A Review of Tanzania’s Economic Performance During the Two Decades: 1995 – 2015

The main objective of this paper is to review Tanzania’s economic performance under the Third and Fourth Phase Governments from 1995 – 2015. Its significance is to understand and draw lessons on how reforms started earlier in mid-1980s were earnestly implemented to propel Tanzania’s economy from crisis to sustainable high growth path during the two decades. The paper analyses Tanzania’s secondary data using tabular and graphical presentation to observe performance trends of key variables. The paper also reviews various literature on Tanzania’s reform efforts to put together a narrative about economic performance over time.The findings emphasize importance of economic stabilization measures for stable macroeconomics. Fiscal and monetary policy measures must be supported by government intervention to mitigate adverse effects where external economic environment exerts its influence; for example, when oil and food prices are rising. Reform of public sector by improving public expenditure and public enterprise management to raise efficiency and reduce government budgetary costs is crucial. Privatization of public enterprises done in Tanzania was to implement this reform. Notably, market reforms increase production and productivity, which lead to overall economic growth, per capita income growth and poverty reduction as evidenced in Tanzania. Institutional building to manage and regulate market economy is important lesson from the analysis. Formation of key institutions like Tanzania Revenue Authority (TRA) and regulatory bodies helped the Government to perform important functions like revenue collection and economic regulation. Overall, the paper shows the importance of reforms in improving economic performace as evidenced by high GDP and per capita GDP growth and significant poverty reduction in Tanzania.