President Samia Suluhu Hassan’s claim that “Tanzania’s economy is “doing better” than the US and Europe requires nuanced analysis. She has dared us to fact check her controversial claims. While Tanzania demonstrates “strong growth momentum”, direct comparison with advanced economies overlooks critical differences in economic scale, structure, and development stages. Here’s a balanced assessment:
✅ Evidence Supporting Tanzania’s Strong Performance.
1. Higher GDP Growth Rates:
Tanzania’s economy is projected to grow by 5.5–6% in 2025, significantly outpacing the US (1.4%) and the EU (average ~1-2%). This growth is driven by agriculture, manufacturing, tourism, and infrastructure investments like the East African Crude Oil Pipeline (EACOP) and Standard Gauge Railway.
2. Currency Recovery:
The Tanzanian shilling (TZS) rebounded from being Africa’s worst-performing currency in early 2025 to one of its best, following a ban on domestic use of foreign currencies.
3. Macroeconomic Stability:
Tanzania maintains low inflation (3.1–3.8%), a narrowing fiscal deficit (projected at 2.5% of GDP in 2025), and manageable public debt (47.5% of GDP). Foreign reserves cover ~4.5 months of imports.
4. Sectoral Resilience:
Gold exports, tourism recovery, and agricultural output have bolstered foreign exchange earnings. The current account deficit narrowed to 2.6% of GDP in 2024.
⚠️ Critical Context and Limitations.
1. Economic Scale and Development Stage:
– Tanzania’s GDP per capita is “$1,187”, compared to the EU’s “$35,948” and the US’s ~$80,000.
– “43% of Tanzanians live below the $2.15/day poverty line”, with high reliance on subsistence agriculture (65% of employment).
– The US and EU have advanced industrial/service economies; Tanzania remains a “lower-middle-income country” with limited industrialization (manufacturing is 8% of GDP).
2. Structural Vulnerabilities:
– Dependence on commodities:
Gold prices and climate-sensitive agriculture pose risks.
– Infrastructure gaps:
Energy and transport deficiencies hinder productivity.
– Revenue challenges:
Tax collection is low (13% of GDP), limiting public investment.
3. External Risks:
Tanzania is highly exposed to “climate shocks”, geopolitical tensions, and global inflation , while the US/EU have stronger shock-absorption capacity.
4. Samia’s Broader Argument:
Her speech emphasized “reducing aid dependency”—noting that struggling Western economies cannot sustain largescale assistance. She urged domestic revenue mobilization to preserve “dignity“. This aligns with Tanzania’s revised foreign policy focusing on “economic sovereignty” amid global fragmentation.
💡 Conclusion: Growth vs. Development.
– Relative Growth:
Tanzania’s economy is “growing faster” than the US/EU in percentage terms, reflecting recovery potential and demographic dividends.
– Absolute Development:
The US/EU have “higher productivity, innovation, and living standards”. Comparing a developing economy to advanced ones without adjusting for scale is misleading.
– Policy Context:
Samia’s claim underscores Tanzania’s “resilience amid global crises” (e.g., wars, supply-chain disruptions) and aligns with her agenda to boost domestic revenue and reduce borrowing.
In essence, Tanzania is “doing better” in growth momentum but “not in overall economic advancement”. The statement serves as a motivational tool for fiscal self-reliance rather than a literal comparison of economic power.
For sustained progress, Tanzania must address structural constraints like massive poverty (43%), industrialization, human capital, and climate adaptation.
The most important economic parameter ought to be how many Tanzanians have been pulled out of poverty rather than being imbued in fancy economic data that majority of Tanzanian hardly understand or feel in theor day to day struggles.
📊 Economic Indicators Comparison (2025 Projections).
| No. | Indicator. | Tanzania. | United States. | European Union. |
| 1.0 | GDP Growth. | 6.0%. | 1.4%. | ~1-2%. |
| 2.0 | GDP Per Capita. | $1,187. | ~$80,000. | $35,948. |
| 3.0 | Inflation. | 3.5%[1] | 3.0% | 2.6%. |
| 4.0 | Public Debt (% GDP). | 47.5%. | | >120%. | ~90% (EU avg. |
| 5.0 | Poverty Rate. | 43% | <10% | ~20% (relative). |
How does Tanzania economy compare within the EAC?
Tanzania’s economy holds a pivotal position within the East African Community (EAC), characterized by robust growth, ongoing structural challenges, and distinct comparative advantages. Here’s a detailed analysis of its standing relative to regional peers:
📈 1. Growth Trajectory and Economic Size.
– Tanzania’s Performance:
GDP growth accelerated to **5.3% in 2023** and is projected to reach **5.7% in 2024** and **6% in 2025**, driven by agriculture, manufacturing, and tourism . This outpaces the **EAC average of 5.1% (2024)** and **SADC’s 3.4%** .
– Regional Comparison:
– Kenya:
Historically larger economy, growing at “~5.5% (2024)” but facing higher public debt (68% of GDP).
– Rwanda/Uganda:
Show faster growth sporadically (e.g., Rwanda occasionally hits 7-8%) but are more volatile.
– Burundi/South Sudan:
Lag significantly due to instability, with growth often below “3%”.
Table: Comparative GDP Growth (2023-2025).
| No. | Country. | 2023 Growth (%). | 2024 Growth (%). | 2025 Projection (%). |
| 1.0 | Tanzania. | 5.3. | 5.7. | 6.0. |
| 2.0 | EAC Average. | ~5.2. | ~5.1. | ~5.7. |
| 3.0 | Kenya. | ~5.0. | ~5.5. | ~5.8. |
| 4.0 | Uganda. | ~5.2. | ~5.0. | ~5.5. |
| 5.0 | Rwanda. | ~7.0. | ~7.5. | ~7.0. |
⚙️ 2. Economic Structure and Diversification.
– Agriculture Dominance:
Employs “65-70%” of Tanzania’s workforce but contributes only “26%” to GDP. This contrasts with Kenya, where services (e.g., finance, ICT) contribute “~54%” to GDP.
– Industrialization Gap:
Manufacturing remains stagnant at “~8% of GDP” since the 1990s . Uganda has made strides, increasing manufacturing from “6.4% to 16.4% of GDP” (2004–2022).
– Natural Resources:
Tanzania’s gas reserves and minerals (gold, coal) offer competitive advantages, though value addition is limited.
👥 3. Poverty and Social Indicators.
– Poverty Rate:
“27.7%” (2020), worsened by COVID-19 . This is higher than Kenya’s “~27%” but lower than Burundi’s “>70%”.
– Human Capital:
Tanzania’s Human Capital Index is “0.39” (regional average), lagging behind Kenya’s “0.52” due to gaps in education and health.
– Urbanization:
“37%” of Tanzanians live in cities, below Kenya’s “~45%”, impacting service-sector dynamism.
💰 4. Fiscal and External Sector Health.
– Public Debt:
“45.5% of GDP (2023)”, lower than Kenya’s “68%” but rising.
– “Revenue Mobilization:
Tax revenues at “13% of GDP (2024)” are among the region’s lowest, constraining infrastructure investment.
– Trade Deficit:
Current account deficit narrowed to “3.8% of GDP (2023)” due to tourism and exports, outperforming Uganda’s “~7%”.
🌐 5. Regional Integration and Competitiveness.
– Trade Openness:
“43% of GDP (2023)”, below the EAC average. The AfCFTA could boost GDP per capita by “12% by 2050” if implemented effectively.
– Infrastructure Gaps:
Electricity access (“39%”) trails the SSA average (**50%**), though Kenya leads with “>75%” access .
– “Geopolitical Positioning”:
Tanzania’s neutrality in regional conflicts (vs. Kenya’s involvement in Somalia) aids stability.
🔮 6. Future Outlook and Strategic Position.
– Vision 2050:
Aims to transform Tanzania into a middle-industrial economy . Critical focus areas include “energy access”, “tax reform”, and “human capital”.
– Climate Risks:
Could reduce GDP growth by “4% by 2050”:without adaptation measures.
– EAC Leadership Potential:
Tanzania’s size and stability position it to rival Kenya as the EAC’s largest economy by “2030** if it sustains **>7% growth”.
Table: Sectoral Contribution to GDP in the EAC (2023).
| No. | Country. | Agriculture (% GDP). | Industry (% GDP). | Services (% GDP). |
| 1.0 | Tanzania. | 26. | 33. | 41. |
| 2.0 | Kenya. | 22. | 24. | 54. |
| 3.0 | Uganda. | 24. | 29. | 47. |
| 4.0 | Rwanda. | 25. | 18 | 57. |
💎 Conclusion.
Tanzania exhibits strong growth momentum within the EAC, supported by macroeconomic stability and resource endowments. However, it trails Kenya in diversification and human capital, while leading in debt sustainability.
To ascend as the EAC’s top economy, Tanzania must accelerate industrialization, deepen regional trade integration under AfCFTA, and invest in climate resilience. With effective reforms, it could realize its Vision 2050 goals and reshape East Africa’s economic landscape.
Which country within the EAC has alleviated most of her citizens out of poverty?
Tanzania has demonstrated the most significant progress in poverty alleviation within the EAC, though Kenya also shows notable efforts and systemic approaches. Here’s a comparative analysis:
📉 1. Tanzania’s Poverty Reduction Achievements.
– Substantial Decline:
Poverty decreased from “34.4% (2007)” to “26.4% (2018)”, an 8-percentage-point reduction. Extreme poverty fell from 11.7% to 8.0% in the same period.
– Rural Impact:
Most reductions occurred in rural areas due to improved basic services and agricultural diversification.
– Social Safety Nets:
Programs like “TASAF PSSN” prevented ~1 million people from falling into poverty by 2018.
– Challenges:
Despite progress, “14 million Tanzanians remain poor” (up from 13 million in 2007), and vulnerability is high: For every four people escaping poverty, three fall back in.
🏙️ 2. Kenya’s Poverty Dynamics.
– Recent Stagnation:
Poverty rates hover around “~27%” (similar to Tanzania), with COVID-19 pushing an additional “2 million Kenyans into poverty”.
– Systemic Approaches:
Kenya focuses on “devolution-based poverty mapping”, financial inclusion, and education reforms. Its “Giant Leap” scenario aims for poverty eradication by 2050 through wealth taxation and agricultural transformation.
– Inequality Concerns:
Urban inequality is rising, with slower progress in connecting the poor to high-growth sectors like services and ICT.
🌍 3. Regional Context.
– Uganda/Rwanda:
High growth rates (Uganda: 5.9% in 2024; Rwanda: 7-8% historically) but limited explicit poverty data. Rwanda’s public investment in infrastructure may indirectly reduce poverty.
– Burundi/South Sudan:
Extreme poverty (>70%) due to conflict and instability.
– EAC-Wide Initiatives:
Regional strategies focus on “agricultural productivity” and “gender inclusion” to address poverty drivers, but implementation varies.
📊 Key Comparison: Tanzania vs. Kenya.
| No. | Metric. | Tanzania. | Kenya. |
| 1.0 | Poverty Rate (2023) | 26.4% (2018). | ~27% (2023). |
| 2.0 | Reduction (10 yrs). | ↓8%** (34.4% → 26.4%). | Minimal reduction. |
| 3.0 | Safety Nets. | TASAF (Questionable). | Extensive but fragmented. |
| 4.0 | Structural Barriers. | Low education enrollment (<33% secondary). | Higher human capital (HCI 0.52 vs 0.39). |
| 5.0 | Urban-Rural Gap. | | High (rural lag in services). | Rising urban inequality. |
💡 Conclusion: Tanzania Leads, but Challenges Persist.
Tanzania’s “pro-poor policies” (e.g., agricultural support, rural infrastructure) drove measurable declines in poverty rates, outpacing Kenya’s efforts.
However, “Kenya’s systemic frameworks” (e.g., devolved resource allocation, poverty-eradication plans) could yield long-term gains if fully implemented . Both nations face population growth that offsets percentage gains, leaving millions in poverty. For sustained success, Tanzania must address education gaps and economic vulnerability, while Kenya requires accelerated implementation of inclusive policies.
Why then it Tanzania which exports beggars to Kenya, and not the other way around?
The perception that Tanzania “exports beggars” to Kenya more than vice versa stems from complex socioeconomic factors rather than one-dimensional causality. Based on available data and regional dynamics, here’s a breakdown of key contributing factors:
🌾 1. Agricultural Dependency and Rural Poverty.
– Structural Vulnerability:
Tanzania’s economy relies heavily on agriculture (26% of GDP), employing 65-70% of its workforce but characterized by low productivity and seasonal income fluctuations . This creates chronic underemployment, especially in rural areas where 74% of the poor reside.
– Export Restrictions:
Policies like cereal export bans (e.g., maize to Kenya in 2023) disrupt farmer incomes and supply chains. When Tanzania restricts exports to stabilize domestic prices, small-scale farmers lose critical revenue streams, exacerbating poverty cycles.
👥 2. Demographic and Urbanization Pressures.
– Youth Bulge:
Tanzania has a median age of 18 and a high birth rate (4.6 births per woman), leading to a rapidly growing labor force that outpaces formal job creation . Kenya’s birth rate is lower (3.4), with slightly better urban job absorption.
– Limited Urban Opportunities:
Urbanization in Tanzania (37%) trails Kenya (45%), constraining access to urban service-sector jobs. Rural migrants often lack skills for Kenya’s more diversified manufacturing/service sectors, pushing some into informal survival activities.
🏭 3. Industrial Gap and Job Creation.
– Manufacturing Stagnation:
Tanzania’s manufacturing sector contributes only ~8% to GDP—unchanged since the 1990s—compared to Uganda’s rise to 16.4% . Kenya’s industrial base (24% of GDP) generates more formal employment, attracting Tanzanian migrants.
– Trade Imbalances:
Despite Tanzania’s overall trade surplus in the EAC ($484.5M), its exports to Kenya are low-value agricultural goods (e.g., cereals, vegetables). Kenya exports higher-value products (pharmaceuticals, machinery) to Tanzania, reflecting asymmetrical economic complexity.
💰 4. Regional Economic Disparities.
– Poverty Reduction Divergence:
Tanzania reduced poverty from 34.4% (2007) to 26.4% (2018), but 14 million remain poor. Kenya’s poverty rate (~27%) is similar, but its stronger services sector (54% of GDP) offers more diverse informal opportunities.
– Human Capital Gaps:
Tanzania’s Human Capital Index (0.39) lags behind Kenya (0.52), with lower education enrollment and skills development, limiting employability in higher-value sectors.
⚖️ 5. Policy and Historical Context.
– Debt and Structural Issues:
Tanzania’s historical debt burden (partially relieved in 2005) constrained social spending. Though growth is robust (5.4% in 2024), poverty reduction is offset by population growth.
– Border Dynamics:
Trade disputes (e.g., Kenyan goods barred at Tanzanian borders) disrupt formal cross-border livelihoods, pushing some toward informal—and sometimes desperate—survival strategies.
📊 Comparative Table: Key Disparities Driving Migration.
| No. | Factor. | Tanzania. | Kenya. |
| 1.0 | Agricultural Dependence. | 65-70% workforce, low mechanization | 22% of GDP, more commercialized. |
| 2.0 | Industrial Capacity. | 8% of GDP, stagnant for decades. | 24% of GDP, growing manufacturing. |
| 3.0 | Youth Unemployment. | High (median age 18, limited formal jobs). | Moderate (better urban job absorption). |
| 4.0 | Trade Profile. | Net exporter of low-value agricultural goods. | Net exporter of higher-value manufactured goods. |
💎 Conclusion.
Tanzania’s “export of beggars” is better understood as a symptom of “structural economic gaps”—agricultural vulnerability, limited industrialization, and demographic pressures—rather than national failure. Kenya’s relatively diversified economy acts as a pull factor. Addressing this requires:
– Tanzania:
Accelerating labor-intensive industrialization and skills development to absorb rural workers.
– EAC Collaboration:
Removing trade barriers (e.g., Kenya-Tanzania cereal restrictions) to enhance cross-border livelihoods and reduce desperation-driven migration.
These dynamics underscore how regional economic integration, if fairly managed, could transform migration from survival necessity to voluntary opportunity.
The annual inflation rate in Tanzania has recently been around 3.1% to 3.3%. Specifically, the rate was 3.1% in September 2024, according to Trading Economics, and remained at 3.1% in November 2024, according to Trading Economics. In March 2025, it edged up to 3.3%, according to TanzaniaInvest. The average inflation rate in Tanzania for 2024 was estimated at 3.24%, according to Statista, and the rate has generally been decreasing since 2012.
Read more analysis by Rutashubanyuma Nestory
