Attaining Middle Income Status: Tanzanian Growth and Structural Transformation Required to Reach Middle Income Status by 2025
The Government of Tanzania aims to transform the nation into a middle income country by 2025. The paper describes the sort of structural transformation that Tanzania may be expected to undergo as it grows to middle income status.
This is achieved by assembling data for a set of comparator countries that reached middle income status over the past 50 years and reviewing the structure of their economies as they reached this target. It then analyses what would be required for Tanzania to transform into a country akin to these middle income comparator countries.
A primary finding from this study is that, in order to cross the threshold into lower middle income status by 2025, Tanzania will need to sustain per capita growth of approximately 5% per year, equivalent to an overall GDP growth of approximately 7.7%. Moreover, as Tanzania transforms into a middle income country, the structure of the economy is likely to change significantly. The model used in this paper suggests that agriculture as a share of GDP will fall from 28% to around 20%, while the manufacturing sector sustains high growth (13%) and doubles its share of a rapidly-growing GDP (from 9% to 18%). The service sector and non-manufacturing industry sector stay relatively constant in proportion to GDP.
