Tanzania’s Third National Five-Year Development Plan (FYDP III; 2021/22 – 2025/26) is a continuation of Government’s efforts in achieving the goals it set in the National Development Vision 2025, a multi-sectoral vision whose function is to guide at the national level economic and social development efforts up to the year 2025. Tanzania Vision 2025 has three main objectives, namely: (1) to achieve quality and good life for all; (2) to achieve good governance and the rule of law; and (3) to build a strong and resilient economy that can effectively withstand global competition.
The National Development Vision 2025 has been implemented through various Programs and the Long-Term Perspective Plan 2011/12 – 2025/26 whose implementation was divided into three phases of the Five-Year National Development Plans. The First Five Year National Development Plan 2011/12 – 2015/16 had a theme of unleashing growth potential by de-bottlenecking binding constraints to growth. The Second Five Year National Development Plan 2016/17 – 2020/21 focused on nurturing industrialisation for economic growth. The Third and final Five-Year National Development Plan 2021/22 – 2025/26 has a theme of realising competitiveness and industrialization for human development that aims to increase efficiency and productivity in manufacturing using the resources available in abundance within the country.
The main objective of the Third Plan is to contribute to realisation of the National Development Vision 2025 goals. These goals include Tanzania becoming a middle-income country status and continue with transformation of becoming an industrial country with a high human development or a high standard of living. Upon reaching its vision, Tanzania is envisioned to have the following attributes: peace, stability and unity; good governance; an educated and learning society; and a strong economy that can withstand competition and benefit many people. Therefore, the FYDP III enhances the thrust of previous plans by emphasizing economic reform, industrial development, and the knowledge and ability to participate fully in international trade. Tanzania can benefit more from its geographical location, abundance natural resources than it is now. The peace and political stability of a country are valuable assets that, among other things, will attract local and foreign investors to areas with economic growth opportunities. Further, FYDP III highlights for increased investment in science, technology and innovation as a way for the country to move from comparative advantage into competitive advantages, stimulate industrial development and become competitive in local, regional and global markets.
In achieving the priority areas of the Plan, the strategic objectives of the FYDP III are (i) improve key productive infrastructures including roads, railways, water, and air transport as well as reliable access to energy; (ii) strengthen the business and investment enabling environment through effective policies to facilitate free private-sector competition; and (iii) improve and strengthen education and training systems, including reforming the education curriculum in line with labor market demand as well as integrating research and development with productive economic activities. To achieve these objectives, main efforts will be directed to (i) identification of interventions designed to improve the competitiveness of the country (also through a transformative participation of the private sector and non-state actors in the competitive economy); (ii) interventions to further deepen industrialization; (iii) trade and investment to increase Tanzania’s participation in global and regional trade; (iv) social development, emphasizing coverage, equity and quality of services to attain inclusive economy; and (v) skills development.
The government of Tanzania is moving in a positive direction to achieve the objectives of FYDP III. The financial inclusion in the country has increased to 65% in 2022 from 58% to 2017. The GDP of Tanzania expanded by 4.6% in 2022, up from 4.3% in 2021. Specifically, growth in the first and second quarters of 2023 was 5.4 percent and 5.2 percent, respectively, bolstered by the diversified nature of economic activities.
