Zanzibar: The Islands Strive for Greater Economic Autonomy

Zanzibar is an archipelago lying off the coast of mainland Tanzania in the Indian Ocean. It comprises four major islands and a number of smaller islets. The main island is Unguja, which has a population of nearly one million. It is often referred to as ‘Zanzibar Island’. Pemba is the second-largest island with some 400 000 inhabitants.

Zanzibar is a historical trade hub for commerce between the islands, the African mainland, the Arabian Peninsula, and the Indian subcontinent. Spice plantations were developed with cloves as the main cash crop commodity (hence the popular name: ‘the spice islands’). African, Arab and Asian conducted trade in spices, ivory and slaves.

Tanganyika gained its independence from Britain in 1961. Zanzibar formally achieved independence from Britain in 1963. In 1964, Tanganyika united with Zanzibar to form the United Republic of Tanganyika and Zanzibar. The names of the two entities were later fused, and the country was named Tanzania. Under the unification agreement, Zanzibar was designated as a semi-autonomous state of Tanzania with its own government, headed by its own president and the right to administer local affairs, legal system, taxes, and separate elections.

Zanzibar’s economy is strongly dependent upon tourism. In 2023, tourism arrivals registered a record 638 498 visitors. The sector accounts for about 27% of its economy and some 80% of its foreign exchange earnings. The support infrastructure for the sector is being developed. There are now over 1 500 hotels and resorts on the islands. The Abeid Amani Karume International Airport on Unguja Island has been revamped and upgraded, and in 2024 received an award for Best Airport under Two Million in Africa. The airport on Pemba Island is being upgraded to international standard. Road rehabilitation programmes are underway.  

The attractions are numerous, and not only beach and sea-orientated. There is the Swahili cultural heritage, and much evidence of historic Arab influence.  Stone Town is a historic trade centre of old buildings constructed from coral stone and mangrove timber, with intricately-carved doors and decorated interiors.

In 2006, I joined the tourist throng visiting Zanzibar Island. Much of my time was spent lazing on the beach and initiating my scuba diving career. I took a morning off from my leisure activities to visit the offices of the Zanzibar Investment Promotion Authority. The senior ZIPA official I met was adamant. “Tourism is vital for our country. We have at least seven new applications for private hotel developments.” He added, “But these tourism projects must help develop the local population by assisting local suppliers. For example, we need to supply good quality meat to the hotels and resorts, but we need an abattoir, and good packaging, and training to meet the required standards.”

Zanzibar’s president, Hussein Mwinyi, is emphasising the importance of the blue (coast and sea-linked) economy as a vehicle for developing the archipelago. A major blue economy component is coastal tourism, but it also features a range of other economic activities such as fisheries (including deep-sea fishing), aquaculture, and seaweed farming. Underpinning this blue economy is port development. A feature of this port development is the strengthening of the links of the ports in Unguja and Pemba with the larger mainland ports such as Tanga and Mombasa.

A number of recent initiatives and projects illustrate Zanzibar’s efforts to reduce its dependence upon the Tanganyika mainland.

The Zanzibar government has been engaged in talks with Water and Power Consultancy Services Limited of India for a study of the archipelago’s electricity needs. Zanzibar currently receives 110 megawatts via submarine cables from the mainland national grid. This is not enough to meet its growing power demand, and President Mwinyi has expressed his government’s readiness to collaborate with companies for the establishment of its own electricity source. The Zanzibar Renewable Energies and Energy Efficiency Initiative is focusing on the generation of solar and wind power.

The e-Government Agency of Zanzibar is working with Mastercard to accelerate Zanzibar’s Digital Transformation Programme as part of the Zanzibar Digital Government Strategy 2023-2027. The programme aims to establish a strong digital economy that will facilitate digital governance and improve public services. In early 2023, the government and the African e-commerce company, Wasoko, announced the establishment of an innovation hub on the main island which was dubbed ‘Silicon Zanzibar’. It is hoped that ICT companies will be attracted to invest in Zanzibar. Zanzibar is already registering greater foreign direct investment in ICT than the mainland.

Zanzibar is located in a particularly dry area, and a major water shortage exists. Some of Zanzibar’s water is brought in by ships from the mainland. The growing tourism sector is placing considerable strain on Zanzibar’s water supply. (Tourists consume considerably more than the locals.) The islands have freshwater aquifers, wells and boreholes, but water quality is negatively affected by rising sea levels which increase salinity and pollution. The Zanzibar Water Authority is receiving strong support from German technical assistance agencies and water specialists. A German engineering firm has installed pilot mini-desalination plants which are powered by solar and wind energy.

Zanzibar faces the challenges of a fast-growing population and a high unemployment rate. Today the total population is nearly 2 million. Population growth stands at nearly 4,5%. The unemployment rate in 2021 was nearly 20%. While the state is recording record tourist arrivals which bring in substantial revenues, the high number of visitors place strain on infrastructure, services, and the environment.

Nevertheless, Zanzibar is experiencing positive economic growth, with the government predicting a GDP growth rate of 5,5% (compared with 5% in 2023.) The improvement is reflected in the tax revenue collection total announced at the end of 2023 by the Zanzibar Revenue Authority. The figure was a 51% improvement over the previous year.

Zanzibar appears to be set for a transition from a historic trade hub to a tourist paradise and a modern, functional, and self-reliant economic state.