Tanzania’s Growing Economy Puts Better Jobs at the Heart of Its Next Growth Chapter

Inflation remained within the Bank of Tanzania’s 3–5% target band, public debt stood at 49% of GDP, and government revenue exceeded fiscal year 2026 targets, reflecting stronger domestic resource mobilization.

Tanzania's economy is expanding steadily, with GDP growth of 5.9% in 2025 and forecasts of 6.1% in 2026 and 6.5% over the medium term, raising a pressing question about how that progress translates into better livelihoods. Nearly 69% of working-age people are employed, and many still earn too little to support an adequate living, making job quality a central concern in the World Bank's Tanzania Economic Update, featuring "Making Jobs Work".

Finance, trade and transport contributed most to growth, supported by increased government spending ahead of the October 2025 elections. Inflation remained within the Bank of Tanzania's 3–5% target band, public debt stood at 49% of GDP, and government revenue exceeded fiscal year 2026 targets, reflecting stronger domestic resource mobilization.

Global Pressures and Sector Weaknesses Test Economic Progress

The current account deficit, measuring the gap between the country's earnings from abroad and its external spending, widened to 2.5% of GDP in 2026 as high energy prices and freight costs linked to conflict in the Middle East increased pressure. Gold exports provide some protection, leaving Tanzania exposed to international shocks that can affect the cost of sustaining growth.

Mining output has suffered from maturing mines and limited new investment, and agriculture, which employs most Tanzanians, faces inefficient input markets, including problems with fertilizer distribution. The report recommends maintaining fiscal discipline to keep debt sustainable and preserve resources for essential services and investment, diversifying exports beyond gold and tourism, and increasing investment in agriculture and industry. Better access to inputs and markets for smallholder farmers would help turn agricultural potential into higher productivity and earnings.

Employment Does Not Guarantee a Decent Living

Most workers earn their livelihoods in low-productivity agriculture or informal activities, where employment can leave families trapped in poverty despite their daily efforts. Gaps in foundational skills make it difficult to move into more productive, better-paid work, and support programs for poorer households remain small, fragmented and unable to reach many people who need help acquiring skills or finding better opportunities.

Women face additional obstacles through occupational segregation, care responsibilities and limited access to training, leaving them disproportionately concentrated in the lowest-quality jobs. These barriers restrict their opportunities to improve earnings and make workforce support less effective when programs fail to account for the demands on their time.

Formal businesses are few and expand slowly, limiting the creation of good jobs, with young firms accounting for only 12% of registered businesses in Tanzania compared with 38% in Rwanda. Complicated registration, weak systems for resolving business failure, limited long-term credit and insecure land rights discourage investment and expansion, placing particularly heavy burdens on smaller firms.

Business Reforms and Practical Skills Can Improve Job Quality

Creating more good jobs requires conditions that allow businesses to start, invest and grow, including simpler registration through digital platforms, a stronger legal framework and broader access to finance. Digitally accessible land records would give businesses greater legal certainty when making investment decisions, helping address a barrier that holds back private sector activity.

Preparing workers for those opportunities requires social protection programs that actively support skills development and movement into better employment. Childcare and flexible schedules should be built into workforce programs so women can participate, and skills gained through years of informal work should receive formal recognition and certification, giving experienced workers credentials that can open doors to better jobs.

Tanzania's maintained macroeconomic stability provides a foundation for this work, with broader prosperity depending on coordinated action to expand private sector opportunities and equip people to benefit from them. The report places business growth and workforce development at the centre of a strategy for turning economic expansion into more productive employment and stronger household incomes.