
Tanzania: Automotive 2021
Located in Eastern Africa between Kenya and Mozambique and bordering the Indian Ocean, Tanzania benefits from a strategic geographic proximity to African, Asian and Middle Eastern export markets and a strong agricultural industry. Following strong economic growth over the past decade, Tanzania graduated to lower-middle-income status in July 2020. However, COVID-19 pandemic has negatively impacted the local economy, as steep declines in production, consumption and imports significantly reduced fiscal revenue. In 2020, real GDP growth fell from 5.8% in 2019 to 2.0% in 2020, and per capita growth receding for the first time in more than 25 years. Nevertheless, Tanza- nia has fared better economically than regional neighbours such as Kenya and Uganda due in part to a sharp rise in the price of gold, along with the government’s reluctance to implement comprehensive lockdown measures.
Tanzania’s automotive industry remains relatively undeveloped, consisting of a small, fragmented network of automotive parts and after-sales service players. The country remains solely dependent on imported vehicles, with vehicle imports amounting to around US$ 415 mn annually. However, local vehicle manufacturing activities are beginning to take shape, with a number of deals for the development of production and assembly facilities signed since 2017.