Tanzania’s Growth Gains Need Better Jobs to Bring Lasting Prosperity to More Families

The latest World Bank Group Tanzania Economic Update projects average growth of 6.5% over the medium term, supported by increased private-sector activity.

Tanzania's economy is expected to grow by 6.1% in 2026, creating an opportunity to improve living standards in a country where having work does not necessarily provide a secure route out of poverty. The latest World Bank Group Tanzania Economic Update projects average growth of 6.5% over the medium term, supported by increased private-sector activity. Turning that expansion into greater prosperity will depend on whether more people can move into productive, better-paying and more secure employment that gives households a stronger financial foundation.

A Growing Economy Needs to Deliver for Workers

The country enters this period with several encouraging economic signals, including inflation within the Bank of Tanzania's target range, sustainable public debt and strong growth in credit to the private sector. These conditions support expanding business activity, although the outlook depends on continued reforms that improve the business environment and fiscal consolidation that strengthens public finances without undermining growth. Global uncertainty and climate risks remain part of the economic picture, making the quality and resilience of that growth particularly important for families whose incomes are vulnerable to disruption.

Firas Raad, World Bank Division Director for Tanzania, said deliberate policy choices and sustained investment in education, skills and health are essential to connect economic expansion with better employment. Those investments would help more Tanzanians participate in the opportunities created by a growing economy, giving workers the capabilities needed for more productive roles and helping businesses find the talent required to expand. The report places inclusive and sustainable growth at the centre of this effort, with progress measured through improvements in people's livelihoods as well as economic output.

Employment Alone Is Not Enough to Reduce Poverty

The report's special theme, "Making Jobs Work," identifies job quality as Tanzania's central employment challenge, with an employment rate already among the highest in the world. Many people work in low-productivity activities, particularly agriculture and informal employment, where earnings and security remain limited. Gaps in education, skills and health restrict workers' opportunities, leaving households exposed to shocks and making it difficult for employment to deliver lasting improvements in living standards.

Building a stronger workforce will require better skills development, social protection and labour market systems that support people's participation in productive employment. The report pairs this priority with the need for more productive firms capable of creating quality jobs, recognising that improvements in workers' capabilities need to be matched by businesses with the capacity to employ them. A stronger connection between workforce development and business expansion would give Tanzania a clearer path towards reducing poverty through employment.

Helping Businesses Expand Can Open Better Career Paths

Mary-Jean Moyo, International Finance Corporation Division Director for Tanzania, described the country's jobs challenge as fundamentally a firm growth challenge, placing business investment and expansion at the heart of better employment opportunities. Helping productive firms grow can increase their capacity to hire and generate higher-quality work, allowing more Tanzanians to benefit from the country's economic momentum. The report identifies an enabling business environment as an important foundation for turning private-sector activity into broader gains for workers.

Tanzania's Vision 2050 sets an ambitious direction in which the private sector becomes the dominant source of investment financing, giving businesses a central role in the country's development. Reaching that goal will require a robust and predictable business environment that attracts private investment and supports firms' growth. The opportunity for Tanzania lies in connecting that investment with stronger skills, greater productivity and secure employment, so the benefits of economic expansion become more visible in household incomes and everyday living standards.