Zanzibar optimistic economic growth will hit 7.5% on tourism boom

• Zanzibar legislators project 7.5% economic growth. 
• President Mwinyi advocates private sector participation.
• Zanzibar recent talks with Brazil, US expected to bare fruits.

Zanzibar has set it’s economic growth target for the financial year 2026/27 on tourism expansion, Finance and Planning Minister Dr. Juma Malik Akili has said. The island projects new arrivals to increase by 9.3 percent and to surpassing one million visitors. According to the minister, the spice islands expect overall stronger economic growth in 2026 based on the positive performance reported in the just ended financial year 2025/26.

Speaking to press at the start of the week, Dr. Akili commended performance of the tourism sector noting domestic revenue collection surged considerably. According to him, tourism remains the backbone of Zanzibar’s economy.

International arrivals for the ended 2025/26 period rose sharply by 24.5 percent to reach 917,167 visitors, up from 736,755 in 2024. “This growth also boosted activity across hospitality, transport, and service industries…the multiplier effect can be seen throughout the economy,” he said.

Short of specifying the growth figures, he cited increased infrastructure investments that he said are expected to drive the Isles’ economic growth.

Earlier, during his presentation of the Zanzibar Development Plan for the 2026/2027 financial year, Dr. Akili said the Zanzibar economy is projected to grow by 7.5 percent in 2026, up from 7.0 percent in 2025. “This performance reflects our continued resilience and effective policy implementation across all sectors,” he said.

According to the minister, domestic revenue collection has improved significantly. Pegging the rise at 24.3 percent compared to the previous year, he credited the improvement to increased efficiency and general economic expansion.

Further still, he said Zanzibar enjoyed increased investment activity with some 136 new projects having been registered in 2025, up from 131 projects in 2024. “This signals rising investor confidence … thanks to the conducive investment environment that is attracting new key players to Zanzibar,” the minister said.

He went on to point out that, per capita income on the island has increased to $1,320, a fact that he said is evidence of improved living standards for the Islanders. That been said, the minister was keen to acknowledge that there was an investment slowdown in both the agriculture and manufacturing sectors.

The minister said, development slowdown in the agriculture sector underscores the need to accelerate economic diversification. To this end, the minister said the government is focusing on broader economic reforms aimed at boosting productivity, improving service delivery and strengthening the general investment climate of the island.

He said in the 2026/27 financial year, the government will focus on implementing major strategic projects particularly in infrastructure development.

He cited road construction works, development of Pemba Airport, and expansion of Mangapwani and Mpigaduri ports, as well as the Fumba Sports City to mention but a few.

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Zanzibar aims for 7.5% economic growth

In another related development, the government of Zanzibar has set it’s sites on a GDP growth of 7.5% for the financial year 2016/17. With inflation controlled and within the single digit range and domestic revenue up 41.4% of its GDP, Zanzibar officials are confident the economy will maintain its current trajectory.

“Our budget deficit is below 3%, we have sufficient foreign reserves to cover at least four months of imports and our per capita income is above $1,449… we are on the right track,” Dr. Akili reassured stakeholders.

To the benefit of Zanzibar, Tanzania is expected to host the Africa Cup of Nations 2027, that is expected to boost Zanzibar’s tourism sector with increased arrivals. Owing to the games, the government has increased investment in related infrastructure and so has the private sector especially in the hospitality sector.

Speaking of private sector engagement, Zanzibar has prepared Concessional Agreements and Performance Contracts, that are specifically designed to enhance efficiency of major contracts across key sectors but with emphasis on investments that target the blue economy, ports, education, and health.

Notably, the government has budgeted for development projects, including  modernizing the State House and construction of a high-tech facility to house Government Security Offices, and invites private contracts to bid for the open tenders.

The government also invites investors to take part high-impact strategic projects like the Mangapwani Integrated Port, the Southern Unguja water distribution project, and the construction of the Binguni Cancer Service Center.

Likewise, the government of Zanzibar is also prioritizing digital transformation on the island and has announced investment in its Integrated Land Management.

Zanzibar also calls out to it’s diaspora and is updating the official registration system for the Zanzibar Diaspora, which has already registered 1,360 individuals to date.

“The government will now focus on boosting economic growth by utilizing production forces, increasing investment, and strengthening the participation of the private sector in business and industry,” concluded the minister.

He emphasized that Zanzibar President Mwinyi has prioritized professional discipline as an essential pillar for the implemention of his government’s sustainable development policies over the next five years.

The president has also highlighted the importance of the international investment community following his recent engagement with diplomats and delegations from the USA, Saudi Arabia, France, Oman, India, and Brazil with whom he discussed tourism, technology transfer, and infrastruecture development.

“It is the duty of every one of us to continue supporting the government, maintaining national solidarity, and participating fully in efforts to build a strong Zanzibar with inclusive development for the welfare of the citizens,” the President insisted.

The budget presentation is aligned with the Zanzibar Development Vision 2050 and the CCM Election Manifesto for 2025-2030, aiming to create a competitive and modern economy integrated into global trade systems.

A significant portion of recent activity has focused on removing “Non-Tariff Barriers” (NTBs) within the East African Community (EAC) to streamline cross-border trade and improve the ease of doing business for local and international firms.

However, it should be noted that despite the positive and optimistic outlook,  the president cautioned of risks that come with current that global uncertainties, especially the persisting geopolitical tensions and fluctuations in fuel and commodity prices, that he said could affect the projected growth.

That been said, the president reassured stakeholders that his government will continue to implement measures to safeguard economic stability, including strengthening local production, improving food security systems and maintaining prudent monetary policies in collaboration with the Bank of Tanzania.