Economy
GDP (2006): $12.1 billion.
Average growth rate (2006): 6.2%.
Per capita income (2006): $320.
Natural resources: Hydroelectric potential, coal, iron, gemstones, gold, natural gas, nickel, diamonds, crude oil potential, forest products, wildlife, fisheries.
Agriculture (2004): 46.4% of GDP. Products--coffee, cotton, tea, tobacco, cloves, sisal, cashew nuts, maize, livestock, sugar cane, paddy, wheat, pyrethrum.
Industry/manufacturing (2004): 8.8% of GDP. Types--textiles, agro-processing, light manufacturing, construction, steel, aluminum, paints, cement, cooking oil, beer, mineral water and soft drinks.

Trade (2006): Exports--$1.723 billion (merchandise exports, 2006): coffee, cotton, tea, sisal, cashew nuts, tobacco, cut flowers, seaweed, cloves, fish and fish products, minerals (diamonds, gold, and gemstones), manufactured goods, horticultural products; services (tourism services, communication, construction, insurance, financial, computer, information, government, royalties, personal and other businesses). Major markets--U.K., Germany, India, Japan, Italy, China, Bahrain, Malaysia, South Korea, Thailand, Pakistan, Indonesia.. Primary imports--petroleum, consumer goods, machinery and transport equipment, used clothing, chemicals, pharmaceuticals. Major suppliers--U.K., Germany, Japan, India, Italy, U.S., United Arab Emirates, Hong Kong, Singapore, South Africa, Kenya.

TANZANIA ECONOMY
Significant measures have been taken to liberalize the Tanzanian economy along market lines and encourage both foreign and domestic private investment. Beginning in 1986, the Government of Tanzania embarked on an adjustment program to dismantle state economic controls and encourage more active participation of the private sector in the economy. The program included a comprehensive package of policies which reduced the budget deficit and improved monetary control, substantially depreciated the overvalued exchange rate, liberalized the trade regime, removed most price controls, eased restrictions on the marketing of food crops, freed interest rates, and initiated a restructuring of the financial sector.

In July 2003, Tanzania's Poverty Reduction and Growth Facility (PRGF) arrangement with the International Monetary Fund was extended for an additional three years; it will expire in July 2006. In June 2003, the Tanzanian Government successfully completed a previous three-year PRGF, the successor program to the Enhanced Structural Adjustment Facility (ESAF). From 1996-1999, Tanzania had an ESAF agreement. Tanzania also embarked on a major restructuring of state-owned enterprises. The program has so far divested 335 out of some 425 parastatal entities. Overall, real economic growth has averaged about 4% a year, much better than the previous 20 years, but not enough to improve the lives of average Tanzanians. Also, the economy remains overwhelmingly donor-dependent. Moreover, Tanzania has an external debt of $7.5 billion. The servicing of this debt absorbs about 40% of total government expenditures. Tanzania has qualified for debt relief under the enhanced Highly Indebted Poor Countries (HIPC) initiative. Debts worth over $6 billion were cnceled following implementation of the Paris Club VII Agreement. Agriculture dominates the economy, providing more than 44% of GDP and 80% of employment. Cash crops, including coffee, tea, cotton, cashews, sisal, cloves, and pyrethrum, account for the vast majority of export earnings. While the volume of amajor crops--both cash and goods marketed through official channels--have increased in recent years, large amounts of produce never reach the market. Poor pricing and unreliable cash flow to farmers continue to frustrate the agricultural sector.

Accounting for less than 10% of GDP, Tanzania's industrial sector is one of the smallest in Africa. It was hard hit during the 2002-2003 drought years and again in 2005-06 by persistent power shortages caused by low rainfall in the hydroelectric dam catchment area, a condition compounded by years of neglect and bad management at the state-controlled electric company. Management of the electric company was

The main industrial activities (90%) are dominated by small and medium sized enterprises (SMEs) specializing in food processing including dairy products, meat packing, preserving fruits and vegetables, production of textile and apparel, leather tanning and plastics. A few larger factories (10%) manufacture cement, rolled steel, corrugated iron, aluminium sheets, cigarettes, beer and bottling beverages, fruit juices and mineral water. Other factories produce raw materials, import substitutes, and processed agricultural products. Poor infrastructure in water and electricity supply systems continue to hinder factory production. In general, Tanzania’s manufacturing sector targets primarily the domestic market with limited exports of

Despite Tanzania's past record of political stability, an unattractive investment climate has discouraged foreign investment. Government steps to improve the business climate include redrawing tax codes, floating the exchange rate, licensing foreign banks, and creating an investment promotion center to cut red tape. In terms of mineral resources and the largely untapped tourism sector, Tanzania could become a viable and attractive market for U.S. goods and services.

Zanzibar's economy is based primarily on the production of cloves (90% grown on the island of Pemba), the principal foreign exchange earner. Exports have suffered with the downturn in the clove market. Tourism is apromising sector with a number of new hotels and resorts have been built in recent years.

The Government of Zanzibar legalized foreign exchange bureaus on the islands before the mainland Tanzania moved to do so. The effect was toincrease the availability of consumer commodities. Furthermore, with external funding, the Government of Zanzixbar plans to make the port of Zanzibar a free port. In 2007, the rehabilitation of Zanzibar’sport facilities commenced with assistance from European donors.. The island's manufacturing sector is limited mainly to import substitution industries, such as cigarettes, shoes, and process agricultural products. In 1992, the government designated two export-producing zones and encouraged the development of offshore financial services. Zanzibar still imports much of its staple requirements, petroleum products, and manufactured articles.