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Tanzania vs. Malawi

Economy

TanzaniaMalawi
Economy - overview

Tanzania has achieved high growth rates based on its vast natural resource wealth and tourism with GDP growth in 2009-17 averaging 6%-7% per year. Dar es Salaam used fiscal stimulus measures and easier monetary policies to lessen the impact of the global recession and in general, benefited from low oil prices. Tanzania has largely completed its transition to a market economy, though the government retains a presence in sectors such as telecommunications, banking, energy, and mining.

The economy depends on agriculture, which accounts for slightly less than one-quarter of GDP and employs about 65% of the work force, although gold production in recent years has increased to about 35% of exports. All land in Tanzania is owned by the government, which can lease land for up to 99 years. Proposed reforms to allow for land ownership, particularly foreign land ownership, remain unpopular.

The financial sector in Tanzania has expanded in recent years and foreign-owned banks account for about 48% of the banking industry's total assets. Competition among foreign commercial banks has resulted in significant improvements in the efficiency and quality of financial services, though interest rates are still relatively high, reflecting high fraud risk. Banking reforms have helped increase private-sector growth and investment.

The World Bank, the IMF, and bilateral donors have provided funds to rehabilitate Tanzania's aging infrastructure, including rail and port, which provide important trade links for inland countries. In 2013, Tanzania completed the world's largest Millennium Challenge Compact (MCC) grant, worth $698 million, but in late 2015, the MCC Board of Directors deferred a decision to renew Tanzania's eligibility because of irregularities in voting in Zanzibar and concerns over the government's use of a controversial cybercrime bill.

The new government elected in 2015 has developed an ambitious development agenda focused on creating a better business environment through improved infrastructure, access to financing, and education progress, but implementing budgets remains challenging for the government. Recent policy moves by President MAGUFULI are aimed at protecting domestic industry and have caused concern among foreign investors.

Landlocked Malawi ranks among the world's least developed countries. The country's economic performance has historically been constrained by policy inconsistency, macroeconomic instability, poor infrastructure, rampant corruption, high population growth, and poor health and education outcomes that limit labor productivity. The economy is predominately agricultural with about 80% of the population living in rural areas. Agriculture accounts for about one-third of GDP and 80% of export revenues. The performance of the tobacco sector is key to short-term growth as tobacco accounts for more than half of exports, although Malawi is looking to diversify away from tobacco to other cash crops.

The economy depends on substantial inflows of economic assistance from the IMF, the World Bank, and individual donor nations. Donors halted direct budget support from 2013 to 2016 because of concerns about corruption and fiscal carelessness, but the World Bank resumed budget support in May 2017. In 2006, Malawi was approved for relief under the Heavily Indebted Poor Countries (HIPC) program but recent increases in domestic borrowing mean that debt servicing in 2016 exceeded the levels prior to HIPC debt relief.

Heavily dependent on rain-fed agriculture, with corn being the staple crop, Malawi's economy was hit hard by the El Nino-driven drought in 2015 and 2016, and now faces threat from the fall armyworm. The drought also slowed economic activity, led to two consecutive years of declining economic growth, and contributed to high inflation rates. Depressed food prices over 2017 led to a significant drop in inflation (from an average of 21.7% in 2016 to 12.3% in 2017), with a similar drop in interest rates.

GDP (purchasing power parity)$149.785 billion (2019 est.)

$141.585 billion (2018 est.)

$134.274 billion (2017 est.)

note: data are in 2010 dollars
$19.741 billion (2019 est.)

$18.914 billion (2018 est.)

$18.333 billion (2017 est.)

note: data are in 2017 dollars
GDP - real growth rate6.98% (2019 est.)

6.95% (2018 est.)

6.78% (2017 est.)
4% (2017 est.)

2.3% (2016 est.)

3% (2015 est.)
GDP - per capita (PPP)$2,660 (2019 est.)

$2,590 (2018 est.)

$2,530 (2017 est.)

note: data are in 2010 dollars
$1,060 (2019 est.)

$1,043 (2018 est.)

$1,038 (2017 est.)

note: data are in 2017 dollars
GDP - composition by sectoragriculture: 23.4% (2017 est.)

industry: 28.6% (2017 est.)

services: 47.6% (2017 est.)
agriculture: 28.6% (2017 est.)

industry: 15.4% (2017 est.)

services: 56% (2017 est.)
Population below poverty line26.4% (2017 est.)51.5% (2016 est.)
Household income or consumption by percentage sharelowest 10%: 2.8%

highest 10%: 29.6% (2007)
lowest 10%: 2.2%

highest 10%: 37.5% (2010 est.)
Inflation rate (consumer prices)3.4% (2019 est.)

3.5% (2018 est.)

5.3% (2017 est.)
9.3% (2019 est.)

12.4% (2018 est.)

11.7% (2017 est.)
Labor force24.89 million (2017 est.)7 million (2013 est.)
Labor force - by occupationagriculture: 66.9%

industry: 6.4%

services: 26.6% (2014 est.)
agriculture: 76.9%

industry: 4.1%

services: 19% (2013 est.)
Unemployment rate10.3% (2014 est.)20.4% (2013 est.)
Distribution of family income - Gini index40.5 (2017 est.)

34.6 (2000)
44.7 (2016 est.)

39 (2004)
Budgetrevenues: 7.873 billion (2017 est.)

expenditures: 8.818 billion (2017 est.)
revenues: 1.356 billion (2017 est.)

expenditures: 1.567 billion (2017 est.)
Industriesagricultural processing (sugar, beer, cigarettes, sisal twine); mining (diamonds, gold, and iron), salt, soda ash; cement, oil refining, shoes, apparel, wood products, fertilizertobacco, tea, sugar, sawmill products, cement, consumer goods
Industrial production growth rate12% (2017 est.)1.2% (2017 est.)
Agriculture - productscassava, maize, sweet potatoes, sugar cane, rice, bananas, vegetables, milk, beans, sunflower seedsweet potatoes, cassava, sugar cane, maize, mangoes/guavas, potatoes, tomatoes, pigeon peas, bananas, plantains
Exports$7.827 billion (2017 est.)

$5.697 billion (2016 est.)
$10.718 billion (2019 est.)

$10.326 billion (2018 est.)

$9.658 billion (2017 est.)
Exports - commoditiesgold, tobacco, cashews, sesame seeds, refined petroleum (2019)tobacco, tea, raw sugar, beans, soybean products, clothing and apparel (2019)
Exports - partnersIndia 20%, United Arab Emirates 13%, China 8%, Switzerland 7%, Rwanda 6%, Kenya 5%, Vietnam 5% (2019)Belgium 16%, United States 8%, Egypt 7%, South Africa 6%, Germany 6%, Kenya 5%, United Arab Emirates 5% (2019)
Imports$9.972 billion (2017 est.)

$8.464 billion (2016 est.)
$12.818 billion (2019 est.)

$12.372 billion (2018 est.)

$11.631 billion (2017 est.)
Imports - commoditiesrefined petroleum, palm oil, packaged medicines, cars, wheat (2019)postage stamps, refined petroleum, packaged medicines, fertilizers, office machinery/parts (2019)
Imports - partnersChina 34%, India 15%, United Arab Emirates 12% (2019)South Africa 17%, China 16%, United Arab Emirates 9%, India 9%, United Kingdom 8% (2019)
Debt - external$22.054 billion (2019 est.)

$20.569 billion (2018 est.)
$2.102 billion (31 December 2017 est.)

$1.5 billion (31 December 2016 est.)
Exchange ratesTanzanian shillings (TZS) per US dollar -

2,319 (2020 est.)

2,300 (2019 est.)

2,299.155 (2018 est.)

1,989.7 (2014 est.)

1,654 (2013 est.)
Malawian kwachas (MWK) per US dollar -

762.4951 (2020 est.)

736.6548 (2019 est.)

732.335 (2018 est.)

499.6 (2014 est.)

424.9 (2013 est.)
Fiscal year1 July - 30 June1 July - 30 June
Public debt37% of GDP (2017 est.)

38% of GDP (2016 est.)
59.2% of GDP (2017 est.)

60.3% of GDP (2016 est.)
Reserves of foreign exchange and gold$5.301 billion (31 December 2017 est.)

$4.067 billion (31 December 2016 est.)

note: excludes gold
$780.2 million (31 December 2017 est.)

$585.7 million (31 December 2016 est.)
Current Account Balance-$1.313 billion (2019 est.)

-$1.898 billion (2018 est.)
-$591 million (2017 est.)

-$744 million (2016 est.)
GDP (official exchange rate)$60.633 billion (2019 est.)$7.766 billion (2019 est.)
Ease of Doing Business Index scoresOverall score: 54.5 (2020)

Starting a Business score: 74.4 (2020)

Trading score: 20.2 (2020)

Enforcement score: 61.7 (2020)
Overall score: 60.9 (2020)

Starting a Business score: 77.9 (2020)

Trading score: 65.3 (2020)

Enforcement score: 47.4 (2020)
Taxes and other revenues15.2% (of GDP) (2017 est.)21.7% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-1.8% (of GDP) (2017 est.)-3.4% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 3.9%

male: 3.1%

female: 4.6% (2014 est.)
total: 40.5%

male: 33.1%

female: 47.7% (2017 est.)
GDP - composition, by end usehousehold consumption: 62.4% (2017 est.)

government consumption: 12.5% (2017 est.)

investment in fixed capital: 36.1% (2017 est.)

investment in inventories: -8.7% (2017 est.)

exports of goods and services: 18.1% (2017 est.)

imports of goods and services: -20.5% (2017 est.)
household consumption: 84.3% (2017 est.)

government consumption: 16.3% (2017 est.)

investment in fixed capital: 15.3% (2017 est.)

investment in inventories: 0% (2017 est.)

exports of goods and services: 27.9% (2017 est.)

imports of goods and services: -43.8% (2017 est.)
Gross national saving30.5% of GDP (2017 est.)

23.1% of GDP (2016 est.)

24.9% of GDP (2015 est.)
11% of GDP (2019 est.)

9.1% of GDP (2018 est.)

8.2% of GDP (2017 est.)

Source: CIA Factbook