Tanzania's economy is set for significant growth, with sectors such as finance, insurance, information, and communication leading the charge. Policy reforms and a conducive business environment are driving economic expansion, according to a review of domestic economic performance by the Bank of Tanzania (BoT).
Between January and September last year, the financial and insurance sectors surged by 16 percent, marking a substantial increase from the 9.3 percent growth recorded during the same period in 2022. Similarly, the information and communication sector experienced a growth rate of 7.9 percent in 2023, compared to 7.6 percent in 2022.
The BoT report attributes this growth to ongoing improvements in the business environment, facilitated by reforms, policies, and public investment, particularly in infrastructure.
The banking sector, which constitutes a significant portion of the financial sector, exhibited liquidity, profitability, and adequate capitalization. Deposits, assets, and loans all saw increases, while asset quality improved with a decline in nonperforming loans from 5.5 percent in June 2023 to 4.3 percent in December 2023.
Prof. Jehovaness Aikaeli from the University of Dar es Salaam noted that the rapid expansion of service sectors indicates overall growth, as these sectors play a pivotal role in supporting primary production sectors like industries and agriculture.
The positive trajectory observed in Tanzania's industrial sector in recent years is closely linked to the growth of service sectors, as industries require financial support, insurance coverage, and advancements in automation provided by the information and communication services sector.
Dr. Lutengano Mwinuka from the University of Dodoma emphasized the importance of creating conducive environments for business innovation and development, particularly in self-employment and the informal sector. He highlighted the need for capital markets, intellectual property rights systems, and incubation centers to support overall infrastructure.
Ms. Zena Msonde, CEO of Hashtech Tanzania Limited, highlighted the transformative impact of technology on industries, predicting increased connectivity, data usage, and digital transformation. Emerging technologies like 5G networks, the Internet of Things (IoT), and artificial intelligence (AI) are expected to revolutionize communication and information consumption.
Mr. Ng'winula Kingamkono, Founder and CEO of Tunzaa Fintech Inc., underscored the importance of regulatory frameworks to support digital growth and innovation in financial services. He emphasized collaboration with regulatory bodies to create an ecosystem conducive to startup growth and investment.
The African Development Bank (AfDB) predicts Tanzania's economy to grow by 6.1 percent in 2024, surpassing Kenya and Uganda in growth momentum. Tanzania ranks among the top African countries poised for strong economic performance, indicating a promising outlook for sustained growth and development.