Insights from Tanzania Investment and Consultant Group Ltd (TICGL)

By Amran Bhuzohera, Economist – TICGL

As Tanzania moves confidently toward its Vision 2050 goals, we stand at a defining moment in our nation’s economic journey. Across the country, the energy for progress is visible — from infrastructure expansion and industrial growth to innovations in agriculture and digital transformation. Yet, unlocking the full potential of these business and investment opportunities requires a clear understanding of our local markets, institutional frameworks, and the dynamics that drive both public and private investment.

At TICGL, this is exactly what we do.

Understanding the Market, Guiding Investment

As an Economist at TICGL, We have seen first-hand how data-driven insights can turn ambitious ideas into sustainable investments. TICGL is more than a consulting firm — we are a bridge between economic knowledge and strategic action. Our work helps investors, policymakers, and entrepreneurs navigate Tanzania’s evolving investment environment with clarity and confidence.

We combine local expertise with global standards to provide our clients with evidence-based analysis, advisory support, and market intelligence. Our mission is simple: to empower decisions that create value, jobs, and long-term growth for Tanzania.

Our Core Focus Areas

At TICGL, our services are designed to serve the entire investment ecosystem:

• Economic and Policy Research: We analyze sectors, markets, and policy trends to provide practical insights that shape investment strategies and public reforms.
• Investment Advisory and Facilitation: We help investors identify viable projects, conduct due diligence, and navigate regulatory processes to ensure smooth market entry and partnership building.
• Public–Private Partnerships (PPPs): We support government agencies, LGAs, and private sector partners in structuring, negotiating, and managing PPP projects aligned with national development priorities.
• Business Consulting and Market Support: We offer advisory services for SMEs and large investors, helping them understand taxation, compliance, and business climate challenges in Tanzania.

Introducing the Tanzania Investment Portfolio

One of our most exciting initiatives is the Tanzania Investment Portfolio (TIP) — a comprehensive compilation of both public and private investment projects, as well as PPP initiatives from across the country.

This portfolio showcases over 100 investment and business opportunities across sectors such as energy, agriculture, tourism, transport, manufacturing, mining, real estate, and technology. It highlights Tanzania’s diverse economic potential and the unique local advantages that make each project both viable and impactful.

More importantly, the TIP is built to help investors understand Tanzania from the inside out — its policies, institutions, and emerging market realities.

Why Tanzania, Why Now

Tanzania’s steady growth, political stability, and demographic momentum make it one of Africa’s most promising investment frontiers. By 2050, with a projected population of over 114 million, our domestic market will be one of the largest in the region.

At TICGL, we believe that informed investment is the key to unlocking this potential — turning opportunities into industries, and industries into livelihoods. Through our research and advisory work, we continue to connect vision with opportunity, and ideas with action.

A Call to Collaborate

We invite investors, development partners, and business leaders to engage with TICGL and explore the Tanzania Investment Portfolio. Together, we can shape an investment environment that is inclusive, data-driven, and globally competitive — one that reflects Tanzania’s growing confidence on the continental and international stage.

Connect with TICGL

📍 Head Office: Dar es Salaam, Tanzania
🌐 Website: www.ticgl.com
📧 Email: economist@ticgl.com
📞 Phone: +255 768 699 002

Economic Stability, Resilience, and Growth Momentum

By Amran Bhuzohera

Tanzania’s economy in 2025 continues to display strong resilience amid a complex post-election environment and global uncertainties. Data from the Bank of Tanzania (BoT) and National Bureau of Statistics (NBS) highlight a broadly stable macroeconomic landscape marked by low inflation, steady currency appreciation, manageable public debt, and rising foreign investment flows. The combination of policy discipline, export recovery, and domestic demand expansion positions Tanzania as one of East Africa’s most stable economies heading into 2026.

1. Inflation: Controlled and Predictable

Headline inflation remained within the 3–5% target range, rising slightly to 3.5% in October 2025 from 3.4% the previous month. The modest uptick reflects higher food prices (7.4%) partially offset by declining fuel and energy costs (–1.4% monthly).

Key takeaway: Inflation stability preserves purchasing power and encourages investor confidence. Food inflation remains a challenge, particularly for low-income households, but easing monthly trends suggest temporary relief.

2. Exchange Rate and External Sector: Strong Shilling, Narrowing Deficit

The Tanzanian shilling appreciated 9.4% year-on-year to an average of TZS 2,471.69/USD in September 2025, reversing the 10.1% depreciation of 2024. This reflects robust export performance—especially gold, cashews, and cereals—and increasing tourism earnings.

Key takeaway: Currency strength has improved debt servicing capacity and dampened imported inflation, anchoring macroeconomic stability.

3. Public Debt: Sustainable and Development-Focused

Tanzania’s total national debt stood at TZS 127.47 trillion (USD 50.77 billion) as of September 2025, with external debt accounting for 70.6%. The debt composition remains largely concessional and directed toward infrastructure, energy, and social services.

Key takeaway: Debt levels are sustainable and aligned with regional thresholds. An appreciating shilling reduces repayment costs for USD-denominated debt, though diversification of borrowing remains essential.

4. Fiscal and Monetary Position: Discipline Anchored in Stability

Fiscal operations show a TZS 618.5 billion deficit, financed mainly through domestic bonds and concessional loans. Revenue performance reached 87.2% of target while expenditure execution stood at 71.9%. The BoT policy rate remained at 6.0%, supporting 12% private sector credit growth.

Key takeaway: Fiscal discipline, supported by strong domestic debt markets, has preserved macroeconomic credibility without crowding out private credit.

5. Sectoral Outlook: Growth Catalysts Emerging

The 2025 outlook projects GDP growth between 5.5% and 6.5%, supported by agriculture, tourism, and manufacturing. Infrastructure investment and digital transformation remain key growth levers under the FYDP III framework.

Key takeaway: Structural investments in transport, power, and agriculture will sustain growth momentum into 2026, while diversification remains essential to shield against external shocks.

6. Zanzibar: Parallel Progress

Zanzibar’s economy mirrors mainland stability, posting 3.5% inflation and a USD 836.6 million current account surplus (+34.7%), driven by tourism (+28.2% arrivals). Fiscal discipline and service exports remain key strengths.

Conclusion

Tanzania’s 2025 economic story is one of stability amid transition. Inflation remains low, the shilling is strong, and debt sustainability is intact. However, persistent food inflation and USD exposure warrant close monitoring. Continued structural reforms, SME incentives, and agricultural modernization under the FYDP III will determine whether Tanzania sustains its 6%+ growth trajectory and advances toward upper-middle-income status by 2030.

In June 2025, Tanzania’s government securities market demonstrated strong investor confidence, with TZS 1.23 trillion in bids received for Treasury bonds—nearly double the TZS 638.7 billion on offer—indicating a 93% oversubscription rate. The BoT selectively accepted TZS 322.4 billion to manage borrowing costs, with yields of 14.50% for 20-year bonds and 14.80% for 25-year bonds, reflecting inflation expectations and long-term risk premiums. Notably, no Treasury bills were issued, signaling the government’s strong cash position and preference for long-term financing. Meanwhile, the interbank cash market (IBCM) remained active and stable, with TZS 2.87 trillion in transactions—up 125% year-on-year—and a marginally lower average rate of 7.93%, indicating healthy liquidity and effective monetary policy transmission by the BoT.

Government Securities Market and the Interbank Cash Market June

1. Government Securities Market

The Government Securities Market in Tanzania serves as a cornerstone for domestic financing, allowing the government to raise funds for budgetary needs while providing investors with secure, long-term investment opportunities. The market primarily consists of Treasury bonds (long-term securities) and Treasury bills (short-term securities). In June 2025, the market dynamics reflected strategic fiscal management and strong investor confidence.

Treasury Bonds

Treasury bonds are long-term debt instruments issued by the Bank of Tanzania (BoT) on behalf of the government to finance fiscal deficits and infrastructure projects. The bonds are typically offered with maturities ranging from 2 to 25 years, and their yields are influenced by market demand, inflation expectations, and monetary policy conditions.

• June 2025 Auctions:
  • The BoT conducted auctions for 20-year and 25-year Treasury bonds, reflecting a focus on long-term financing to support infrastructure and development projects under the FY 2024/25 budget.
  • Total tenders received: TZS 1,232.9 billion, indicating robust investor interest.
  • Accepted bids: TZS 322.4 billion, showing selective acceptance to manage borrowing costs and align with fiscal targets.
  • Amount offered: TZS 638.7 billion, meaning the auctions were oversubscribed (tenders exceeded the offered amount by approximately 93%). This oversubscription highlights strong investor confidence in Tanzania’s fiscal stability and the attractiveness of long-term government securities.
  • Yields:
    • 20-year bond: 14.50%, reflecting a competitive return for long-term investors amid prevailing economic conditions.
    • 25-year bond: 14.80%, slightly higher due to the longer maturity and associated risks, such as inflation and interest rate volatility over an extended period.
• Context and Insights:
  • The high oversubscription rate suggests that institutional investors, such as pension funds, insurance companies, and commercial banks, view Treasury bonds as safe and lucrative investments. This is likely driven by Tanzania’s stable macroeconomic environment and the BoT’s credible monetary policy framework.
  • The yields (14.50% for 20-year and 14.80% for 25-year bonds) are elevated compared to shorter-term securities, reflecting the term premium demanded by investors for locking in funds over extended periods. These yields also align with Tanzania’s inflation trends and the BoT’s efforts to balance borrowing costs with investor expectations.
  • The focus on long-term bonds indicates a strategic shift toward financing projects with longer gestation periods, such as infrastructure development, which is critical for Tanzania’s economic growth targets under its Development Vision 2025.

Treasury Bills

Treasury bills are short-term securities (typically with maturities of 35, 91, 182, or 364 days) used to manage short-term liquidity needs of the government. Unlike Treasury bonds, no auctions for Treasury bills were held in June 2025.

• Reason for No Auctions:
  • The domestic financing requirement for FY 2024/25 had already been met by June 2025, likely due to successful bond auctions earlier in the fiscal year and prudent fiscal management.
  • This absence reflects confidence in the government’s cash flow position, reducing the need for short-term borrowing. It also suggests that the government prioritized long-term financing through bonds to avoid frequent rollovers associated with short-term bills.
• Context and Insights:
  • The lack of Treasury bill auctions could indicate that the government met its short-term financing needs through other sources, such as revenue collection or external financing (e.g., concessional loans or grants).
  • By avoiding short-term borrowing, the BoT may be aiming to reduce refinancing risks and stabilize the yield curve, focusing on longer-term securities to lock in funding at predictable rates.

2. Interbank Cash Market (IBCM)

The Interbank Cash Market (IBCM) is a critical component of Tanzania’s financial system, enabling banks to lend and borrow short-term funds to manage liquidity. It supports monetary policy transmission by ensuring banks have access to liquidity, which influences credit availability and economic activity.

Transactions

• Turnover in June 2025: TZS 2,873.9 billion, a significant volume but lower than TZS 3,267 billion in May 2025 (a decrease of approximately 12%). However, it was substantially higher than TZS 1,277.6 billion in June 2024 (a year-on-year increase of 125%).
• Dominant Trades:
  • Overnight placements: Accounted for 37.3% of total volume, reflecting banks’ preference for ultra-short-term liquidity management to meet immediate cash flow needs.
  • 7-day tenors: Contributed 26.5% of total volume, indicating demand for slightly longer liquidity buffers, likely to manage weekly operational cycles.
• Context and Insights:
  • The high turnover (TZS 2,873.9 billion) underscores a vibrant interbank market, where banks actively manage liquidity surpluses and deficits. The year-on-year increase from June 2024 suggests growing confidence in the banking sector and increased economic activity.
  • The slight decline from May 2025 could be attributed to seasonal factors, such as reduced liquidity needs at the end of the fiscal year, or banks adjusting their portfolios after meeting reserve requirements.
  • The dominance of overnight and 7-day tenors reflects a cautious approach by banks, prioritizing flexibility in a dynamic economic environment. These short tenors are typical in markets with stable but fluctuating liquidity conditions.

Interest Rates

• Overall IBCM rate:
  • June 2025: 7.93%
  • May 2025: 7.98%
• The marginal decline (0.05 percentage points) indicates a stable liquidity environment, with banks able to access funds at slightly lower costs.
• Context and Insights:
  • The IBCM interest rate is influenced by the BoT’s monetary policy stance, particularly the Central Bank Rate (CBR), which was likely maintained at a level to ensure price stability and support economic growth.
  • The slight decline in the IBCM rate suggests adequate liquidity in the banking system, reducing competition for interbank funds. This aligns with the BoT’s efforts to maintain a balanced monetary policy, ensuring liquidity without triggering inflationary pressures.
  • The rate of 7.93% is relatively low compared to Treasury bond yields (14.50%–14.80%), reflecting the lower risk and shorter duration of interbank transactions compared to long-term government securities.

Summary Table

Insights and Broader Implications

1. Robust Demand for Government Securities:
   • The oversubscription of Treasury bond auctions (TZS 1,232.9 billion in tenders vs. TZS 638.7 billion offered) reflects strong investor confidence in Tanzania’s fiscal and monetary policy framework. This demand is likely driven by institutional investors seeking stable, high-yield assets amid global economic uncertainties.
   • The high yields (14.50% for 20-year and 14.80% for 25-year bonds) indicate that investors are pricing in inflation risks and long-term uncertainties, but the oversubscription suggests these yields are competitive compared to alternative investments.
2. Fiscal Prudence in Treasury Bill Strategy:
   • The absence of Treasury bill auctions in June 2025 signals that the government has effectively managed its short-term financing needs, possibly through higher-than-expected revenue collection or earlier borrowing. This reduces rollover risks and borrowing costs, contributing to fiscal sustainability.
   • The focus on long-term bonds aligns with Tanzania’s development agenda, prioritizing investments in infrastructure and other capital-intensive projects.
3. Healthy Interbank Market:
   • The IBCM’s high turnover (TZS 2,873.9 billion) and stable interest rates (7.93%) indicate a well-functioning banking system with adequate liquidity. The dominance of overnight and 7-day tenors suggests banks are managing liquidity efficiently, balancing short-term needs with operational flexibility.
   • The slight decline in IBCM rates from May to June 2025 reflects a stable monetary environment, supported by the BoT’s effective liquidity management tools, such as open market operations and reserve requirements.
4. Monetary Policy Transmission:
   • The active IBCM and stable interest rates facilitate the transmission of the BoT’s monetary policy, ensuring that changes in the policy rate (e.g., CBR) influence lending and borrowing behavior across the economy.
   • The high turnover in the IBCM compared to June 2024 (125% increase) suggests growing economic activity and banking sector confidence, which supports credit creation and private sector growth.
5. Economic Context:
   • Tanzania’s financial markets are operating in a context of steady economic growth, with the BoT projecting GDP growth of around 5.5%–6% for 2025, driven by sectors like agriculture, mining, and infrastructure.
   • Inflation remains a key consideration, with the BoT targeting a range of 3%–5%. The high bond yields and stable IBCM rates suggest that inflationary pressures are manageable but warrant close monitoring.

Tanzania is experiencing an unprecedented surge in Foreign Direct Investment (FDI), positioning itself as East Africa’s premier investment hub. With a strong policy and infrastructure reform agenda, Tanzania is not only attracting capital but also creating jobs, transferring technology, and reducing poverty in line with its Vision 2050 of achieving a USD 1 trillion economy.

Key Trends and Performance (2023–Q3 2024/25)

• FDI Growth: FDI increased from USD 1.3–1.6 billion in 2023 to USD 6.56 billion in 2024, representing a more than 400% jump. In Q3 of 2024/25 alone, Tanzania attracted USD 1.36 billion.
• Projects & Jobs: In 2024, 901 projects were registered with a total capital of USD 9.31 billion, creating 212,293 jobs, the highest since 1991. In Q3 2024/25 alone, 24,444 jobs were created.
• GDP Growth: FDI-driven growth led to a GDP increase from 5.3% in 2023 to 5.5% in 2024, with a projection of 8% by 2030.

Main FDI Sectors

1. Manufacturing – Led all sectors with 377 projects valued at USD 3.1 billion in 2023 alone.
2. Transport & Infrastructure – Contributed over USD 1.2 billion.
3. Agriculture – Projected to attract USD 2 billion in agro-processing FDI by 2030.
4. Renewable Energy – With USD 3 billion projected by 2030, including strategic projects like the Julius Nyerere Hydropower Plant.
5. Real Estate – Driven by policy changes allowing 99-year leases, it attracted USD 185.54 million in Q3 2024/25 from UAE investors.

Policy and Institutional Reforms

• TISEZA Act 2025: Merged TIC and EPZA, introduced a USD 50 million threshold for strategic projects, expedited permits, and established a national land bank.
• National Land Policy 2023: Enabled long-term lease access to land for foreign investors.
• Tanzania Electronic Investment Window (TeIW): Reduced investment registration times from 60 to 30 days.
• One Stop Facilitation Centre (PISC): Supports 80% of investors, easing FDI logistics.

Challenges Still to Address

• Infrastructure Gaps: Only 45% of Tanzanians had electricity access in 2023, hindering scalability of SEZs.
• Land Disputes: Affect around 20% of investment projects, especially in rural zones.
• Bureaucratic Inefficiencies: 15% of FDI projects experienced delays due to poor inter-ministerial coordination.
• Foreign Exchange Shortages and regional disparities persist, particularly in Nyasa Zone.

2025–2030 Strategic Goals

• USD 15 billion in annual FDI by 2030.
• 1 million jobs created by 2030.
• USD 5 billion in infrastructure investment: 20,000 km of roads and 10,000 MW energy capacity.
• 50% of FDI projects to be joint ventures.
• 95% of all FDI applications processed digitally via TeIW.
• USD 1 billion directed to underserved regions like Nyasa Zone.

Inclusive and Sustainable Growth

Programs like Vikapu Bomba (training 5,000 women in 2024 and targeting 50,000 by 2030) and SEZs like Kibaha Textile Park (projected 38,400 jobs) emphasize inclusive development. FDI also aligns with SDG 8 (Decent Work) and SDG 13 (Climate Action) by promoting green energy and equitable employment.

Conclusion

Tanzania’s FDI trajectory showcases how robust policy, sectoral strategy, and institutional reform can unlock transformative economic growth. By addressing remaining gaps and promoting equity, Tanzania is on course to become a regional economic powerhouse by 2030.

Tanzania’s investment landscape experienced remarkable growth between 2023 and 2024. The number of registered investment projects surged by 71%, from 526 projects in 2023 to 901 projects in 2024. This expansion was accompanied by a significant rise in committed capital investments, which grew by 62.8%, increasing from $5.72 billion in 2023 to $9.31 billion in 2024. In addition, employment opportunities linked to these investments rose sharply, with 212,293 jobs created in 2024, compared to 137,010 jobs in 2023—an increase of approximately 55%. This upward trend reflects strong investor confidence and supportive government policies, as shown by the rising number of permits and approvals issued: work permits grew by 40.8%, Certificates of Incentives by 71.3%, and land rights approvals by 22.2%. Despite a slight decrease in residence permits (-11.4%) and TRA-approved exemptions (-11.9%), the overall environment signals a robust and broad-based investment expansion in Tanzania.

Investment-Related Permits, Licenses, and Approvals: Tanzania 2023 vs 2024

1. Overall Growth in Investment Projects

• 2023: 526 projects
• 2024: 901 projects
• Increase: +375 projects
• Growth Rate: +71.3%

This 71% increase in investment projects explains why permit and approval activities also expanded.

2. Permits and Approvals Breakdown

3. Detailed Explanation

Immigration (Residence Permits)

• Decrease: From 5,540 (2023) to 4,908 (2024)
• Why decrease?
  • Possibly stricter immigration rules or a shift towards local employment (hence, fewer expatriate residence permits).

Labour Office (Work Permits)

• Increase: From 5,272 to 7,425 permits
• Reason:
  • Reflects more foreign professionals being hired due to investment project expansions.
  • +40.8% growth shows demand for skilled foreign workers.

TRA (Tax Exemptions Approved)

• Decrease: From 268 to 236 approvals
• Reason:
  • Possible tightening of exemption policies to protect tax revenues.
  • Shows slight decline of -11.9%.

NIDA (Legal Identity Cards/NIN)

• Increase: From 387 to 457 cards
• Meaning:
  • More legal identification activities linked to newly registered workers and businesses.
  • +18.1% increase.

TIC (Certificates of Incentives)

• Massive Increase: From 526 to 901 certificates
• Meaning:
  • Directly matches the 71% jump in investment projects.
  • Reflects strong government support through fiscal/tax incentives to investors.

Ministry of Lands (Derivative Rights)

• Increase: From 54 to 66 approvals
• Meaning:
  • More investors are acquiring land rights for their projects (factories, offices, farms, etc.).
  • +22.2% growth.

4. Other Major Impacts Related to the Growth

• Jobs: An additional 75,283 jobs created in 2024.
• Capital: An additional $3.59 billion invested.

Key Takeaways:

• Strong increases in permits for work, incentives, and land rights support the surge in new investments.
• Work permits (+40.8%) and Certificates of Incentives (+71.3%) are especially notable.
• Residence permits (-11.4%) and TRA exemptions (-11.9%) slightly declined, reflecting more selective approvals.
• Overall investment environment is expanding rapidly, leading to more capital, more projects, and more employment opportunities in Tanzania.

Trend on Tanzania’s Investment Growth (Based on Permits, Projects, Capital, and Jobs Data)

1. Strong Positive Growth Trend

• Projects increased by 71%.
• Capital investment increased by 62.8%.
• Jobs created increased by 55%.

This shows that investment is expanding strongly across all important dimensions:
more projects, more money coming in, and more jobs being created.

2. Administrative Efficiency and Policy Support

• Certificates of Incentives from TIC grew by 71.3%, exactly matching the project growth.
• This suggests that Tanzania's government (through TIC and other agencies) is working actively to:
  • Attract investors
  • Process approvals faster
  • Offer incentives to stimulate investment

Policy and administrative support are aligning well with investment growth needs.

3. Higher Demand for Labor (Local and Foreign)

• Work permits rose by 40.8%, indicating:
  • Higher demand for foreign technical experts
  • More foreign companies bringing specialists to Tanzania
• Meanwhile, local hiring is also rising as shown by the 212,293 new jobs created.

Investment is creating employment opportunities both for Tanzanians and expatriates.

4. More Demand for Land and Legal Compliance

• Derivative rights (land ownership rights) approvals increased by 22.2%.
• NIDA ID cards increased by 18.1%.

This shows that investors are securing land for long-term operations and formalizing their presence legally (getting IDs/NINs for employees).

5. Selective Tightening in Some Areas

• Residence permits (-11.4%) and TRA exemption approvals (-11.9%) dropped.
• This could mean:
  • The government is being more selective in approving tax exemptions and permanent residence.
  • Encouraging local hiring and domestic value creation instead of over-depending on expatriates and incentives.

Tanzania is balancing growth with better controls to maximize local economic benefits.

🔵 Summary of the Trend

✅ Tanzania’s investment environment is growing strongly and broadly.
✅ Government facilitation and private sector response are in sync.
✅ Investments are leading to real economy benefits: more jobs, more money, more businesses.
✅ The country is carefully managing some parts (like residence permits and tax exemptions) to safeguard national interests.
Tanzania is solidifying itself as a growing investment destination in 2024 with sustainable, job-creating, and capital-attracting growth trends.