Tanzania’s economy is expected to grow 6.1% in 2026 and average 6.5% over the medium term, but the World Bank Group says stronger growth alone won’t reduce poverty unless the country creates more productive, better-paying, and secure jobs.
The latest World Bank Group Tanzania Economic Update says Tanzania has maintained a relatively strong economic growth trajectory despite global uncertainty and climate-related risks. However, the report warns that the country faces a significant challenge in translating economic expansion into higher household incomes, improved living standards and sustainable employment.
The report identifies job creation as one of the key factors that will determine whether Tanzania can convert its economic growth into broader prosperity. While the country has one of the highest employment rates globally, a large share of workers remain engaged in low-productivity activities, particularly agriculture and informal employment.
These jobs often provide limited earnings, restricted access to social protection and fewer opportunities for workers to develop skills that can enable them to move into higher-paying occupations.
The World Bank’s special theme, “Making Jobs Work,” argues that Tanzania’s challenge is therefore not simply to create more jobs but to improve the quality and productivity of existing employment while expanding opportunities in sectors capable of generating better incomes.
“Tanzania’s economy continues to grow despite global uncertainty and climate risks. To turn that growth into better jobs, the country needs to make deliberate policy choices and keep investing in education, skills, and health. This will help ensure that growth is more inclusive and sustainable,” said Firas Raad, World Bank Division Director for Tanzania.
The report projects economic growth of 6.1% in 2026, rising to an average of 6.5% over the medium term. Increased private-sector activity is expected to remain an important driver of expansion.
Other economic indicators point to continued stability. Inflation remains within the Bank of Tanzania’s target range, public debt is considered sustainable, while strong growth in private-sector credit indicates increased economic activity and financing for businesses.
However, the World Bank says maintaining this momentum will require continued reforms, including growth-friendly fiscal consolidation and measures to improve Tanzania’s business environment.
For the labour market, the report highlights two major priorities.The first is strengthening Tanzania’s workforce through improved education, skills development, health services, social protection and labour-market systems. Better skills can help workers move from subsistence and low-productivity activities into sectors where productivity and wages are higher.
The second priority is expanding the number of productive firms that can invest, grow, and create quality employment.
The report argues that the private sector will be particularly important in generating the scale of employment needed to support Tanzania’s expanding working-age population. Productive businesses that are able to access finance, technology, markets and skilled workers can create more stable jobs while increasing productivity across the economy.
“‘Tanzania’s jobs challenge is ultimately a firm growth challenge. By helping productive firms invest, expand, and create more quality jobs, we can make economic growth more inclusive and deliver better opportunities for Tanzanians,” said Mary-Jean Moyo, International Finance Corporation Division Director for Tanzania.
The emphasis on firms and investment is also aligned with Tanzania’s long-term development ambitions under Vision 2050, which seeks to establish a stronger private-sector-led economy.
The vision places private investment at the centre of Tanzania’s future economic transformation, with the private sector expected to become the dominant source of investment financing.
Achieving this objective will require a predictable and competitive business environment that gives domestic and international investors greater confidence to establish, expand and diversify their operations.
For Tanzania, this could have significant implications for employment. Greater investment in manufacturing, agribusiness, tourism, services, technology and other productive sectors could help shift workers from low-productivity informal activities into more productive formal and semi-formal employment.
The World Bank report therefore presents economic growth and job creation as closely connected challenges. Stronger growth provides an opportunity to expand employment, but the quality of that growth will determine whether it produces meaningful improvements in household incomes.
Tanzania’s medium-term economic outlook remains positive, but sustaining that performance will require policies that connect investment and business expansion with skills, productivity and employment.
The report’s central message is that Tanzania does not simply need more jobs. It needs an economy capable of generating better jobs at scale—jobs that offer higher productivity, improved earnings and greater economic security while enabling more Tanzanians to participate in and benefit from economic growth.
