The latest World Bank Group Tanzania Economic Update projects average medium-term growth of 6.5%, supported by increasing private-sector activity.
Inflation remains within the Bank of Tanzania’s target range, public debt is considered sustainable and strong private-sector credit growth indicates expanding economic activity.
However, the World Bank said the outlook depended on growth-supporting fiscal consolidation and continued reforms to improve Tanzania’s business environment.
The report found that Tanzania’s main employment challenge was not a shortage of jobs but insufficient access to productive, secure and better-paid work.
Although the employment rate is among the highest globally, most Tanzanians work in low-productivity activities, particularly agriculture and informal employment.
Many workers also have limited skills and remain highly vulnerable to economic and climate-related shocks. “Tanzania’s economy continues to grow despite global uncertainty and climate risks,” World Bank Division Director for Tanzania Firas Raad said.
“To turn that growth into better jobs, the country needs to make deliberate policy choices and keep investing in education, skills and health.”
Raad said stronger human capital would help make economic growth more inclusive and sustainable.
The World Bank identified two main priorities: developing a stronger workforce through improved education, skills, social protection and labour-market systems, and expanding the number of productive businesses capable of creating quality employment. “Tanzania’s jobs challenge is ultimately a firm growth challenge,” said International Finance Corporation Division Director for Tanzania Mary-Jean Moyo.
“By helping productive firms invest, expand and create more quality jobs, we can make economic growth more inclusive and deliver better opportunities for Tanzanians.”
The report said Tanzania should establish a stable and predictable business environment capable of attracting more domestic and foreign private investment.
That would support the country’s Vision 2050 objective of making the private sector the dominant source of investment financing.
The World Bank said policies should help productive companies overcome barriers to investment and expansion while improving workers’ access to skills, healthcare and employment support.
Successfully linking workforce development with private-sector growth could allow Tanzania to convert strong economic expansion into higher incomes, lower poverty and more secure livelihoods.
–WorldBank/ChannelAfrica–
