Tanzania anticipates a robust economic upswing of approximately 5.5% in 2024, marking a noteworthy uptick from the 5% growth projected for 2023. However, this optimistic outlook is not without its cautionary notes, as outlined by the nation’s finance minister and central bank governor in their correspondence with the International Monetary Fund.

In a letter dated November 27, Finance Minister Mwigulu Nchemba and Central Bank Governor Emmanuel Tutuba highlighted the potential risks stemming from external geopolitical factors. While expressing confidence in the economic trajectory, they acknowledged the susceptibility to challenges such as heightened geopolitical conflicts, increased commodity price volatility, abrupt global slowdowns, or recessionary pressures. Furthermore, the specter of natural disasters related to climate change adds an additional layer of concern to the near-term prospects of the Tanzanian economy.

To address these potential headwinds, the officials disclosed strategic measures taken by the central bank, including the sale of $353.9 million on the foreign exchange market between July and October. Notably, there has been a deliberate reduction in the frequency and amounts of interventions. Looking ahead, Nchemba and Tutuba emphasized a nuanced approach, indicating that future forex interventions would be restrained to addressing disorderly market conditions. They also underscored the importance of allowing the exchange rate to exhibit flexibility as a safeguard against external shocks, aligning with a broader economic strategy.

Tanzania’s economic landscape, anchored in sectors like tourism, mining, agriculture, and manufacturing, remains dynamic, and the government is taking proactive steps to navigate potential challenges and foster sustained growth.

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