Tanzania’s economy falls into the lower middle-income group as a fairly recent development. The cycle of development in Tanzania, in terms of financial stability has been slow and testing but the country was aiming for long term results when the pandemic hit. Tanzania is largely agriculturally based and has seen some fluctuation in an already struggling economy through the years due to its central economy policy in the past.
The sharp decline hurried the country into reassessing its policies and the country is aiming for a mixed economic standing in the long run and has been attentive towards various other sectors apart from agriculture to help achieve that goal. The arrival of Covid-19 along with its health-related preventive measures has put the slow but steady growth formula of Tanzania to the test. The results have been better than expected and yet majorly taxing on the country’s recently risen economy. The inflation has been slow and stable due to low dependence on imports except oil, but the GDP has accelerated to 2.5%, reports the World Bank.
The World Bank has further stated that correctly targeted preventive policies can minimize the impact of declining trade and soften the blow for businesses. To keep the economy afloat and help the recently risen economic bracket of the country, new policies that support the livelihoods of majorly self-employed population has been put in place.
With export going stagnant, agriculture being consumed within the country and oil industry crashing beyond belief, the market space in Tanzania has opened wide and ICT has taken a hold in the demanding market of businesses looking to stay active and stable remotely. While the industrial sector is majorly dominated by construction and mining, small businesses have risen to meet the demands in the market with the help of ICT’s broadband and cloud computing services.
Pre-pandemic fiscal policies had been supporting the business sector in Tanzania which helped their stability during this difficult period. These very businesses had already been adopting cloud infrastructures and looking for better technological business adoption when the pandemic came along and quickened the process.
The ICT (Information and Communication Technology) sector was one of the most stable sectors that helped economies worldwide and cushioned the GDP fall during this difficult period. Similar pattern was observed in Tanzania where ICT rose to solve remote work problems for much of the self-employed population in the country and hence contributed a fair share towards the surprisingly stable economy.
Bouncing back to its original growth rate is still far from reach but measures are already being implemented to create an even better system for any such crisis in the future along with gradual long-term growth.