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  • Following two decades of sustained growth, Tanzania reached an important milestone in July 2020, when it formally graduated from low-income country to lower-middle-income country status. Tanzania’s achievement reflects sustained macroeconomic stability that has supported growth, in addition to the country’s rich natural endowments and strategic geographic position.

    Political Context

    President Samia Suluhu Hassan was sworn in on March 19, 2021 as the United Republic of Tanzania’s sixth, and first woman, president, following the death of President John Pombe Magufuli on March 17, 2021. President Hassan was the Vice President of the Fifth-Phase Government from October 2015. The government has prioritized efforts to clamp down corruption, improve public infrastructure systems, improve public administration and accountability, and proper management of public resources for improved social outcomes. The 2020 Worldwide Governance Indicators show Tanzania has either deteriorated or has been stagnant in most governance indicators between 2012 and 2019 (except for control of corruption and political stability/absence of violence). The strongest decline has been in the rule of law, governance effectiveness, and voice and accountability whereby political, media and civil society organization’s freedoms have continued to shrink.

    Economic Overview

    Reflecting strong income growth over the past decade, on July 1, 2020 the World Bank announced that Tanzania’s gross national income (GNI) per capita increased from $1,020 in 2018 to $1,080 in 2019, exceeding the threshold for lower-middle income status. The country’s broad vision of its development goals as a middle-income country in 2025 are set out in the Tanzania Development Vision 2025, characterized by high-quality livelihoods, peace, stability, and unity good governance, a well-educated and learning society, and a competitive economy capable of sustainable growth and shared benefits. Increased GNI per capita is impressive but not enough to reach these goals. Investing in both human development and physical capital is key to achieving these broad goals and improving the quality of life for all Tanzanians. 

    Tanzania has fared relatively well compared to its regional peers, but economic growth has slowed significantly. The real gross domestic product (GDP) growth rate fell from 5.8%  in 2019 to an estimated 2.0% in 2020, and per capita growth turned negative for the first time in more than 25 years. The global economic slowdown has adversely affected export-oriented industries, especially tourism and traditional exports, and caused a drop in foreign investment. Gold has been the sole export to benefit from the crisis, as international gold prices rose sharply between 2019 and 2020. Although the government did not impose stringent mobility restrictions, the pandemic prompted firms and consumers to adopt precautionary behaviors, hindering domestic economic activity. Meanwhile, steep declines in production, consumption, and imports have significantly reduced fiscal revenue. The pandemic has also compounded preexisting challenges in the financial sector, and the share of nonperforming loans on bank balance sheets continues to be high, while the growth of credit to the private sector has slowed.

    Slowing economic activity has adversely impacted livelihoods. During June and July 2020, the World Bank conducted a COVID-19 Business Pulse Survey (COV-BPS) covering 1,000 small and medium enterprises in Tanzania. The survey data indicate that about 140,000 formal jobs were lost in June 2020, and another 2.2 million nonfarm informal workers suffered income losses. Tanzanians employed in informal nonfarm microenterprises tend to be especially exposed to economic shocks, as they often have limited savings to draw on in a crisis. Firms reported an average decline in sales of 36%, which has jeopardized the solvency of more than three-quarters of small and medium enterprises. Most affected firms have not benefited from any type of government support, and respondents suggested that tax deferrals for firms in the most severely affected sectors, including tourism and related services, could help mitigate the disruptive effect of the crisis and enable a swift recovery.

    Social Context

    The crisis could push an additional 600,000 people below the national poverty line. While the

    poverty headcount ratio at national poverty line (TZS 49,320 per month per adult equivalent, which is equal to $1.35 per person per day in purchasing-power-parity terms) has declined modestly over time, falling from 28.2% of population in 2012 to 26.1 in 2019, Tanzania’s rapid population growth has caused the number of people living below the national poverty line to steadily increase. In 2020, the pandemic-induced economic slowdown caused the poverty rate to rise to an estimated 27.2%, compounding the effect of population growth on the absolute number of people living in poverty. Because a large share of Tanzania’s population is close to the poverty line, even a mild economic shock can push numerous households into poverty. The impact of the crisis has been especially acute among households that rely on self-employment and informal microenterprises in urban areas.

    Last Updated: Mar 23, 2021

  • World Bank Group (WBG) Engagement in Tanzania

    The World Bank’s active portfolio in Tanzania includes 17 national International Development Association (IDA) projects with total net commitments of $3.86 billion. Key sectors supported include transport (23%), urban development (7%), education (20%), energy (17%), water (13%), social protection (10%), health/nutrition (5%), environment/natural resources (4%) and governance and poverty projects make up 2% of the portfolio. Tanzania is also included in seven regional projects, with its total commitments reaching $728 million supporting the transport, energy, environment, health and education sectors.

    In March 2018, the Bank’s Board of Executive Directors endorsed the new Tanzania Country Partnership Framework 2018-2022 (CPF). The CPF is informed by extensive consultations with a wide range of stakeholders as well as a country opinion survey. Aligned with the priorities identified in Tanzania’s Second Five-Year Development Plan and Zanzibar’s Third Strategy for Growth and Reduction of Poverty, the CPF has three focus areas: (1) enhance productivity and accelerate equitable and sustainable growth, (2) boost human capital and social inclusion, and (3) modernize and improve the efficiency of public institutions.

    The CPF 2018-2022 represents both continuity with, and enhancement of, the current program and more intensive engagement in priority areas. It will deepen investments in transport, information and communication technology, and energy to support spatial transformation and inclusive growth, and will significantly scale up human capital development. These interventions will address the rural-urban divide and boost the enablers for poverty reduction that affect access to infrastructure, social services and productive jobs. Given the key role of the private sector, the new framework will innovate to maximize access to finance and generate jobs for Tanzania’s development.

    A Performance and Learning Review (PLR) of the Tanzania CPF is planned for FY22, including an extension of the CPF period. The PLR will provide an opportunity to reflect on Tanzania’s achievement of a Lower Middle-Income Status and make adjustments as needed to develop a roadmap to guide its further transition to a MIC economy.

    International Finance Corporation (IFC)

    IFC’s strategy in Tanzania involves proactively developing pipeline projects through investment and advisory interventions, focusing on finance, energy and service. IFC will also works closely with IDA to identify actions to promote more rapid commercialization of agriculture.

    The IFC places emphasis on strengthening financial markets, particularly in terms of access to finance for micro and small-medium enterprises. IFC is looking to forge partnerships with local banks aimed at supporting its initiatives in the financial sector with local currency financing, as well as developing products to support the microfinance, small-medium enterprises and housing sectors. IFC seeks to provide advisory services to improve the investment climate through reform programs that cover licensing, regulatory reform and other areas tracked in the Doing Business indicators.

    Knowledge Products

    High-quality, consolidated knowledge products facilitated and deepened policy dialogue, and informed design and realization of government programs. These products were used to inform plans for, e.g., tourism-led growth and initiatives related to energy, governance, education, and natural resources.

    The Tanzania Economic Update series has focused on a range of topics: productive jobs, unlocking the potential of the tourism industry, improving tax performance, leveraging public private partnerships to finance development; the importance of investing in girls and human capital development.

    Under the current CPF, the Bank will continue to use analytics to guide operations, prepared in close collaboration with the client and taking into consideration counterpart capacity. Knowledge products will use a combination of hands-on technical assistance, impact evaluations, policy notes and broader reports to inform the lending programs and policy dialogue. The Tanzania Systematic Country Diagnostic, completed in March 2017, has been recognized by a broad range of stakeholders as an important source of knowledge.

    Last Updated: Mar 23, 2021

  • Human Capital: According to the World Bank’s Human Capital Index 2020 (HCI 2020), a child born in Tanzania today will be 39% as productive when she grows up as she could be if she enjoyed complete education and full health. This is slightly lower than the average for Sub-Saharan Africa region and lower than the average for Lower middle-income countries.

    Health: Tanzania has had a substantial decline in infant and under-five mortality rates, from 136 in 1999 to 50 deaths per 1,000 live births by 2019. In 2020, 95 out of 100 children born today survive to age 5, but 32 out of 100 children are stunted, and so are at risk of cognitive and physical limitations that can last a lifetime (HCI 2020).

    Education: Levels of education access, completion and equity have improved, as did levels of secondary educational attainment for both women and men. As a result of the Fee-Free Basic Education Policy, enrollment rose by 17% in primary, from 8.6 million to 10.1 million, and by 23% in secondary, from 1.8 million to 2.2 million, over four years (2015-2018).

    Between 2016-2018, there has been a substantial increase in student retention with a 39% increase in student survival through primary schools and 4% increase in the number of students transitioning to lower secondary. The gender gap has narrowed in primary and lower secondary education but remains in upper secondary whereby girls make up 38% of upper secondary enrollment.


    In December 2018, the World Bank and the International Monetary Fund (IMF) completed the Financial Sector Assessment Program (FSAP) to review the financial sector landscape in Tanzania, including financial sector stability and development aspect (diversification and financial inclusion). The FSAP results aim to support the government and regulators to strengthen and develop a well-diversified financial sector.

    The Bank has also been actively supporting development of the long-term finance market, especially the capital market and housing finance. The Bank supported the Dar es Salaam Stock Exchange (DSE) to move from a manual trading system to an automated trading system and provide options/recommendations for new product development. This also led to the establishment of the Tanzania Mercantile Exchange.

    On housing finance, the Bank has supported the development of the mortgage finance and affordable housing markets through a sustainable private sector-driven approach. The Tanzania Mortgage Refinance Company (TMRC) was established to provide medium and long-term liquidity to financial institutions. Between 2011 and 2017, the mortgage portfolio significantly increased and financial institutions offering mortgage products increased 11 times while maturity of mortgage loans is now three-to-five times longer. TMRC has also started to raise capital from the bond market and the project is now a strong model of maximizing finance for development. 

    In addition, there has been progress in the areas of housing conditions, ownership of assets, and access to clean drinking water and sanitation, including for the poor and rural populations.

    Last Updated: Mar 23, 2021

  • Donor coordination has been strong at the sector level, and sector working groups have been effective. The World Bank has been actively engaged in and has often led coordination in, for example, fiscal management and public expenditure review, governance, statistics and poverty monitoring, energy, transport, agriculture, private sector development, health and education, and ICT. Leveraging its unique global expertise and knowledge in individual sectors, the Bank has been playing a catalytic role in informing the sector-level dialogues and supports by the donors in the country.

    Partnering with other development organizations for lending and analytical work has been at the core of the World Bank Group’s country partnership framework in Tanzania. Several large lending programs, such as the Productive Social Safety Net Project, the Education Program-for-Results, the Health Program-for-Results, and the Dar es Salaam Maritime Gateway Project, are co-financed by bilateral donors, including the US, UK, and Sweden. Partnerships through trust funds, such as public-private partnerships (PPPs), transport and urban resilience (the UK Foreign, Commonwealth and Development Office), investment climate advisory services (Global Affairs Canada), statistical capacity building (European Union), and state-owned enterprise reforms (Norway), provide important complementary support to generation of knowledge on important development issues in Tanzania while facilitating government’s capacity building in related areas.

    Last Updated: Mar 23, 2021



Tanzania: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments


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In Depth

Mar 31, 2021

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Economic growth in Sub-Saharan Africa is estimated to have contracted by 2.0% in 2020, closer to the lower bound of the forecast in April 2020.

Human Capital in Africa

Human capital, the total of a country’s potential, is a primary factor in spurring economic growth and enhancing competitiveness.

IDA in Africa

With IDA’s help, hundreds of millions of people have escaped poverty—through the creation of jobs, access to clean water, schools, roads, nutrition, electricity, and more.

CPIA Africa

Africa’s poorest countries saw little to no progress on average in improving the quality of their policy and institutional frameworks in 2018.

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Watch, listen and click through the latest videos, podcasts and slideshows highlighting the World Bank’s work in Sub-Saharan Africa.

Doing Business in Tanzania

The Doing Business report provides objective measures of business regulations and their enforcement. See where your country ranks.

Additional Resources

Country Office Contacts

Main Office Contact
50 Mirambo Street
P. O. Box 2054
Dar es Salaam, Tanzania
For general information and inquiries
Loy Nabeta
External Affairs Officer
For project-related issues and complaints