Mastering Inflation: CCM's Strategy for Economic Stability

By Uchumi360 Economics Desk

DAR ES SALAAM — As Tanzania prepares for its 2025 general elections, the Chama Cha Mapinduzi (CCM) party's manifesto positions economic stability as a bedrock for its ambitious growth plans. The document highlights a notable decline in average inflation from 3.3% in 2020 to 3.1% in 2024 (Page 10), crediting prudent monetary policies and enhanced supply chain resilience. With a pledge to maintain inflation below 5% through 2030, CCM aims to safeguard purchasing power and attract investment. Yet, in a global economy marked by volatility, can this strategy hold firm?

The manifesto's success in curbing inflation reflects a strategic focus on food security and infrastructure. Page 3 details a rise in food self-sufficiency from 114% to 128% between 2020 and 2024, supported by irrigation expansion from 561,383 to 983,466 hectares. This buffer against imported inflation, driven by global commodity price swings, has been bolstered by investments in storage and distribution, reducing reliance on volatile markets. Independent data from the Bank of Tanzania aligns with this trend, reporting an average inflation rate of 3.2% in 2024, down from 3.5% in 2020, with food prices stabilizing due to a national food reserve initiative.

From a monetary economics perspective, this stability is a boon for growth. Low inflation enhances consumer confidence and preserves the real value of wages, critical in a country where 65% of the workforce depends on agriculture. The manifesto’s commitment to modernizing the Tanzania Revenue Authority (TRA) with digital tools aims to improve tax collection efficiency, potentially increasing revenue from TZS 23 trillion in 2024 to TZS 30 trillion by 2030 (Page 14). This could fund further price-stabilizing measures, such as subsidies for fertilizers, which dropped production costs by 10% in 2023, per the Ministry of Agriculture.

The International Monetary Fund (IMF) praises Tanzania’s fiscal discipline, noting a debt-to-GDP ratio of 40%, sustainable but requiring careful management. The manifesto proposes leveraging this stability to attract FDI, which reached $1.65 billion in 2023, with a target of $3 billion by 2030 (Page 10). However, risks loom large. The World Bank warns that climate-induced droughts, which cut agricultural output by 15% in 2023, could push inflation above 5% if not addressed. CCM counters this with plans for climate-resilient irrigation and renewable energy, aiming to power 12,318 villages by 2030, up from 8,587 in 2024 (Page 8).

Analytically, maintaining low inflation hinges on balancing growth and demand. The Phillips Curve suggests a trade-off: pushing GDP growth to 7% (as pledged) might exert upward pressure on prices unless supply-side reforms, such as the manifesto's 5 million-hectare irrigation goal, keep pace. A 2024 study by the East African Community (EAC) Secretariat found that regional integration under AfCFTA could stabilize input costs, potentially capping inflation at 3.5% if trade volumes rise 20% by 2027.

Challenges persist. Global oil price shocks, with Brent crude averaging $85 per barrel in 2025, could strain fuel subsidies, a key inflation driver. The manifesto’s proposal to establish petroleum reserves by 2028 (Page 6) aims to mitigate this, but funding remains unclear given Tanzania’s $25 billion external debt. Critics also note discrepancies: Trading Economics reported a 3.4% inflation rate in Q1 2025, hinting at seasonal pressures that CCM must address.

Despite these hurdles, the outlook is promising. The African Development Bank projects Tanzania’s inflation could average 3.0% by 2029 if agricultural productivity sustains. President Samia Suluhu Hassan’s assertion, “We will ensure economic stability for all” (Page 4), underscores a policy continuity that has kept inflation in check since 2020. If CCM delivers, Tanzania could emerge as a model of price stability in East Africa, bolstering its appeal to investors and citizens alike.