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The Economic Activity of Tanzania

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Tanzania has a largely agriculture-based economy that accounts for more than 50% of gross domestic product (GDP), and provides 85% of export products. These export products, which account for a big majority of export earnings, include coffee, tea, cotton, cashews, cloves, sisal or hemp, and pyrethrum, a chrysanthemum-based insecticide. The country’s main export markets are the United Arab Emirates, The Netherlands, and Germany.

The country’s industrial sector, which is one of the smallest in Africa, is limited to the processing of agricultural products and small consumer items but somehow contributes to local economy, along with informal business activities like second-hand clothing, household items and foodstuffs. Most industries in the country, however, are adversely affected by persistent electricity outages caused by lack of rainfall and unsound management of the government-run electric company. The biggest hindrance to overall economic development is the country’s overdependence on agriculture.

To lift itself from the bottom of the world economy ratings, the country undertakes programs to improve its economy, including reforms of its financial institutions, banks and financial services. It has developed the Poverty Reduction and Growth Facility program with the International Monetary Fund (IMF) while it continues receiving grants through the initiative called Heavily Indebted Poor Countries (HIPC), as well as assistance from the World Bank (WB) to promote the mining and tourism sectors that could yet prove as key areas for growth of the country.