Political and economic situation

The Tanzanian economy is performing strongly, driven mainly by information and communications technology, construction, manufacturing and other services. Medium-term prospects are favourable, with annual growth projected to remain above 7%, supported by public investment in infrastructure, particularly in the transport and energy sectors. Tanzania aims to become a middle-income country by 2025. Agriculture is still a very important sector, employing the majority of the workforce, but it suffers from infrastructure gaps and low productivity. Growth is not broad based and poverty levels remain high. A 2014 household budget survey indicated that 28.2% of Tanzanians are poor and poverty continues to be more prevalent in rural than in urban areas.

After years of high inflation that peaked at 16% in 2012, inflation has begun to stabilise at single-digit levels in the past year, declining to an annual average of 6.1% in 2014. The decrease was due to monetary policy, a favourable food supply situation and declining fuel prices. Export performance remains strong, driven by gold and tourism. But imports of capital and intermediate goods like oil have grown, keeping the current account deficit at around 11% of GDP. Tanzania is a member of both the Southern African Development Community (SADC) and the East African Community (EAC).

Tanganyika (now mainland Tanzania) became a unitary presidential democratic republic in 1962. Two years later Tanganyika and the island archipelago of Zanzibar merged to form the United Republic of Tanzania. The country has weathered more than five decades of tension and secession movements in Zanzibar. However, the new draft constitution proposed by the National Assembly in 2013 preserves the existing dual-government structure, with a union government for the mainland and Zanzibar and a separate government for Zanzibar. The draft constitution is still the subject of discussions on details and procedures. The presidential and parliamentary elections of 25 October 2015 resulted in a victory at union level for the ruling Chama Cha Mapinduzi (CCM) party and its presidential candidate John Pombe Magufuli, who succeeded his predecessor Jakaya Kikwete on 5 November 2015. In Zanzibar, the head of the Electoral Commission annulled the election due to irregularities and the count was not completed, so the incumbent Ali Mohamed Shein of the CCM is still in office.

The national currency is the Tanzanian Shilling (14 September 2015: USD 1 = TZS 2,173, EUR 1 = TZS 2,456.23).