The Tanzania Investment Centre (TIC) Quarterly Bulletin for January to March 2025 (Q3 2024/25) reports a significant 46.72% increase in capital inflow compared to the same period in the previous year (Q3 2023/24), with total capital attracted reaching USD 2,164.7 million compared to USD 1,475.43 million in Q3 2023/24. This growth, coupled with the registration of 199 investment projects expected to generate 24,444 jobs, underscores Tanzania’s robust economic development trajectory. Below, TICGL analyze the sectors driving this capital increase, supported by figures from the document, and explain how they contribute to economic diversification, a critical factor in reducing reliance on traditional sectors and fostering sustainable growth.

Sectors Driving the Capital Inflow Growth

The bulletin highlights notable increases in capital, project numbers, and job opportunities in specific sectors during Q3 2024/25, The key sectors driving the 46.72% capital increase include:

1. Agriculture:
   • Capital Increase: The bulletin notes a “notable increase” in capital in the agriculture sector, though exact capital figures per sector are not provided in the text. However, the sector’s prominence is evident from the number of projects and jobs.
   • Projects and Jobs: Agriculture saw an increase in registered projects and job opportunities. For context, the document highlights specific agricultural projects like the Bugwema Irrigation Scheme (USD 14.89 million, 2,500+ household jobs) and the Usariver Agricultural SEZ, indicating significant investment interest.
   • Figure Reference: Figure 4.2 shows a rise in the number of agricultural projects and jobs compared to Q3 2023/24, suggesting a substantial contribution to the capital inflow.
2. Energy:
   • Capital Increase: The energy sector recorded a significant increase in capital, driven by projects like solar and clean energy initiatives (e.g., inbound missions from China and India focusing on energy).
   • Projects and Jobs: The sector also saw an increase in registered projects and job creation. Figure likely reflects this growth in project numbers.
   • Example Projects: Missions from Japan (energy, February 13, 2025) and India (clean energy, March 28, 2025) indicate targeted investments.
3. Economic Infrastructure:
   • Capital Increase: This sector experienced a notable rise in capital, likely driven by projects like the East Africa Commercial & Logistics Center (EACLC) with an investment exceeding USD 200 million and infrastructure-focused missions (e.g., UAE’s logistics hub interest).
   • Projects and Jobs: The bulletin notes an increase in project numbers and jobs, with Figure 4.2 illustrating this trend.
   • Significance: The EACLC, with its 75,000 square meters and four functional areas (commercial trading, logistics, business district, leisure), is a flagship project enhancing Tanzania’s role as a regional trade hub.
4. Services:
   • Capital Increase: The services sector, encompassing tourism, real estate, and other services, also contributed to the capital surge. Inbound missions from Japan (real estate, February 2025) and Poland (tourism, January 16, 2025) highlight this focus.
   • Projects and Jobs: Figure shows growth in service-related projects and jobs, reflecting investments in tourism and hospitality.
5. Manufacturing:
   • Capital Increase: Despite a slight decrease in the number of projects, the manufacturing sector recorded a 45.87% increase in capital, making it a significant driver of the overall 46.72% capital growth.
   • Projects and Jobs: Figure indicates a slight dip in project numbers but a substantial increase in capital, suggesting larger-scale investments. Examples include Chinese investments in motorcycle assembly, tire manufacturing, and steel production.
   • Specific Investments: The bulletin lists 19 inbound missions from China alone, many focusing on manufacturing sectors like tea processing, building materials, and stainless steel.

Quantitative Breakdown

• Total Capital (Q3 2024/25): USD 2,164.7 million.
• Previous Year (Q3 2023/24): USD 1,475.43 million.
• Increase in Capital: USD 2,164.7M – USD 1,475.43M = USD 689.27 million, equivalent to a 46.72% increase.
• Projects Registered: 199 projects (94 foreign-owned, 66 locally owned, 39 joint ventures).
• Jobs Created: 24,444 jobs.
• Expansion Projects: 9 projects with USD 100.09 million in capital and 1,542 jobs.
• Sectoral Contribution:
  • Agriculture, Energy, Economic Infrastructure, and Services: Increased in projects, jobs, and capital.
  • Manufacturing: 45.87% capital increase, despite fewer projects.

Contribution to Economic Diversification

Economic diversification reduces Tanzania’s reliance on traditional sectors like agriculture and mining, fostering resilience and sustainable growth. The sectors driving the capital inflow contribute to diversification as follows:

1. Agriculture:
   • Diversification Impact: Investments like the Bugwema Irrigation Scheme (USD 14.89 million) and the Usariver Agricultural SEZ modernize agriculture, shifting from subsistence to commercial farming. The Usariver project focuses on horticulture for export, enhancing foreign exchange earnings.
   • Economic Benefits: These projects create over 2,500 household jobs (Bugwema) and boost food security, reducing dependence on rain-fed agriculture. The allocation of 30,000 hectares in Mkulazi for the “Mkulazi Agricultural City” (USD 570 million) supports large-scale agribusiness, diversifying agricultural output.
   • Figure Impact: The increase in agricultural projects supports value-added activities like processing, reducing reliance on raw commodity exports.
2. Energy:
   • Diversification Impact: Investments in solar and clean energy (e.g., Chinese solar project) reduce dependence on traditional energy sources like hydropower, enhancing energy security.
   • Economic Benefits: Energy projects support industrial growth by ensuring reliable power for manufacturing and infrastructure projects like the EACLC. This enables Tanzania to attract more industries, diversifying from agriculture-based revenue.
   • Figure Impact: The rise in energy sector capital reflects investments in renewable energy, aligning with global sustainability trends.
3. Economic Infrastructure:
   • Diversification Impact: The EACLC (USD 200 million+) integrates wholesale, logistics, warehousing, and e-commerce, positioning Tanzania as a regional trade hub. The Standard Gauge Railway (SGR) in Morogoro enhances trade connectivity, opening markets for diverse sectors like horticulture and manufacturing.
   • Economic Benefits: The EACLC is expected to create jobs and boost trade across East Africa, while the SGR supports faster transport of perishable goods, diversifying market access. These projects reduce reliance on traditional trade routes and ports.
   • Figure Impact: Figure shows 73 projects in Dar es Salaam, where EACLC is located, indicating infrastructure’s role in capital attraction.
4. Services:
   • Diversification Impact: Investments in tourism and real estate (e.g., Japanese and Polish missions) diversify Tanzania’s economy by capitalizing on its tourism potential and urban development needs.
   • Economic Benefits: Tourism projects create jobs and foreign exchange, while real estate investments (supported by the 2023 Land Policy) stimulate construction and housing markets, broadening economic activity.
   • Figure Impact: Figure shows increased service sector projects, reflecting growth in non-traditional sectors.
5. Manufacturing:
   • Diversification Impact: The 45.87% capital increase in manufacturing supports industrial growth in areas like tea processing, motorcycle assembly, and steel production. This shifts Tanzania from raw material exports to value-added manufacturing.
   • Economic Benefits: Manufacturing projects create high-skill jobs (e.g., 1,542 jobs from expansion projects) and increase export revenues. The Kibaha Textile SEZ (USD 78.85 million, 38,400 jobs) exemplifies large-scale industrial diversification.
   • Figure Impact: Figure highlights manufacturing’s capital growth, underscoring its role in economic transformation.

Broader Economic Development Impact

• Job Creation: The 24,444 jobs across these sectors reduce unemployment and increase household incomes, boosting domestic consumption and tax revenues.
• FDI and Domestic Investment: The 62.5% increase in joint ventures (39 projects) indicates growing local participation, fostering inclusive growth. Figure shows 94 foreign-owned and 66 locally owned projects, balancing FDI and domestic investment.
• Regional Distribution: Figure shows Dar es Salaam (73 projects), Pwani (48), and Arusha (16), ensuring economic activity spreads beyond urban centers, promoting balanced development.
• Policy Support: The Tanzania Investment and Special Economic Zones Authority Act and the 2023 Land Policy create a conducive environment, encouraging diverse investments. The EACLC’s alignment with the Belt & Road Initiative enhances global trade linkages.

Conclusion

The 46.72% increase in capital inflow to USD 2,164.7 million in Q3 2024/25 was driven by agriculture, energy, economic infrastructure, services, and manufacturing, as evidenced by Figure and specific project data. These sectors contribute to economic diversification by modernizing agriculture, enhancing energy security, improving trade infrastructure, expanding service industries, and boosting manufacturing. Projects like the EACLC (USD 200 million+), Kibaha Textile SEZ (USD 78.85 million), and Bugwema Irrigation Scheme (USD 14.89 million) exemplify this shift, creating jobs, increasing exports, and reducing reliance on traditional sectors. These investments, supported by reforms like TISEZA and the 2023 Land Policy, position Tanzania as a diversified, resilient economy and a leading investment destination in Africa.

This table will provide a clear, concise overview of the figures that illustrate Tanzania’s economic development during Q3 2024/25, as requested, with an emphasis on the 46.72% capital inflow increase and other key metrics.

Explanation of the Table

This table captures key figures from the bulletin that highlight Tanzania’s economic development in Q3 2024/25, focusing on investment, job creation, and sectoral contributions. Figures contribute to economic development:

• Capital Inflow (USD 2,164.7 million, 46.72% increase): Reflects strong investor confidence, driven by agriculture, energy, infrastructure, services, and manufacturing. This supports economic growth by increasing available capital for development projects.
• Projects and Jobs (199 projects, 24,444 jobs): The high number of projects and jobs boosts employment, household incomes, and tax revenues, fostering inclusive growth.
• Sectoral Growth: Manufacturing’s 45.87% capital increase and projects like the EACLC (USD 200 million+) and Kibaha Textile SEZ (USD 78.85 million) drive industrial and trade diversification.
• Agricultural Investments: Projects like Bugwema (USD 14.89 million) and Mkulazi (USD 570 million) modernize agriculture, enhancing food security and exports.
• Regional Balance: The distribution of projects across Dar es Salaam, Pwani, and Arusha promotes equitable economic development.
• 2024 Achievements: The record 901 projects and 212,293 jobs highlight a landmark year, driven by reforms like the Investment Act 2022 and the National Investment Campaign.

Between 2020 and 2024, Tanzania experienced a remarkable surge in investment activities, signaling growing confidence in the country's economic prospects. The number of projects registered by the Tanzania Investment Centre (TIC) increased from 207 in 2020 to 901 in 2024 — a 335% growth over five years. At the same time, total capital investment rose sharply from $1.1 billion to $9.3 billion, marking a 745% increase. Job creation linked to these projects also soared by 1,121%, with employment opportunities growing from 17,385 in 2020 to 212,293 in 2024. This rapid expansion reflects both domestic and foreign investor confidence, with domestic projects growing by 402%, foreign projects by 399%, and joint ventures by 184%. Key sectors like manufacturing, agriculture, commercial real estate, transportation, and telecommunications attracted the largest share of capital and created substantial jobs, demonstrating Tanzania’s ongoing transformation into a vibrant investment hub.

Key Figures:

• Total Projects: Increased from 207 (2020) to 901 (2024) — +335% growth.
• Domestic Projects: Increased from 64 (2020) to 321 (2024) — +402% growth.
• Foreign Projects: Increased from 81 (2020) to 404 (2024) — +399% growth.
• Joint Venture Projects: Increased from 62 (2020) to 176 (2024) — +184% growth.
• Capital Investment: Rose from $1.1 billion (2020) to $9.3 billion (2024) — +745% growth.
• Jobs Created: Rose from 17,385 (2020) to 212,293 (2024) — +1,121% growth.
• Top Investment Sectors by Capital (2024): Manufacturing ($2.19 billion), Agriculture ($1.89 billion), Commercial Buildings ($788.86 million).
• Top Sources of FDI (2024): China ($1.05 billion), Vietnam ($783.4 million), Mauritius ($773.96 million).
• Top Region by Investment (2024): Dar es Salaam with $4.44 billion across 356 projects and 107,962 jobs.

Project Registration Trends (2020-2024)

Project Ownership in 2024

• Foreign ownership: 44.8% (compared to 40.7% in 2023)
• Joint ventures: 19.6% (compared to 24.7% in 2023)
• Domestic ownership: 35.6% (compared to 34.6% in 2023)

Sectoral Analysis of Projects (January-December 2024)

Expansion Projects (January-December 2024)

Total expansion projects: 51 projects across various sectors.

Sectors by Project Count

Total projects: 901 The document doesn't provide the exact number for each sector, but visually it appears manufacturing has the highest number of projects, followed by commercial buildings and services.

Jobs Created by Sector (January-December 2024)

Total jobs: 212,293 Top sectors for job creation:

1. Commercial Building: approximately 125,760 jobs
2. Manufacturing: approximately 45,883 jobs
3. Economic Infrastructure: approximately 18,780 jobs
4. Transportation: approximately 7,475 jobs
5. Tourism: approximately 6,949 jobs

Capital Investment by Sector (January-December 2024)

Total investment: $9.3 billion Top sectors receiving investment:

1. Manufacturing: approximately $2.19 billion
2. Agriculture: approximately $1.89 billion
3. Commercial Building: approximately $788.86 million
4. Transportation: approximately $706.39 million
5. Telecommunication: approximately $651.92 million

Foreign Direct Investment (FDI)

Top 5 Sources of FDI in 2024

1. China: $1,053.46 million
2. Vietnam: $783.4 million
3. Mauritius: $773.96 million
4. UAE: $702.52 million
5. United Kingdom: $394.30 million

Top 5 Sources of FDI in 2023

1. China: $2,111.41 million
2. India: $190.53 million
3. Singapore: $143.29 million
4. Hong Kong: $135 million
5. Germany: $131.25 million

Permits, Licenses and Approvals (2024 vs 2023)

The document shows a significant increase in permits, licenses, and approvals issued in 2024 compared to 2023, though the exact numbers aren't clearly visible in the document. The figure shows increases across multiple institutions including Immigration (residence permits), Labor Office (work permits), TRA (approved lists of exemptions), NIDA (legal identity card/NIN), TIC (certificate of incentives), and Ministry of Lands (derivative rights).

Top 10 Regional Distribution (by Capital Investment)

1. Dar es Salaam: 356 projects, 107,962 jobs, $4,440.97 million capital
2. Pwani: 166 projects, 49,784 jobs, $1,243.87 million capital
3. Ruvuma: 11 projects, 5,735 jobs, $597.64 million capital
4. Mwanza: 37 projects, 4,395 jobs, $581.11 million capital
5. Morogoro: 22 projects, 11,556 jobs, $446.17 million capital
6. Shinyanga: 16 projects, 1,121 jobs, $415.21 million capital
7. Arusha: 64 projects, 6,657 jobs, $213.06 million capital
8. Dodoma: 47 projects, 6,540 jobs, $182.36 million capital
9. Kigoma: 8 projects, 774 jobs, $155.62 million capital
10. Tanga: 23 projects, 1,315 jobs, $137.66 million capital

This analysis shows Tanzania's continued growth in investment across various sectors and regions, with significant increases in both domestic and foreign investments over the five-year period.

Trend Analysis of TIC Investment Projects (2020–2024):

1. Massive Growth in Investment Activity

• Project registrations rose 335% (from 207 to 901 projects).
• Strong surges in 2023 (+79%) and 2024 (+71%) especially indicate a sharp acceleration in interest.
• This suggests that Tanzania became a significantly more attractive investment destination over this period — possibly due to government reforms, better investment climate, infrastructure development, or global shifts.

2. Balanced Growth Between Domestic and Foreign Investments

• Domestic projects grew 402%, while foreign projects grew 399%.
• This shows that local investors are increasingly active, not just foreign investors — a positive signal of internal economic confidence and private sector development.

3. Joint Ventures Growing, But More Slowly

• Joint ventures increased 184%, slower compared to domestic and foreign projects.
• This may suggest a need to further encourage partnerships between Tanzanian and foreign investors.

4. Exceptional Job Creation

• Jobs created rose from 17,385 in 2020 to 212,293 in 2024 — a 1,121% increase.
• Shows investment projects are not just rising numerically, but also becoming larger and more labor-intensive, especially in sectors like commercial building and manufacturing.

5. Sharp Increase in Capital Investment

• Capital investment jumped from $1.1 billion to $9.3 billion (+745%).
• This signals larger-scale projects, and higher-value industries being targeted (not just quantity of projects but also quality/size).

6. Sectoral Insights

• Manufacturing is the top sector by project count and by capital investment ($2.19 billion).
• Commercial building dominates in job creation (125,760 jobs) but not necessarily in capital.
• Agriculture attracted the second-highest investment ($1.89 billion), reflecting efforts to modernize and commercialize the sector.
• Transportation and Telecommunications are emerging sectors — critical for logistics and digital economy growth.

7. Changes in Project Ownership Structure

• Foreign ownership increased slightly from 40.7% (2023) to 44.8% (2024).
• Domestic ownership also rose slightly, while joint ventures declined, suggesting investors may increasingly prefer to go solo rather than partner.

8. Foreign Direct Investment (FDI) Dynamics

• China remains the leading source of FDI in 2023 and 2024, though its FDI declined from $2.1 billion (2023) to $1.05 billion (2024).
• New strong entries in 2024 include Vietnam, Mauritius, and UAE — indicating diversification of Tanzania’s FDI sources.
• Shows shifting global investment patterns towards Tanzania.

9. Administrative Improvements

• A significant increase in permits, licenses, and approvals in 2024 suggests:
  • Greater activity and support from regulatory agencies.
  • Possibly better ease of doing business.
  • Tanzania’s institutions are responding to investment growth with better service delivery.

10. Regional Distribution

• Dar es Salaam and Pwani regions dominate in project number, job creation, and capital — but other regions like Ruvuma and Mwanza also attract significant investments.
• This suggests some beginning of investment decentralization, though still heavily urban/concentrated.

In Summary:

• Tanzania’s investment climate significantly improved from 2020–2024, characterized by:
  • Higher number, size, and diversity of projects.
  • Increased domestic investor participation.
  • Massive job creation.
  • Sectoral diversification.
  • Geographic spreading (still early but visible).
• Policy reforms, institutional strengthening, infrastructure improvements, and targeted promotion efforts likely played key roles.

Tanzania Investment Centre - Key Figures 2020-2024

Project Ownership Distribution (%)

Top 5 Sectors by Job Creation (2024)

Top 5 Sectors by Capital Investment (2024)

Top 5 Sources of FDI

Top 10 Regional Distribution (2024)

Macroeconomic Indicators (2024)