Tanzania has a developing economy considered lower-middle income. It is centered around manufacturing, tourism, agriculture, and financial services. Tanzania's economy has been transitioning from a planned economy to a market economy since 1985. Although the total GDP has increased since these reforms began, GDP per capita dropped sharply at first, and only exceeded the pre-transition figure in around 2007.

The value of Tanzania's GDP at current prices reached USD 174.7 billion in 2022. Tanzania has the 2nd largest economy in East Africa after Kenya, and the 7th largest in Sub-Saharan Africa.

It has sustained relatively high economic growth compared to global trends, as is characteristic of African nations. According to World Bank data, the last 5 years have seen the slowest growth since 2000. The medium-term outlook is so far positive, with growth projected at 8 percent in 2020/21, which is supported by large infrastructure spending.

On 7 September 2021, the IMF approved US$567.25 million in emergency financial assistance to support Tanzania’s efforts in responding to the COVID-19 pandemic by addressing the urgent health, humanitarian, and economic costs.

History

Significant measures have been taken to liberalize the Tanzanian economy along market lines and encourage both foreign and domestic private investment. Beginning in 1986, the Government of Tanzania embarked on an adjustment program to dismantle the socialist (Ujamaa) economic controls and encourage more active participation of the private sector in the economy. The program included a comprehensive package of policies which reduced the budget deficit and improved monetary control, substantially depreciated the overvalued exchange rate, liberalized the trade regime, removed most price controls, eased restrictions on the marketing of food crops, freed interest rates, and initiated a restructuring of the financial sector. Tanzania accepted austerity measures required by the International Monetary Fund (IMF) and World Bank-imposed structural adjustment policies.

Current GDP per capita of Tanzania grew more than 40 percent between 1998 and 2007. In May 2009, the IMF approved an Exogenous Shock Facility for Tanzania to help the country cope with the global economic crisis Tanzania is also engaged in a Policy Support Instrument (PSI) with the IMF, which commenced in February 2007 after Tanzania completed its second three-year Poverty Reduction and Growth Facility (PRGF), the first having been completed in August 2003. The PRGF was the successor program to the Enhanced Structural Adjustment Facility, which Tanzania also participated in from 1996 to 1999. The IMF's PSI program provides policy support and signaling to participating low-income countries and is intended for countries that have usually achieved a reasonable growth performance, low underlying inflation, an adequate level of official international reserves, and have begun to establish external and net domestic debt sustainability.

Tanzania also embarked on a major restructuring of state-owned enterprises. The program has so far divested 335 out of some 425 parastatal entities. Overall, real economic growth has averaged about 4 percent a year, much better than the previous 20 years, but not enough to improve the lives of average Tanzanians. Also, the economy remains overwhelmingly donor-dependent. Moreover, Tanzania has an external debt of $7.9 billion. The servicing of this debt absorbs about 40 percent of total government expenditures. Tanzania has qualified for debt relief under the enhanced Heavily Indebted Poor Countries (HIPC) initiative. Debts worth over $6 billion were canceled following implementation of the Paris Club 7 Agreement.

Macro-economic trend

This is a chart of trend of gross domestic product of Tanzania at market prices estimated by the International Monetary Fund with figures in millions of shillings.2006 Data IMF Year Gross DomesticProduct US DollarExchange rateDerivedGDP ($m) 1980 45,749 5,572 1985 115,006 6,436 1990 830,693 4,259 1995 3,020,501 5,631 2000 7,267,133 9,079 2005 13,713,477 12,167 2010 – —

As of 2025, the mean urban wage in Tanzania was estimated to be TZS 494,812 ($189), whereas the mean rural wage was estimated at TZS 367,034 ($140); both of these were a small increase from respectively TZS 425,608 and 317,779 in 2020. In July 2025, the minimum wage for public officials was raised from TZS 370,000 to TZS 500,000.

Tanzania has a substantial degree of inequality. According to the WID, the top 1% of Tanzanians gained 17.90% of the total income in 2023, whereas the bottom 50% gained 14.10%. The most recent Gini coefficient (for the year 2018) is 40.5.

The economy saw a GDP growth of 5.5% in 2024. Except for a low point of 2% in 2020, the growth varied between 4.5% and 7.7% for every year since 1999.

The following table shows the main economic indicators in 1980–2026. Inflation below 5% is in green.

YearGDP(in billion US$ PPP)GDP per capita(in US$ PPP)GDP (in billion US$ nominal)GDP growth(real)Inflation rate(in Percent)Government debt(in % of GDP)19809.149510.93.3%30.2%n/a198110.052913.00.5%25.7%n/a198210.754814.90.6%28.9%n/a198311.456515.32.4%27.1%n/a198412.258513.93.4%36.1%n/a198513.261212.64.6%33.3%n/a198614.364315.96.6%32.4%n/a198715.56767.85.9%29.9%n/a198816.87077.54.4%31.2%n/a198918.17426.43.8%25.8%n/a199020.18035.27.0%36.4%n/a199121.28256.02.1%25.2%n/a199221.88285.60.6%20.7%n/a199322.68375.21.2%26.1%n/a199423.58365.51.6%37.9%n/a199524.88506.43.6%26.8%n/a199626.48847.94.5%21.0%n/a199727.89199.33.5%16.1%n/a199829.293811.53.7%12.8%n/a199931.097311.84.8%7.9%n/a200033.31,01512.44.9%6.0%n/a200136.11,06912.66.0%5.1%50.8%200239.31,13413.17.2%4.6%47.4%200342.81,20414.26.9%4.4%44.4%200447.41,29815.67.8%4.1%44.5%200552.51,39817.27.4%4.4%25.4%200656.61,46718.94.7%7.3%17.4%200763.11,58921.88.5%7.0%23.8%200867.91,66427.85.6%10.3%21.6%200972.01,71829.35.4%12.1%23.9%201077.51,80831.96.4%7.2%27.6%201185.31,93634.47.9%12.7%28.4%201291.42,01639.75.1%16.0%30.0%201399.22,12645.76.8%7.9%32.7%2014107.82,23850.06.7%6.1%36.4%2015115.52,32647.46.2%5.6%39.5%2016124.62,42449.86.9%5.2%39.8%2017135.32,54654.06.7%5.3%40.1%2018146.02,65954.87.0%3.5%42.0%2019164.92,91358.86.9%3.4%40.4%2020186.63,20163.44.5%3.3%41.3%2021204.73,40868.04.8%3.7%43.4%2022229.53,70974.24.7%4.4%44.9%2023250.23,92678.45.1%3.8%47.8%2024270.44,12079.25.5%3.1%49.9%2025294.54,35587.35.9%3.3%49.7%2026320.94,60794.95.9%4.0%48.7%

Agriculture

The Tanzanian economy is heavily based on agriculture, which accounts for 28.7 percent of gross domestic product, provides 85 percent of exports, and accounts for half of the employed workforce; The agricultural sector grew 4.3 percent in 2012, less than half of the Millennium Development Goal target of 10.8 percent. 16.4 percent of the land is arable, with 2.4 percent of the land planted with permanent crops.

This strong dependence on agriculture, makes Tanzania's economy highly vulnerable to weather shocks and fluctuating commodity prices. 76% of Tanzania's population subsist thanks to agriculture and, due to the lack of knowledge and infrastructure to develop and implement some kind of agricultural technology, any droughts, floods, or temperature shocks can severely damage the living standards of those people and create huge increases in unemployment, hunger, and malnutrition rates, as well as, in really severe case, mortality rates due to starvation.

Tanzania produced in 2018:

5.9 million tons of maize; 5 million tons of cassava (12th largest producer in the world); 3.8 million tons of sweet potato (4th largest producer in the world, second only to China, Malawi and Nigeria); 3.4 million tons of banana (10th largest producer in the world, 13th adding plantain production); 3 million tons of rice; 3 million tons of sugarcane; 1.7 million tons of potato; 1.2 million tons of beans (6th largest producer in the world); 940 thousand tons of peanut (7th largest producer in the world); 930 thousand tons of sunflower seed (12th largest producer in the world); 808 thousand tons of sorghum; 561 thousand tons of sesame seed (5th largest producer in the world, losing only to Sudan, Myanmar, India and Nigeria); 546 thousand tons of coconut (11th largest producer in the world); 454 thousand tons of mango (including mangosteen and guava); 389 thousand tons of pineapple; 373 thousand tons of orange; 356 thousand tons of tomato; 238 thousand tons of cotton; 171 thousand tons of cashew nuts (6th largest producer in the world);

In addition to smaller productions of other agricultural products, like tobacco (107 thousand tons, 8th largest producer in the world), coffee (55 thousand tons), tea (36 thousand tons) and sisal (33 thousand tons).

Industry Industries are a major and growing component of the Tanzanian economy, contributing 22.2 percent of GDP in 2013. This component includes mining and quarrying, manufacturing, electricity and natural gas, water supply, and construction.

Mining

Mining contributed 3.3 percent of GDP in 2013. The vast majority of the country's mineral export revenue comes from gold, accounting for 89 percent of the value of those exports in 2013. It also exports sizable quantities of gemstones, including diamonds and tanzanite. All of Tanzania's coal production, which totalled 106,000 short tons in 2012, is used domestically.

Minerals Other minerals exploited in Tanzania include;

Pozzolana Salt Gypsum Kaolinite Silver ore Copper Phosphate Tanzanite Tin Graphite Bauxite.

Modern gold mining in Tanzania started in the German colonial period, beginning with gold discoveries near Lake Victoria in 1894. The first gold mine in what was then Tanganyika, the Sekenke Gold Mine, began operation in 1909, and gold mining in Tanzania experienced a boom between 1930 and World War II. By 1967, gold production in the country had dropped to insignificance but was revived in the mid-1970s, when the gold price rose once more. In the late 1990s, foreign mining companies started investing in the exploration and development of gold deposits in Tanzania, leading to the opening of a number of new mines, like the Golden Pride mine, which opened in 1999 as the first modern gold mine in the country, or the Buzwagi mine, which opened in 2009.Tanzania Mining History tanzaniagold.com, accessed: 24 July 2010•Mineral Sector Overview Ministry of Energy and Minerals website, accessed: 27 July 2010

Nickel reserves amounting to 290,000 tonnes were discovered in October 2012 by Ngwena Company Limited, a subsidiary of the Australian mining company IMX Resources. An initial investment of around USD $38 million has been made since exploration began in 2006, and nickel should start being mined at the end of 2015.

Chinese firms have been showing major interest in Tanzania's mineral deposits; an announcement was made in late 2011 of a plan by the Sichuan Hongda Group, to invest about US$3 billion to develop the Mchuchuma coal and Liganga iron ore projects in the south of the country. It was also announced in August 2012 that China National Gold Corp are in talks to purchase mining assets in Tanzania from African Barrick Gold, in a deal that could be worth more than £2 billion stg.

In November 2012, the Tanzanian government announced investigations into allegations that mining investors in the country were harassing and on some occasions, killing residents around mining sites.

Electricity