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Select Economic and Financial Indicators2014201520162017e2018f
Real GDP (% change)
GDP (USD bn)48.345.647.751.656.6
Inflation (average)
Fiscal Balance (% GDP)-3.0-3.3-3.1-3.4-4.3
Broad Money (% change, end period)15.618.86.912.614.5
Population (mn)46.7447.6848.6850.0551.05
Exports (USD bn)
Imports (USD bn)13.712.511.612.514.2
Current Account Balance (% GDP)-10.1-8.5-5.6-5.6-6.5
FX Reserves (USD bn, end period)
Exchange Rate (average)1,663.42,037.12,186.02,234.92,250.1

Economic Outlook

Economic Outlook

Real GDP: Tanzania’s macroeconomic performance is forecast to remain strong, with real GDP growth close to 7% in 2018, driven by transport, construction, mining, services (mainly communications and financial), and tourism.

Inflation: Inflation is likely to moderate somewhat in 2018, partly due to increased food supply following an ease in drought conditions (lowering food price pressures), and further supported by broad stability of the TZS, helping to contain the domestic price rises for imports. However, higher global oil prices will maintain some inflationary pressures.

Fiscal balance: The budget deficit is likely to continue widening over 2018 as the government implements plans to increase budget spending over the 2017/18 fiscal year, amid efforts to upgrade infrastructure and to industrialise the economy. However, ongoing measures to improve tax revenue collection should help to keep the deficit from widening beyond 4.5% of GDP, alongside efforts to strengthen public financial management, and debt management.

Current account: The current account deficit is set to widen again, beyond 6% of GDP, as the country increases imports of investment goods in line with aims to improve infrastructure. It will continue to be financed mainly by FDI and donor capital inflows. Persistently high current account deficits reflect the structural deficit on the trade account – and high import dependency amid weak export sector performance. This points to the need to boost external competitiveness through enhanced exchange rate flexibility (as well as reforms to reduce barriers to trade, promote financial deepening, and improve the business climate). On the other hand, rising tourism receipts (up 9.7% to USD2.3bn in 2017) should help to limit widening of the current account beyond this level.


Risks revolve around establishing a transparent institutional framework for natural gas taxation and wealth management to improve good governance will be important if the economy and future generations are to benefit from these resources. Weather and oil price shocks also pose challenges to be overcome with limited institutional capacity.

FX, FI and Commodity Information

FX, FI and Commodity Information

Exchange rate structure

TargetNo target, participation from BoT limited to liquidity management and smoothen volatility
Type of interventionVia spot market
Convertible currency?No
Market participantsn/a
Source: Bloomberg, IMF, and Ecobank Research


FX ProductsSpotForwardsNon-deliverable ForwardsOptionsSwaps
On offerYesYes – up to 6 monthsNoNoYes
Daily trading volume (USD mn)7.8mn/an/a
Average trade size (USD mn)n/a
Average spread
Trading hoursLimited
Settlement cycleT+2T+Tenor+2n/aT+2
FX Market StructureThe BoT participates in the FX market both for liquidity management purposes and to smooth out short-term fluctuations in the exchange rate while maintaining an adequate level of FX reserves.
Non-resident FX RegulationsSpotForwardsNon-deliverable ForwardsOptionsSwaps
Trade and FDI flowPurchase of foreign/local currencies requires supporting documentsn/a
Financial flow
Resident FX RegulationsSpotForwardsNon-deliverable ForwardsOptionsSwaps
Trade and FDI flowPurchase of foreign/local currencies requires supporting documentsn/a
Financial flow
Source: Bloomberg, IMF, and Ecobank Research


Primary MarketTreasury billsTreasury notesTreasury bondsCentral Bank billsOMOs
End useGovernment financingGovernment & infrastructure financing
Maturity structure35- to 364-days2- to 15-yrs
Coupon paymentsn/aSemi-annual
Secondary Market
Daily trading volumeLimited tradingn/a
Average trade sizeLimited trading
Settlement cycleT+3
Ecobank local affiliate contact details:
Ecobank Tanzania, Acacia Building, Kinondoni Road 84, P.o Box  20500, Dae es salaam
Tel: +255 22 2923471
Source: Bloomberg, IMF, and Ecobank Research

FI Primary Market information

FI Primary Market information

Tanzania Debt2014201520162017e2018f
Government debt (% GDP)33.836.737.237.438.3
Sub-Sahara average44.552.656.155.655.8
External debt (official creditors, % GDP)23.627.
Sub-Sahara average25.530.231.932.933.2
External public debt stock (USD bn)11.412.413.314.416.2
Share of total sub-Sahara debt (%)
Source: IMF and World Bank

Banking Sector Information

Banking Sector Information

Tanzania has the second largest banking sector in the EAC (after Kenya), regulated by the Bank of Tanzania (BOT). Following liberalisation with the Banking and Financial Institutions Act 2006, which lowered the barriers to new entrants and foreign banks, the number of private banks and the national branch network have expanded substantially. At end-2015 there were 56 banking institutions, comprising 36 commercial banks, 12 community banks, three financial institutions, two development financial institutions and three deposit taking microfinance banks. These banks can be divided into four categories: local private banks, regional banks, international banks and multinational banks. In terms of ownership, 34 institutions (comprising seven state-owned banks) are majority locally-owned, 29 are majority foreign-owned, and the rest are mixed ownership.

Concentration risks remain elevated

Despite the increase in the number of banks in recent years, the banking sector continues to be highly concentrated. At end-2015 the top seven banks (which make up the large-sized Tier I category) accounted for 63%, 62% and 66% of total assets, loans & advances, and customer deposits, respectively. The high concentration risk has led to calls for new regulation to secure the stability of systemically-important banks (SIBs) and to ensure the competitiveness of the sector.

Tanzania’s banking sector key balance sheet items, USD millions

Balances with Bank of Tanzania1,2071,485
Investment in Government Securities1,9641,699
Balances with Other Banks & Financial Institutions793844
Loans, Advances and Overdrafts5,9616,876
Other Assets9351,058
Total Assets11,25412,410
Deposits from Other Banks & Financial Institutions410336
Customer Deposits9,2618,950
Special Deposits8894
Total Funding Liabilities10,33610,191
Sources: Ecobank Research, Tanzania Bankers Association (TBA)

Banking sector assets grown strongly

During FY2015 total banking sector assets grew by 38% year-on-year in local currency terms to an equivalent of US$12.4bn. This growth was driven by 28% year-on-year growth in liquid assets (cash, balances with BOT, interbank balances and investment securities) and robust 44% year-on-year growth in Loans, Advances and Overdrafts (all in local currency terms).

During FY2015 earning assets accounted for 70% of total assets. Loans, advances & overdrafts made up 55% and 79% of total assets and earning assets, respectively. Lending is largely focused on the trade, consumer, manufacturing and real estate sector, which accounted for 20%, 17.8%, 11% and 9.1% of total outstanding loans, respectively, at end-2015.

Customer deposits remain the key source of funding, accounting for 88% of total funding liabilities in FY2015. Customer deposits grew by 21% year-on-year in TZS terms to an equivalent of USD8.95bn.

Wide margins drive earnings

Banks generated gross revenues of USD1.55bn in FY2015, out of which gross funded revenues comprised 73% of the total (with non-funded revenues accounting for the balance), underlining how wide margins continue to power banks’ earnings. Net funded revenues (net of funding costs and impairment adjustments) accounted for 66% of total net revenues. However, banks were only able to deliver 26% of total net revenues as their bottom line, indicating the need for the country’s commercial banks to achieve higher efficiency levels.

Asset quality has deteriorated

Asset quality remained a concern in 2015. The ratio of gross non-performing loans (NPLs) to Gross Loans rose to 7.88% at end-2015, up from 6.83% at end-2014. This was not fully reflected in commercial banks’ income statements as only 5% of net funded revenues were impaired by loan losses and provisions for reclassifications. However, we expect escalated provisions to exert a drag on banks’ income statements in 2016-18.

Banks were well capitalized in 2015

Data from the BOT indicate that Tanzania’s banking sector remained adequately capitalized in 2015. The ratios of Core Capital and Total Capital to Total Risk Weighted Assets and Off Balance-Sheet Exposures were 16.92% and 18.92%, respectively, which were above the 16.28% and 17.41% recorded in 2014. Both ratios are well above the required minimum legal capital adequacy ratios for a bank or financial institution of 10% and 12% for core and total capital, respectively.

Commodity and trade information

Commodity and trade information

Hydrocarbon & mineral production

Tanzania is a diverse mineral producer, with large unexploited reserves. The country is East Africa’s leading gold producer with output of 82 tonnes in 2016. The country is also an important producer of precious stones, including 242,000 carats of diamonds and Tanzanite (a unique stone found only in Tanzania) in 2016. The country produces small volumes of silver (16,000 tonnes in 2016), coal (260,000 tonnes), phosphate (50,000 tonnes) and copper ore (6,500 tonnes). In 2016 Tanzania China International Mineral Resources launched the US$1.8bn Liganga iron & steel project, located in Ludewa District, which aims to produce 2.9mn tonnes per year of iron ore and 1mn tonnes per year of steel, with first production expected in 2018/19. Tanzania has the third highest installed capacity for cement in East Africa, estimated at 194,000 tonnes in 2016.

In 2017 Tanzanian president John Magufuli suspended the granting of new mining licenses and the renewal of expired licenses and ordered the renegotiation of all mining contracts. This has led to the suspension of new mining activity while negotiations between mining companies and the government proceed.

Tanzania has been a gas producing country since 2003. The country produced around 32bn cubic feet of natural gas in 2013, all of which was consumed by the domestic power and industrial sectors. Tanzania’s offshore region is estimated to hold 70trn cubic feet of gas, with 43trn cubic feet already discovered by oil explorers such as Norway’s Statoil. The country has no known oil reserves. Tanzania imports all its petroleum product needs, estimated at 2.6mn tonnes, primarily from India, Saudi Arabia, Switzerland and South Africa. The country also serves as a re-export hub of petroleum products for countries across East and Southern Africa.

Soft commodity production

Tanzania is a diverse producer of soft commodities, both for domestic and world markets. Output of food crops for domestic consumption is focused on maize (5.9mn tonnes in 2016), cassava (5.6mn tonnes), sweet potatoes (3.8mn tonnes), bananas (3.6mn tonnes) and milled rice (1.8mn tonnes).

Tanzania is East Africa’s third largest coffee producer, with estimated output of 800,000 60-kg bags of Robusta and Arabica coffee in 2016/17 (July-June). Output has fluctuated from season to season, reflecting both the ‘on-off’ cycle of coffee trees and also farmers’ response to periodically weak prices and low yields. A major constraint to production growth is large-scale smuggling of coffee from the Kagera region (which produces a quarter of Tanzanian output) to Uganda, as farmers search for better prices.

Tanzania is East Africa’s leading cotton producer, with cotton lint output of 61,000 tonnes in 2016/17 (July-June). However, production has declined sharply from a peak of 120,000 tonnes in 2011/12, owing to erratic weather, low yields and weak farmgate prices, all of which have driven farmers into more lucrative crops, such as tobacco and onions. In recent years the country has emerged as an important producer and exporter of horticultural goods, with output of 1.8mn tonnes of vegetables, 1.5mn tonnes of potatoes, 1.2mn tonnes of dry beans & 540,000 tonnes of tomatoes in 2016.

Tanzania is Africa’s second largest producer of raw cashew nuts (RCN), after Côte d’Ivoire, with output of 225,000 tonnes in 2016, and is the fourth largest producer of tea in East Africa, with output of 29,000 tonnes in 2016. The country’s other significant soft commodity production includes sugar cane (3mn tonnes in 2016), sesame seed (940,000 tonnes), sunflower seed (890,000 tonnes), groundnuts (550,000 tonnes) and tobacco (102,000 tonnes).

Trade flows


Tanzania’s imports totalled US$10.2bn in 2016. Capital goods, including machinery, vehicles and electronics, were the largest imports, together worth US$2.6bn, owing to the relatively underdeveloped manufacturing sector. Given the lack of refineries in the region, petroleum products are a sizeable import, worth US$970mn in 2016. Tanzania also imported iron & steel (worth US$468mn) and plastics (US$379mn) for its industrial and construction sectors. Tanzania is a major importer of textiles & apparel, worth US$826mn in 2016, and of pharmaceuticals, worth US$371mn, both for domestic consumption and re-export to the sub-region. Although a leading producer of cereals, Tanzania relies heavily on imports of wheat (worth US$189mn in 2016) and is Africa’s second largest importer of palm oil (10.5% of the total), worth US$271mn.


Tanzania’s exports totalled US$4.7bn in 2016. Gold was the largest export, totalling US$1.7bn, most of which went to South Africa, India and Switzerland. Tanzania also exported precious metal ores (worth US$322mn), most of which went to China, Germany and Japan for processing. Agricultural goods dominate Tanzania’s other exports, together totalling US$1.4bn in 2016. These included US$370mn worth of tobacco, US$348mn of cashews, US$187mn of vegetables, US$152mn of coffee, US$130mn of sesame seed, US$64mn of cotton and US$45mn of tea. Tanzania is also a re-export hub for its neighbours, notably of glass (worth US$146mn), most of which went to the DRC.

  • Flag
  • Population
  • Area
    947,300 sq km
  • Capital
  • Largest city
    Dar es Salaam
  • Official language
    Kishwali and English
  • Major languages
    Kishwali, English and Arabic
  • Currency
    Tanzanian shilling

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