Tanzania's $85 Billion Economy Set for Rapid Growth, Challenging Kenya's Regional Dominance

Tanzania is one of Africa's fastest-growing economies and is forecast to overtake Kenya as East Africa's largest economy in the next ten years. The country also boasts a GDP of $85 billion, which is expected to exponentially grow by 6.1% in 2026, 8% in 2028 and 10.5% in 2030.

However, President Samia Suluhu Hassan and her administration are aware that this economic promise rings hollow if it does not translate into tangible benefits such as inclusivity, increased job prospects and poverty reduction.

The government has sought to address these challenges through the ambitious national development plan, Vision 2050, which aims to develop Tanzania into a country with a $1 trillion economy by 2050. This plan does not merely signal prosperity, but Tanzania's complete economic transformation for the betterment of all Tanzanians.

In her New Year's Eve address, President Samia stated, 'As we enter 2026, we are starting the implementation of our National Vision 2050... The government will continue strengthening revenue collection through electronic systems, improve transparency in public finances, and ensure effective use of resources.'

For Tanzania to achieve such a seismic level of economic growth, it must leverage human capital development across key sectors such as mining, energy and agriculture, value-added production, industrialisation and its strategic location.

The government is showing its dedication to enhancing education opportunities and technical training, particularly for the youth. Youth Investors Resource Centres (YIRC) are soon to be established nationwide to teach the youth skills that they can use to help launch their own local businesses. Considering that Tanzania has one of the world's youngest populations with a median age of 18 years, news of such initiatives is being well received.

Moreover, Tanzania's mining sector was one of the key drivers behind the country's 5.8% GDP growth in 2025. However, only 16% of land has been surveyed, with the government intending to increase this to 50% by 2030 through geological surveys to assess the availability of minerals across the country.

The next crucial step is to ensure that both policy and legal frameworks are implemented to ensure that investors do not merely explore or mine mineral resources but develop the necessary facilities to process mineral resources locally to add value, stimulate manufacturing, and create high-quality jobs for locals.

In fact, since the start of 2026, the government has already taken measures to limit the role of foreign firms in mining procurement, to ensure that Tanzanians play a more substantive role across the mining value chain.

Tanzania's ability to thrive in local processing and value addition will rely heavily on the country having sufficient energy supplies — a challenge it appears to be very well-positioned to meet. Tanzania already produces 4,000 MW of energy, which it aims to double by 2030 and aspires to have a fully industrialised energy sector that powers the economy by 2050.

Furthermore, agriculture has long been a cornerstone of Tanzania's economy, accounting for over 25% of the country's GDP, and employing approximately 70-75% of the national workforce. Despite Tanzania enjoying abundant fertile land, low productivity in many crops persists.

The government is poised to solve this, increasing the agriculture budget fivefold from TZS 200 billion (USD 79.36 million) to over TZS 1.2 trillion (USD 476.16 million) between 2020 and 2025 under Vision 2050.

However, the President recognises that if Tanzania is to realise its goals of economic transformation, implementing only structural reforms will not suffice. Hence, there has also been a notable pivot in the state's role in the economy.

The government has prioritised the resumption of structured dialogue with the private sector. This approach is exemplified by negotiations with international energy companies on the long-stalled LNG project. The $42 billion-project is timely given the rising global demand for LNG and is projected to deliver multi-billion-dollar revenue each year.

Such deals serve as concrete proof to investors that Tanzania values consistency and consultation and is dedicated to working toward a more predictable, investor-responsive approach.

Similarly, Tanzania is a gateway to eight neighbouring countries in the region, with the Dar es Salaam port, the fourth largest on the African continent's Indian Ocean coastline, allowing vital access to landlocked countries such as Rwanda, Burundi, and Zambia.

The port handles more than 90% of Tanzania's international trade and has undergone infrastructural developments which have enabled the country to accommodate larger vessels, speed up handling times, and enhance Tanzania's position as a regional logistics hub.

The government intends to build on this progress, with the Tanzania Ports Authority (TPA) encouraging private sector investment in the construction and modernisation of ports across the country to increase connectivity and boost regional competitiveness.

To achieve its goal of economic transformation, Tanzania must ensure that politics, business and the economy work in tandem.

The government is now prioritising sustained conversations with private organisations on key projects, investing in highly skilled individuals to develop important sectors, and ensuring that economic growth translates into increased employment and higher standards of living.