Revealed: Regions with the highest, lowest inflation in Tanzania

While at national level, the annual headline inflation rate stagnated at 3.1 in September and August 2024, in Dar es Salaam, inflation stood at 6.5 percent in September 2024. That was a decrease from 8.2 percent in June, 2024.

This increase was driven by higher costs in personal care products, social protection services, and miscellaneous goods. Similarly, the Southern Highlands, including Njombe, Iringa, Rukwa, and Mbeya, saw a rise in inflation from 4.1 percent in June to 4.4 percent in September, largely due to higher prices in housing, water, gas, and fuels.

In contrast, the Northern and Lake Zones recorded relatively low inflation rates. The Lake Zone (Mwanza, Shinyanga, Simiyu, Kagera) saw the lowest inflation at just 1.1 percent in September, down from 1.6 percent in June. The Northern Zone (Arusha, Kilimanjaro, Tanga, Manyara) also experienced a slight rise from -0.3 percent in June to 1.4 percent in September, but remained among the least affected regions.

The economic stability in these regions can largely be attributed to the strength of the agricultural sector, which has helped shield them from the broader inflationary pressures affecting urban centres.

Dr Mwinuka Lutengano of the University of Dodoma explained, “Agriculture in these regions has maintained price stability, making them less vulnerable to shocks compared to urban economies that rely more on services and manufacturing.”

The overall drop in inflation across many regions is partly due to a successful 2023/24 crop season, which led to lower food prices. However, non-food items in Dar es Salaam and the Southern Highlands have driven inflation higher.

Dr Daudi Ndaki of Mzumbe University noted that urbanisation in places like Dar es Salaam has placed pressure on the cost of living.

“As economic activities ramp up in urban centres, particularly in housing and services, there’s heightened demand for goods like housing and personal care products,” he said.

This surge in demand has contributed to the sharp price increases in Dar es Salaam, where residents face escalating costs for housing, utilities, and other essential services.

Dr Isack Safari of Saint Augustine University of Tanzania (SAUT) observed that the Southern Highlands’ inflation spike was tied to growing demand for housing and utilities due to increased investment in the region.

“The region’s rising demand for basic services, combined with a population influx, is putting pressure on available resources,” he said.

In contrast, the Lake and Northern Zones have remained relatively insulated from these pressures. Dr Lutengano attributed the stability in these regions to their strong agricultural focus, which has acted as a buffer against inflationary shocks.

Other regions, such as the Central and South Eastern Zones, recorded moderate inflation. The Central Zone (Dodoma, Singida, Tabora) had a slight dip in inflation from 1.9 percent in June to 1.8 percent in September, while the South Eastern Zone (Lindi, Mtwara, Ruvuma) saw a minor drop from 2.5 percent to 2.4 percent.

Despite these trends, urban centres like Dar es Salaam and the Southern Highlands remain areas of concern due to their higher inflation rates.

Repor executive director Donald Mmari highlighted the long-term consequences of rising costs in cities.

“The high cost of living in cities, especially in housing and utilities, remains a significant challenge despite the overall decrease in food prices,” he said.

Dr Emmanuel Maliti of the University of Dar es Salaam voiced concern about regional inflation disparities.

“While inflation is lower in areas like the Lake and Northern Zones, the high rates in cities like Dar es Salaam could increase poverty levels and widen the economic divide,” he said.