role
The World Bank has sought to actively support Government of Tanzania's economic recovery efforts. Tanzania joined the World Bank Group in 1962. Beginning with an IDA credit for education in 1963, a total of 114 credits and 27 Bank loans have so far been approved for Tanzania. In a meeting of the Board of Executive Directors of IDA, on April 4, 2000, to review Tanzania’s Interim Poverty Reduction Strategy Paper and its joint World Bank-IMF staff assessment, the Directors agreed that Tanzania is eligible for debt relief under the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative framework. Tanzania has since been receiving interim debt relief.

A new Country Assistance Strategy (CAS) for Tanzania was approved by the Bank’s Board on June 15, 2000. Building on the stable macroeconomic framework to address poverty, strengthen sources of growth for improved per capita income and enhanced social services delivery, are now central to Tanzania’s development agenda. Reflecting this, the focus of this CAS is on higher economic growth, poverty reduction and institutional reforms to improve governance. It conforms with Government’s main strategic directions - adherence to macro stability, increased private sector participation in the economy, a renewed emphasis on rural development and improved delivery of social services. It also supports the Government's desire to enter into new relationships with partners, based on the phased switching from projects to programs for a more effective and efficient use of aid resources. In supporting these objectives, the CAS suggests a lending program which will be increasingly geared towards operations with a direct bearing on poverty and strengthening of social sector programs, in a shift from the earlier emphasis on infrastructure development. We are presently working on 4-5 projects a year. There is close interaction with the IMF on the macroeconomic program.

The International Finance Corporation (IFC) Program ranges from $20-$ 40m. over the next 3 years, with a focus on private sector development through loan/equity investments, advisory services (via its Foreign Investment Advisory Service and Africa Project Development Facility), privatization of state-owned enterprises and capital market development. IFC will continue to build on the reforms initiated with IDA support to invest in private infrastructure provision, expand and deepen financial markets and institutions, and provide financing and capacity building to Tanzanian small and medium enterprises. IFC’s committed portfolio presently includes investments in tea, leather, agricultural products, tourism, and finance.

Tanzania became a member of the Multilateral Investment Guarantee Agency (MIGA) in 1992. MIGA has issued guarantees for investments in the country's finance and telecommunications sectors. It has currently a number of applications pending in the agribusiness, manufacturing, infrastructure and tourism sectors. Tanzania has been an active beneficiary of MIGA's technical assistance activities, including mining and tourism investment promotion activities, capacity building events for investment intermediaries and MIGA's information dissemination tools.

The World Bank Institute (WBI) has focused on public sector management and governance (especially anti-corruption work), agriculture sector management, decentralization and health issues. The Global Development Learning Center was launched successfully by WBI in FY00. In fiscal 2001, WBI will continue to work in these areas.

Contacts

Mr. James W. Adams
Country Director
50 Mirambo Street
Dar es Salaam
Tanzania
Tel: (255) 22 2114575-7/ 2116197-99
Fax: (255) 22 2113039
Email: jadams@worldbank.org

Mr. Ronald Brigish
Country Program Coordinator,
1818 H Street NW,
Washington D.C. 20433, USA
Tel: (202) 473-6691
Fax: (202) 473-5453
Email: rbrigish@worldbank.org

Ms. Preeti Ahuja
Country Operations Officer,
1818 H Street NW,
Washington D.C. 20433, USA
Tel: (202) 473-1675
Fax: (202) 473-5453
Email: pahuja@worldbank.org

Ms. Rest Lasway
NGO/Gender Liaison
Dar es Salaam, Tanzania
Tel: (255) 22 2116198
Fax: (255) 22 2113039
Email: rlasway@worldbank.org

Useful Links
http://www.africaindex.africainfo.no/africaindex1/coregister.htmlAfrican Studies - University of Pennsylvania
Index on Africa
Maps of Africa - U. of Penn.
CNN - Africa Sites
Tanzania _U.S. Embassy

c.c, www.worldbank.org

Coffee, Cotton, Tea, Tobacco, Cashew nuts, Sisal, Cloves, Honey and beeswax

Rice, Maize, Cassava

Textiles and leather

In 1986 Tanzania embarked on an economic recovery programme followed by an Economic and Social Action Programme in 1989. Both programmes were sponsored by the World Bank and IMF.

Within these programmes state controls were dismantled, the private sector was promoted, the trade and the exchange rate system were liberalised, price controls were eliminated and most state monopolies were privatised. Development priority was given to roads, railways and ports. The economy expanded during 1986 to 1994 after a long period of stagnation but deteriorated again in 1995 to 1996. The setback was attributed to worsening macroeconomic management and development assistance was withdrawn. Aid was reinstated after the government committed itself to further reform and the economy began to improve again.

Tanzania remains one of the world’s poorest countries, however, partly because of its heavy reliance on the agricultural sector which has been hit hard by adverse climatic conditions and falling market prices. Agricultural development is constrained by lack of irrigation and only about 15% of available arable land is cultivated.

The country produces one quarter of the world’s cashew nuts but exports a significant proportion of them in the unprocessed form to the Indian sub-continent for de-shelling. Some shelling takes place in the country but the industry was set back by the introduction of inappropriate high-tech equipment. Small-scale cashew nut producers have benefited from a return to a system where they can bargain directly with buyers. The sisal market has suffered a long-term decline due to competition from synthetic fibres for use in bags and ropes. Tanzanian production has fallen from a quarter of a million tons a year in the 1960s to around 35,000 tons. The clove industry representing the bulk of Zanzibar’s exports has suffered after the collapse of the price after Indonesia, the world’s largest importer, was assisted to become self-sufficient in supplies. There has been a serious decline in coffee and cotton production as the price of these commodities also fell. Production of tobacco, tea, cashew and horticultural products has risen, however, in recent years.

Tanzania Market Surveys

Commercialization of Agricultural Market information and Commodity exchange services in Tanzania.

Introduction & demonstration of Cassava processing equipment in the Eastern Zone of Tanzania

Strategies for the improvement of the Poultry Feed Industry in Tanzania