DAR ES SALAAM, March 3, 2021 ¨C In July 2020, Tanzania reached a remarkable milestone toward the objectives set in the country¡¯s own Tanzania Development Vision (TDV) 2025 by achieving lower middle-income country status. This was the result of two decades of sustained growth and investment supported by stable macroeconomic conditions, rich natural endowments, and the country¡¯s strategic geographical position.
The latest ÐÓ°ÉÂÛ̳ Economic Update, , argues that this achievement is an opportunity for the country to assess the quality of past growth in delivering broad welfare gains and to develop a roadmap to guide its further transition to a successful middle-income economy with a high level of human capital development, high-quality livelihood opportunities, and broad gains in living standards, as outlined in TDV 2025.
The report frames Tanzania¡¯s ¡®next leap¡¯ of development around three strategic pillars: sustaining robust medium-term growth in a challenging external environment, improving the inclusiveness of growth and its impact on poverty reduction, and fostering upward economic mobility and strengthening economic security. These three pillars reflect both the lessons of international experience and Tanzania¡¯s unique circumstances and form the basis for an actionable policy agenda to achieve the goals of the TDV 2025. This strategic framing is also timely as the country prepares its next Five-Year Development Plan.
The report highlights that what got Tanzania to LMIC status will not be enough to reach its ambitious middle-income goals. It will require a concerted effort to restore the economy¡¯s growth momentum from the COVID-induced slowdown while expanding access to economic opportunities. Private investment should be the driver of sustainable future growth, as Tanzania¡¯s experience of the previous two decades have shown. The report notes the slowing of private investment growth in recent years and urges the government to accelerate current efforts to improve the business climate. The report also underscores the double challenge Tanzania is facing ¨C attracting private investment and boosting productivity ¨C and suggests that policies to accelerate the uptake of digital technologies can play an important role on both fronts and promote inclusive growth.
High population growth, slow and uneven job creation, low levels of education and limited access to educational and employment opportunities, especially among women and girls, have hindered the inclusiveness of economic growth, blunting its effect on poverty reduction and the expansion of the middle class. The current economic expansion has been driven by sectors that employ relatively few workers, especially from poor households. Wealthier Tanzanians, particular