Tanzania - Economy



Tanzania has an agricultural economy whose chief commercial crops are sisal, coffee, cotton, tea, tobacco, pyrethrum, spices, and cashew nuts. Agriculture accounts for 48% of GDP, provides 85% of exports, and employs 80% of the workforce. The most important minerals are gold and diamonds. Industry is mainly concerned with the processing of agricultural materials for export and local consumption. Gas production in the Rufiji Delta was scheduled for 2002. The multi-million dollar Songosongo gas pipeline project was being developed in 2003.

After 25 years of socialist experimentation achieved important advances in education and health, poor economic performance led the government, in 1986, to adopt market-style reforms in conjunction with the IMF structural adjustment program. Since then, significant progress has been made in revitalizing the economy and donors have pledged additional funds to rehabilitate Tanzania's deteriorated economic infrastructure. The high inflation rate dropped to 5% in 2001, and the economy grew by 5%.

In 2001, bilateral donor countries pledged $1 billion in aid for the country's reform programs, including education. Tanzania in 2003 was receiving $3 billion over time in debt relief under the IMF/World Bank Heavily Indebted Poor Countries (HIPC) initiative, and the net present value of Tanzania's external debt was being reduced by 54%. The economy was improving, with the mining, tourism, agriculture, construction, telecommunications, and utilities sectors all showing potential for growth. The government had sold off state-owned enterprises, was welcoming foreign investment, and had implemented strict fiscal and monetary policies. Nonetheless, Tanzania's macroeconomic progress had not translated into better lives for its rural poor.

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