The World Bank in Tanzania

The United Republic of Tanzania is a country of 69 million people located in East Africa. Tanzania is culturally and geographically diverse, spanning over 1,000 km across, bordering eight other countries, and host to the most populous city in East Africa: the port city of Dar es Salaam. Founded through the union of Tanganyika and the Zanzibar Archipelago, Tanzania has been governed continuously since independence by the Chama Cha Mapinduzi (CCM) party and its predecessors. President Samia Suluhu Hassan, one of only two sitting female presidents in Africa, currently leads the nation. National elections are scheduled for October 2025.

Economic Overview
Tanzania is a lower-middle income country with a per capita GDP of $1,149. The economy is relatively diversified: agriculture accounts for about a quarter of total value addition, industry for a third, and services for the remainder. Agriculture remains the largest source of employment, with two in three Tanzanians working in the sector. Rapid urbanization nevertheless means that 37% of Tanzanians now live in cities. Poverty is estimated at 43% using the International Poverty Line of $2.15 2017 PPP/day (about 2,080 nominal TSH in 2024), with a Human Capital Index of 0.39, roughly in line with the regional average.

Over the past years, Tanzania has built a track record of macroeconomic stability even amid serious economic shocks. Growth has been robust, fiscal balances manageable, and inflation has remained in the single digits. Vast natural endowments and favorable demographics have supported high investment levels that have strongly contributed to growth.

Growth accelerated to 5.5% in 2024, promoted by expanding exports, a good agricultural season, and increased electricity supply. Higher global demand for Tanzanian goods like gold, tourism, and agricultural commodities improved the terms of trade. Tanzanian firms were able to meet additional demand thanks to improvements in the business environment which have led to investments that increased productive capacity. Tanzania’s current account deficit is estimated to have narrowed to 2.3% of GDP in 2024, a sustainable level in the long term given the increased levels of FDI and highly concessional finance that Tanzania attracts. This has also alleviated some tensions in foreign exchange markets caused by limited rate flexibility.

The fiscal deficit has been trending toward the regional benchmark of 3% of GDP recently despite an ambitious infrastructure agenda. Tax revenues at 13% of GDP in 2024 remain low compared to peers and needs. Public debt levels remain nevertheless contained at around half of GDP. Prudent fiscal policy combined with stringent monetary policy has kept inflation below the central bank’s 5% target.

Development Agenda
Tanzania is projected to grow at an average rate of around 6% over the long-term. However, higher and more inclusive growth will be needed to meet development goals set out in the Vision 2050, which will follow the successful Vision 2025 this year and is shaping up to be ambitious.

To achieve poverty reduction and shared prosperity, Tanzania needs to create more and better jobs through private sector-driven growth. While the country has managed to maintain a robust GDP growth rate in recent years, its public sector-driven growth model faces critical constraints and has not yet accelerated the structural transformation and poverty reduction at the levels that Tanzania needs to achieve its development objectives. If Tanzania is to capitalize on its young and rapidly growing workforce, it will need to lift them from low-productivity sectors, such as subsistence agriculture and the informal economy, toward more productive employment by investing in better education and health outcomes. Prioritizing girls’ and women’s access to educational, health, and economic opportunities is particularly important for human capital formation and for catalyzing the demographic dividend. Additionally, adapting effectively to climate change will limit losses across economic and climate scenarios.

Last Updated: Apr 04, 2025

Tanzania has made significant social and economic progress in recent decades, achieving lower-middle-income country status in 2020. Between 2000 and 2020, life expectancy improved from 52 to 67 years, and school attainment from 3.8 to 6.4 years. The share of Tanzanians with access to electricity increased from 7% in 2011 to 43% in 2021. Despite impressive achievements in the past three decades, Tanzania has yet to fully realize its significant growth potential to build a more prosperous, inclusive, and resilient economy.

A new World Bank Group Country Partnership Framework (CPF) for FY2025-2029 was endorsed by the World Bank Board of Directors in July 2024 and aims to tackle Tanzania’s binding constraints and support the achievement of the country’s national development goals. The CPF focuses on three mutually reinforcing high-level outcomes: (i) enhancing human capital to boost labor productivity, (ii) catalyzing private sector-led growth, and (iii) enhanced resilience to shocks and climate impacts. Progress in these areas is underpinned by two cross-cutting priorities: increased empowerment of women and youth and improved government effectiveness with more efficient, transparent, and accountable institutions. The CPF is aligned with the Government of Tanzania’s Development Vision 2025, the Third Five-Year Development Plan (FYDP III) for 2021/22-2025/26, and Zanzibar’s Development Vision 2050. Consultations with the government on the Tanzania Development Vision 2050, which is currently under preparation, also informed the CPF.

As of March 2025, the World Bank financing commitments for operations in Tanzania amount to $10 billion, including 29 national operations ($8.8 billion) and seven regional operations ($1.2 billion). Key sectors include Infrastructure (48%), People (26%), Prosperity (12%), Planet (13%), and Digital (1%). The investment portfolio combines Investment Project Financing for public physical and social infrastructure​; Development Policy Financing providing budget support for policy reform and institutional actions​; and Program-for-Results financing supporting program design and implementation with emphasis on strengthening institutions, systems, and building capacity.

International Finance Corporation (IFC)

IFC’s operations in Tanzania are guided by the World Bank Group (WBG) CPF, endorsed by the board in July 2024, and the Government of Tanzania’s Vision 2025. Activities focus on developing the agricultural sector (with an emphasis on improving aggregation, warehousing, and logistics infrastructure), expanding access to financial services, supporting infrastructure development in power and telecommunications, and supporting the business-enabling environment by promoting regulatory reforms to ease licensing requirements and by building capacity in agribusiness and tourism.

Additionally, IFC seeks gender-inclusive and climate-sustainable investments and advisory projects.

IFC's portfolio in the country is well diversified, covering all major sectors with a total exposure of $431 million, including $129 million in short-term funding as of July 2024. IFC has committed $73.3 million so far in FY25 with an investment pipeline of $509 million. IFC’s advisory portfolio stands at $12.1 million, with an additional $6.3 million approved to increase women’s economic inclusion ($1.1 million in implementation so far).

IFC is delivering its financial institutions and manufacturing, agribusiness, and services advisory programs in Tanzania. Going forward, IFC will focus on enhancing value addition in agribusiness and light manufacturing, supporting the development and rollout of digital information platforms and solutions for agribusinesses and their supply chains, and improving access to finance by working with microfinance institutions. IFC also leverages its partnerships, working with international partners (CIDA, the EU, GIZ, DIFD, Japan Trust Fund, and USAID) to support and implement private sector development initiatives.

Multilateral Investment Guarantee Agency (MIGA)

In 2024, MIGA issued three new guarantees to clients investing in Tanzania, with an exposure of $151 million as of March 2025. In April 2024, MIGA issued a political risk insurance guarantee for TPG’s investment in Airtel Mobile Money Tanzania. In June 2024, MIGA issued a political risk insurance guarantee to ABSA Bank of South Africa to add its two subsidiaries in Tanzania to an existing capital optimization guarantee. MIGA’s current pipeline includes a distributed energy project in southern Tanzania, a data center project in Dar es Salaam, and a mining project in Ulanga. As part of the new World Bank Group Guarantees platform, which is housed in MIGA, MIGA will also leverage deeper collaboration across the WBG to de-risk foreign investment, paying close attention to projects that boost job creation.

Analytics and Knowledge Products

The World Bank Group continues to use analytics to guide project operations, along with hands-on technical assistance, impact evaluations, policy notes, and broader reports to inform lending and policy dialogue.

The WBG Country Climate and Development Report was launched in December and shows that climate change could slow economic growth by up to 4% by 2050, push an additional 2.6 million Tanzanians into poverty, and force up to 13 million more citizens to migrate internally by 2050. The CCDR identifies measures by which Tanzania can limit these impacts and boost its GDP by up to 0.5% by 2050. The Tanzania Economic Update (TEU) flagship series provides policy-relevant analysis on the economy and a special focus on topical issues, with the most recent edition focusing on the importance of investing in basic education. Other key ASA underway include the Education Public Expenditure Review as well as work on procurement, energy, disability, public-private partnerships, and governance.

Last Updated: Apr 04, 2025

Water

The World Bank has supported the improvement of water outcomes in Tanzania through several operations. The $650 million IDA-financed Sustainable Rural Water Supply and Sanitation Program (SRWSSP), which will be concluded in 2025, aimed to increase access to rural water supply and sanitation services in participating districts and strengthen the capacity of select sector institutions to sustain service delivery. The program worked in all 137 rural districts of mainland Tanzania. Here are some of the main achievements:

·       Systems strengthening: the creation and capacitation of the dedicated Rural Water Supply and Sanitation Agency (RUWASA) and Community-Based Water Supply Organizations have helped to increase access and capacity to sustain services.

·       Increased water supply access: more than 7.92 million people gained access to improved water supply.

·       Increased sanitation access: about 10.113 million people gained access to improved sanitation.

·       Improved and sustained community-wide sanitation access: about 1,487 villages achieved and sustained community-wide sanitation.

·       Increased Water, Sanitation, and Hygiene (WASH) services access in healthcare facilities: about 1,828 healthcare facilities were provided with improved WASH services.

·       Increased WASH access in educational facilities: 1,387 primary schools gained access to improved sanitation and hygiene facilities.

·       Private sector development: the program has supported the government’s efforts to crowd in PPPs to the rural sector.

This results-based financing program has demonstrated remarkable success, consistently ranking among the top three projects in the World Bank's water portfolio for three consecutive years (FY 21- to FY 23) based on access to water and sanitation corporate scorecard indicators.

Education

The World Bank is the largest external financier of the education sector in Tanzania, with a $1.5 billion IDA portfolio dedicated to improving access and quality across pre-primary, primary, secondary, tertiary, and technical and vocational education levels. The last decade has witnessed significant improvements at all levels. In mainland Tanzania, pre-primary enrollment increased from 37% to 89%, primary from 96% to 98%, lower secondary from 46% to 53%, upper secondary from 4% to 8%, and tertiary from 4% to 6.1%. In Zanzibar, pre-primary enrollment rose from 57% to 88%, primary from 97% to 123%, and lower secondary from 68% to 90%.

National data indicates that access to and completion of lower secondary education can significantly improve job prospects and wages, as well as prevent early marriage and pregnancies. Through the Secondary Education for Quality Improvement Project (SEQUIP, P170,480), approved in 2020, the Government of Tanzania implemented a comprehensive set of interventions to enhance access to and retention in secondary schools. The project aims to reduce distance to schools, decrease class size, ensure WASH facilities are available, create a safe and abuse-free environment for students, and provide quality education through better trained teachers and improved access to learning materials. The project places special emphasis on improving adolescent girls' opportunities to access and complete secondary education.

·       Overall, since 2019 (baseline year), there has been a 60% increase in the number of students reaching the end of public lower secondary education (form 4), and 86% increase in students transitioning from lower secondary (form 4) to senior secondary (form 5).

·       The number of adolescent girls successfully transitioning from lower secondary (form 4) to senior secondary (form 5) has more than doubled, with a 114% increase. Gender parity is nearly achieved, having improved from 0.75 (2019) to 0.98 (2023). A 92% rise in adolescent girls enrolling in senior secondary (form 5) has been observed. Gender parity increased from 0.76 (2019) to 0.95 (2023).

·       68% of the adolescent girls who dropped out of school reintegrated through Alternative Education Pathways.

·      All public schools are implementing the Safe School Program generating a secure, inclusive, and gender-responsive environment for learning in schools.

·      Around 6 million adolescent girls and boys are currently benefitting from learning enhancement interventions under SEQUIP.

However, a lot more needs to be done to sustain this momentum. The government has recently announced a 10-year compulsory education policy and committed to providing 13 years of fee-free basic education. An increase in student enrollment is expected, alongside the projected doubling of the school-age population by 2061. Projections indicate that by 2030, there could be a deficiency of over 370,000 teachers in basic education. Continued investment in the basic education subsector is important as the government begins implementing the revised Education and Training Policy (2023) and the updated national competency-based curriculum.

Last Updated: Apr 04, 2025

Partnering with other development organizations is a key aspect of the WBG's Country Partnership Framework in Tanzania. The Development Partners Group, chaired by the UN and co-chaired by a bilateral partner, serves as an important forum to discuss development issues as well as engage with the government on strengthening partnerships between the government and its development partners. The WBG also leads and participates in several sector development partners’ groups in order to harmonize and align partner programs and approaches with national priorities.

Several large lending programs, such as the Productive Social Safety Net Project, the BOOST Primary Student Learning Program-for-Results, and the Dar es Salaam Maritime Gateway Project, are co-financed by bilateral donors, including Sweden and the United Kingdom. The Msimbazi Basin Development Project has been co-financed by the Netherlands Ministry of Foreign Affairs and the Spanish Agency for International Development Cooperation. The recently approved Dodoma Integrated and Sustainable Transport (DIST) project received support from the Global Facility for Disaster Risk Reduction and Recovery (GFDRR) and the Japan-World Bank Program for Mainstreaming Disaster Risk Management (DRM) in Developing Countries, which is supported by the Government of Japan and managed by GFDRR’s Tokyo DRM Hub. There are also complementary investments by JICA, AfDB and other partners to deliver on the Dodoma National Capital City Masterplan.

Additionally, the French Development Agency (AFD) is financing the establishment of the fifth corridor of the Dar es Salaam Bus Rapid Transit (BRT) system with up to Euro 178M, while the European Investment Bank (EIB) is preparing a $125M investment into the WB-financed Dar es Salaam Urban Transport Improvement Project that will focus on the BRT-4 infrastructure.

Last Updated: Apr 04, 2025