Public-Private Partnerships (PPPs) have become a key strategy for job creation and economic growth in Tanzania. By combining government support and private sector investment, PPPs help expand formal employment opportunities in key sectors such as infrastructure, manufacturing, agriculture, and digital services. According to the 2025 Employment Study, over 40% of new formal jobs in the last five years have been created through PPPs.

This article examines how PPPs contribute to formal employment growth, the challenges facing their implementation, and policy recommendations for maximizing their impact.

The Impact of PPPs on Formal Employment Growth

• 35% of formal jobs created through PPPs are in construction and infrastructure, due to large-scale public projects.
• 22% of new formal jobs are in manufacturing, where PPPs have boosted industrial production.
• 18% are in agribusiness, where PPP-funded processing plants and value chain projects have expanded employment.

How PPPs Are Expanding Formal Employment

1. Infrastructure Development and Construction Jobs

PPPs increase investments in roads, ports, energy, and urban development, creating thousands of formal jobs.

• 40% of infrastructure-related PPP jobs come from road and bridge construction projects.
• 30% are in energy projects, including hydropower and renewable energy initiatives.

2. Industrialization and Manufacturing Jobs

PPPs have boosted Tanzania’s industrialization agenda, helping to expand manufacturing jobs.

• 28% of PPP-supported manufacturing jobs are in textile and apparel production, driven by export-focused factories.
• 22% are in food processing, where PPP-funded factories are improving agricultural value chains.

3. Agriculture and Agribusiness Development

PPPs have helped modernize agriculture and expand agribusiness employment.

• 40% of new agriculture-related PPP jobs are in large-scale commercial farming, providing formal employment to rural workers.
• 35% are in agro-processing, creating jobs in food packaging, grain milling, and dairy processing.

4. Digital Economy and ICT Jobs

PPP collaborations in technology and digital services are creating new job opportunities in fintech, e-commerce, and software development.

• 35% of PPP-funded digital jobs are in e-commerce, where partnerships between telecom companies and fintech firms are driving job growth.
• 30% of formal ICT jobs are in mobile banking and digital financial services.

Challenges Facing PPPs in Employment Creation

Despite their success, PPPs in Tanzania face challenges that limit their full employment potential.

• 31% of respondents cited limited private sector funding, slowing down PPP project expansion.
• 26% of respondents identified bureaucracy as a key obstacle, delaying project approvals and implementation.
• 21% noted a skills gap, making it difficult to fill high-tech jobs in manufacturing and ICT.

Opportunities to Strengthen PPPs for Job Creation

1. Expanding PPP Investments in Emerging Sectors

By focusing on high-growth industries, PPPs can create long-term employment opportunities.

• Green energy PPPs can boost employment in solar and wind power projects.
• Digital economy PPPs can support tech startups and digital job creation.

2. Improving Skills Development and Workforce Readiness

Investing in training programs can close the skills gap and ensure local workers benefit from PPP projects.

• 40% more jobs could be created by expanding vocational training programs in PPP projects.
• 35% job growth is expected if universities partner with PPPs to train students in job-ready skills.

3. Reducing Bureaucracy and Improving Regulatory Efficiency

Streamlining PPP approvals can accelerate job creation.

• 50% more PPP projects could be launched if approval processes are shortened.
• 30% job growth is expected if business taxation for PPPs is simplified.

Conclusion and Policy Recommendations

PPPs have proven to be a key driver of formal employment growth in Tanzania, especially in infrastructure, manufacturing, agriculture, and ICT. However, regulatory challenges, financial limitations, and skills gaps remain barriers to maximizing their impact.

Key Policy Recommendations:

1. Increase Private Sector Funding for PPPs – Offer incentives and tax breaks for private investors in employment-generating projects.
2. Expand Vocational Training – Ensure PPP projects include skills development programs to create a skilled workforce.
3. Reduce Bureaucracy in PPP Approvals – Establish faster approval systems and streamlined regulations.
4. Strengthen Digital Economy PPPs – Encourage public-private collaborations in fintech, e-commerce, and tech startups.
5. Promote Sustainable and Green PPP Investments – Focus on renewable energy and climate-friendly infrastructure projects.

NOTE:

The research and case studies presented in this report were conducted by Tanzania Investment and Consulting Group Limited (TICGL) to analyze employment trends, macroeconomic stability, and job creation dynamics in Tanzania. The study covered a sample size of 2,500 respondents, representing diverse economic sectors and geographic regions. A mixed-methods approach was employed, integrating quantitative surveys (85%), structured interviews (10%), and focus group discussions (5%) to gather both statistical data and qualitative insights. The research was conducted across six key regions: Dar es Salaam (25% of respondents), Mwanza (18%), Arusha (15%), Dodoma (14%), Mbeya (12%), and Morogoro (16%), ensuring a balance between urban and rural employment patterns.

The findings indicate that Tanzania’s workforce is 71.8% informal (25.95 million workers) and 28.2% formal (10.17 million workers), highlighting a significant divide in job security, wages, and access to social protection. Among the 2,500 surveyed individuals, formal employment accounts for 23% (550 individuals), predominantly in government (32% of formal jobs), banking and financial services (25%), manufacturing (18%), and education and healthcare (15%). On the other hand, informal employment constitutes 49% (1,170 individuals), with key sectors including agriculture (35% of informal workers), small businesses and trade (28%), transportation (15%), and casual labor (12%). The remaining 27% (650 individuals) were unemployed, with youth unemployment (ages 18–35) reaching 33%, significantly higher than the national average of 9.2%.

Employment trends indicate that formal employment is projected to rise to 38% by 2030, driven by industrialization, digital transformation, and policy reforms. However, major barriers continue to slow the transition, including limited job availability (42%), skills mismatches (26%), and bureaucratic challenges (21%). The study also found that women make up 65% of the informal workforce, primarily due to barriers in accessing formal jobs, while 72% of youth are engaged in informal employment due to limited entry-level job opportunities.

To bridge the gap between formal and informal employment, Tanzania must focus on expanding SME growth, strengthening vocational training programs, improving access to financial services for small businesses, and reducing bureaucratic hurdles for business registration. This report emphasizes the key trends, challenges, and opportunities shaping Tanzania’s employment landscape and highlights the role of public-private partnerships, investment in digital workforce expansion, and targeted policy interventions in creating a more structured and inclusive workforce by 2030.