The revelation came during what should have been a routine conversation. I was discussing President Samia Suluhu Hassan’s track record with a prominent hotel owner when our exchange took an unexpected turn.
As we debated the ongoing wave of enforced disappearances plaguing Tanzania, my interlocutor—a man who admitted he doesn’t follow the news—dismissed these incidents with a casual shrug. “They’re just politicians and activists,” he said, as if human rights violations were merely background noise to the real story.
But then his tone shifted to enthusiasm. Despite acknowledging political problems, he insisted that President Samia had delivered “spectacular” economic performance. His evidence was personal and compelling: his hotel now employs 1,700 staff, more than double the 700 he retained during the Magufuli era. Foreign direct investment was flowing, business was booming, and from his vantage point, Tanzania had never looked better economically.
I left that conversation with a nagging question: if Tanzania’s economy is performing so well for some, why do ordinary citizens like myself continue to struggle with rising costs and diminishing opportunities?
The answer, I realised, lies not in conflicting data but in conflicting class positions—and reveals a fundamental truth about Tanzania’s economic transformation under two very different presidents.
The Magufuli paradox
President John Magufuli’s tenure (2015-2021) was defined by populist theatre that masked a deeper consolidation of elite power. His administration’s “economic warfare” against foreign corporations and high-profile anti-corruption campaigns created the appearance of pro-people policies. The “Bulldozer” promised to flatten inequality and build prosperity for all Tanzanians.
The reality, however, proved more complex. Research from Democracy in Africa reveals that Magufuli’s economic strategy primarily served to “shore up his own political strength” by centralising control over financial resources. Rather than democratising wealth, his policies created new gatekeepers where proximity to state power determined economic success.
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The costs were measurable: foreign direct investment collapsed from US$2 billion in 2013-2014 to around US$1 billion during Magufuli’s first term. Private sector credit growth plummeted from 25 per cent when he took office to just one per cent by 2017. While Magufuli’s supporters celebrated his nationalist stance, the economic data told a different story—one of stagnation disguised as sovereignty.
The Samia pivot
President Samia’s administration represents a dramatic reversal, embracing investment and business growth with remarkable success. The numbers are impressive: registered investment projects surged to US$8.6 billion from 2021 to 2023, a 173 per cent increase. Foreign direct investment increased to US$ 1.7 billion in 2024, the highest level recorded since 2014.
For capital owners like my hotel-owning interlocutor, this transformation has been transformative. His ability to double his workforce reflects broader trends: registered investment projects increased 26 per cent between 2021 and 2023, creating 87,187 jobs compared to 61,900 in the previous period. The business community’s enthusiasm is understandable—they are the primary beneficiaries of this economic renaissance.
Yet this success story raises uncomfortable questions about distribution. While foreign investors capture 41 per cent of new projects and joint ventures account for another 27 per cent, Tanzanian investors hold just 32 per cent.
The pattern suggests that economic growth, while real, may be recreating colonial-era dynamics where external capital partners with local elites while ordinary citizens remain marginalised.
The most damning evidence against both administrations, however, lies in Tanzania’s inequality trajectory. World Bank data shows the Gini coefficient rising from 37.8 in 2011 to 40.5 in 2018, indicating that inequality increased regardless of which economic model dominated. A 2024 UNCTAD report confirms that Tanzania is “experiencing an increasing level of income inequality,” which undermines growth’s poverty-reduction potential.
This pattern reveals a troubling consistency: whether under Magufuli’s state-centred nationalism or Samia’s market-friendly liberalism, wealth continues concentrating at the top while ordinary Tanzanians see little improvement in their material conditions.
The tax trap
Tanzania’s tax structure illuminates why economic growth fails to translate into broad-based prosperity. Policy Forum Tanzania research reveals that indirect taxes now comprise 55.9 per cent of government revenue, up from 50.7 per cent a decade ago. Value Added Tax alone contributes 28.8 per cent of total revenue, while Personal Income Tax provides only 11.1 per cent.
This regressive structure means ordinary Tanzanians pay disproportionately through consumption taxes on essential goods, while High Net-Worth Individuals (HNWIs) face minimal taxation on their wealth.
The study by Policy Forum notes that “wealth and assets are concentrated within a small segment of the population, yet there is insufficient capacity to assess and tax these assets, such as real estate, capital gains and luxury goods effectively.”
The implications are stark: those struggling to afford basic necessities pay higher effective tax rates than those accumulating wealth through investments and property. It’s a system designed to extract revenue from the poor while protecting the rich—hardly the foundation for inclusive growth!
Tanzania’s anaemic labour movement compounds these structural problems. The Trade Union Congress of Tanzania (TUCTA) represents only 650,000 workers as of June 2016 (it is the most recent data available on their website) in a labour force exceeding 32 million. Recent analysis also indicates that union density in Tanzania is below two per cent, with 83 per cent of workers lacking formal labour rights.
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This weakness means that even as foreign investment creates jobs, workers have minimal leverage to negotiate fair wages or working conditions. Hotel owners can expand their workforce when profitable, but employees have little say in compensation or job security. The result is growth that benefits capital while keeping labour costs artificially low.
Beyond false choices
Tanzania’s experience under both Magufuli and Samia demonstrates that the choice between nationalist populism and market liberalism is false if both paths lead to concentrated wealth and persistent inequality. Genuine inclusive development will therefore require structural reforms that address power imbalances rather than simply changing which elites benefit from economic policy.
As a starting point, Tanzania must shift from regressive consumption taxes toward progressive wealth taxation. This will include implementing property taxes, capital gains taxes, and luxury goods taxes that ensure those with the greatest capacity to pay contribute proportionally to public revenue.
Also, strong, independent trade unions are essential for ensuring workers capture fair shares of economic growth. This will require, inter alia, legal reforms that facilitate union formation and protect collective bargaining rights.
Meaningful development requires devolving power from the central government to local authorities, giving communities greater control over development priorities and resource allocation.
Rather than focusing exclusively on large-scale foreign investment, policies should also actively support small and medium enterprises that create broad-based employment and keep wealth circulating locally.
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Most importantly, citizens must have meaningful opportunities to participate in economic decision-making, from budget processes to development planning, ensuring that growth strategies reflect majority interests rather than elite preferences.
The class lens
My conversation with the hotel owner ultimately revealed more than different opinions about economic policy—it exposed how class position shapes perception of political performance.
From his perspective as a capital owner employing 1,700 people and benefiting from foreign investment flows, President Samia’s policies represent unqualified success. His business thrives, his workforce has expanded, and the investment climate has never been more favourable.
From my position as someone struggling with rising costs while watching inequality grow despite economic expansion, the same policies appear far less successful. While GDP grows and foreign investment flows, ordinary Tanzanians like myself continue facing unaffordable basic services and limited economic opportunities.
This divergence isn’t about optimism versus pessimism or business acumen versus journalistic scepticism. It reflects, I believe, fundamentally different class interests. Capital owners benefit from policies that attract foreign investment and maintain flexible, low-cost labour markets.
Workers benefit from policies that redistribute wealth, strengthen labour rights, and ensure economic growth translates into broad-based prosperity.
Until Tanzania acknowledges this class divide and designs policies that prioritise majority interests over elite preferences, economic growth will continue enriching the few while leaving the many behind.
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The challenge, in my opinion, isn’t choosing between nationalism and liberalism, but building an economic model that serves all Tanzanians rather than just those positioned to capture the benefits of capital accumulation.
Perhaps that’s the most honest assessment possible: in contemporary Tanzania, your evaluation of government economic performance depends largely on which side of the class divide you occupy. And for now, those with capital are clearly winning.
Khalifa Said is the Editor-in-Chief of Dar es Salaam-based digital publication The Chanzo. He’s available at Khalifa@thechanzo.com or on X as @ThatBoyKhalifax. These are the writer’s own opinions and do not necessarily reflect the viewpoint of The Chanzo. Want to publish in this space? Contact our editors at editor@thechanzo.com for further inquiries.
