Authored by Dr. Bravious Felix Kahyoza (PhD, FMVA, CP3)
This discussion paper examines the evolution and strategic significance of Tanzania’s economic engagement with China, focusing on investment flows, bilateral cooperation under the Forum on China-Africa Cooperation (FOCAC), and opportunities emerging from the Belt and Road Initiative (BRI). The analysis underscores Tanzania’s transformation into one of the most attractive investment destinations for Chinese enterprises in Africa—anchored on stability, strategic location, and pro-business reforms.
Over the past two decades, China has invested over USD 11.5 billion across 1,360 projects, creating more than 155,000 jobs in Tanzania. This partnership continues to evolve from infrastructure diplomacy toward sustainable industrialization and inclusive growth—reflecting both nations’ commitment to mutual benefit and balanced development.
Key Findings
🇨🇳 Historical Foundations, Modern Convergence
Tanzania-China relations date back to 1964, built on South–South solidarity and anti-colonial cooperation. Landmark projects like the TAZARA Railway in the 1970s laid the foundation for enduring bilateral trust. Under FOCAC (since 2000), Tanzania has gained zero-tariff access to 98% of its exports to China, expanding trade to USD 8.78 billion by 2023.
Strategic Investment Hub
Tanzania’s robust macroeconomic stability, political peace, and pro-market legal reforms make it a leading destination for Chinese foreign direct investment (FDI). Sectors driving current inflows include manufacturing, infrastructure, energy, agriculture, and ICT—supported by economic growth averaging 6–7% annually and inflation contained below 5%.
⚙️ Flagship Chinese Investments
Notable ventures include:
These investments highlight China’s leadership in Tanzania’s industrial growth and align with the FYDP III vision for structural transformation and import substitution.
BRI and FOCAC Synergy
Through BRI, large-scale infrastructure such as Bagamoyo Port (USD 10B) and industrial zones enhance regional connectivity. FOCAC complements this by promoting green investment, skills transfer, and policy harmonization, ensuring people-centered growth.
Reforms and Institutional Strengthening
The Tanzania Investment Act of 2022 streamlined procedures by eliminating over 230 redundant taxes, improving licensing timelines, and strengthening arbitration mechanisms under ICSID. Agencies like TIC and EPZA now serve as one-stop centers for investors, offering tax holidays and capital repatriation guarantees.
Challenges and Future Prospects
While Chinese investment has boosted industrial capacity, environmental and social sustainability issues persist, particularly in extractive industries and agriculture. Bureaucratic inefficiencies and uneven policy enforcement remain barriers to consistent investment outcomes.
To sustain long-term benefits, Tanzania must:
With effective reforms, trade volumes and job creation are projected to double by 2030, reinforcing the win-win narrative of Tanzania-China cooperation.
Conclusion
Tanzania’s partnership with China has evolved from ideological solidarity to a pragmatic economic alliance shaping Africa’s future growth trajectory. Through BRI and FOCAC, Tanzania exemplifies how infrastructure-led and industrial diversification can transform emerging economies—if guided by sustainability, transparency, and local value creation.
This paper concludes that Tanzania’s investment imperative lies not only in attracting capital but in ensuring that every yuan invested translates into skills, technology, and shared prosperity for Tanzanians.
Read the Full Paper:
Tanzania's Investment Imperative in the Context of China-Africa Relations (FOCAC)
Published by TICGL | Economic Research Centre