At $90.14bn, Tanzania’s 2025 GDP is roughly 36% higher than the $66.07bn recorded in 2020 and nearly double the $47.41bn figure reported in 2015. The economy if Tanzania is now on course to hit the $100bn GDP mark, a milestone that only 11 African countries have achieved. Tanzania’s real GDP grew by 6% in 2025, up from 5.5% the previous year, with the International Monetary Fund (IMF) projecting sustained expansion of 6.3% to 6.5% through 2028.
Last year’s robust growth was driven primarily by record gold exports, a booming tourism sector and the completion of the 2,115 MW Julius Nyerere Hydropower Project. The financial services sector was also a standout performer thanks to record profits generated by the nation’s largest commercial banks.
A historic rally in gold prices and increased production at major mines led to a 37.4% jump in gold exports, which reached a record $4.7bn compared with $3.4bn in the previous year. Gold accounted for 45.7% of the total value of goods Tanzania exported last year. The surge in gold exports pushed the broader mining sector’s overall contribution to GDP above 10% for the first time.
Meanwhile, tourism extended its multi-year recovery in 2025. International arrivals rose 11.4% to a record 2.3m visitors by October, while revenues reached $4.3bn from $3.8bn a year earlier – closely rivalling gold exports. The rebound highlights the sector’s continued recovery from the Covid‑19 downturn in 2020, when annual arrivals dipped to 600,000 from 1.5m a year earlier and revenues dropped to $900m from $2.6bn.
Betting big on infrastructure
Tanzania’s power sector entered a new phase in 2025. The Julius Nyerere Hydropower Project, which was connected to the national grid in April, more than doubled the country’s installed generation capacity to 4,015 MW.
Built at a cost of 6.5 trillion shillings ($2.5bn),the project is expected to play a central role in Tanzania’s industrialisation drive by making power more affordable for manufacturers. The project is also important for symbolic reasons. It was 99.5% financed by domestic tax revenues and local budgets, reflecting the government’s broader push for economic self-reliance.
In transport, the ongoing construction of the Standard Gauge Railway (SGR) represents Tanzania’s most ambitious undertaking. The new electrified line is designed to replace the colonial-era meter-gauge railway and will link the Port of Dar es Salaam with the country’s interior and neighbouring landlocked states including Burundi, Rwanda and the Democratic Republic of Congo.
Passenger trains already connect Dar es Salaam, Morogoro and Dodoma multiple times daily, while freight services reach the Ihumwa dry port in about four hours – cutting transit times for goods by more than half according to local reports. When fully built, the 2,800 km line is expected to cost between $7bn and $10bn, with most funding expected to come from public sources.
Tanzania’s efforts to become a regional trade and logistics hub do not end with the SGR. The country is also modernising its ports, amid stiff competition from the Port of Mombasa in Kenya, which serves the same neighbouring landlocked countries.
In 2023 Tanzania awarded a 30‑year concession to UAE logistics giant DP World, which committed to $250m investment in the first five years, with a $1bn total projected over the concession’s lifespan. Since the deal was signed, DP reports that operational metrics at the Port of Dar es Salaam have significantly improved. Roll‑on/roll‑off (RoRo) automotive discharge times, for example, reduced sharply from more than 300 hours to under 28 hours, while average ship waiting delays at anchorage fell from 46 days to just seven.
Tanzania courts private investors
Tanzania’s infrastructure drive is designed to make the country more attractive to private investors. President Samia Suluhu Hassan says this strategy is already paying off, citing steady growth in foreign direct investment (FDI).
“In principle, the basic infrastructure for investment growth has already been laid in Tanzania. Having done that, we have improved the number of FDI projects registered in the country. In 2018 we had around 250 projects, but by 2024 we had registered over 970 projects. In doing this we moved from $3.8bn [total stock of FDI] to close to $12bn,” Hassan told the World Governments Summit in Dubai.
According to the United Nations Conference on Trade and Development (UNCTAD), Tanzania attracted $1.72bn in FDI in 2024, a 28.3% increase from $1.34bn in 2023. The country recorded inflows of $1.1bn in 2022, $1bn in 2021 and $944m in 2020.
This year Hassan unveiled a new policy doctrine dubbed “sovereign pragmatism”, proclaiming a shift from aid‑dependent development towards trade, investment and technology transfer. “We seek trade, not just aid; technology transfer, not just technical assistance,” she said.
Official development assistance (ODA) to Tanzania has contracted by 84% since 2013, with further declines of 9% to 17% projected for 2025–2026. Domestic revenue growth has not kept pace with the retreat of aid, creating pressure to turn to private investment to bridge the gap.
Economic reforms inspire confidence
Tanzania concluded its IMF programme in July, triggering the release of $443.8m – of which $154m was released under the Extended Credit Facility (ECF) and $289.7m through the Resilience and Sustainability Facility (RSF). Overall, Tanzania has received a total of approximately $1.7bn during the course of this IMF assistance package – $1.06bn through the ECF and $636.5m under the RSF.
In a statement the IMF executive board praised the country’s “robust economic growth and successful implementation of core structural reforms,” noting that most quantitative performance targets were met on schedule. These include a shift to an interest rate‑based framework and measures to strengthen financial sector stability, fiscal transparency and climate risk planning.
“Amid external and domestic shocks, Tanzania’s reform programme supported by the Extended Credit Facility (ECF) has enabled the authorities to maintain macroeconomic stability and advance reforms,” said Bo Li, IMF deputy managing director and acting chair of the board.
Li urged authorities to sustain the pace of reforms in order to generate jobs for the country’s fast‑growing population and to “strengthen resilience to climate change”.
The African Development Bank (AfDB) cautions, in its latest economic outlook report on Tanzania, that unemployment and poverty remain significant downside risks. Other vulnerabilities “include the impact of the Middle East conflict and the global geopolitics that could increase oil and food prices and disrupt export and import supply chains, climate change vulnerabilities and lingering effects of socio‑political tensions”.
Although extreme poverty in Tanzania fell from 41% in 2020 to 35% in 2025, poverty rates remain stubbornly high due to low agricultural productivity and high unemployment. Youth unemployment in particular stands at 10%. Government initiatives focused on agricultural value chains, human capital investment and expanded social protection can help address these challenges, the AfDB says.
As Tanzania seeks to drum up more FDI, questions remain over whether the new government will be able to woo international investors following last year’s elections. Tanzania is counting on diplomatic re-engagement with its international partners, including strengthening commercial ties with partners like Russia and India, which together with Brazil, China and South Africa form the BRICS alliance that has long sought to challenge Western geopolitical dominance.
Opportunities across a number of sectors – with countries looking to diversify their supply chains – should bode well for the country, as will the fact that Tanzania has always been a reliable partner despite an economy that has opened up more slowly than some of its neighbours. With a new mindset for investment and a growing pipeline, it’s an appealing market on many fronts.
This Tanzania special report was produced in support of the Infra for Africa Forum in Dar es Salaam, powered by Africa50.