anzania’s economic freedom score is 61.3, making its economy the T 93rd freest in the 2021 Index. Its overall score has decreased by 0.4 point, primarily because of a decline in trade freedom. Tanzania is ranked 8th among 47 countries in the Sub-Saharan region, and its overall score is above the regional average but below the world average.

Tanzania’s economy retained its spot in the moderately free category for the third consecutive year. The government says it prioritizes industrial- WORLD RANK: REGIONAL RANK: ization and job creation with a commitment to pursuing a development strategy led by the private sector, but rising protectionist tendencies 93 8 have deterred foreign direct investment. Economic freedom is also stymied by the weak rule of law and the lack of business freedom. ECONOMIC FREEDOM STATUS: MODERATELY FREE IMPACT OF COVID-19: As of December 1, 2020, 21 deaths had been attributed to the pandemic in Tanzania, and economic growth was fore- cast to decline to 1.9 percent for the year.

ECONOMIC FREEDOM SCORE

61.3 ▼ DOWN 0.4 POINT

0 50 60 70 80 100  REGIONAL AVERAGE WORLD (SUB-SAHARAN AFRICA REGION) 55.7 61.6 AVERAGE

HISTORICAL INDEX SCORE CHANGE (SINCE 1995): +4.0

RECENT FREEDOM TREND QUICK FACTS



POPULATION: UNEMPLOYMENT: 61.7 61.3 59.9 60.2 58.0 million 2.0%  58.6 GDP (PPP): INFLATION (CPI): $193.5 billion 3.4% 6.3% growth in 2019

5-year compound FDI INFLOW:  $1.1 billion annual growth 6.6% $2,771 per capita PUBLIC DEBT: 38.1% of GDP 

       2019 data unless otherwise noted. Data compiled as of September 2020

BACKGROUND: In 1964, shortly after independence from Britain, and the island of merged to form Tanzania. The (CCM) party has been in power continuously since independence. of the CCM was reelected to a five-year term as president in 2020, but the election was marred by violence and the intimidation and harassment of the opposition. Magufuli’s first term was marked by an aggressive “anti-corruption” campaign that included crackdowns on civil society and political opponents. Despite vast mineral and natural resources and tourism, most Tanzanians are poor and dependent on subsistence agriculture. Plans for the construction of an oil pipeline from western Uganda to Tanzania’s Tanga port are ongoing.

400 2021 Index of Economic Freedom WORLD AVERAGE | ONE-YEAR SCORE CHANGE IN PARENTHESES 12 ECONOMIC FREEDOMS | TANZANIA

RULE OF LAW GOVERNMENT SIZE

(–0.6) (–3.2) (+2.0) (+0.1) (+0.2) (–2.1)

 

 

 

 

 

41.3 40.2 34.5 80.7 91.8 90.8   Property Judicial Government Tax Government Fiscal Rights E ectiveness Integrity Burden Spending Health

All land belongs to the state, but secured interests in leased The top individual income and corporate tax rates are 30 land and movable property are recognized and enforced. percent. Other taxes include a value-added tax and an Complex land laws have provoked numerous disputes, and interest tax. The overall tax burden equals 11.5 percent of total land ownership remains restrictive. The poorly resourced, domestic income. Government spending has amounted to ill-trained, and corrupt judiciary remains under political 16.6 percent of total output (GDP) over the past three years, influence. Corruption is pervasive in government procure- and budget deficits have averaged 2.0 percent of GDP. Public ment, the awarding of licenses and concessions, dispute debt is equivalent to 38.1 percent of GDP.

 settlements, regulations, customs, and taxation. Enforcement of anticorruption legislation is politically motivated.

REGULATORY EFFICIENCY OPEN MARKETS

(–0.2) (+1.3) (+0.7) (–3.4) (No change) (No change)

 

 

 

 

 

45.7 67.7 72.9 64.4 55.0 50.0   Business Labor Monetary Trade Investment Financial Freedom Freedom Freedom Freedom Freedom Freedom

Tanzania has failed to improve its business freedom for the Tanzania has four preferential trade agreements in force. The fourth straight year, and start-up processes now take more trade-weighted average tariff rate is 10.3 percent, and 19 non- time. However, both the value added per worker and the tariff measures are in effect. Trade and investment policies labor force participation rate have increased. The govern- needed to sustain open markets are undercut by lingering ment provides large subsidies to state-owned enterprises government interference in the economy. Foreign investment and maintains price controls on fuels, utilities, and agricul- in several sectors remains restricted. The financial sector is tural commodities. underdeveloped, and less than 50 percent of adult Tanzanians have formal banking accounts.

The Heritage Foundation | heritage.org/Index 401