This analysis offers a detailed breakdown of Foreign Direct Investment (FDI) and Domestic Investment (DI) recorded under the general investment scheme for July–September 2025 (Q1 2025/26). It builds on the broader Quarterly Investment Bulletin by unpacking the US$2,538.56 million total capital into its core components: FDI at US$1,618.43 million (64%) and DI at US$920.13 million (36%). The distribution highlights Tanzania’s deliberate strategy to attract substantial foreign inflows while maintaining strong domestic participation. Manufacturing remains the dominant driver of FDI—absorbing more than 77% of foreign capital—whereas DI is concentrated in infrastructure, real estate, and service-oriented sectors. The insights derive from the bulletin’s visual data presentations, including Figure 4.6, with reasonable estimations applied where exact sectoral splits are not explicitly stated.

This FDI surge aligns with TISEZA's reforms, attracting high-value projects in value-added sectors. As of October 2025, external reports confirm the UAE's ascent as Tanzania's top FDI source, overtaking China for the first time, driven by maritime and energy deals like the Bagamoyo Eco Maritime City SEZ. By December 8, 2025, cumulative 2025 FDI is projected to exceed US$4 billion, per UNCTAD estimates, though Q2 data (October-December) remains preliminary amid post-election stabilization. Read More: How Tanzania’s Q1 2025/26 Investment Boom Is Reshaping Growth Through TISEZA Reforms

1. Capital Contributions by Sector: FDI vs. DI

Manufacturing is overwhelmingly FDI-driven, reflecting incentives for export-oriented processing (e.g., minerals, agro-goods). DI dominates in domestic-priority areas like buildings and infrastructure, supporting urban development and connectivity.

Note: Dashes indicate no explicit allocation; totals aggregate to overall figures. Agriculture shows mixed FDI/DI but lacks quantified splits.

2. Aggregated Total FDI and DI Capital

FDI's lead (US$1,618.43M) highlights global confidence post-TISEZA launch, while DI (US$920.13M) grew via joint ventures (11 projects, per prior data).

3. Sector Breakdown: Shared FDI + DI Capital

This table integrates partial overlaps from bulletin charts (Figure 4.6), showing total per sector. Manufacturing's total exceeds US$1.25B due to unquantified DI contributions.

4. Top FDI Source Countries (General Scheme)

The UAE's US$502.02M lead—up from prior years—stems from strategic ports and energy pacts, eclipsing China's traditional dominance in infrastructure. India and Singapore target manufacturing, while France eyes renewables. These inflows supported 116 foreign projects (58% of total).

5. FDI by Country in EPZ/SEZ Scheme

EPZ/SEZ FDI totaled US$97.83M across 6 projects, with China dominating (90% of capital). Jobs surged to 2,607, emphasizing export zones like Benjamin Mkapa SEZ.

Additional Insights and Context

• Trends and Drivers: FDI's manufacturing skew (77%) supports Tanzania's "new economy" pivot, per the Director General's message in the bulletin, with 10,079 jobs expected. DI's infrastructure focus addresses bottlenecks, enabling FDI spillovers (e.g., better ports for UAE/Chinese exports). The Knauf ad highlights German-Tanzanian JV success in construction materials, tying into commercial buildings.
• Global Momentum: As of December 2025, UAE's rise reflects diversified partnerships beyond China (down to 27% from 35% in 2024), per TIC reports. India's inflows align with bilateral trade pacts, targeting US$500M by year-end. Challenges include land acquisition delays, but TISEZA's OSFC mitigated 2,695 consultations.
• Projections: UNCTAD forecasts 15% FDI growth in 2026, with SEZs like Buzwagi (mining-focused) drawing more from top sources. For real-time updates, visit TISEZA's portal.

Tanzania's Economic Development Amid Escalating Political Crisis

The Quarterly Investment Bulletin for July-September 2025 (Q1 2025/26) highlighted Tanzania's promising economic trajectory under the newly launched Tanzania Investment and Special Economic Zones Authority (TISEZA), with US$2.54 billion in registered investments, a 24% year-on-year capital surge, and launches of five flagship SEZs (e.g., Bagamoyo Eco Maritime City). These gains, driven by manufacturing FDI (US$1.25 billion) and foreign sources like the UAE (US$502 million), positioned Tanzania for 6% GDP growth in 2025, per IMF projections. However, the October 29, 2025 elections—marred by irregularities, opposition boycotts, and President Samia Suluhu Hassan's declared 98% victory—triggered nationwide violence, repression, and international backlash that persists into December. As of December 8, protests continue, with a major "megaprotest" planned for December 9, prompting U.S. warnings for Americans to stockpile food and water amid fears of nationwide unrest. This turmoil threatens to reverse Q1 momentum, with preliminary Q2 (October-December) data indicating a 15% dip in investor inquiries and stalled SEZ progress.

Economic Development Highlights from Q1 2025/26 and Early Q2 Trends

Q1 showcased resilience, with 201 projects creating 20,808 jobs and FDI comprising 64% of capital (US$1.62 billion), led by manufacturing (77% of FDI). Regional hubs like Dar es Salaam and Mtwara thrived, while EPZ/SEZ inflows tripled. The bulletin emphasized TISEZA's One-Stop Facilitation Centre (2,695 consultations) and promotions in 21 countries. However, post-election data reveals headwinds: Q2 registrations are down ~10% from Q1, with FDI inquiries dropping 15% due to instability, per TICGL reports. Overall 2025 FDI targets US$15 billion, but unrest risks missing this by 20-25%.

Political Issues: From Elections to Ongoing Repression (July-December 2025)

The bulletin lauded President Hassan's "bold strides," but July-September saw pre-election crackdowns: Over 500 opposition arrests, abductions (e.g., CHADEMA leader Tundu Lissu on treason charges), and media silencing. The October 29 vote, boycotted by major opposition, resulted in Hassan's landslide amid low turnout and a nationwide internet shutdown. Post-election violence erupted immediately: Security forces used live ammunition, tear gas, and blackouts, killing hundreds (UN estimates 200+; opposition claims 1,000+) in Dar es Salaam, Arusha, and Dodoma.

By December 8, the crisis deepens:

• Treason Charges and Detentions: 145+ charged with treason; thousands arrested, including youths (though President ordered some charges dropped on November 15).
• Nepotism and Investigations: Hassan's inauguration in a military barracks (November 3) was followed by appointing family to ministries (e.g., daughter as Deputy Education Minister), fueling outrage. Opposition rejected a government-led probe; CHRAGG report (November 14) cited "opportunistic actors" but was dismissed as biased.
• International Response: AU/SADC condemned the vote, calling for non-recognition and fresh elections. EU froze the 2025 Annual Action Plan (US$150M+ in aid) on November 27, citing "grave" irregularities. U.S. State Department (December 4) is reviewing ties over repression, investment barriers, and violence. Ghana urged impartial probes (December 3).

Protests persist, with Gen Z-led actions amplifying calls for accountability via global petitions.

Potential Impacts on Tanzania's Economy

Q1's FDI boom buffered initial shocks, but by December, political instability has cascaded into economic vulnerabilities. Tanzania's 5.6% GDP growth in FY 2024/25 (agriculture/mining-led) faces downward revisions to 4-5% for 2025/26, per SECO reports, with unrest disrupting 25% of GDP from informal sectors. Cumulative effects could cost US$1-2 billion in lost opportunities by mid-2026.

Recommendations for TISEZA to Safeguard and Advance Success

TISEZA's investor-centric mandate positions it as a stabilizer amid chaos. To protect Q1 gains and hit US$15 billion annual targets, it must prioritize de-risking and advocacy, leveraging its independence:

1. Immediate Risk Mitigation: Issue "Stability Alerts" via OSFC for ongoing projects, partnering with AfDB/World Bank for political risk insurance (covering 30% of SEZ investments). Accelerate virtual aftercare for 1,000+ foreign firms, targeting non-Western sources (e.g., UAE/India) to offset EU/U.S. pullbacks.
2. Transparent Promotion Amid Crisis: Relaunch outbound missions (post-December 9) with a "Resilience Roadmap," emphasizing SEZ incentives and neutrality. Diversify to 25+ countries, focusing on "safe-haven" sectors like renewables (e.g., French inflows).
3. Local Empowerment and Inclusivity: Expand youth/women-led initiatives (per bulletin Section Ten) with anti-unrest clauses, aiming for 3,000 jobs in stable regions like Mwanza. Engage opposition in SEZ forums for cross-partisan buy-in, reducing perceptions of bias.
4. Advocacy for Reforms: Publicly urge independent probes via stakeholder reports (e.g., to AU), while tracking unrest via dashboards. Collaborate with MDAs on emergency permits to preempt disruptions, targeting 20% more consultations in Q3.
5. Long-Term Monitoring: Publish a Q2 bulletin addendum by January 2026 quantifying impacts, with scenarios for 10-15% growth recovery. Advocate for TISEZA-led "Peace Dividend" funds from recovered aid.

By insulating investments from politics, TISEZA can transform this "national catastrophe" into a catalyst for resilient growth—engage them at tiseza.go.tz for opportunities.