Tanzania’s National Development Plan for 2025/26 outlines strategic priorities to sustain economic growth, enhance infrastructure, and improve social services. With a projected GDP growth of 6.0%, the plan emphasizes industrialization, investment, agriculture, and public-private partnerships (PPP) to drive development. Key focus areas include energy expansion, transport modernization, job creation, and food security, ensuring a resilient and self-sufficient economy while preparing for Vision 2050.
Key Highlights and Figures:
1. Economic Performance (2024/2025)
2. Development Achievements (2019/20 – 2024/25)
| Indicator | 2019/20 | 2024/25 Target | Achievement (%) |
| Electricity Production (MW) | 1,602.32 | 3,077.96 | 63% |
| Villages Connected to Electricity | 8,587 | 12,318 | 100% |
| Water Service Coverage in Rural Areas (%) | 70.1% | 79.6% | 94% |
| Maternal Mortality (per 100,000 births) | 556 | 180 | 173% |
| Students Transitioning from Primary to Secondary (%) | 48% | 90% | 78% |
| Investment Projects Registered at TIC (per year) | 207 | 901 | 150% |
| Investment Value (USD Billion) | - | 8.501 | 104% |
| Food Self-Sufficiency (%) | 114% | 140% | 91% |
| Irrigated Agriculture Area (Hectares) | 694,715 | 983,466 | 82% |
| Number of Tourists | 1,035,687 | 4,244,266 | 85% |
| Tourism Revenue (USD Billion) | - | 6 | 68% |
3. Budget for 2025/26
4. Key Priority Areas for 2025/26
5. Major Government Plans
The plan aligns with Tanzania’s Vision 2025 and is part of the Third Five-Year National Development Plan (2021/22 – 2025/26). The government aims to complete ongoing projects while preparing for Vision 2050. The focus remains on sustaining economic growth, improving social services, and enhancing private sector involvement.
1. Economic Growth & Stability
2. Development Achievements (2019 – 2024/25)
The government has made significant progress in infrastructure, energy, agriculture, health, and education:
3. Budget Priorities for 2025/26
4. Key Priorities for 2025/26
5. Future Outlook
Introduction
Public-Private Partnerships (PPPs) are central to Tanzania’s strategy for achieving sustainable development and economic transformation. Through innovative financial models and collaboration, the government aims to address infrastructure, energy, and social challenges while leveraging private sector efficiency and capital. These partnerships are aligned with Tanzania’s Vision 2025, focusing on inclusivity and growth.
Development Budget and Cost-Sharing Model
From 2021/22 to 2024/25, Tanzania allocated 54.575 trillion TZS to development projects, with 33.794 trillion TZS sourced domestically. The government employs an 80-20 cost-sharing model, where 80% of project funding is contributed by the private sector, significantly reducing the government’s financial burden. This model not only minimizes upfront costs but also allocates risk, with the private sector absorbing potential project overruns.
The development plan is expected to create approximately 10,000 jobs, with 8,000 positions in the private sector. Moreover, it is anticipated to boost annual economic output by 1 trillion TZS, enhancing Tanzania’s position as a regional economic hub.
Major Projects and Their Impact
The Julius Nyerere Hydropower Project alone is projected to generate 31.725 billion TZS in annual revenue, showcasing the financial efficiency of PPP initiatives.
Comparative Insights from Africa
Tanzania’s PPP model mirrors successful regional practices. For instance, Kenya’s Nairobi Expressway, funded 80% by the private sector, has significantly reduced traffic congestion while generating $25 million in annual toll revenue. Similarly, Rwanda’s Kigali Innovation City has created 50,000 digital jobs, boosting the country’s tech ecosystem. Morocco’s Noor Solar Power Complex demonstrates the environmental benefits of PPPs, powering two million homes and reducing carbon emissions by 760,000 tons annually.
These examples highlight the potential for Tanzania to replicate such successes, particularly in renewable energy, transportation, and technology sectors.
Recommendations for Strengthening Tanzania’s PPPs
Conclusion
Tanzania’s strategic use of PPPs is transforming its economic landscape, fostering job creation, enhancing infrastructure, and improving access to essential services. Flagship projects like the Standard Gauge Railway and Julius Nyerere Hydropower Project underscore the potential of PPPs to drive economic growth and inclusivity. By addressing challenges such as regulatory gaps and expanding partnerships to sectors like healthcare and education, Tanzania can solidify its position as a regional leader in sustainable development.
Between 2015 and 2021, TANROADS has strategically increased infrastructure investments, focusing on high-value projects to drive Tanzania's economic growth. Over this period, the total investment reached 3,264.173 Billion TZS, with a peak average project value of 119.40 Billion TZS per project in 2019. In 2021, despite only 4 projects, the average remained high at 81.41 Billion TZS per project, emphasizing a shift toward impactful, large-scale infrastructure that strengthens national and regional connectivity.
2021
2020
2019
2018
2017
2016
2015 and Earlier
1. Investment Growth Over Time
2. Recent Trends (2020–2021)
3. Earlier Years (2015 and Before)
4. Long-Term Trends
| Rank | Project Name | Year | Contract Sum (Bil TZS) |
| 1 | J.P. Magufuli Bridge | 2019 | 592.609 |
| 2 | BRT Phase 2 Lot 1 | 2018 | 189.400 |
| 3 | LUSITU-MAWENGI LOT2 | 2016 | 159.217 |
| 4 | USESULE-KOMANGA LOT1 | 2017 | 158.800 |
| 5 | WIDENING OF MOROGORO ROAD (KIMARA –KIBAHA) | 2018 | 140.450 |
| 6 | KOMANGA KASINDE LOT2 | 2017 | 140.000 |
| 7 | KASINDE-MPANDA LOT3 | 2017 | 133.800 |
| 8 | LOT 2: IHUMWA DRY PORT – MATUMBULU – NALA SECTION | 2020 | 120.860 |
| 9 | LOT 1: NALA – VEYULA – MTUMBA – IHUMWA DRY PORT SECTION | 2020 | 100.840 |
| 10 | MORONGA-MAKETE LOT2 | 2017 | 110.446 |
To promote sustainable economic growth, Tanzania is increasingly leveraging Public-Private Partnerships (PPPs) to improve financial efficiency and boost investment in key sectors. Over the 2021/22 to 2024/25 fiscal years, Tanzania allocated a total of 54.575 trillion TZS to its development budget, with 33.794 trillion TZS sourced domestically. By implementing PPPs under an 80-20 cost-sharing model, the government aims to reduce its financial burden, enhance service delivery, create jobs, and increase revenue through private sector collaboration. This article explores the impact and strategic approach of PPPs in Tanzania’s economic development.
1. Development Budget Allocation and Funding Trends
Across four fiscal years, Tanzania’s development budget reveals a structured approach to funding large-scale infrastructure, energy, social services, and economic development projects. The allocation data highlights the prioritization of domestic financing over external funds, underscoring a commitment to fiscal responsibility and self-reliance.
| Fiscal Year | Total Development Budget (TZS Trillions) | Domestic Funding (TZS Trillions) | External Funding (TZS Trillions) |
| 2021/22 | 13.33 | 10.37 | 2.96 |
| 2022/23 | 15.00 | 12.31 | 2.70 |
| 2023/24 | 11.49 | N/A | N/A |
| 2024/25 | 14.755 | 11.114 | 3.640 |
| Total | 54.575 | 33.794 | 9.3 |
This budget structure, with over 60% sourced domestically, signals Tanzania’s shift towards utilizing internal revenue for growth, allowing foreign financing to focus on specific, large-scale projects.
2. Key Recurring Projects and Economic Impact
Tanzania’s development agenda targets large-scale projects in infrastructure, energy, social services, and economic development to achieve comprehensive growth.
3. Financing Strategies for Development
To finance these ambitious projects, Tanzania adopts a diversified approach, with the following methods:
4. Economic Benefits of Public-Private Partnerships (PPPs)
PPPs offer a unique model for maximizing resource utilization while minimizing financial risks to the government. The 80-20 cost-sharing model illustrates substantial economic benefits:
a) Cost Savings
Through PPPs, project costs are shared, reducing government expenditure. For instance:
b) Increased Investment and Economic Output
By leveraging PPPs, Tanzania’s 54.575 trillion TZS development budget could attract an estimated 43.66 trillion TZS from the private sector, enabling increased investments in other critical areas.
c) Risk Mitigation
With an 80% private sector contribution, the government’s risk exposure is substantially reduced. For example, in a 200 billion TZS project, a cost overrun of 30 billion TZS would mean the government only covers 6 billion TZS, transferring the remaining 24 billion TZS risk to private investors.
d) Enhanced Revenue Sharing
Infrastructure projects like the Julius Nyerere Hydropower Project can enhance revenue through efficient PPP implementation. With a 2,115 MW capacity, an estimated revenue of 10 million TZS per MW annually could see a 15% efficiency increase under PPPs, yielding an additional 31.725 billion TZS in revenue.
e) Job Creation and Economic Stimulation
PPPs can create approximately 10,000 jobs, injecting 10 billion TZS into the economy annually. This job creation benefits local economies and provides citizens with employment opportunities, improving livelihoods and increasing domestic consumption.
f) Long-term Economic Growth
By facilitating infrastructure development, PPPs can increase trade efficiency by 5%, which translates to a 1 trillion TZS boost in annual economic output. This growth benefits both the government and private sector through improved services and a broader tax base.
5. Strategic Advantages of PPPs for Tanzania’s Development Goals
The strategic implementation of Public-Private Partnerships in Tanzania is driving sustainable economic growth, enhancing service delivery, and creating employment opportunities. By balancing risk, leveraging private investment, and focusing on key sectors, Tanzania is building a resilient economy that benefits both the public and private sectors. Through continued collaboration, PPPs will play a crucial role in realizing Tanzania’s long-term development goals.
A Legacy of Collaboration and a Blueprint for the Future
By Dr. Bravious Kahyoza, PhD, Senior Economist at TICGL
Tanzania’s journey with Public-Private Partnerships (PPPs) is a compelling narrative of ambition, resilience, and progress. From visionary reforms to groundbreaking collaborations, the country has redefined how public and private sectors can unite to tackle critical challenges. At its core, this is a story of transformation, driven by innovation and a steadfast belief in the power of partnership to uplift a nation.
The Foundations of PPPs in Tanzania
The foundation for PPPs in Tanzania was laid during the administration of President Benjamin Mkapa, whose foresight underscored the importance of liberalization in achieving sustainable economic growth. Under his leadership, Tanzania embraced reforms that positioned the private sector as an engine of development. Mkapa’s vision was clear: the private sector is not a competitor but a development partner. This belief set the stage for deeper collaborations between the government and private entities in providing critical public services and infrastructure.
Building on this foundation, the government under Prime Minister Mizengo Pinda took decisive steps to institutionalize the PPP framework. In 2010, the Public-Private Partnership Act, Cap. 103 was enacted, establishing the PPP Coordination Unit and the PPP Finance Unit to analyze projects for technical and financial viability, respectively. Pinda championed the legislation, emphasizing the need for a structured system where the government and private sector could collaborate efficiently. However, implementation challenges soon became evident, necessitating further reforms.
Evolution and Reforms of the PPP Framework
By 2014, the government acknowledged these challenges and moved to amend the PPP Act, merging the two units into the PPP Centre, a centralized entity within the Office of the Prime Minister. This reform aimed to streamline decision-making processes and reduce bureaucratic hurdles. Economic experts like Prof. Lucian Msambichaka from the University of Dar es Salaam supported the change, noting that a fragmented approach could not thrive in a fast-paced economic environment. A single institution, he argued, would instill confidence among investors and guide the process more effectively.
Another pivotal reform came in 2018, when the PPP Centre was relocated to the Ministry of Finance and Planning to align its operations more closely with the country’s fiscal policies. Leaders like Prof. Kitila Mkumbo, Minister of Planning and Investment, advocated for the move, believing that integration with the finance ministry would ensure more effective resource mobilization aligned with national priorities.
Current Leadership and Progress
Today, the PPP Centre operates under the Ministry of Finance and Planning, led by David Zacharia Kafulila, a seasoned public administrator appointed as the Centre’s first Executive Director in January 2024. Under his leadership, Tanzania’s PPP agenda has been revitalized, leading to the initiation and acceleration of projects in critical sectors such as energy, transportation, and health. With a results-driven approach, Kafulila emphasizes that partnerships must deliver real outcomes. His leadership has drawn praise from President Samia Suluhu Hassan, who, in a national address, recognized the Centre’s transformation into a model of efficiency and innovation. Projects once stalled are now progressing, instilling a renewed sense of hope for the future.
Challenges and the Road Ahead
Yet, despite the progress, challenges remain. The late Prof. Honest Ngowi from Mzumbe University often highlighted the barriers hindering the full realization of PPPs in Tanzania. These include gaps in the legal and institutional framework, a need for more comprehensive feasibility studies, and improved risk-sharing mechanisms to better attract private-sector investment. As he put it, goodwill alone is not enough—the government must foster an environment where investors feel secure and respected.
The impact of faith-based organizations in sectors such as education, health, and water demonstrates the transformative power of partnerships. Their successes offer proof of concept, yet scaling these models to large infrastructure projects has proven difficult due to complex regulatory and financial dynamics.
Tanzania’s PPP progress has been bolstered by broader economic reforms. Investment as a percentage of GDP increased from 17.6 percent in 1995 to 26.3 percent in 2008, and by 2023, it stood at 40.25 percent—reflecting greater private sector participation. However, access to credit remains low by global standards, limiting the scope of private involvement in high-impact projects. Prof. Ngowi often emphasized the need for expanded access to long-term financing to support truly transformative initiatives.
Foreign Direct Investment has also seen positive growth, rising by 14.7 percent in 2023 to reach $1.65 billion, up from $1.44 billion the year before. This increase was largely driven by a surge in intercompany loans, which accounted for 43.1 percent of total FDI flows, compared to 8.7 percent in 2022. While these figures are promising, they remain modest when compared to global and regional benchmarks. Addressing bottlenecks in infrastructure and refining the regulatory environment will be crucial to attracting even more investment. Prof. Mkumbo has often stressed that without a supportive business environment, Tanzania risks falling behind in the global competition for capital.
A Look at Regional Success Stories
Valuable lessons can be drawn from other African countries that have implemented successful PPP models. South Africa’s Renewable Energy Independent Power Producer Procurement (REIPPP) program has attracted billions in investment by offering clear guidelines, competitive bidding, and consistent government commitment. Kenya’s Nairobi Expressway is another success story, showcasing the value of strategic partnerships that balance investor returns with public benefits.
These examples underline a central truth: effective PPPs depend on transparent processes, strong institutions, and clear policy frameworks that inspire investor confidence while safeguarding public interest.
The Future of PPPs in Tanzania
As Tanzania moves toward realizing its Vision 2025 development agenda, the role of PPPs will only grow more critical. The government recognizes that bridging financial and technical resource gaps will require active participation from the private sector. Kafulila maintains that PPPs are not just a financing mechanism—they are a strategy for delivering better services and spurring economic growth. His balanced approach blends private-sector innovation with public oversight to ensure lasting benefits for all citizens.
The legacy of PPPs in Tanzania reflects decades of deliberate policy choices and courageous leadership—from President Mkapa’s economic liberalization to Prime Minister Pinda’s legal reforms and the insights of economists like Prof. Msambichaka and Prof. Ngowi. Today, that legacy is being shaped further by a new generation of leaders and partners.
With strong leadership, coherent policies, and a shared national vision, Tanzania is well-positioned to unlock the full potential of Public-Private Partnerships—building a future defined by inclusive development, modern infrastructure, and sustained prosperity.
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.
Authored by Dr. Bravious Felix Kahyoza PhD, FMVA, CP3P (braviouskahyoza5@gmail.com)
This discussion paper introduces a comprehensive Public Relations (PR) framework designed to enhance the performance and legitimacy of Public-Private Partnerships (PPPs) in Tanzania’s infrastructure development. It emphasizes the critical role of strategic communication in building public trust, improving stakeholder participation, and aligning PPP operations with Tanzania’s Vision 2025 and the Five-Year Development Plan (FYDP III).
As Tanzania faces an annual infrastructure financing shortfall of USD 1.7 billion, PPPs have emerged as essential tools for bridging resource gaps and mobilizing private sector expertise. However, challenges such as limited awareness, skepticism, and inconsistent communication have hindered PPP adoption. The proposed PR framework aims to overcome these barriers by institutionalizing transparency, participatory engagement, and digital communication mechanisms through the PPP Centre.
Key Findings
Low Awareness and Mistrust Hampering PPP Success
Public understanding of PPPs remains limited, particularly in rural areas, where misinformation and skepticism are widespread. The study projects that a targeted PR strategy could increase awareness by 50% and public trust by 30% within 18 months, promoting more inclusive participation.
Strategic Communication as a Policy Enabler
Evidence from African case studies shows that PR-driven communication enhances stakeholder cooperation. Countries like Kenya and South Africa recorded 25% higher investment inflows and 20% fewer project disputes after embedding PR practices into PPP governance.
Integrated Framework for Tanzania’s PPP Centre
The proposed PR framework includes:
Capacity and Impact Metrics
The framework targets training 1,000 officials, creating five university-based knowledge hubs, and engaging 20 new private firms within 18 months. With effective implementation, these interventions could generate USD 500 million in new private investment and 10,000 jobs, significantly narrowing the infrastructure financing gap.
Policy Implications
The PR framework transforms communication from a passive function into a strategic policy instrument—a prerequisite for achieving sustainable PPP outcomes. Policymakers are urged to:
By adopting this framework, Tanzania can reposition its PPP Centre as a model of strategic governance, leveraging public trust and private innovation to accelerate infrastructure development sustainably.
Conclusion
Strategic public relations represent a new frontier in Tanzania’s infrastructure policy. Beyond awareness, the framework fosters dialogue, accountability, and partnership synergy—the foundations of resilient PPP ecosystems. If implemented, this approach could catalyze inclusive growth, attract foreign direct investment, and create a collaborative public-private culture essential for long-term national development.
Read the Full Paper:
“Developing a Strategic Public Relations Framework for Sustainable Infrastructure Development”
Published by TICGL | Economic Research Centre