This note is prepared by TERI for research and strategic-information purposes only. It does not constitute investment, legal, tax or financial advice, and it does not state the position of the Government of Tanzania or TISEZA. All Q4 2025/26 and Q4 2024/25 figures for the General Investment Scheme and the EPZ/SEZ schemes are drawn directly from TISEZA's own Quarterly Investment Bulletin (April–June 2026); combined totals, ratios and averages are TICGL/TERI's own calculations from those published figures. Regional and global comparator figures use UNCTAD's annual, balance-of-payments FDI series, which is methodologically different from TISEZA's quarterly registered-capital series and is shown for context, not for direct like-for-like comparison.
01 — OverviewExecutive Summary
A single number is doing a lot of work in Tanzania's investment conversation this quarter: Foreign Direct Investment (FDI) registered under the General Investment Scheme (GIS) — the scheme most people simply call the "General Scheme" — fell 58.4% between Q4 2024/25 (April–June 2025) and Q4 2025/26 (April–June 2026), from USD 2,538.86 million to USD 1,055.47 million. Total GIS investment, FDI and Domestic Investment (DI) combined, fell 41.6%, from USD 3,220.33 million to USD 1,880.05 million.
Two things sit alongside that headline and change how it should be read. First, DI within the GIS rose 21.0% over the same period, from USD 681.47 million to USD 824.58 million, and now accounts for close to 44% of GIS capital, up from about 21% a year earlier. Second, capital registered under Tanzania's EPZ and SEZ schemes — reported separately by TISEZA — rose from USD 115.16 million to USD 3,378.5 million, an increase of roughly 29 times, driven substantially by a small number of very large agriculture and forestry projects.
A 58.4% fall in one scheme's FDI line is a real number and deserves a real explanation — this report ranks five candidate explanations against the evidence TISEZA itself publishes. But it is not, on its own, evidence that Tanzania's investment climate deteriorated. When General Scheme and EPZ/SEZ capital are added together, total investment registered by TISEZA rose by roughly 57.7% year-on-year. The more accurate description of Q4 2025/26 is reallocation, not retreat.
This note works from TISEZA's Quarterly Investment Bulletin for April–June 2026 (Section Four: Investment Performance), cross-checked against UNCTAD's regional and global FDI series and contemporaneous reporting on Tanzania's October 2025 general election, to give TICGL/TERI's reading of what is — and is not — happening to foreign investment in Tanzania.
1. What Actually Happened in Q4 2025/26
A scheme-level FDI drop, not an economy-wide one1.1 FDI vs. Domestic Investment, General Investment Scheme
TISEZA's comparison of approved investment capital between Q4 2025/26 and the corresponding quarter of FY2024/25 shows total GIS investment falling from USD 3,220.33 million to USD 1,880.05 million, a decrease of 41.6%. This decline was driven almost entirely by FDI, which fell 58.4%, from USD 2,538.86 million to USD 1,055.47 million. DI moved the opposite direction, rising 21.0% to USD 824.58 million. The practical effect: DI's share of GIS capital nearly doubled, from roughly 21% to roughly 44%, in a single year.
| Indicator (General Investment Scheme) | Q4 2024/25 | Q4 2025/26 | Change |
|---|---|---|---|
| Total approved capital | $3,220.33M | $1,880.05M | −41.6% |
| FDI | $2,538.86M | $1,055.47M | −58.4% |
| Domestic Investment (DI) | $681.47M | $824.58M | +21.0% |
| FDI share of GIS capital | ≈78.8% | ≈56.1% | −22.7 pts |
| DI share of GIS capital | ≈21.2% | ≈43.9% | +22.7 pts |
| Registered projects | 250 | 243 | −2.8% |
| Average capital per project | ≈$12.88M | ≈$7.74M | ≈−40% |
General Investment Scheme: FDI vs. Domestic Investment
Project count barely moved — down just 2.8%, from 250 to 243. What moved was deal size: average capital per project fell from roughly USD 12.9 million to roughly USD 7.7 million. Tanzania is not seeing meaningfully fewer investors register projects in the General Scheme; it is seeing a much smaller number of exceptionally large projects than it saw a year earlier.
1.2 Where the capital went: registered investment by sector
Manufacturing remained the leading destination in Q4 2025/26, with 139 projects, USD 764.07 million in capital and 17,875 projected jobs. The commercial building, construction and economic infrastructure group ranked second (13 projects, USD 387.22 million, 7,343 jobs), followed by tourism (23 projects, USD 361.36 million, 2,397 jobs — about 90.6% of it foreign-financed) and agriculture (23 projects, USD 69.27 million). Transportation, services, energy, and mining and petroleum made up the remainder.
| Sector (GIS, Q4 2025/26) | Projects | Capital | Jobs |
|---|---|---|---|
| Manufacturing | 139 | $764.07M | 17,875 |
| Commercial Building / Construction / Econ. Infrastructure | 13 | $387.22M | 7,343 |
| Tourism | 23 | $361.36M | 2,397 |
| Agriculture | 23 | $69.27M | n/a in bulletin narrative |
| Transportation, Services, Energy, Mining & Petroleum (combined) | 45 | ≈$298.13M | ≈6,190* |
| Total, General Investment Scheme | 243 | $1,880.05M | 33,805 |
*Residual sectors' project count, capital and jobs are TICGL/TERI calculations (total minus the four named sectors above); the bulletin does not break these out individually in its narrative text. A separate ownership-source view in the same bulletin (Section 4.5.1.2) splits infrastructure and commercial-building capital slightly differently (Economic Infrastructure $215.19M; Commercial Building/Construction $154.63M, entirely local-financed) — both views are TISEZA's own, shown here as published.
General Investment Scheme Capital by Sector, Q4 2025/26
1.3 Ownership structure and regional distribution
Foreign-majority projects fell from 130 to 124, joint ventures fell from 50 to 46, while locally-owned projects rose from 70 to 73 — a small but consistent shift toward local ownership across all three categories. Regionally, Dar es Salaam (77 projects, USD 946.41 million, 11,243 jobs) and Pwani (54 projects, USD 264.18 million, 10,694 jobs) together accounted for more than half of all registered GIS projects and the large majority of GIS capital in the quarter, followed by Arusha, Mwanza, Geita, Dodoma and Morogoro.
Alongside new registrations, TISEZA recorded 11 expansion projects by existing investors during the quarter, worth a combined USD 380.79 million and projected to create 1,780 jobs — a signal that at least some already-established investors are deepening their Tanzania exposure even as new large-ticket FDI registrations slowed.
02 — DiagnosisFive Possible Explanations, Ranked
TICGL/TERI ranks five candidate explanations for the General Scheme FDI decline by how well each is supported by the bulletin's own data and by outside evidence, not by any single confirmed cause. As with most quarter-on-quarter shifts in investment data, more than one factor is very likely at work simultaneously.
Base effect — one-off large projects registered a year earlier
Q4 2024/25's USD 2.54 billion in GIS FDI was most likely lifted by a small number of unusually large infrastructure or energy projects registering in that specific quarter; Q4 2025/26 shows no comparable "mega project" cohort in the General Scheme. This is the explanation best supported by TISEZA's own numbers: project count fell only 2.8% while average capital per project fell by roughly 40%, meaning the drop is concentrated in deal size, not in the number of investors coming forward.
Global capital is becoming more selective
UNCTAD's most recent Global Investment Trends data shows global FDI flows rising in 2025, but almost entirely toward developed economies (+43%) while flows to developing economies declined (−2%) and became more concentrated in a limited number of host economies and in capital- and technology-intensive sectors. Higher-for-longer global interest rates and continued geopolitical uncertainty are part of the same story. Tanzania is competing for a shrinking, more selective slice of global FDI aimed at developing markets generally — not losing ground because of anything specific to the General Scheme.
Domestic crowding-in
DI within the GIS rose 21.0% in the same quarter that FDI fell 58.4%. This is not automatically a bad sign — a rising DI share (from ≈21% to ≈44% of GIS capital) can reflect growing confidence among Tanzanian investors and a genuine broadening of the domestic capital base, which several TICGL/TERI reports have flagged as a longstanding structural need. It does mean, however, that at least part of the "FDI gap" this quarter has been filled by local capital rather than replaced.
Election / political-cycle effect
Tanzania held its general election on 29 October 2025 — inside the twelve months separating the two quarters compared in this bulletin. International investment-risk commentary published in the following months flagged a period of heightened political tension and social unrest around the vote, and noted that this combination of factors typically increases short-term caution among internationally mobile capital, even where a country's underlying economic fundamentals are largely unaffected. Election-adjacent dips in FDI registration are a documented, recurring pattern across emerging markets generally, and are typically followed by normalisation once the political calendar clears. TICGL/TERI treats this as a real but partial contributor rather than the primary explanation, particularly since DI — which is far more sensitive to purely domestic political sentiment — rose rather than fell over the same period.
Rising competition from neighbouring countries
On UNCTAD's 2024 annual figures (the latest full comparable year), Ethiopia (USD 3.98bn) and Uganda (USD 3.31bn) both attracted substantially more FDI than Tanzania (USD 1.72bn), and East Africa's 2025 regional total rose 12% with growth led by Ethiopia and Uganda specifically. Kenya, meanwhile, posted its strongest-ever FDI year in 2025 on the strength of digital-economy investment. Some internationally mobile capital that might otherwise have flowed to Tanzania's General Scheme in Q4 2025/26 may simply have been directed toward these more aggressively promoted regional destinations instead — though Tanzania's own FDI growth rate has, in other recent years, outpaced the regional average, so this is best read as a contributing rather than a decisive factor. See Section 4 for the full comparison.
The evidence most strongly favours explanations 1 and 2 acting together: a high statistical base from a small number of large projects a year ago, combined with a genuinely more selective global FDI environment for developing economies broadly. Explanations 3, 4 and 5 are real and worth monitoring, but none of them alone is large enough to explain a 58.4% single-quarter move in a series this volatile.
3. The Fuller Picture: EPZ/SEZ Capital Rose Nearly 30-Fold
Reallocation, not retreatTISEZA reports EPZ and SEZ scheme investment separately from the General Scheme. In Q4 2025/26, the Authority registered 7 EPZ/SEZ projects worth USD 3,378.5 million, projected to create 30,235 jobs and generate USD 517.8 million in turnover — up from USD 115.16 million in capital, 1,155 jobs and USD 73.15 million in turnover in Q4 2024/25. Ownership of the seven Q4 2025/26 projects comprised four foreign-owned, two locally-owned and one joint venture.
| EPZ/SEZ indicator | Q4 2024/25 | Q4 2025/26 | Change |
|---|---|---|---|
| Capital | $115.16M | $3,378.5M | ≈+2,834% |
| Jobs | 1,155 | 30,235 | ≈+2,518% |
| Turnover | $73.15M | $517.8M | ≈+608% |
| FDI within EPZ/SEZ | $97.62M | $3,147.8M | ≈+3,124% |
| DI within EPZ/SEZ | $38.04M | $230.7M | ≈+506% |
Source: TISEZA, Quarterly Investment Bulletin, April–June 2026, Section 4.6. Percentage changes rounded; base-period values are small, so percentage changes should be read alongside the absolute figures.
Ruvuma Region alone accounted for USD 2,600 million of the USD 3,378.5 million in EPZ/SEZ capital (about 77%) and 18,050 of the 30,235 projected jobs (about 60%), concentrated in a single large agriculture project. China was overwhelmingly the leading FDI source within EPZ/SEZ, contributing USD 3,143.8 million in capital and 19,027 of the scheme's jobs — Kenya and the UAE followed a distant second and third. This is close to a textbook example of the "one-off large project" pattern flagged as explanation #1 above, just operating in the EPZ/SEZ scheme rather than the General Scheme.
3.1 The combined picture
Adding General Scheme capital to EPZ/SEZ capital gives the clearest single measure of TISEZA's total quarterly investment performance. On that combined basis, total registered capital rose from approximately USD 3,335.49 million in Q4 2024/25 to approximately USD 5,258.55 million in Q4 2025/26 — an increase of roughly 57.7%.
General Scheme vs. EPZ/SEZ vs. Combined Total
A single scheme's FDI line falling 58.4% is a genuine, worthwhile signal — it should prompt exactly the kind of diagnostic exercise this report carries out. But treated in isolation, it overstates the story. Capital did not leave Tanzania; a large share of it appears to have shifted toward the EPZ/SEZ schemes, which the Government has been actively building out — including the launch of Special Economic Zones on 12 August 2025 and the allocation of more than 40 land parcels across the Bagamoyo, Ruvuma, Kwala and Nala SEZs — precisely because these zones offer stronger incentive packages, serviced land and streamlined regulatory processes than the General Scheme.
04 — ContextRegional and Global Context
Tanzania's quarter did not happen in isolation. Two broader trends help calibrate how much of the General Scheme's FDI drop is Tanzania-specific versus part of a wider pattern affecting developing economies and East Africa as a region.
4.1 East Africa: a more competitive field
On UNCTAD's 2024 annual FDI figures — the latest full comparable year across the region — Ethiopia led East Africa with USD 3.98 billion (+21.9% year-on-year), followed by Uganda at USD 3.31 billion (+10.4%), Tanzania at USD 1.72 billion (+28.3%, the fastest growth rate in the group that year), Kenya at USD 1.50 billion (roughly flat), Rwanda at USD 819 million (+14.4%) and Somalia at USD 765 million (+13%). East Africa's regional FDI total rose 12% in 2025 to roughly USD 15 billion, with growth concentrated in Ethiopia and Uganda; Kenya separately reported its strongest-ever FDI year in 2025, driven by digital-economy and renewable-energy investment.
East African FDI Inflows, UNCTAD Annual Basis (2024, latest comparable year)
These are UNCTAD's annual, balance-of-payments FDI figures for calendar 2024 — a different measure, on a different basis and timeframe, from the TISEZA quarterly registered-capital figures used throughout the rest of this report. They are shown to illustrate relative scale and regional competitive positioning, not as a direct comparison to the 58.4% General Scheme figure.
4.2 A more selective global environment
UNCTAD's Global Investment Trends Monitor for 2025 recorded a 14% rise in global FDI to an estimated USD 1.6 trillion — but more than USD 140 billion of that increase came from flows through global financial conduit economies rather than new productive investment, and flows to developed economies rose 43% while flows to developing economies declined 2%. Greenfield project announcements — the category most relevant to a scheme like Tanzania's General Scheme — fell 16% globally despite high headline values driven by a small number of megaprojects, and international project finance declined for a fourth consecutive year. This is the global backdrop explanation #2 in Section 2 draws on: developing economies broadly are seeing a smaller, more concentrated share of global capital, independent of anything specific to Tanzania.
4.3 Tanzania's institutional response
The same bulletin that reports the General Scheme's FDI decline also documents active institutional expansion: the formal launch of Special Economic Zones on 12 August 2025; more than 40 land parcels allocated across the Bagamoyo (≈524.89 hectares, 5 projects), Ruvuma (≈375.59 hectares), Kwala (≈3.20 hectares) and Nala (≈2.02 hectares) SEZs; continued implementation of the MKUMBI II regulatory-reform blueprint; a National Investment Database System that has already captured over 1,000 projects; and One-Stop Facilitation Centre services that processed 1,275 work permits and 2,702 residence permits during the quarter. None of this offsets the General Scheme FDI number directly, but it is the institutional context in which that number sits.
05 — ImplicationsWhat This Means
For different audiences, the same set of numbers points to different, practical takeaways.
1For policymakers
- Treat the General Scheme FDI figure as a genuine signal worth investigating quarter-by-quarter, not a one-off to dismiss — but publish the combined GIS + EPZ/SEZ figure alongside it so the headline is not read in isolation.
- Continue building the EPZ/SEZ pipeline deliberately, since it is now attracting the scale of FDI the General Scheme used to.
- Monitor project-size concentration risk: a handful of very large projects (Ruvuma, China-linked) now account for the majority of new-scheme capital growth.
2For investors and market entrants
- Manufacturing, tourism and infrastructure remain the deepest, most active General Scheme sectors by project count and capital in Q4 2025/26.
- EPZ/SEZ zones (Bagamoyo, Ruvuma, Kwala, Nala) now offer materially larger co-investment and supply-chain opportunities than a year ago, particularly around the large anchor projects already registered there.
- Rising DI (+21%) signals growing local co-investment appetite — a relevant consideration for structuring joint ventures.
3For researchers and analysts
- Any year-on-year FDI comparison for Tanzania should specify which TISEZA scheme it refers to — General Scheme and EPZ/SEZ moved in opposite directions by an order of magnitude this quarter.
- Project-count and average-deal-size data are as informative as the headline capital figure for diagnosing whether a decline reflects fewer investors or fewer mega-projects.
4For the wider public conversation
- "FDI fell 58.4%" and "Tanzania attracted more total investment than a year ago" are both accurate statements about the same quarter — they describe different schemes and different aggregation levels, not contradictory realities.
"A single scheme's FDI line falling 58.4% deserves a real explanation, not a shrug — and this report has tried to give it one. But the more complete picture for Q4 2025/26 is not an investor retreat from Tanzania. It is a reallocation: fewer mega-projects landing in the General Scheme against an unusually high base, a genuinely more selective global FDI environment for developing economies, and a rapidly scaling EPZ/SEZ programme absorbing exactly the kind of large-ticket foreign capital the General Scheme lost. Read the two schemes together, and total investment registered by TISEZA this quarter rose by more than half."
— TICGL / Tanzania Economic Research Institute (TERI)
06 — SourcesMethod & Source Note
All Q4 2025/26 and Q4 2024/25 figures for the General Investment Scheme and the EPZ/SEZ schemes are drawn from the Tanzania Investment & Special Economic Zones Authority (TISEZA), Quarterly Investment Bulletin, April–June 2026 (Section Four: Investment Performance). Combined totals, percentage-point shares, average-deal-size and multi-year growth-rate calculations are TICGL/TERI's own, computed from those published figures. Regional and global comparator data draw on UNCTAD's World Investment Report 2025 and Global Investment Trends Monitor #50 (January 2026), together with contemporaneous reporting on Tanzania's October 2025 general election and its investment-climate implications.
The full TISEZA Quarterly Investment Bulletin, including regional maps, sectoral detail and investment-promotion activity for the quarter, is available on request; see below.
Request TICGL/TERI's Full Investment Climate Briefing
This page summarises TICGL/TERI's reading of TISEZA's Q4 2025/26 Quarterly Investment Bulletin. Institutions, investors and development partners may request a fuller briefing — including sector-by-sector detail, regional maps and investment-promotion activity for the quarter — directly from TERI.
✉️ Request via economist@ticgl.com →07 — Quick AnswersFrequently Asked Questions
Why did FDI in Tanzania's General Investment Scheme fall 58.4% in Q4 2025/26?
TISEZA's Quarterly Investment Bulletin shows FDI in the General Investment Scheme fell from USD 2,538.86 million in Q4 2024/25 to USD 1,055.47 million in Q4 2025/26, a 58.4% drop. TICGL/TERI ranks five contributing factors: a high base from one-off large projects registered a year earlier, more selective global capital allocation, domestic crowding-in, the 29 October 2025 election cycle, and rising regional competition for FDI. Project-count data show the number of projects fell only marginally while average deal size roughly halved, pointing most strongly to the base-effect explanation.
Did Domestic Investment also fall in Q4 2025/26?
No. Domestic Investment (DI) in the General Investment Scheme rose 21.0%, from USD 681.47 million to USD 824.58 million, and its share of GIS capital nearly doubled, from about 21% to about 44%.
Is Tanzania's total investment actually falling?
Not when both TISEZA schemes are combined. General Scheme plus EPZ/SEZ capital rose from about USD 3.34 billion to about USD 5.26 billion — an increase of roughly 58%. EPZ/SEZ capital alone rose from USD 115.16 million to USD 3,378.5 million, driven substantially by large agriculture and forestry projects concentrated in Ruvuma Region. TICGL/TERI reads this as a reallocation of capital, not an overall retreat.
What role did Tanzania's October 2025 general election play?
Tanzania held its general election on 29 October 2025, inside the period this bulletin compares. International investment-risk commentary flagged heightened political tension around the vote as a factor that typically increases short-term investor caution. TICGL/TERI ranks this as a moderate-likelihood contributor alongside four others, not the primary explanation.
How does Tanzania's FDI compare with its East African neighbours?
On UNCTAD's 2024 annual figures, Ethiopia led with USD 3.98 billion, followed by Uganda (USD 3.31bn), Tanzania (USD 1.72bn), Kenya (USD 1.50bn), Rwanda (USD 819M) and Somalia (USD 765M). Tanzania's 28.3% growth that year was the fastest in the group. Globally, 2025 FDI flows to developing economies declined 2% while flows to developed economies rose 43% — relevant context for any single quarter's dip.
Muhtasari kwa Kiswahili
Kwa Nini FDI Ilishuka kwa 58.4% kwenye General Scheme? Uchambuzi wa Robo ya Nne 2025/26. — Uwekezaji wa moja kwa moja kutoka nje (FDI) kwenye Mpango Mkuu wa Uwekezaji (General Investment Scheme) ulishuka kutoka Dola za Marekani bilioni 2.54 (Robo ya Nne 2024/25) hadi Dola bilioni 1.06 (Robo ya Nne 2025/26) — punguzo la asilimia 58.4, kulingana na Ripoti ya Robo ya Uwekezaji ya TISEZA.
Lakini si sehemu nzima ya taswira: Uwekezaji wa ndani (DI) kwenye General Scheme uliongezeka kwa asilimia 21.0 (kutoka Dola milioni 681.5 hadi milioni 824.6), na mtaji uliosajiliwa kwenye mipango ya EPZ/SEZ uliongezeka mara karibu 30 (kutoka Dola milioni 115.2 hadi Dola milioni 3,378.5), hasa kutokana na miradi mikubwa ya kilimo na misitu, hususan mkoani Ruvuma inayohusishwa na uwekezaji kutoka China. Idadi ya miradi kwenye General Scheme haikushuka sana (kutoka 250 hadi 243) — kilichoshuka ni ukubwa wa wastani wa mradi mmoja mmoja, ambao ulipungua kwa karibu nusu.
Sababu tano zinazowezekana (kwa mpangilio wa uwezekano): (1) Base effect — miradi mikubwa ya mwaka jana isiyo na mfano mwaka huu (uwezekano: juu sana); (2) Mtaji wa dunia kuwa selective zaidi kuelekea nchi zilizoendelea (UNCTAD inaonesha FDI kwa nchi zinazoendelea ilishuka asilimia 2 mwaka 2025 wakati za nchi zilizoendelea ziliongezeka asilimia 43) (uwezekano: juu); (3) Domestic crowding-in — DI imeongezeka (uwezekano: wastani-juu); (4) Kipindi cha Uchaguzi Mkuu wa Oktoba 29, 2025 (uwezekano: wastani); (5) Ushindani kutoka nchi jirani kama Ethiopia na Uganda ambazo zilivutia FDI kubwa zaidi mwaka 2024 (uwezekano: wastani).
Taswira kamili: Ukijumlisha General Scheme na EPZ/SEZ, jumla ya mtaji uliosajiliwa na TISEZA uliongezeka kutoka Dola bilioni 3.34 hadi Dola bilioni 5.26 — ongezeko la takriban asilimia 57.7. Kwa hiyo, hata FDI ikishuka kwenye General Scheme, siyo dalili ya jumla ya uwekezaji kupungua Tanzania — ni reallocation ya mtaji kuelekea maeneo yenye vivutio bora zaidi.
- FDI, General Scheme: –58.4% (Dola bilioni 2.54 → 1.06)
- DI, General Scheme: +21.0% (Dola milioni 681.5 → 824.6)
- Mtaji wa EPZ/SEZ: +2,834% (Dola milioni 115.2 → 3,378.5)
- Jumla (General Scheme + EPZ/SEZ): +57.7% (Dola bilioni 3.34 → 5.26)
Chanzo: TISEZA, Ripoti ya Robo ya Uwekezaji, Aprili–Juni 2026; UNCTAD. Uchambuzi kamili unapatikana kwa ombi: economist@ticgl.com.