By Dr. Bravious Kahyoza, PhD, Senior Economist at TICGL and Dr. Jasinta Msamula, PhD. Lecturer Mzumbe University.
Public-Private Partnerships (PPPs) could be Tanzania’s key ingredient for sustained economic development—if implemented effectively. Lessons from successful global models provide a roadmap for strengthening infrastructure, mobilizing private investment, and unlocking Tanzania’s full economic potential.
Tanzania’s economic growth remains hindered by infrastructure gaps in critical sectors such as transportation, energy, water, and sanitation.
Addressing these problems is urgent if the country wants to grow in the long term. PPPs can help by using private money, skills, and sharing risks between the government and investors.
The World Bank’s 2023 Private Participation in Infrastructure (PPI) report says private companies invested over $100 billion in infrastructure. This money went into 322 projects in 68 countries. Although this is a bit less than in 2022, it shows investors trust markets with good rules and clear leadership.
Global Lessons for Tanzania
Around the world, strategic PPPs have transformed economies, enhanced infrastructure, and boosted fiscal stability. From China’s renewable energy boom to Peru’s modernized ports, the results speak for themselves. If Tanzania can adopt the right policies, it too can attract investment, generate employment, and increase global competitiveness.
Europe and Central Asia: Transparent Procurement Drives Growth
Countries in Europe and Central Asia have successfully attracted PPP investments by ensuring transparent procurement and regulatory clarity. A notable example is Uzbekistan’s $400 million Andijan Solar PV Plant, which secured significant private sector involvement and paved the way for renewable energy advancements. Similarly, Bulgaria’s solid waste management projects have demonstrated how PPPs can enhance urban services while reducing the government’s financial burden.
East Asia and the Pacific: Trade and Energy Efficiency
In East Asia and the Pacific, large-scale PPPs have been game-changers for trade and infrastructure. In 2023, China and the Philippines secured $51.4 billion in private infrastructure investments, primarily in railway projects that reduced transportation costs and boosted export competitiveness—two areas where Tanzania urgently needs improvement. China’s renewable energy investments further demonstrate how infrastructure and sustainability can go hand in hand, while the Philippines’ diversified PPP investments in energy, logistics, and ICT present a model for Tanzania to follow.
Latin America: Ports and Roads as Economic Catalysts
Latin America’s experience highlights how modernized ports and efficient road networks can drive economic transformation. Peru’s $975 million Chancay Multipurpose Port Terminal improved logistics, increased trade, and attracted global supply chain investments—proving that infrastructure investment yields tangible economic benefits. Brazil’s concession-based road infrastructure projects reduced logistics costs by 20%, improving supply chain efficiency—an approach Tanzania could replicate to enhance transportation networks and reduce operational costs.
Middle East and North Africa: Infrastructure for Resilience
The Middle East and North Africa (MENA) region offers insights into building resilience through infrastructure diversification. Egypt’s $2.3 billion Ain Sokhna Port expansion significantly boosted trade and regional competitiveness. Meanwhile, Tunisia’s $220 million investment in sanitation infrastructure greatly improved urban health and resilience—areas that are increasingly relevant for rapidly growing Tanzanian cities.
South Asia: The Power of Policy Reforms
India’s $7 billion in highway PPP concessions proves that policy consistency, investor confidence, and open procurement systems are essential in attracting long-term investment. If Tanzania implements similar policy reforms, it could unlock substantial funding for transport, energy, and digital infrastructure.
Sub-Saharan Africa: Emerging Success Stories
PPPs are already making an impact in Africa. Senegal’s $316 million investment in modernized transportation has strengthened logistics networks, while South Africa’s $1 billion port and logistics upgrades have significantly boosted trade efficiency. Tanzania is also making strides, with ongoing investments in transport, energy, and logistics attracting growing attention. However, the time is ripe for Tanzania to expand PPPs into emerging sectors like ICT and renewable energy, where global trends indicate strong investment potential.
The Road Ahead for Tanzania
Tanzania’s infrastructure development strategy must embrace global best practices in PPP structuring, policy transparency, and investment incentives. By doing so, the country can attract high-quality investments, enhance economic competitiveness, and drive long-term growth. While the challenges are substantial, so are the opportunities. With strategic planning and commitment to reform, Tanzania can transform its infrastructure landscape and unlock a new era of economic development.
What Does Tanzania Need to Do?
Tanzania’s path forward is clear—addressing structural challenges is essential to unlocking the full potential of Public-Private Partnerships (PPPs). Bureaucratic inefficiencies and legal uncertainties continue to delay projects and shake investor confidence. One critical step is the establishment of a centralized PPP unit under the Ministry of Finance. Such a unit would streamline processes, ensure accountability, enhance expertise, and provide consistent oversight, making Tanzania’s PPP framework more attractive to investors.
Strengthening Financing Mechanisms
Financing is central to successful Public-Private Partnerships (PPPs). The World Bank’s PPI Report shows 67% of global PPP funding comes from private capital, 13% from public funds, and 20% from Development Finance Institutions (DFIs).
DFIs help de-risk projects through concessional loans, guarantees, and equity.
Tanzania should embrace blended finance, which combines concessional and commercial funds, to attract private investment.
Effective PPP models include Brazil’s Build-Operate-Transfer (BOT), the Design-Build-Finance-Operate (DBFO) model, and Peru’s concession agreements, all of which balance infrastructure development with public service delivery.
Tapping into Local Capital Markets
Local capital markets remain an underutilized resource for infrastructure financing in Tanzania. South Africa’s success in mobilizing domestic infrastructure debt provides a strong example. Encouraging pension funds, banks, and institutional investors to finance large-scale projects could significantly enhance funding availability while reducing reliance on foreign capital.
In addition, transparent procurement systems are vital. Competitive bidding processes not only ensure value for money but also help curb corruption, which is critical for building long-term trust with investors.
Diversifying PPP Investments Beyond Transportation
Tanzania must look beyond roads and ports to diversify its PPP portfolio. Expanding into ICT, water, sanitation, renewable energy, and industrial parks will broaden economic opportunities and address pressing national priorities. Projects that provide both social and economic benefits should be at the top of Tanzania’s PPP agenda.
Inspiration for Bold Action
Egypt’s Ain Sokhna Port expansion and South Africa’s renewable energy program show that bold choices can lead to big changes.
Tanzania should not be left behind. By supporting a wider range of projects, improving governance, and building stronger institutions, the country can attract more investment to improve its infrastructure.
The solutions are possible as Tanzania can create a strong Public-Private Partnership (PPP) unit, use open and fair procurement systems, and train local professionals, helping the country manage complex PPP projects better.
Important areas like water sanitation, industrial parks, and transport hubs should be given priority to help grow the economy.
Tanzania must not miss this chance as other regions—such as East Asia, Latin America, and Sub-Saharan Africa—show that PPP success comes from clear planning, strong institutions, and stable policies.
This is the right moment for serious reforms and smart investments.
With honest leadership, creative financing, and fair development, Tanzania can become a leader in building infrastructure.
PPPs can bring jobs, raise productivity, and improve lives. But to make this happen, Tanzania must take action—not just talk.