Tanzania marked 63 years of independence with notable strides in political stability, a growing economy, and regional influence. Yet, these achievements mask persistent challenges that question the essence of true independence.
The paradox of economic growth coexisting with dependency on donor aid and foreign economies calls for critical reflection.
This essay delves into Tanzania’s steady economic trajectory, citizens’ income suffocation, and systemic weaknesses, including underperforming human resources, institutions, infrastructure, and productive capacity.
It further evaluates President Samia Suluhu Hassan’s administration’s approach and proposes a pragmatic way forward.
Tanzania’s average GDP growth rate of 5-6% over the past two decades has positioned it as one of Africa’s fastest-growing economies. Sectors such as mining, telecommunications, and tourism have been pivotal.
However, the growth has not translated into tangible benefits for the majority. Over 26% of Tanzanians still live below the poverty line, and income inequality is rising.
Comparatively, Rwanda, another East African nation, has demonstrated how targeted policies can bridge this gap.
Despite being resource-poor, Rwanda has achieved significant poverty reduction through efficient public service delivery and strategic investment in social sectors.
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Tanzania, in contrast, struggles with equitable wealth distribution, leaving millions suffocated by stagnant incomes amidst rising living costs.
Dependency on Donors and Foreign Economies
Tanzania relies heavily on external aid, which accounts for about 30% of its budget. This dependency indicates systemic weaknesses in domestic revenue generation and productive capacity.
For example, while Ethiopia has reduced its donor dependency by aggressively developing its industrial parks, Tanzania’s industrial sector contributes only 8% to GDP.
Furthermore, excessive dependence on foreign economies, especially China and India, exposes the nation to global market volatility.
Zambia is a case in point. It recently faced a debt crisis due to its overreliance on Chinese loans for infrastructure development.
Tanzania risks a similar fate unless it recalibrates its development financing model to emphasize domestic resource mobilization and fiscal discipline.
Weak Human Resources
Tanzania’s workforce, though abundant, suffers from a skills mismatch. With over 900,000 graduates entering the labor market annually, unemployment remains high due to inadequate training for market demands.
Countries like Singapore have overcome similar challenges through rigorous educational reforms and skill development programs. Tanzania must emulate such models to harness its demographic dividend effectively.
Weak Institutions
Effective governance and robust institutions are prerequisites for sustainable development. Tanzania’s institutions, however, are plagued by inefficiency, corruption, and political interference.
The Controller and Auditor General (CAG) reports consistently highlight mismanagement of public funds, yet accountability remains elusive. Botswana’s example of independent oversight bodies demonstrates how institutional integrity fosters economic growth.
Weak Infrastructure
While Tanzania has made commendable progress in infrastructure, such as the Standard Gauge Railway (SGR) and Julius Nyerere Hydropower Project, energy access, rural connectivity, and digital infrastructure remain.
For instance, only 37% of Tanzanians have access to electricity, compared to 75% in Kenya. Bridging these gaps requires strategic public-private partnerships and targeted investments.
Weak Productive Capacity
Tanzania’s economy remains agrarian, with agriculture employing 65% of the population but contributing only 28% to GDP. Value addition in agriculture is minimal, and the manufacturing sector is underdeveloped.
By contrast, Vietnam transformed its economy by investing in agro-processing and export-oriented manufacturing, significantly increasing its productive capacity. Tanzania must adopt similar strategies to diversify its economic base.
Samia Suluhu Hassan’s Administration: A Silver Lining?
President Samia Suluhu Hassan has taken commendable steps to address these challenges. Her administration has prioritized foreign investment, streamlined bureaucratic processes, and promoted international trade.
The renewed focus on multilateralism and regional integration is also promising. However, without systemic reforms, these efforts risk being superficial.
The Way Forward
Firstly, Strengthen Domestic Revenue Mobilization: Tanzania must expand its tax base by formalizing the informal sector, improving tax administration, and combating tax evasion.
Secondly, Investing in Human Capital: A robust education and training system aligned with market demands is essential. Establishing vocational training centres and incentivizing innovation can bridge the skills gap.
Thirdly, Institutional Reforms: Enhancing the independence and capacity of oversight bodies like the CAG, judiciary, and anti-corruption agencies is crucial for accountability and trust.
Fourth, Infrastructure Development: Prioritize investments in energy, transport, and digital infrastructure to unlock economic potential, especially in rural areas.
Fifth, Promote Industrialization: Incentivize agriculture’s local manufacturing and value addition to reduce dependency on raw material exports and create jobs.
Sixth, Leverage Regional Integration: Strengthen ties within the East African Community (EAC) to access larger markets and attract investments.
Seventh, Enhance Governance: Good governance, transparency, and public sector efficiency are non-negotiable for sustainable development.
Sixty-three years after independence, Tanzania stands at a crossroads. The persistent reliance on donors and foreign economies underscores the need for systemic transformation.
President Samia’s administration has a unique opportunity to redefine the nation’s development trajectory by addressing weaknesses in human resources, institutions, infrastructure, and productive capacity.
Embracing pragmatic reforms and learning from global best practices will pave the way for a self-reliant, prosperous Tanzania. The time to act is now.