The Roadmap to PPP Development
By Dr. Bravious Kahyoza, PhD, Senior Economist at TICGL
Tanzania’s journey in Public-Private Partnerships (PPPs) began with the National PPP Policy in 2009, which laid the foundation for a structured approach to public-private collaboration.
The Public-Private Partnership Act, CAP 103, was enacted in 2010, establishing a key institution: PPP Coordination Unit under the Ministry of Finance, responsible for receiving, analyzing, and assessing financial feasibility for PPP projects.
Over the years, amendments to the PPP framework have been made to address challenges and enhance efficiency.
In 2014, the Act was amended to establish the PPP Centre as a One-Stop Centre under the Prime Minister’s Office. However, to further consolidate PPP activities, another amendment in 2018 transferred the PPP Centre to the Ministry of Finance and Planning, ensuring that all public-private partnership operations were streamlined under one ministry.
A major turning point came with the 2023 Amendment, which introduced significant reforms to streamline processes, improve governance, and attract investments. The Public-Private Partnership Act of 2023 officially became operational on July 14, 2023, marking a proactive step toward making Tanzania a preferred investment destination.
Key Features of the 2023 PPP Amendment Act
Strengthening Governance and Approval Processes
One of the most notable reforms introduced in the 2023 Amendment Act is the establishment of special arrangements for strategic projects. Under these provisions, any agreement concerning strategic projects must first be vetted by the Attorney General before receiving final approval.
Additionally, the prefeasibility study requirement has been strengthened. Now, every contracting authority must submit a prefeasibility study to relevant ministers as part of each budget cycle to ensure potential PPP projects align with national development goals.
To enhance efficiency, a strict timeline has been introduced for project approvals. The PPP Centre is required to analyze prefeasibility studies, proposal documents, and evaluation reports for bidder selection within thirty working days from the date of submission.
Enhancing the Financing and Procurement Framework
The 2023 Amendment defines public funding in PPP projects as government financial support that constitutes fiscal commitments and liabilities. This ensures clarity in how public resources are allocated in PPP projects.
To improve procurement processes, the Act mandates the establishment of Special Purpose Vehicles (SPVs) by private sector partners before signing any PPP agreement. This measure helps in risk allocation, project financing, and long-term project sustainability.
Moreover, the Act promotes amicable dispute resolution by emphasizing negotiation-based mechanisms for resolving disputes that may arise during PPP project implementation.
Promoting Transparency and Accountability
To ensure continuous monitoring, the new law requires the PPP Centre to consolidate periodic performance reports from all PPP projects and submit them to the PPP Steering Committee before forwarding them to the Minister of Finance.
Another key improvement is the legal primacy of the PPP Act. In case of any conflict between the PPP Act and other laws, the provisions of the PPP Act will take precedence, eliminating ambiguities that could slow down project implementation.
Impact of the 2023 PPP Amendment Act
The amendment of the PPP Act in 2023 is expected to have significant positive impacts on Tanzania’s investment climate and infrastructure development.
One of the most notable benefits is the introduction of investment incentives for private sector investors. These include tax benefits and government guarantees for mining and petroleum projects, along with assistance in securing capital. These measures are designed to attract more private sector participation in strategic projects.
The amendment also enhances efficiency in project implementation by reducing preparation time and optimizing resource utilization. By clarifying the roles of different stakeholders and introducing clear standard operating procedures, the Act ensures that projects move from planning to execution more efficiently.
Furthermore, the Act introduces key definitions that strengthen the overall PPP framework. Concepts such as Special Purpose Vehicles (SPVs), standard documents, and strategic projects are now well-defined, leading to greater transparency, accountability, and better decision-making.
The introduction of dispute resolution mechanisms under the amendment Act strengthens governance and fosters better collaboration between the public and private sectors. By prioritizing negotiation-based resolutions, the law reduces risks associated with legal uncertainties in PPP projects.
Positioning Tanzania as a Competitive Investment Destination
The recent PPP Amendment Act of 2023 marks a major milestone in Tanzania’s journey toward creating a sustainable hub for local and foreign investment. With these legal and regulatory improvements, the government hopes to attract more private sector engagement in critical infrastructure areas and stimulate economic growth.
By enabling investment possibilities, fostering dispute resolution, and providing tax incentives, Tanzania is positioning itself as a regional leader in infrastructure-driven economic growth. The success of these reforms will depend on consistent implementation, policy stability, and continued collaboration between the public and private sectors.
With bold reforms and a strong commitment to transparency, Tanzania is well on its way to unlocking the full potential of Public-Private Partnerships.