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Tanzania vs. Kenya

Economy

TanzaniaKenya
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.

Kenya is the economic, financial, and transport hub of East Africa. Kenya’s real GDP growth has averaged over 5% for the last decade. Since 2014, Kenya has been ranked as a lower middle income country because its per capita GDP crossed a World Bank threshold. While Kenya has a growing entrepreneurial middle class and steady growth, its economic development has been impaired by weak governance and corruption. Although reliable numbers are hard to find, unemployment and under-employment are extremely high, and could be near 40% of the population. In 2013, the country adopted a devolved system of government with the creation of 47 counties, and is in the process of devolving state revenues and responsibilities to the counties.

Agriculture remains the backbone of the Kenyan economy, contributing one-third of GDP. About 75% of Kenya’s population of roughly 48.5 million work at least part-time in the agricultural sector, including livestock and pastoral activities. Over 75% of agricultural output is from small-scale, rain-fed farming or livestock production. Tourism also holds a significant place in Kenya’s economy. In spite of political turmoil throughout the second half of 2017, tourism was up 20%, showcasing the strength of this sector. Kenya has long been a target of terrorist activity and has struggled with instability along its northeastern borders. Some high visibility terrorist attacks during 2013-2015 (e.g., at Nairobi’s Westgate Mall and Garissa University) affected the tourism industry severely, but the sector rebounded strongly in 2016-2017 and appears poised to continue growing.

Inadequate infrastructure continues to hamper Kenya’s efforts to improve its annual growth so that it can meaningfully address poverty and unemployment. The KENYATTA administration has been successful in courting external investment for infrastructure development. International financial institutions and donors remain important to Kenya's growth and development, but Kenya has also successfully raised capital in the global bond market issuing its first sovereign bond offering in mid-2014, with a second occurring in February 2018. The first phase of a Chinese-financed and constructed standard gauge railway connecting Mombasa and Nairobi opened in May 2017.

In 2016 the government was forced to take over three small and undercapitalized banks when underlying weaknesses were exposed. The government also enacted legislation that limits interest rates banks can charge on loans and set a rate that banks must pay their depositors. This measure led to a sharp shrinkage of credit in the economy. A prolonged election cycle in 2017 hurt the economy, drained government resources, and slowed GDP growth. Drought-like conditions in parts of the country pushed 2017 inflation above 8%, but the rate had fallen to 4.5% in February 2018.

The economy, however, is well placed to resume its decade-long 5%-6% growth rate. While fiscal deficits continue to pose risks in the medium term, other economic indicators, including foreign exchange reserves, interest rates, current account deficits, remittances and FDI are positive. The credit and drought-related impediments were temporary. Now In his second term, President KENYATTA has pledged to make economic growth and development a centerpiece of his second administration, focusing on his "Big Four" initiatives of universal healthcare, food security, affordable housing, and expansion of manufacturing.

GDP (purchasing power parity)
$162.5 billion (2017 est.)
$153.3 billion (2016 est.)
$143.3 billion (2015 est.)

note: data are in 2017 dollars

$163.7 billion (2017 est.)
$156 billion (2016 est.)
$147.4 billion (2015 est.)

note: data are in 2017 dollars

GDP - real growth rate
6.98% (2019 est.)
6.95% (2018 est.)
6.78% (2017 est.)
5.39% (2019 est.)
6.32% (2018 est.)
4.79% (2017 est.)
GDP - per capita (PPP)
$3,200 (2017 est.)
$3,100 (2016 est.)
$3,000 (2015 est.)

note: data are in 2017 dollars

$3,500 (2017 est.)
$3,400 (2016 est.)
$3,300 (2015 est.)

note: data are in 2017 dollars

GDP - composition by sector
agriculture: 23.4% (2017 est.)
industry: 28.6% (2017 est.)
services: 47.6% (2017 est.)
agriculture: 34.5% (2017 est.)
industry: 17.8% (2017 est.)
services: 47.5% (2017 est.)
Population below poverty line
22.8% (2015 est.)
36.1% (2016 est.)
Household income or consumption by percentage share
lowest 10%: 2.8%
highest 10%: 29.6% (2007)
lowest 10%: 1.8%
highest 10%: 37.8% (2005)
Inflation rate (consumer prices)
5.3% (2017 est.)
5.2% (2016 est.)
8% (2017 est.)
6.3% (2016 est.)
Labor force
24.89 million (2017 est.)
19.6 million (2017 est.)
Labor force - by occupation
agriculture: 66.9%
industry: 6.4%
services: 26.6% (2014 est.)
agriculture: 61.1%
industry: 6.7%
services: 32.2% (2005 est.)
Unemployment rate
10.3% (2014 est.)
40% (2013 est.)
40% (2001 est.)
Distribution of family income - Gini index
37.6 (2007)
34.6 (2000)
48.5 (2016 est.)
42.5 (2008 est.)
Budget
revenues: 7.873 billion (2017 est.)
expenditures: 8.818 billion (2017 est.)
revenues: 13.95 billion (2017 est.)
expenditures: 19.24 billion (2017 est.)
Industries
agricultural processing (sugar, beer, cigarettes, sisal twine); mining (diamonds, gold, and iron), salt, soda ash; cement, oil refining, shoes, apparel, wood products, fertilizer
small-scale consumer goods (plastic, furniture, batteries, textiles, clothing, soap, cigarettes, flour), agricultural products, horticulture, oil refining; aluminum, steel, lead; cement, commercial ship repair, tourism, information technology
Industrial production growth rate
12% (2017 est.)
3.6% (2017 est.)
Agriculture - products
coffee, sisal, tea, cotton, pyrethrum (insecticide made from chrysanthemums), cashew nuts, tobacco, cloves, corn, wheat, cassava (manioc, tapioca), bananas, fruits, vegetables; cattle, sheep, goats
tea, coffee, corn, wheat, sugarcane, fruit, vegetables; dairy products, beef, fish, pork, poultry, eggs
Exports
$4.971 billion (2017 est.)
$5.697 billion (2016 est.)
$5.792 billion (2017 est.)
$5.695 billion (2016 est.)
Exports - commodities
gold, coffee, cashew nuts, manufactures, cotton
tea, horticultural products, coffee, petroleum products, fish, cement, apparel
Exports - partners
India 21.8%, South Africa 17.9%, Kenya 8.8%, Switzerland 6.7%, Belgium 5.9%, Democratic Republic of the Congo 5.8%, China 4.8% (2017)
Uganda 10.8%, Pakistan 10.6%, US 8.1%, Netherlands 7.3%, UK 6.4%, Tanzania 4.8%, UAE 4.4% (2017)
Imports
$7.869 billion (2017 est.)
$8.464 billion (2016 est.)
$15.99 billion (2017 est.)
$13.41 billion (2016 est.)
Imports - commodities
consumer goods, machinery and transportation equipment, industrial raw materials, crude oil
machinery and transportation equipment, oil, petroleum products, motor vehicles, iron and steel, resins and plastics
Imports - partners
India 16.5%, China 15.8%, UAE 9.2%, Saudi Arabia 7.9%, South Africa 5.1%, Japan 4.9%, Switzerland 4.4% (2017)
China 22.5%, India 9.9%, UAE 8.7%, Saudi Arabia 5.1%, Japan 4.5% (2017)
Debt - external
$17.66 billion (31 December 2017 est.)
$15.21 billion (31 December 2016 est.)
$27.59 billion (31 December 2017 est.)
$37.7 billion (31 December 2016 est.)
Exchange rates
Tanzanian shillings (TZS) per US dollar -
2,243.8 (2017 est.)
2,177.1 (2016 est.)
2,177.1 (2015 est.)
1,989.7 (2014 est.)
1,654 (2013 est.)
Kenyan shillings (KES) per US dollar -
102.1 (2017 est.)
101.5 (2016 est.)
101.504 (2015 est.)
98.179 (2014 est.)
87.921 (2013 est.)
Fiscal year
1 July - 30 June
1 July - 30 June
Public debt
37% of GDP (2017 est.)
38% of GDP (2016 est.)
54.2% of GDP (2017 est.)
53.2% 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

$7.354 billion (31 December 2017 est.)
$7.256 billion (31 December 2016 est.)
Current Account Balance
-$1.313 billion (2019 est.)
-$1.898 billion (2018 est.)
-$57.594 billion (2019 est.)
-$56.194 billion (2018 est.)
GDP (official exchange rate)
$51.76 billion (2017 est.)
$79.22 billion (2017 est.)
Stock of direct foreign investment - at home

NA

$8.738 billion (31 December 2017 est.)
$5.317 billion (31 December 2016 est.)
Stock of direct foreign investment - abroad

NA

$1.545 billion (31 December 2017 est.)
$335.5 million (31 December 2016 est.)
Market value of publicly traded shares
$1.803 billion (31 December 2012 est.)
$1.539 billion (31 December 2011 est.)
$1.264 billion (31 December 2010 est.)
$19.33 billion (31 December 2016 est.)
$26.48 billion (31 December 2015 est.)
$26.16 billion (31 December 2014 est.)
Central bank discount rate
8.25% (31 December 2010)
3.7% (31 December 2009)
10% (1 January 2017)
11.5% (1 January 2016)
Commercial bank prime lending rate
17.62% (31 December 2017 est.)
15.96% (31 December 2016 est.)
13.67% (31 December 2017 est.)
16.56% (31 December 2016 est.)
Stock of domestic credit
$9.045 billion (31 December 2017 est.)
$9.616 billion (31 December 2016 est.)
$32 billion (31 December 2017 est.)
$29.88 billion (31 December 2016 est.)
Stock of narrow money
$5.002 billion (31 December 2017 est.)
$4.641 billion (31 December 2016 est.)
$14.07 billion (31 December 2017 est.)
$12.77 billion (31 December 2016 est.)
Stock of broad money
$5.002 billion (31 December 2017 est.)
$4.641 billion (31 December 2016 est.)
$14.07 billion (31 December 2017 est.)
$12.77 billion (31 December 2016 est.)
Taxes and other revenues
15.2% (of GDP) (2017 est.)
17.6% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)
-1.8% (of GDP) (2017 est.)
-6.7% (of GDP) (2017 est.)
Unemployment, youth ages 15-24
total: 3.9%
male: 3.1%
female: 4.6% (2014 est.)
total: 7.4%
male: 7.3%
female: 7.4% (2016)
GDP - composition, by end use
household 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: 79.5% (2017 est.)
government consumption: 14.3% (2017 est.)
investment in fixed capital: 18.9% (2017 est.)
investment in inventories: -1% (2017 est.)
exports of goods and services: 13.9% (2017 est.)
imports of goods and services: -25.5% (2017 est.)
Gross national saving
25% of GDP (2017 est.)
23.1% of GDP (2016 est.)
24.9% of GDP (2015 est.)
10.4% of GDP (2017 est.)
11% of GDP (2016 est.)
11.4% of GDP (2015 est.)

Source: CIA Factbook