Paving the way for Tanzania’s middle class

July 6, 2014

In yet another report outlining the vast potential of Tanzania’s fast expanding consumer class, a research company noted that the number of people classified as middle income will grow to 20 million by 2020 in a country with population of estimated 48 million people.It is now well documented that Tanzania’s demographic dividend and rising per capita income present a once in a generation opportunity for the nation to lift itself up by the boot straps. If these optimistic projections pan out, Tanzania will join the ranks of middle income economies in the not too distant future probably in the next 11 years. The report said the increase in the middle class is unprecedented, and would present a rare opportunity for companies to utilise immediately. Tanzania is not about linear growth anymore. The country is going through a take-off point for many goods and products with Gas industry expected to be at the forefront of unprecedented economic growth.

Such bullish predictions are encouraging and have created a heady feeling among policy makers and corporate chiefs in United Republic of Tanzania, a country that is currently working on a new constitution and will expect to have a new leader come next year after the current President Jakaya Kikwete two term limits comes to an end. But whoc can blame the corporate strategists whose job it is to make such forecasts. There is no doubt Tanzania is headed up and no way down. However, before Tanzanians get carried away with the euphoria and get caught in the hype, they should be aware that such an outcome is by no means certain. If indeed the country is to create a 20-million-strong middle-income market, plenty of work lies ahead. First, the country’s consumer companies must adjust their strategies to meet the aspirations of this new class of consumers. They must invest much more in Research and Development and innovate so as to develop new products and services.Also, the government must recalibrate its budget, shift spending from subsidies to improving the education system, and build infrastructure. It must empower private business by reducing the burden of red tape that has seen multinationals shun Dar es salaam. The consumer revolution is underway but it will need a huge push from the government and the private sector.

Contador Harrison