(Dar es Salaam) – The Bank of Tanzania (BoT) has projected steady economic growth for both mainland Tanzania and Zanzibar in 2025, with growth rates expected to be 6% and 6.8%, respectively. This optimistic outlook is driven by improved productivity in agriculture, infrastructure projects, transport, energy reliability, and the effective implementation of fiscal and monetary policies.
During a press briefing on January 8, 2025, Governor Emmanuel Tutuba discussed the latest monetary policy committee (MPC) meeting, which reviewed global economic trends and the domestic economic situation. He highlighted the significant role of agricultural production, construction, transportation, and energy sectors in fueling Tanzania’s economic growth.
For mainland Tanzania, the economy grew by 5.4% in the first half of 2024. It is expected to achieve 5.6% growth in the third quarter and 5.7% in the fourth quarter of 2024, with an overall projected growth of 5.4% for the year. This growth is attributed to increased activities in agriculture, transport, construction, and trade. In Zanzibar, the economy grew by 6.8% in the first quarter and 7.2% in the second quarter of 2024, with an anticipated growth of 7.2% for the 2024/25 fiscal year.
Governor Tutuba reiterated that the economic growth for both Tanzania and Zanzibar in 2025 would likely maintain steady momentum, with mainland Tanzania projected to grow at 6% and Zanzibar at 6.8%. These growth rates are expected to be driven by continued improvements in agriculture, infrastructure, transportation, energy, and sound fiscal management.
Another notable aspect of the 2025 forecast is the stability of the Tanzanian shilling. According to Tutuba, the shilling is expected to remain stable in the first quarter of 2025 due to sufficient foreign exchange reserves available as of the fourth quarter of 2024. The reserves are supported by the decision to keep the central bank’s interest rate at 6%, which is expected to help maintain adequate liquidity in the economy and control inflation, keeping it below the 5% target.
Tutuba also mentioned that the Bank of Tanzania (BoT) had a foreign exchange reserve of USD 5.5 billion (approximately 13.67 trillion Tanzanian shillings), which is sufficient to cover over 4.7 months of imports. The Bank of Tanzania aims to maintain this level of reserves throughout the first quarter of 2025 and is also exploring ways to increase reserves by buying gold locally.
As part of the efforts to manage the currency, the BoT is continuing to implement Section 26 of the Bank of Tanzania Act, which promotes the use of the Tanzanian shilling in domestic transactions to reduce the reliance on foreign currencies. Tutuba emphasized that these measures aim to stabilize the Tanzanian currency against foreign currencies and contribute to the government’s efforts to curb unnecessary foreign currency use.
In a decision made during the MPC meeting, the committee confirmed that the central bank’s interest rate (CBR) would remain at 6% for the first quarter of 2025. This decision is designed to maintain sufficient liquidity, keep inflation within the target range, and support the continued growth of the economy.
| Region | Projected Growth for 2025 | Key Growth Drivers |
|---|---|---|
| Mainland Tanzania | 6% | Agriculture, construction, transport, energy, fiscal policies |
| Zanzibar | 6.8% | Agriculture, infrastructure, energy, fiscal management |
