In this series, we take a look at Africa, country-by-country, and offer a (very) brief glance at the historical events, key industries, and current political situation shaping individual states.
Photo: Dar es Salaam, Tanzania (Source: Muhammad Mahdi Karim/ Encyclopædia Britannica)
Quick facts
Head of state: President Samia Suluhu Hassan (2021–present)
Capital: Dodoma
Largest city: Dar Es Salaam
National population: 63.6 million (2021)
GDP: USD 67.8 billion (2021)
A (very) brief history
Home to some of the oldest human settlements ever discovered, including the Olduvai Gorge in the north, Tanzania is often referred to as the “Cradle of Mankind.” Among million-year-old fossils, Tanzania also features the Laetoli footprints which were made by the immediate ancestors of humans roughly 3.6 millions ago.
The arrival of Vasco de Gama in 1498 signaled the beginning of an era of control by the Portuguese that would extend until the 17th century, when they were driven out by Arabs from Oman. By the 19th century, Europeans (notably Germans and the British) began again attempting to assert control over the area as well as its islands.
Fast forward to the 20th century, and Tanzania gained independence from Britain in 1961. In the decades since, it has since become one of the largest economies in East Africa. The country also includes the Zanzibar archipelago of islands, of which Zanzibar is the largest. Tanzania and Zanzibar united in 1964 to form the current United Republic of Tanzania.
Since independence in the mid 20th century, Tanzania has had a tumultuous political history, with periods of authoritarian rule and economic decline. The country’s first prime minister and then President Julius Nyerere advocated for a policy of socialism, with collective agriculture driving down production and taking the economy with it.
In the mid 1980s, President Ali Hassan Mwinyi pushed to diversify the economy, opened the country to foreign investment, and the economy grew as a result. The early 90s saw the emergence of a multi-party democratic system. The 2000s saw school fees abolished, and education rates increased significantly.
In 2021, Vice President Samia Suluhu Hassan ascended to the Presidency after the extended public absence and subsequent death of President John Magufuli. She is the sixth and first female President of the Republic of Tanzania.
Key industries
Between 2010–2019, Tanzania’s economy was growing at over 6% per year, and in 2019, it was reclassified as a middle income country. Several industries contribute enormously to this growth, including:
Agriculture
As the mainstay of the Tanzanian economy, agriculture employs upwards of 65% of the population. The sector is dominated by small-scale farmers and includes crops such as maize, rice, and cassava. In recent years, the government has been working to modernize the sector and promote investment in agriculture.
Tourism
Tanzania is known for its wildlife, including the Serengeti National Park and the Ngorongoro Conservation Area, as well as its beautiful beaches and aforementioned historical sites. The government has also been investing in tourism infrastructure and promoting the industry as a way to generate foreign exchange and create jobs.
Natural resources
Minerals – including gold, diamonds, and Tanzanite (a popular jewelry gemstone) – are also important to the Tanzanian economy. The mining sector has been growing in recent years, accounting for approximately 7% of the country’s GDP in 2020 and 300,000 jobs. The government has been promoting investment in the industry, including a recent USD 50 million Australian investment in a nickel mining project.
Photo: Elephant and tourists at Ngorongoro Crater (Source: George Lamson/ Flickr)
How politics affects the business environment
The government has been promoting foreign investment in the country and has implemented policies to make it easier for foreign companies to do business in Tanzania. This includes tax incentives (including VAT exemption on some air services), streamlined investment procedures, and a well-functioning legal system based on English Common Law.
In recent years, the government has been working to address some of the challenges facing the country, including poverty, unemployment, and a lack of access to basic services such as electricity and clean water. A 5-year plan unveiled in 2021 outlined priority sectors for the government and included a number of initiatives, including investment in infrastructure, education, and healthcare.
Current political and economic climate
President Hassan has departed from her predecessor's governing style in several ways. First, she has attempted to find common ground with the Kenyan government to overcome delays in the completion of a mega port project and second, she is working to further diversify the economy. One recent initiative has been discussions to create a film studio hub in the country under a project spearheaded by British actor Idris Elba.
However, there are concerns that the fiscal discipline of her predecessor is beginning to “slip away.” While Magufuli’s legacy is complicated, to say the least, under his tenure “fiscal deficit narrowed to from 6.5 % in fiscal year 2012/13 to just 2% in 2019/20.” Public debt has also increased significantly in recent years (from just over 10% under Magufuli to nearly one-third of government revenues today).
President Hassan’s strategy focuses on public-sector led growth, and this will naturally stray from the fiscal discipline of years past. As Tanzania and the majority of African countries struggle to simultaneously recover from the Covid-19 pandemic and pursue strategies for long-term, sustainable economic growth, it will be critical to watch how they manage this growing public debt and the diversification of their economies.
Final note
While Tanzania has a diverse economy driven by agriculture, tourism, and minerals, the government has been promoting foreign investment and has implemented policies to address the challenges facing the country, including poverty, unemployment, and a lack of access to basic services.
Despite many challenges, Tanzania has experienced a period of stability and economic growth in recent years. Under its current President, the country appears to be making more meaningful actions in diversifying its economy to become a stronger regional economic and political hub.
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