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.