Tanzania's GDP Sprint: Hitting 6% in 2025 Amid Global Headwinds

By Uchumi360 Economics Desk

DAR ES SALAAM — As Tanzania navigates the economic currents of 2025, projections point to a robust GDP growth rate of 6%, up from 5.5% in 2024, according to the International Monetary Fund (IMF). This sprint, detailed in the ruling Chama Cha Mapinduzi (CCM) party's 2025 manifesto, hinges on mega-projects like the $10 billion Bagamoyo Port and agricultural reforms boosting irrigation to 983,466 hectares. Yet, with the Tanzanian shilling emerging as Africa's weakest currency, down 10% year-to-date per Bloomberg data, global headwinds threaten to derail this momentum. How can Tanzania’s businesses and policymakers turn resilience into a sustained economic surge?

The foundation for this growth lies in recent gains. Tanzania’s economy rebounded from a 1.99% growth rate in 2020, battered by COVID-19 lockdowns, to 5.06% in 2023, per World Bank figures, with 2024’s 5.5% reflecting infrastructure and tourism recoveries. The CCM manifesto amplifies this, projecting a climb to 6% in 2025 and 7% by 2030, driven by a youthful workforce, about 65% under 25, and strategic investments. The Bagamoyo Port, set to handle 20 million containers annually, could unlock $20 billion in trade under the African Continental Free Trade Area (AfCFTA), while irrigation expansion supports a 128% food self-sufficiency rate, curbing import costs.

Analytically, this growth trajectory aligns with East African trends. Kenya’s 5.3% and Uganda’s 6.1% forecasts for 2025, per Deloitte’s East Africa Outlook, underscore regional dynamism, but Tanzania’s edge lies in diversification. The World Bank estimates infrastructure contributes 1.5% to GDP annually, with the Standard Gauge Railway (SGR) cutting logistics costs by 40%. Agriculture, employing 65% of the population, could add 1-2% to growth if the manifesto’s 5 million-hectare irrigation goal by 2030 materializes, per African Development Bank projections. Mining, growing 11.5% in 2024, and tourism, with 5.36 million visitors, further bolster the outlook.

Yet, currency volatility poses a stark challenge. The shilling’s depreciation, driven by $25 billion in external debt and rising oil prices (Brent at $85 per barrel in 2025), erodes export competitiveness. Businesses face a 15% cost increase on imports, per Tanzania Revenue Authority data, prompting a shift to dollar-denominated contracts. The manifesto’s call for four months of import cover in foreign reserves, up from 3.5, aims to stabilize the shilling, but success depends on $1 billion in additional forex inflows. The IMF warns that global slowdowns, with growth at 3.1% per its July 2025 update, could cut FDI from $1.65 billion in 2023 to $1.2 billion unless reforms deepen.

Strategies abound for resilience. Companies can hedge with forward contracts, while the manifesto’s SME loans, totaling TZS 240.9 billion for women, youth, and the disabled, could spur local production, reducing import reliance. AfCFTA offers a $3 billion trade potential by 2027, per EAC Secretariat estimates, if tariff barriers fall 20%. The Tanzania Investment Centre (TIC), with 901 projects in 2024, signals investor confidence, but bureaucratic delays deter 30% of commitments, per UNIDO.

Despite risks, the horizon is bright. Deloitte projects a 5.3% baseline growth, with infrastructure and agriculture as catalysts. President Samia Suluhu Hassan’s vision to “eliminate poverty through growth” resonates as unemployment dips to 9% in 2025, per ILO data. If Tanzania masters currency stability and execution, it could outpace regional peers, becoming East Africa’s economic leader.