By Business Insider Reporter
Afruca Development Bank (AfDB) has said Tanzania’s economy has grown at an impressive average of 6% annually over the past decade.
From infrastructure megaprojects to robust consumer spending, the growth narrative is one of resilience and ambition.
But business leaders and investors must read between the lines – because growth alone is not the whole story.
The recently released Tanzania Country Diagnostic Note (2025) reveals a duality: robust GDP expansion has not translated into equitable prosperity.
Nearly half of Tanzanians still live below the international poverty line, while income inequality has worsened. This paradox poses long-term risks to sustained consumer demand and political stability.
Agriculture, the nation’s largest employer, remains 98% less productive than the economy-wide average, according to AfDB report.
Meanwhile, manufacturing’s share of GDP has stagnated at around 10%, reflecting weak industrial linkages and missed opportunities in value addition.
The report notes that the private sector, which employs 95% of the workforce, is largely informal and undercapitalised.
More than 60% of micro-enterprises shut down within five years, largely due to limited access to finance, regulatory burdens, and infrastructure constraints.
“This is where forward-thinking businesses can make a difference,” says AfDB.
By investing in supply chains, agribusiness and SME financing, the private sector can help drive inclusive economic transformation – while tapping into underserved markets. For example, fintech solutions tailored to rural entrepreneurs can address credit gaps while building customer loyalty and data insights.
Policy moments, says the report, is on the business community’s side. The government is focused on improving the business environment, expanding public-private partnerships, and upgrading logistics and energy infrastructure. But implementation will be key.
To thrive in Tanzania, businesses must align profitability with impact. This means designing inclusive business models, localizing supply chains, and advocating for regulatory reforms. Done right, the private sector can turn Tanzania’s growth paradox into a competitive advantage.
