Over the past decade, Tanzania maintained annual real GDP growth rate averaging 6-7%. In 2017, the economy attained a 6.8% GDP growth, driven by growth in services sector (specifically construction, professional services, and transport and storage) and manufacturing. In particular, transport and storage grew by 6.7 percent in 2017, following improved efficiency at Dar es Salaam and Tanga ports, and increase in transit cargo (by 19.5%). Other activities with high growth rates include; arts and entertainment (9.9%), health services (7.6%), education (7.3%), ICT (6.2%), and trade and repair (6.1%). Despite its low growth rate of 5.9 percent, agriculture remains a core sector in the economy, employing 66.3 percent of the population, while accounting for 20 percent of export earnings.

With a population of 52.5 million people in 2017, per capita income stands at US$ 1,044, which is a 8.9 percent increase from 2016 (US$ 958). The current account deficit increased, following increased imports, especially of transport equipment, building and construction materials, industrial raw materials, and petroleum products for large public investment projects, such as the Standard Gauge Railway (SGR). The reported GDP growth rate is expected to sustain in 2018 and 2019, following increased implementation of various earmarked infrastructure projects (water, energy, rail, road, airport), together with increased production of minerals and natural resources (diamond, natural gas, and coal), and enhanced performance in the agriculture sector.

Despite these positive rates, several challenges bedevil growth, posing significant risks to the attainment of the country’s objective of industrializing and becoming a middle-income economy by 2025. Some of these challenges include; slow pace towards inclusive growth, infrastructure bottlenecks (especially in transport and energy sectors), growing private sector concerns about economic policy uncertainty, and vulnerability to climate change.

The FYDP II pronounced objective of leveraging Tanzania’s geographical advantage to become a transport and trade hub in East and Central Africa. The port of Dar es Salaam is arguably Tanzania’s most important infrastructure asset. Future growth of the economy depends on the port’s ability to improve, to become more efficient and to be able to handle more trade. Despite the remarkable progress and economic opportunities, the country is still economically dependent on agriculture, which employs most people and especially women. Continued progress will rely on deliberate efforts to tap into natural resources, increase tourism revenue and exploit the potential for exporting value-added agricultural products.