Why Invest in Tanzania 2025: Complete Investment Guide | TICGL
Executive Summary
Tanzania presents a compelling investment destination in East Africa, characterized by strong economic growth,
abundant natural resources, political stability, and strategic geographic positioning. With GDP growth projected
at 6.0% in 2025 and 6.3% in 2026, combined with transformative infrastructure investments and regulatory reforms,
Tanzania offers significant opportunities across multiple sectors.
8.9%
Lowest Unemployment in EAC
1.1 Economic Growth Performance
Tanzania has demonstrated consistent economic expansion, positioning itself as one of Africa’s fastest-growing economies.
The country’s economic resilience is driven by diversified growth across multiple sectors, strategic infrastructure investments,
and progressive policy reforms.
Key Growth Drivers:
Electricity Generation:
Surged by +19% in Q1 2025, powering industrial expansion and reducing energy costs
Mining Sector:
Expanded by +16.6% in Q1 2025, driven by global demand for critical minerals
Financial Services:
Grew by +15.4% in Q1 2025, reflecting increasing financial inclusion and digital transformation
Agricultural Expansion:
Sustained growth of +3.0%, supporting food security and export revenues
Infrastructure Investments:
Multi-billion dollar commitments in ports, railways, and energy infrastructure
Tanzania Economic Performance Metrics (2022-2026)Metric2022202320242025 (Projected)2026 (Projected)Real GDP Growth Rate4.7%5.3%5.5%6.0%6.3%GDP Value–TZS 156.6 trillion–GDP per Capita$1,146—-Inflation Rate4.3%3.8%3.4%3.3%3.5%Fiscal Deficit (% GDP)3.6%3.5%–3.0%-3.0%Public Debt (% GDP)43.6%45.5%-49.6%48.3%Tanzania GDP Growth Trajectory (2022-2026)
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Historical Performance
Average 10-Year Growth (2012-2021): 5.5%
Tanzania has maintained consistent economic growth over the past decade, demonstrating resilience through
global economic challenges including the COVID-19 pandemic and international commodity price fluctuations.
1.2 Economic Outlook Consensus
Multiple international financial institutions project strong continued growth for Tanzania, reflecting confidence
in the country’s economic fundamentals and policy direction. The consensus from the IMF, World Bank, African
Development Bank, and Bank of Tanzania indicates sustained momentum through 2026.
International Institutions’ Growth Projections for TanzaniaInstitution2024 Projection2025 Projection2026 ProjectionIMF6.1%6.0%6.3%World Bank5.6%6.0%6.4%African Development Bank5.7%6.0%-Bank of Tanzania5.5%–Institutional Growth Consensus (2024-2026)2.1 East African Competitive Position
Tanzania demonstrates superior formal employment growth trajectories and competitive positioning within the
East African Community (EAC). While facing challenges in business environment rankings, Tanzania’s strategic
advantages in natural resources, market size, and political stability offset these factors for long-term investors.
East African Business Environment ComparisonCountryEase of Business RankLPI ScoreCorporate TaxPort Dwell TimeStrategic AdvantageTanzania141st (58.2/100)2.6/530%10-14 daysStrategic location, natural resourcesRwanda38th (76.5/100)3.0/515%N/ATax efficiency, governanceKenya56th (73.2/100)2.9/510-15%7-10 daysInfrastructure, financial hubUganda—N/A-2.2 Employment Formalization Trajectory (2022-2030)
Tanzania leads East Africa in formal employment growth potential, demonstrating the strongest trajectory for
economic formalization. This presents significant opportunities for investors in sectors requiring skilled labor
and formal business relationships.
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Key Achievement
Tanzania recorded the lowest unemployment rate in East Africa at 8.9% (2022), projected
to decline further to 8.1% by 2030. This indicates a robust labor market with growing employment opportunities
across sectors.
East Africa Formal Employment Growth (2022-2030)CountryFormal Employment 2022Formal Employment 2030Growth DeltaUnemployment 2022Unemployment 2030Tanzania28%38%+10%8.9%8.1%Kenya15%25%+10%6.2%5.5%Uganda20%28%+8%9.0%7.5%Rwanda22%30%+8%16.0%13.0%Formal Employment Growth Comparison (2022-2030)Unemployment Rate Trajectory (2022-2030)
+10%
Formal Employment Growth
Highest in EAC (2022-2030)
38%
Projected Formal Employment
By 2030
8.1%
Projected Unemployment
By 2030 (from 8.9%)
62M
Population Base
Growing Consumer Market
3.1 Mining Sector: A Critical Growth Engine
The mining sector has become Tanzania’s flagship investment opportunity, driven by global demand for critical
minerals and battery materials. With world-class deposits of gold, graphite, nickel, and rare earth elements,
Tanzania is positioned as a strategic supplier for the global clean energy transition.
⚡
Global Opportunity
Global demand for critical minerals projected to quadruple by 2040, positioning Tanzania
as a strategic supplier for electric vehicles, renewable energy systems, and advanced technologies.
Mining Sector Performance Metrics (2023-2025)IndicatorValueTarget/ProjectionContribution to GDP (2023)9.1%10% by 2025Mining Sector Growth Q1 2025+16.6%Sustained expansionTotal Investment Commitments 2025$10.95 billion915 projectsNumber of Projects 2025915Growing pipelineGold Exports Value$2.3 billion (45% of total exports)Expected to double to $6.6B by 2027Gold Production (2024)~40-50 tonnes/yearIncreasing capacityGold Reserves45 million ouncesProven depositsMining Sector GDP Contribution & GrowthKey Mineral ResourcesMineralSignificanceStatusGold4th largest producer in Africa; 90%+ of mineral exports✓ Active large-scale productionGraphiteBattery-grade for EVs; high-grade, large-flake deposits⚙ Major projects: Bunyu (40,000 tons/year), Lindi Jumbo, MahengeNickelKabanga – world’s largest high-grade nickel sulphide deposit🔨 Development stage; $75M invested H2 2025Rare Earth ElementsCritical for clean energy transition🔍 Exploration stageCopper & CobaltBattery materials; catalytic converters🔗 Associated with nickel depositsTanzaniteUnique gemstone found only in Tanzania✓ Active productionUraniumEnergy sector potential🔨 Development stageDiamondsWilliamson mine: 19M carats produced since 1940✓ Active productionMajor Mining Investments (2025)ProjectInvestorInvestmentExpected ProductionBunyu Graphite MineVolt Resources / UOF$37 million total; $11.1M equity40,000 tons/year graphiteKabanga Nickel ProjectLifezone Metals$75 million (H2 2025)High-grade nickel, copper, cobalt, PGMsBarrick Gold OperationsBarrick Gold$558 million (H1 2025)Mine expansion, energy initiativesLiganga Iron & SteelTCIMRL$1.8 billion1.0 million tonnes/year iron & steelBahi Nickel-Copper PlantVariousTZS 37 billion300 tonnes ore/day (Feb 2026 start)Major Mining Project Investments (2025)3.2 Agriculture Sector
Agriculture remains the backbone of Tanzania’s economy with significant modernization opportunities. Despite
its declining share of GDP (from 42% in the early 1990s to 28.7% today), the sector still dominates exports
at 85% and employs 65% of the workforce, presenting massive opportunities for value addition and productivity
enhancement.
Agriculture Sector OverviewMetricValueSignificanceGDP Contribution28.7%Declining from 42% in early 1990sExport Contribution85% of exportsDominant export sectorEmployment Share65% (down from 84.8% in 1990s)Transitioning to formal sectorsInformal Sector Concentration65-70% of informal employment (21.9-23.6M workers)Huge formalization opportunityKey Investment Opportunities:
Value Addition and Agro-Processing:
Transform raw agricultural products into higher-value processed goods for domestic and export markets
Export-Oriented Commercial Farming:
Large-scale production of high-value crops (coffee, tea, cashews, spices, horticulture) for international markets
Irrigation and Mechanization:
Modern irrigation systems and farm machinery to boost productivity and reduce weather dependency
Contract Farming Models:
Partnerships between investors and smallholder farmers to ensure quality, consistency, and market access
Cold Storage and Logistics Infrastructure:
Post-harvest handling facilities to reduce losses and extend market reach for perishable goodsAgriculture’s Evolution in Tanzania’s Economy3.3 Tourism Sector
Tourism is a strategic foreign exchange earner with strong post-pandemic recovery. Tanzania boasts world-class
tourism assets including Mount Kilimanjaro, Serengeti National Park, Zanzibar archipelago, Ngorongoro Crater,
and extensive wildlife reserves and marine parks.
Tourism Sector PerformanceIndicatorValueTrendTourist Arrivals (Aug 2025)2,287,377Strong recoveryGDP Contribution (2021)5.7%Recovered from 5.3% pandemic lowPre-pandemic Contribution (2019)10.6%Target for full recoveryWorld-Class Tourism Assets:
🏔️
Mount Kilimanjaro
Africa’s highest peak
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Serengeti National Park
Great Migration spectacle
🏝️
Zanzibar Archipelago
Pristine beaches & culture
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Ngorongoro Crater
UNESCO World Heritage
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Wildlife Reserves
Selous, Ruaha, Tarangire
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Marine Parks
Mafia Island, Pemba
Tourism Sector Recovery Trajectory3.4 Energy & Infrastructure
Tanzania is undergoing transformative infrastructure development to support industrialization. The energy sector
is experiencing unprecedented expansion with major hydropower projects, natural gas development, and renewable
energy initiatives driving economic growth.
Energy Sector ExpansionProject/MetricCurrent StatusTarget/CapacityJulius Nyerere Hydropower PlantOperational 2024Major electricity generation boostElectricity Growth Q1 2025+19%Sustained expansionNatural Gas Production (Ntorya Field)Licensed 202440M cubic feet/day initial; 140M potentialPower Generation CapacityCurrent capacity expanding10,000 MW target by 2025Electricity Sector Growth (Q1 2025)Port & Logistics Infrastructure
Infrastructure Metrics & TargetsInfrastructureCurrent CapacityTargetChallenge/IssueDar es Salaam Port Capacity15M tons/year20M tons/yearBelow regional peer Mombasa (27M tons)Port Dwell Time10-14 days5-7 daysCongestion cost: 15-20% of exportsTAZARA Railway Utilization20% capacity (0.5M tons/year)2.0M tons/yearAging infrastructure being upgradedLogistics Performance Index (LPI)2.6/53.0/5Below Kenya (2.9), Rwanda (3.0)Standard Gauge Railway (SGR)
Tanzania is developing a 2,000 km SGR network in six phases, providing a critical trade corridor to landlocked
neighbors including the Democratic Republic of Congo, Burundi, Rwanda, Uganda, Malawi, and Zambia.
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SGR Development Phases
Phase 1: Dar es Salaam – Morogoro (300 km)Phase 2: Morogoro – Makutupora (422 km)Phase 3-6: Extending to Tabora, Mwanza, Kigoma (serving landlocked neighbors)
Strategic Value: Provides trade corridor to DRC, Burundi, Rwanda, Uganda, Malawi, and Zambia, unlocking regional market potential of 300+ million people.
Port Capacity Comparison: Regional Context 4.1 FDI Performance
Tanzania has demonstrated strong FDI attraction despite regional headwinds. While many African countries
experienced declining FDI flows, Tanzania has maintained resilience with consistent inflows and a growing
stock of foreign investment reaching $20 billion by 2023.
Tanzania FDI Performance (2021-2025)PeriodFDI InflowGrowth RateNotes2021$1.2 billion-Base year2022$1.3 billion+6.3%Africa overall declined -3%2023~$1.3 billionStableFDI stock: $20 billion2023/24 Fiscal Year$3.5 billion-Government data (TIC)Jul-Sep 2025 Quarter$2.5 billion (TZS 6.18T)-201 projects registeredTanzania FDI Inflows Trend (2021-2025)
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Resilient Performance
Tanzania’s FDI grew by +6.3% in 2022 while the African continent overall experienced a
-3% decline, demonstrating the country’s relative attractiveness and policy effectiveness
in maintaining investor confidence during challenging global conditions.
4.2 Leading FDI Source Countries (2025)
Tanzania has successfully diversified its FDI sources, attracting investment from strategic partners across
multiple continents. The United Arab Emirates has emerged as the leading investor, followed by China, India,
Australia, and the United Kingdom.
🇦🇪
United Arab Emirates
Leading investor
🇨🇳
China
Infrastructure & manufacturing
🇮🇳
India
Diverse sectors
🇦🇺
Australia
Mining sector
🇬🇧
United Kingdom
Mining & services
4.3 FDI Sector Distribution (Jul-Sep 2025)
FDI flows are concentrated in high-growth sectors that align with Tanzania’s development priorities.
Manufacturing dominates the investment landscape, followed by construction, transport & logistics, and mining.
FDI Distribution by Sector (Jul-Sep 2025)
Manufacturing:
Dominant sector attracting the highest FDI, driven by value addition initiatives and export potential
Construction:
Major activity in infrastructure development, real estate, and industrial facilities
Transport & Logistics:
Growing investments in ports, railways, and logistics infrastructure
Mining:
Sustained high investment in critical minerals and gold production5.1 Current Regulatory Framework
Tanzania is actively pursuing regulatory reforms to enhance its business environment and attract greater
foreign investment. While challenges remain, the government has demonstrated commitment to improving ease
of doing business through legislative updates and streamlined procedures.
Business Environment Indicators & Proposed ReformsIndicatorCurrent StatusProposed ReformRegional ComparisonCorporate Tax Rate30%20% (proposed)Rwanda: 15%; Kenya: 10-15%Import Duty (Raw Materials)25%15% (proposed)Regional: 10-15%VAT18%-EAC Standard: 18%Tax Filing Time195 hours/year100 hours targetRwanda: 91 hours; Kenya: 180 hoursBusiness Registration26 days7 days targetRwanda: 4 days; Kenya: 10 daysCorporate Tax Rates: Regional Comparison5.2 Key Investment LegislationTanzania Investment Act of 2022
Simplified Business Registration:
Streamlined processes to reduce time and bureaucracy for new business establishment
Enhanced Transparency:
Clear guidelines and predictable procedures for investment approvals
Improved Investor Protection:
Stronger legal frameworks to safeguard investor rights and property
Streamlined Licensing:
One-stop-shop approach through Tanzania Investment Centre (TIC)Mining Sector Reforms (2017)
⛏️
Mining Sector Regulatory Framework
Government Free Carried Interest: 16% equity stake in all mining projects
Local Shareholding: 30% requirement for special mining licenses
Enhanced Revenue Collection: Improved mechanisms for royalties and taxation
Value Addition Focus: Priority on local beneficiation and mineral processing5.3 Tax Revenue Performance
Tanzania is implementing a Medium Term Revenue Strategy (2025/26-2027/28) to enhance tax compliance,
address evasion loopholes, reduce the budget deficit, and strengthen domestic revenue collection.
Tax Revenue Performance & ChallengesMetric2024 ValueTargetChallengeTax Revenue (% GDP)13.1%Higher mobilization neededBelow peer countriesTaxable Workforce28% (10.2M of 36M)Expand base71.8% informal employmentPublic Sector Wage BillTZS 11.3 trillion (41% of TRA collections)Contain growthFiscal pressureMedium Term Revenue Strategy Focus Areas:
Enhanced Tax Compliance:
Digital systems and improved monitoring to ensure full compliance
Address Evasion Loopholes:
Closing gaps in tax collection and reducing avoidance opportunities
Reduce Budget Deficit:
Target fiscal deficit at 3.0% of GDP through improved revenue
Strengthen Domestic Revenue:
Reduce dependence on external financing through enhanced tax collectionWorkforce Formalization Challenge6.1 SME Performance Indicators
Small and Medium Enterprises play a critical role in Tanzania’s economy, contributing 35% to GDP and
employing 60% of the workforce. However, the sector faces significant challenges including limited access
to finance, high failure rates, and inadequate support infrastructure.
SME Ecosystem Performance & GapsIndicatorCurrent StatusTarget/GoalGap AnalysisSME GDP Contribution35%40% by 2030Below potentialSME Employment Share60% of workforce-Critical for job creationStartup Failure Rate (3 years)60-70%40-50%Very high mortalityAccess to Formal Credit15%30%Severe funding gapAverage Loan SizeTZS 10M (~$4,000)-Insufficient capital
⚠️
Critical SME Challenges
The 60-70% startup failure rate within 3 years and only 15% access to formal credit
highlight urgent needs for entrepreneurship support, financial access programs, and business development services
to unlock the full potential of Tanzania’s SME sector.
6.2 Proposed SME Investment Package
A comprehensive SME support package has been proposed to address the sector’s critical challenges and
accelerate economic formalization. The package focuses on tax reforms, entrepreneurship infrastructure,
and enabling business environment improvements.
Proposed SME Investment Package (2026-2030)Investment AreaAmount (USD)Expected JobsEconomic ImpactTimelineTax Reforms
(Corporate & Import duty reduction)Policy reform20,000-30,000GDP +0.5-1%2026Entrepreneurship Hubs
(Dar es Salaam + Arusha) + Seed Funding$28 million14,000Reduce failure rate to 40-50%2027Infrastructure
(Port, Railway, Roads, Digital Logistics)$1.05 billion35,00020M tons port capacity2028-2030TOTAL INVESTMENT$1.078 billion69,000 jobsGDP +$2.5-4 billion2026-2030SME Investment Package BreakdownExpected Job Creation by Investment AreaExpected Benefits of SME Investment Package:
Job Creation:
69,000 new formal sector jobs across tax reforms, entrepreneurship hubs, and infrastructure development
GDP Growth:
Estimated contribution of $2.5-4 billion to GDP through enhanced productivity and formalization
Reduced Failure Rates:
Lower startup mortality from 60-70% to 40-50% through targeted support and mentorship
Enhanced Competitiveness:
Lower tax rates and import duties will make Tanzanian businesses more competitive regionally
Improved Infrastructure:
Port capacity expansion to 20M tons/year and enhanced logistics will reduce business costs by 15-20% 7.1 Political Environment
Tanzania achieved Lower Middle-Income Country (LMIC) status in 2020 after three decades of market-based
reforms. The country has maintained political stability through peaceful democratic transitions, unified
national identity across 120+ ethnic groups, and a predictable policy environment that supports long-term
investment planning.
Political Stability & Governance IndicatorsFactorStatusPolitical SystemMulti-party democracy since 1992Political Stability✓ Strong – unified national identity; peaceful transitionsNational UnityHigh social cohesion across 120+ ethnic groupsInvestor ProtectionConstitutional guarantees; improving legal frameworkCorruption IndexOngoing anti-corruption initiatives
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Governance Achievement
Tanzania achieved Lower Middle-Income Country (LMIC) status in 2020 after three decades
of consistent market-based reforms, demonstrating sustained commitment to economic development and
institutional strengthening.
7.2 Vision 2050 Development Strategy
Tanzania’s Vision 2050 is an ambitious long-term development framework targeting upper-middle-income status
by 2050 with a $1 trillion economy. The strategy emphasizes sustained economic growth, human capital
development, and inclusive prosperity across all sectors.
Overarching Goals:
Upper-Middle-Income Status by 2050:
Elevate Tanzania from lower-middle to upper-middle-income classification
USD $1 Trillion Economy Target:
Achieve a total GDP of $1 trillion through diversified economic growth
Sustained Economic Growth Averaging 8%+:
Maintain robust annual growth rates above 8% to accelerate development
Equitable Social Development:
Ensure inclusive growth benefiting all segments of society
Improved Human Capital:
Focus on STEM education, vocational training, and digital skills development
Environmental Sustainability:
Balance economic growth with environmental protection and climate resilienceVision 2050: Priority Sectors for Job CreationPriority Sectors for Job Creation:
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Agriculture Modernization
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Manufacturing Expansion
✈️
Tourism Development
💻
ICT & Digital Economy
8.1 World Bank Support
The World Bank maintains a substantial engagement with Tanzania through its Country Partnership Framework
(FY2025-2029), focusing on human capital development, private sector growth, and climate resilience.
World Bank Country Partnership Framework (FY2025-2029)ComponentAmountFocus AreasIDA Commitments (as of Sep 2025)$9 billion35 active operationsInfrastructure62% of portfolioRoads, energy, water, transportPeople (Human Capital)29% of portfolioEducation, health, social protectionPlanet (Climate)9% of portfolioClimate resilience, environmentProsperity (Economic)5% of portfolioPrivate sector, trade facilitationDigital1% of portfolioDigital infrastructure, e-governmentWorld Bank Portfolio Distribution ($9 Billion)Country Partnership Framework Focus:
Enhancing Human Capital:
Boost labor productivity through education, health, and skills development
Catalyzing Private Sector-Led Growth:
Enable business environment reforms and entrepreneurship support
Enhanced Resilience to Shocks:
Build climate adaptation capacity and economic shock absorption mechanisms8.2 IMF Support
The International Monetary Fund provides critical support through the Extended Credit Facility (ECF) and
Resilience and Sustainability Facility (RSF), with a positive outlook contingent on continued reform
implementation and fiscal discipline.
IMF Financial SupportProgramAmountDatePurposeECF & RSF Arrangements$448.4 millionJune 2025Support reform implementation
📊
IMF Assessment
Positive outlook with 6% growth in 2025 contingent on continued reform implementation,
fiscal discipline, and declining debt levels. The IMF’s support underscores confidence in Tanzania’s
macroeconomic management and reform trajectory.
8.3 MIGA Investment Guarantees
The Multilateral Investment Guarantee Agency (MIGA), part of the World Bank Group, provides political risk
insurance and credit enhancement for investments in Tanzania, reducing investor risk and facilitating capital flows.
MIGA Guarantees & PipelineStatusExposure/ValueDetailsCurrent Exposure (March 2025)$151 million3 active guaranteesDistributed Energy ProjectPipelineSouthern TanzaniaData Center ProjectPipelineDar es SalaamMining ProjectPipelineUlanga8.4 Minerals Security Partnership (MSP)
Tanzania is positioned to benefit from the Minerals Security Partnership (MSP), launched in 2022 as an
international initiative to secure critical mineral supply chains for the clean energy transition.
MSP Benefits for Tanzania:
Enhanced Capital Access:
Preferential financing for critical mineral projects from MSP member countries
Market Access Guarantees:
Long-term offtake agreements and stable demand for critical minerals
Geopolitical Advantages:
Strategic partnerships with developed economies seeking supply chain diversification
Technical Support:
Access to best practices and technology for responsible mining operationsInternational Financial Support for Tanzania9.1 Geographic Advantages
Tanzania’s strategic position as an East African coastal nation with major port facilities provides
unparalleled access to regional and international markets. The country serves as a gateway to six
landlocked neighbors and benefits from membership in multiple regional economic communities.
62M
Tanzania Population
Growing rapidly
300M+
Combined EAC Market
Preferential access
6
Landlocked Neighbors
Trade gateway
2
Regional Blocs
EAC + SADC
Tanzania’s Strategic Position:
East African Coastal Nation:
Major port facilities at Dar es Salaam, Tanga, and Mtwara providing ocean access
Gateway to Landlocked Neighbors:
Serves Burundi, Rwanda, Uganda, DRC, Zambia, and Malawi as primary trade corridor
EAC Membership:
Preferential market access to 300+ million people across East African Community
SADC Access:
Southern African Development Community membership expands market reach
Regional Trade Hub:
Strategic corridor for intra-African trade under AfCFTAMarket Access Through Regional Integration9.2 Trade Performance (Year ending Aug 2025)
Tanzania has demonstrated robust trade performance with significant growth in exports, particularly in
gold, cereals, and tourism receipts. The current account deficit remains sustainable, financed by FDI
and concessional financing.
Trade Performance Metrics (Year ending Aug 2025)Trade MetricValueGrowth RateTotal Exports (Goods & Services)$16.9 billion+14.8%Gold Exports$4.3 billion+35.5%Cereal ExportsSignificant value+100% (doubled)Tourist ReceiptsRisingTourist arrivals: 2.29MExport Performance by Category (Year ending Aug 2025)
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Sustainable Current Account
Current Account Deficit: Sustainable at 2.6% of GDP (2024), financed by FDI and
concessional finance. This level is well within safe thresholds and demonstrates Tanzania’s ability
to attract foreign capital to finance growth.
10.1 Wealth Distribution (Africa Wealth Report 2025)
Tanzania’s wealth profile demonstrates growing economic diversification and an expanding middle and upper
class. The country ranks as the 12th wealthiest in Africa and 3rd in East Africa, indicating rising
domestic investment capacity and consumer purchasing power.
Tanzania Wealth Rankings (Africa Wealth Report 2025)RankingPositionDetails12th Wealthiest Country in AfricaContinental rankingGrowing wealth accumulation3rd in East AfricaRegional rankingAfter KenyaWealth Profile:
2,100
Millionaires
USD $1M+ net worth
5
Centi-Millionaires
USD $100M+ net worth
1
Billionaire
Mohammed Dewji
Economic Implications:
Expanding Consumer Market:
Growing middle and upper class indicates increasing domestic consumption capacity
Domestic Investment Capacity:
Local wealthy individuals increasingly investing in Tanzania’s economy
Economic Diversification:
Wealth creation across multiple sectors beyond traditional agriculture
Rising Purchasing Power:
Stronger demand for quality goods, services, real estate, and financial products10.2 Wage Trends
Wage growth across urban, rural, and public sectors demonstrates improving living standards and economic
progress. The significant increase in the public sector minimum wage reflects government commitment to
enhancing worker welfare.
Wage Growth Trends (2020-2025)Category20202025GrowthMean Urban WageTZS 425,608TZS 494,812 ($189)+16.3%Mean Rural WageTZS 317,779TZS 367,034 ($140)+15.5%Public Sector Minimum WageTZS 370,000TZS 500,000 (Jul 2025)+35.1%Wage Growth Across Sectors (2020-2025)
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Rising Standards of Living
The 35.1% increase in public sector minimum wage from TZS 370,000 to TZS 500,000
(July 2025) demonstrates government commitment to improving worker welfare and reflects broader economic
gains being shared across the population.
While Tanzania presents compelling investment opportunities, investors must be aware of critical challenges
and risk factors that could impact operations and returns. Understanding these challenges enables effective
risk mitigation and strategic planning.
11.1 Infrastructure Bottlenecks
Infrastructure Challenges & MitigationChallengeImpactMitigation StrategyPort Congestion15-20% additional export costsPort expansion to 20M tons; dwell time reductionLogistics Costs16-20% of exports (vs. Kenya 10-12%)Railway modernization; road network expansionPower ReliabilityIndustrial development constraintHydropower expansion; natural gas utilizationRailway UnderutilizationTAZARA at 20% capacitySGR development; TAZARA rehabilitation11.2 Fiscal & Economic Challenges
Fiscal & Economic Risk AssessmentRisk FactorCurrent StatusSeverityMitigationNarrow Tax BaseOnly 28% formal employment🔴 CriticalFormalization drive; revenue strategy 2025-2028High Corporate Tax30% (vs. regional 10-15%)🟠 HighProposed reduction to 20%Public Debt49.6% of GDP (2025)🟡 ModerateDeclining trajectory to 48.3% (2026)Foreign Exchange ShortageTZS depreciated 8% in 2023🟠 HighExport promotion; FDI attractionInformal Employment71.8% (25.95M workers)🔴 CriticalComprehensive formalization strategyRisk Factor Severity Assessment11.3 Business Environment Challenges
Business Environment GapsIssueCurrent MetricTargetGapEase of Doing Business141st globally120th-21 positionsBusiness Registration Time26 days7 days-19 daysHigh Compliance Burden195 hours/year tax filing100 hours-95 hoursSME Credit Access15%30%50% improvement needed11.4 Political & External Risks
Election Cycles:
Presidential election considerations (though Tanzania has history of peaceful transitions)
Geopolitical Tensions:
Potential spillover effects from regional conflicts
Climate Shocks:
Agricultural vulnerability to extreme weather events
Global Economic Headwinds:
Exposure to commodity price fluctuations and global demand shifts12.1 Manufacturing
Manufacturing presents significant growth potential, currently contributing only 8% of GDP despite vast
opportunities in mineral processing, agro-processing, and export-oriented production for the EAC market.
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Manufacturing Status
Current Status: 8% of GDP (stagnant since mid-1990s); Share of exports below 25%
Major Gap: Significant untapped potential for industrial expansion and value addition
Manufacturing Opportunities:
Mineral Processing & Beneficiation:
Government priority for value addition before export (gold refining, graphite processing)
Agro-Processing & Value Addition:
Transform raw agricultural products into packaged goods, beverages, and processed foods
Import Substitution Industries:
Reduce reliance on imports by producing consumer goods locally
Export-Oriented Manufacturing:
Leverage EAC market access for manufactured goods targeting 300M+ consumers
Textile & Garment Manufacturing:
Cotton production base provides feedstock for textile industry developmentGovernment Incentives:
Zero Duty on Capital Goods:
Imported machinery and equipment for manufacturing exempt from import duties
Special Economic Zones (SEZs):
Tax holidays, duty exemptions, and streamlined procedures in designated zones
Export Processing Zones (EPZs):
Additional incentives for export-oriented manufacturers12.2 Financial Services
Financial services recorded +15.4% growth in Q1 2025, driven by digital financial services expansion,
increasing smartphone penetration, and government digitalization initiatives. Low financial inclusion
creates massive opportunity for innovative solutions.
15.4%
Sector Growth Q1 2025
Low
Financial Inclusion Rate
Financial Services Opportunities:
Digital Financial Services Expansion:
Mobile money, digital wallets, and cashless payment systems
SME Financing Solutions:
Address critical 15% credit access gap with innovative lending models
Agricultural Finance & Insurance:
Weather-indexed insurance, crop financing, and value chain financing
Mobile Money Ecosystem:
Build on existing mobile penetration to expand financial access
Microfinance Institutions:
Serve unbanked and underbanked populations
Investment Banking & Capital Markets:
Support growing corporate sector and infrastructure financing needs12.3 ICT & Digital Economy
ICT and digital economy development is a strategic priority under Vision 2050, with emphasis on digital
skills development, e-government services, and technology infrastructure expansion.
ICT Opportunities:
Data Centers:
MIGA pipeline project in Dar es Salaam signals growing demand for cloud services
E-Commerce Platforms:
Growing middle class and internet penetration create online retail opportunities
Fintech Solutions:
Payment systems, lending platforms, insurance tech, and blockchain applications
Digital Agriculture Platforms:
Farm management systems, market linkage platforms, and extension services
E-Government Services Support:
Systems integration, digital transformation consulting, and software development
Telecommunications Infrastructure:
5G rollout, fiber optic networks, and rural connectivity solutions
Software Development & IT Services:
Custom applications, enterprise solutions, and technology outsourcing12.4 Real Estate & Construction
Real estate and construction attracted major FDI in Jul-Sep 2025, driven by urbanization in Dar es Salaam,
Arusha, and Mwanza, combined with infrastructure development and growing middle-class housing demand.
Real Estate Opportunities:
Commercial Real Estate:
Office buildings, retail centers, and mixed-use developments
Industrial Parks & Warehouses:
Support manufacturing expansion and logistics optimization
Affordable Housing:
Address housing deficit for growing urban middle class
Hotel & Tourism Infrastructure:
Capitalize on tourism sector recovery and growth potential
Infrastructure Construction:
Roads, bridges, ports, and energy infrastructure projects12.5 Renewable Energy
With electricity growth of +19% in Q1 2025 and government target of 10,000 MW capacity, renewable energy
presents exceptional opportunities across multiple technologies.
Renewable Energy Opportunities:
Hydropower Projects:
Abundant water resources support additional hydropower development
Solar Energy:
High solar irradiation ideal for utility-scale and distributed solar projects
Wind Energy:
Coastal and highland areas offer strong wind resources
Biomass & Waste-to-Energy:
Agricultural residues and urban waste provide feedstock
Mini-Grids for Rural Electrification:
Off-grid solutions for remote communities
Battery Storage Solutions:
Grid stabilization and renewable energy integration
Energy Efficiency Solutions:
Industrial and commercial energy optimization13.1 Key Incentives
Investment Incentives FrameworkIncentive TypeDetailsCapital Goods ImportZero duty for manufacturing and mining sectorsSpecial Economic ZonesTax holidays, duty exemptions, streamlined proceduresExport Processing ZonesDuty-free imports, tax incentives for exportersMining SectorZero duty on mining equipment and machineryLocal ProcurementGovernment and mining companies prioritize local sourcing13.2 Investment Facilitation
🏢
Tanzania Investment Centre (TIC)
One-Stop Shop for Investors: TIC provides comprehensive investment facilitation services
Services Offered:
License facilitation and business registrationInvestor aftercare services and problem resolutionLand allocation support and permit processingInvestment promotion and matchmaking
2023/24 Achievement: $3.5 billion FDI facilitatedTanzania Investment and Special Economic Zones Authority:
SEZ Administration:
Manages Special Economic Zones with preferential tax treatment
Investment Promotion:
Coordinates investment attraction and facilitation efforts
Jul-Sep 2025 Achievement:
201 projects worth TZS 6.18 trillion registered
Tanzania has been listed by the United Nations among countries expected to graduate from Least Developed
Country (LDC) to Developing Country status, recognizing two decades of sustained economic progress and
social development.
🎖️
UN Classification Upgrade
Expected Graduation: Least Developed Country (LDC) → Developing Country Status
This milestone reflects Tanzania’s sustained economic transformation and improved human development indicators.
Achievement Highlights:
Average Annual GDP Growth of 6.2%:
Between 2000-2024 (two decades of sustained expansion)
Rising Per Capita Income:
Improved from low-income to lower-middle-income classification in 2020
Poverty Reduction:
Significant decline in poverty rates through inclusive growth
Major Infrastructure Investments:
Transformative projects in energy, transport, and telecommunications
Improved Social Indicators:
Better health, education, and human capital development outcomesImplications for Investors:
Enhanced Creditworthiness:
Improved sovereign credit ratings and borrowing capacity
Improved International Perception:
Greater confidence from international investors and partners
Access to Commercial Financing:
Better terms and conditions for both sovereign and private sector borrowing
Continued Development Partner Support:
Transition period support ensures continuity of assistance15.1 Strengths Summary
✓
Macroeconomic Stability
5-6%+ GDP growth, low inflation, declining debt
✓
Natural Resources
World-class minerals, agricultural land, gas reserves
✓
Strategic Location
Gateway to 300M+ EAC market
✓
Political Stability
Peaceful transitions, predictable policy
✓
Demographic Dividend
62M young, growing population
✓
International Support
$9B World Bank, $448M IMF support
15.2 Strategic Recommendations for InvestorsPriority Sectors:SectorPriority LevelRationaleMining & Minerals Processing★★★★★ HighestCritical minerals demand surge; highest growth potentialManufacturing & Agro-Processing★★★★★ HighestValue addition push; regional market accessInfrastructure & Construction★★★★☆ HighMulti-billion dollar pipeline; government priorityEnergy (Renewable & Gas)★★★★☆ HighSupply gap; strong government supportFinancial Services★★★★☆ HighMassive underserved market; fintech opportunitiesTourism & Hospitality★★★☆☆ MediumPost-pandemic recovery; world-class assetsInvestment Timing:
Immediate (2025-2026):
Mining projects; energy infrastructure; manufacturing setup
Medium-term (2026-2028):
SME ecosystem; agro-processing; digital services
Long-term (2028-2030):
Integrated value chains; regional expansion; advanced manufacturingRisk Mitigation Strategies:
Partner with Local Entities:
Navigate regulatory landscape with experienced local partners
Engage Early with TIC:
Utilize Tanzania Investment Centre and sector ministries for facilitation
Due Diligence on Infrastructure:
Assess infrastructure dependencies and plan accordingly
Community Relationships:
Build social license to operate through community engagement
Diversify Across Sectors:
Where possible, spread risk across multiple investment opportunities
Leverage Investment Guarantees:
Use MIGA and development finance institutions for risk mitigation
Stay Informed:
Monitor regulatory changes and policy developments continuously15.3 Final AssessmentThe Investment Opportunity
Tanzania presents a compelling investment opportunity characterized by strong fundamentals
(robust economic growth, political stability, strategic location), transformative potential
(infrastructure revolution, formalization drive, industrialization push), and global relevance
(critical mineral supplier for clean energy transition).
The convergence of abundant natural resources, strategic reforms, infrastructure development, and
international support creates a unique investment window for forward-looking investors
seeking exposure to one of Africa’s most promising growth stories.
📚
Data Sources & Analysis Date
Sources: Tanzania Investment and Consultant Group (TICGL), World Bank, IMF, African
Development Bank, Bank of Tanzania, Tanzania Investment Centre, Ministry of Minerals, Government of
Tanzania Statistical Reports, UN Reports
Analysis Date: January 2026
Last Updated: Based on latest available data through Q4 2025
Related Resources & Analysis
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