Economy of United Republic of Tanzania
KEY FACTS 2015
GNI: US$47.7 billion
GNI p.c.: US$920
GDP growth: 7% p.a. 20011–15
Inflation: 5.6% p.a. 2011–15
Tanzania came to independence in 1961 with a severely underdeveloped economy and extremely limited infrastructure. In an effort to bring about rapid yet socially equitable development it became an early proponent of African socialism, launched in 1967 with nationalisation of banking, finance, industry and marketing boards; and the resettlement of peasants in communal ujamaa villages, created out of large estates.
However, after an initial boom, the formal economic base shrank, production fell and the parallel economy became a way of life. The Ugandan war, falls in commodity prices and failures of the policy itself brought the country to the verge of bankruptcy by the mid-1980s.
Since 1986 new policy directions and International Monetary Fund-backed structural adjustment programmes have, at considerable cost to social programmes, helped integrate the parallel economy and stimulate growth, which for the most part has been ahead of population growth since the policy change. Since the mid-1990s, the government has embarked on a programme of economic liberalisation and diversification.
The Dar es Salaam Stock Exchange was opened in March 1998. The government has encouraged foreign investment in industry, especially mining where investments have been made in gold, nickel and cobalt mining. Hundreds of public enterprises were privatised during the 1990s and 2000s, though some entities have since been renationalised (see Transport section). The principal exports are gold, diamonds and other gemstones, coffee, fish and seafood, tobacco, cotton, cashew nuts and tea. In July 2001, an immense new gold mine was commissioned near Mwanza, with the potential to make the country one of the world’s largest producers of gold.
After averaging 2.9 per cent p.a. in the 1990s, GDP growth strengthened in the 2000s. It was sustained at six per cent p.a. or more during 2001–15, despite the adverse international economic climate from 2008–09.