Tanzania was one the best performing economies of the region in the last decade with GDP growth averaging nearly 7.0%. Nevertheless, poverty remains widespread mainly due to uneven growth. While the service and construction sectors have grown very quickly, the agricultural sector, which employs more than half of the population, has lagged behind. The government has recently announced plans to subsidize farmers in order to reduce the loss in case of floods or droughts. While the move will boost development in the rural area, ambitious spending plans could weigh on the country’s fiscal deficit. The latest data released by the Central Bank show that the external sector’s performance in Q1 improved significantly, mainly on the back of higher exports for gold, manufactured goods and re-exports.