The TISEZA Quarterly Investment Bulletin for April–June 2025 highlights a robust surge in investment activity, marking the transitional period before full integration under the new Tanzania Investment and Special Economic Zones Authority (TISEZA). With 285 total projects (250 under the former Tanzania Investment Centre (TIC) and 8 under the Export Processing Zones Authority (EPZA)), these initiatives are projected to create 44,499 jobs and attract $3.61 billion in capital—reflecting a combined 28% increase in projects, a 105% rise in capital, and significant reinvestment momentum compared to Q2 2024. This performance underscores Tanzania's positioning as Africa's emerging manufacturing hub, driven by reforms like the TISEZA Act No. 6 of 2025, which streamlines incentives, reduces bureaucratic overlaps, and enhances Special Economic Zones (SEZs) for export-oriented growth.

Tanzania Investment Performance – April to June 2025

Regional Investment Distribution (TIC Projects)

Sectoral Highlights

EPZA Regional Breakdown

Key Takeaways

• Total 285 projects worth USD 3.6 billion, creating nearly 45,000 jobs.
• Manufacturing and Agriculture remain the largest investment drivers.
• Pwani and Dar es Salaam lead in regional distribution (over 50% of all projects).
• Expansion projects surged sharply, showing strong reinvestment trends.
• Foreign Direct Investment (FDI) accounted for ~79% of total capital under TIC.

Overview of Tanzania's Q2 2025 Investment Performance

Key Metrics from the Bulletin

Total Investment Summary

• FDI Dominance: Foreign Direct Investment (FDI) comprised ~79% of TIC capital ($2.54 billion), with top sources including the UAE, India, and China—highlighting Tanzania's appeal to global players in manufacturing and infrastructure.
• Sectoral Breakdown (TIC + EPZA Combined): Manufacturing led with 113 projects ($1.58 billion, 17,240 jobs), followed by agriculture (25 projects, $961.5 million, but an outsized 76,023 jobs due to labor-intensive agro-processing). Transportation (28 projects, $688 million) and tourism (22 projects, $252 million) rounded out key drivers, promoting diversification beyond mining.

Regional Distribution

Investments are concentrated in coastal and northern regions, supporting urban-rural linkages:

TIC Projects:

EPZA Projects:

Pwani and Dar es Salaam accounted for over 50% of projects, leveraging port access for exports, while inland regions like Kagera show emerging potential in mining and agro-zones.

Implications for Tanzania's Economic Development

This Q2 performance is a pivotal indicator of Tanzania's structural shift toward sustainable, inclusive growth under Vision 2050, which aims for middle-income status by emphasizing industrialization, job creation, and export-led development. The implications span macroeconomic stability, sectoral transformation, and social equity, amplified by TISEZA's unified framework that offers incentives like 10-year corporate tax holidays for export projects and 24-hour building permits.

1. Boost to GDP Growth and Fiscal Revenue

• The $3.61 billion capital injection represents ~1.5–2% of Tanzania's projected 2025 GDP (estimated at $85–90 billion by the IMF), directly fueling expansion in high-value sectors. Manufacturing investments ($1.58 billion) align with the second phase of the National Blueprint for Business and Investment Climate Reform, targeting 8% annual manufacturing growth to reduce import dependency.
• Export and Revenue Impact: EPZA's 1,287% capital surge signals accelerated SEZ development (e.g., Bagamoyo and Mkata zones), potentially increasing non-traditional exports by 15–20% in 2025, per World Bank forecasts. This could add $500–700 million in annual tax revenues through VAT exemptions on raw materials and withholding tax relief, stabilizing fiscal deficits (projected at 3.5% of GDP).
• Broader Context: Tanzania's FDI inflows hit $1.2 billion in H1 2025 (up 45% YoY), per UNCTAD data, positioning it as East Africa's top FDI recipient and supporting infrastructure like the Standard Gauge Railway (SGR) extensions.

2. Employment Generation and Poverty Reduction

• Nearly 45,000 jobs from these projects address youth unemployment (at 13.5% nationally in 2025) and could lower the overall rate by 0.5–1% if realized, especially in labor-intensive agriculture (76,023 projected jobs despite fewer projects). Expansion projects' 962% job growth highlights reinvestment in skills training, aligning with SDG 8 on decent work.
• Inclusive Growth: Women-led initiatives and SMEs received targeted promotion, with aftercare services reaching 883 engagements. This fosters entrepreneurship in tourism and agro-processing, potentially lifting 100,000+ households out of poverty by enhancing rural incomes—vital as 65% of Tanzanians rely on agriculture.
• Internet Insight: A 2025 African Development Bank report notes that such job creation in SEZs could multiply to 150,000 indirect roles via supply chains, reducing urban migration pressures.

3. Sectoral Diversification and Industrialization

• Manufacturing as a Hub: With 113 projects, Tanzania is on track to capture 10% of Africa's $1 trillion manufacturing market by 2030, per UNIDO estimates. Incentives like duty-free plant imports under TISEZA will boost value addition in textiles and electronics, reducing the trade deficit (currently $5 billion).
• Agriculture and Tourism Synergies: $961.5 million in agribusiness (e.g., tomato processing and wineries) enhances food security and exports to EAC/SADC markets. Tourism's $252 million supports 2,200 jobs, leveraging post-COVID recovery to hit 2 million visitors in 2025.
• Sustainability Angle: Forestry and mining projects under EPZA emphasize eco-friendly practices, aligning with green growth goals and attracting ESG-focused FDI.

4. Regional Balanced Development and Infrastructure

• Coastal dominance (Dar es Salaam/Pwani: 150 projects) strengthens logistics hubs, but inland investments (e.g., Kagera's $598 million copper project) promote decentralization, reducing regional disparities (Gini coefficient ~0.38).
• Infrastructure Spillover: Transportation investments ($688 million) will enhance connectivity, cutting logistics costs by 20% and enabling AfCFTA integration—projected to add $2.5 billion to exports by 2027.
• Challenge and Opportunity: While urban bias persists, TISEZA's land bank and SEZ marketing (e.g., 11 outbound missions) could distribute 30% more projects to underserved regions by year-end.

5. Long-Term Reforms and Investor Confidence

• TISEZA's "one-stop" model (delivering 20 focus groups and thousands of permits) has slashed registration times to under 24 hours, boosting ease-of-doing-business rankings (from 156th in 2024 to ~140th projected for 2026 by World Bank).
• Risks and Mitigations: High growth (99% capital surge) risks inflation (at 4.2% in 2025), but digitalization and SME support in the reform blueprint mitigate this. The 437% reinvestment rise signals sustained confidence, with PPPs in SEZs unlocking $10 billion more by 2030.

In summary, Q2 2025's investments propel Tanzania toward a 7%+ GDP trajectory by 2030, fostering inclusive industrialization while addressing unemployment and inequality. TISEZA's reforms are transformative, turning potential into prosperity—inviting global partners to co-create this momentum. For deeper dives, TISEZA's full bulletin offers project spotlights like the Changube Copper initiative.

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.

Authored by Dr. Bravious Felix Kahyoza PhD, FMVA, CP3P (braviouskahyoza5@gmail.com)

This discussion paper examines the evolution and strategic significance of Tanzania’s economic engagement with China, focusing on investment flows, bilateral cooperation under the Forum on China-Africa Cooperation (FOCAC), and opportunities emerging from the Belt and Road Initiative (BRI). The analysis underscores Tanzania’s transformation into one of the most attractive investment destinations for Chinese enterprises in Africa—anchored on stability, strategic location, and pro-business reforms.

Over the past two decades, China has invested over USD 11.5 billion across 1,360 projects, creating more than 155,000 jobs in Tanzania. This partnership continues to evolve from infrastructure diplomacy toward sustainable industrialization and inclusive growth—reflecting both nations’ commitment to mutual benefit and balanced development.

Key Findings

🇨🇳 Historical Foundations, Modern Convergence
Tanzania-China relations date back to 1964, built on South–South solidarity and anti-colonial cooperation. Landmark projects like the TAZARA Railway in the 1970s laid the foundation for enduring bilateral trust. Under FOCAC (since 2000), Tanzania has gained zero-tariff access to 98% of its exports to China, expanding trade to USD 8.78 billion by 2023.

Strategic Investment Hub
Tanzania’s robust macroeconomic stability, political peace, and pro-market legal reforms make it a leading destination for Chinese foreign direct investment (FDI). Sectors driving current inflows include manufacturing, infrastructure, energy, agriculture, and ICT—supported by economic growth averaging 6–7% annually and inflation contained below 5%.

⚙️ Flagship Chinese Investments
Notable ventures include:

• Keda Tanzania Ceramics – USD 87M (5,000 jobs)
• Kinglion Investment (Steel Roofing) – USD 300M (3,000 jobs)
• Goodwill Ceramics – USD 250M (2,500 jobs)
• Sino Tan Kibaha Industrial Park – USD 800M (10,000 jobs)
• EACLC Mall – USD 400M (4,000 jobs)

These investments highlight China’s leadership in Tanzania’s industrial growth and align with the FYDP III vision for structural transformation and import substitution.

BRI and FOCAC Synergy
Through BRI, large-scale infrastructure such as Bagamoyo Port (USD 10B) and industrial zones enhance regional connectivity. FOCAC complements this by promoting green investment, skills transfer, and policy harmonization, ensuring people-centered growth.

Reforms and Institutional Strengthening
The Tanzania Investment Act of 2022 streamlined procedures by eliminating over 230 redundant taxes, improving licensing timelines, and strengthening arbitration mechanisms under ICSID. Agencies like TIC and EPZA now serve as one-stop centers for investors, offering tax holidays and capital repatriation guarantees.

Challenges and Future Prospects

While Chinese investment has boosted industrial capacity, environmental and social sustainability issues persist, particularly in extractive industries and agriculture. Bureaucratic inefficiencies and uneven policy enforcement remain barriers to consistent investment outcomes.

To sustain long-term benefits, Tanzania must:

• Strengthen environmental governance in FDI-linked sectors;
• Promote technology transfer for local SMEs;
• Deepen bilateral transparency in project financing;
• Align investment with green growth and digital trade strategies.

With effective reforms, trade volumes and job creation are projected to double by 2030, reinforcing the win-win narrative of Tanzania-China cooperation.

Conclusion

Tanzania’s partnership with China has evolved from ideological solidarity to a pragmatic economic alliance shaping Africa’s future growth trajectory. Through BRI and FOCAC, Tanzania exemplifies how infrastructure-led and industrial diversification can transform emerging economies—if guided by sustainability, transparency, and local value creation.

This paper concludes that Tanzania’s investment imperative lies not only in attracting capital but in ensuring that every yuan invested translates into skills, technology, and shared prosperity for Tanzanians.

Read the Full Paper:
Tanzania's Investment Imperative in the Context of China-Africa Relations (FOCAC)
Published by TICGL | Economic Research Centre