Economy of Tanzania and business opportunities

Economy of Tanzania

The United Republic of Tanzania is the second largest economy in the East African Community and the twelfth largest in Africa. The country is largely dependent on agriculture for employment, accounting for about half of the employed workforce. An estimated 34 percent of Tanzanians currently live in poverty. The economy has been transitioning from a command economy to a market economy since 1985. Although total GDP has increased since these reforms began, GDP per capita dropped sharply at first, and only exceeded the pre-transition figure in around 2007.

Following the rebasing of the economy in 2014, the GDP increased by a third to $41.33 billion.

Sectors

Agriculture

The Tanzanian economy is heavily based on agriculture, which accounts for 24.5 percent of gross domestic product, provides 85 percent of exports, and accounts for half of the employed workforce; The agricultural sector grew 4.3 percent in 2012, less than half of the Millennium Development Goal target of 10.8 percent. 16.4 percent of the land is arable, with 2.4 percent of the land planted with permanent crops.

Industry and construction

Industry and construction is a major and growing component of the Tanzanian economy, contributing 22.2 percent of GDP in 2013. This component includes mining and quarrying, manufacturing, electricity and natural gas, water supply, and construction.

Mining

Mining contributed 3.3 percent of GDP in 2013. The vast majority of the country's mineral export revenue comes from gold, accounting for 89 percent of the value of those exports in 2013. It also exports sizable quantities of gemstones, including diamonds and tanzanite. All of Tanzania's coal production, which totalled 106,000 short tons in 2012, is used domestically. Other minerals exploited in Tanzania include pozzolana, salt, gypsum, kaolinite, silver ore, copper, phosphate, tin, graphite, and bauxite.Electricity

The government-owned Tanzania Electric Supply Company Limited (TANESCO) dominates the electric supply industry in Tanzania. The country generated 6.013 billion kilowatt hours (kWh) of electricity in 2013, a 4.2 percent increase over the 5.771 billion kWh generated in 2012.

Natural gas

According to PFC Energy, 25 to 30 trillion cubic feet of recoverable natural gas resources have been discovered in Tanzania since 2010. The value of natural gas actually produced in 2013 was US $52.2 million, a 42.7 percent increase over 2012.

Commercial production of gas from the Songo Songo Island field in the Indian Ocean commenced in 2004, thirty years after it was discovered there. Over 35 billion cubic feet of gas was produced from this field in 2013, with proven, probable, and possible reserves totalling 1.1 trillion cubic feet.