IMFSelected IssuesPaperAfricanDepartmentFostering Human Capital in Tanzania’s Rapidly Growing Population:TanzaniaPrepared bySebastian Acevedo*Authorized for distribution byCatherine PattilloJune2025IMF Selected Issues Papersare prepared by IMF staff as background documentation for periodicconsultations with member countries.It is based on the information available at the time it wascompleted onJune 16,2025. This paper is also published separately as IMF Country Report No25/164.ABSTRACT:Tanzania’s human capital development needs are staggering and need to be addressed urgentlyto reap the benefits of the ongoing demographic transition. Almost half of Tanzanians are under 18 years ofage, and the population is projected to double to more than 130 million by 2050. Currently, Tanzania lags itspeers in terms of the coverage and quality of education and health services. This paper (i) takes stock of recentchanges since the launch of theECF program, including improvements in priority social spending; (ii) highlightsthe challenges to close current gaps in health and education and improve service delivery, and (iii) providesRECOMMENDED CITATION:Acevedo, Sebastian, 2025.Fostering Human Capital in Tanzania’s RapidlyGrowing Population. IMF Selected Issues Paper (SIP/2025/099). Washington, D.C.: International MonetaryH51, H52, I15, I25, O15Humancapital, education expenditure, health expenditure,developmentsacevedomejia@imf.org some policy recommendations.JEL Classification Numbers:Keywords: [Type Here]Author’s E-Mail Address: Fund. Fostering Human Capital inTanzania’s Rapidly GrowingPopulationTanzaniaPrepared bySebastian Acevedo UNITED REPUBLIC OFTANZANIASELECTED ISSUESApproved ByThe AfricanDepartmentPreparedbySebastian Acevedo (AFR)FOSTERING HUMAN CAPITAL IN TANZANIA’S RAPIDLY GROWINGPOPULATION ________________________________________________________________________2A. Background _________________________________________________________________________2B. Authorities’ Strategy ________________________________________________________________4C. Challenges Ahead___________________________________________________________________5D. Investing in Human Capital _________________________________________________________6E. Policy Recommendations ___________________________________________________________8BOXES1. World Bank Recommendations to Improve Spending Efficiency ____________________7FIGURES1. Education and Health Indicators ____________________________________________________32. Priority Social Spending _____________________________________________________________33. Composition and Evolution of Social Spending _____________________________________44. Additional Public Spending Needed to Achieve SDGs by 2030______________________6References_____________________________________________________________________________9CONTENTS 2INTERNATIONAL MONETARY FUNDFOSTERING HUMAN CAPITAL IN TANZANIA’S RAPIDLYGROWING POPULATION1Tanzania’s human capital development needs are staggering and need to be addressed urgentlyto reap the benefits of the ongoing demographic transition. Almost half of Tanzanians are under18 years of age, and the population is projected to double to more than 130 million by 2050.Currently, Tanzania lags its peers in terms of the coverage and quality of education and healthservices; one-third of children under 5 years are stunted, placing the country among the 10 mostaffected in the world. In addition, schools are not adequately staffed, affecting education quality,with student-teacher ratios in pre-primary, primary, and lower-secondary schools at 163, 61, and27 respectively. This paper (i) takes stock of recent changes since the launch of the ECF program,including improvements in priority social spending; (ii) highlights the challenges to close currentgaps in health and education and improve service delivery, and (iii) provides some policyrecommendations.A.Background1.Tanzania has seen important progress in access to education, but significantchallenges remain.In 2014, the government launched a policy guaranteeing free access toeducation up to lower-secondary (fee-free basic education program), which resulted in a largeinflow of students into the education system. However, resource allocation did not keep pace withthese policy goals: student-teacher ratios have soared, and significant infrastructure gaps andscarcity of trained teachers and textbooks have affected education quality and outcomes. Anadditional challenge is the attrition of students both within and between the three basic educationcycles (preprimary, primary and secondary) (UNICEF, 2024).2.On the health front, important improvements have also been made.Maternal andunder-five mortality rates have been substantially reduced, and the health sector workforce hascontinued growing, with new recruits deployed predominantly to rural areas. However, thereremains significant shortages of health facilities and workers at all levels of health care, as well