Making public investment count for Dira 2050

DAR ES SALAAM: TANZANIA’S ambition to build a US$1 trillion economy by 2050 will depend not only on how much the country invests, but also on where that investment is directed and how effectively it is put to work.

Over the years, the country has built a substantial portfolio of public institutions, State-owned enterprises and strategic investments across different sectors.

As Tanzania moves into a new phase of development under Dira 2050, greater attention is turning to how these investments can support growth in sectors with the potential to generate wider economic value.

Acting Treasury Registrar Ms Lightness Mauki yesterday identified energy and minerals, transport and logistics, financial services, tourism and agriculture as among the strategic sectors central to achieving Tanzania’s ambitions under Dira 2050.

“These sectors matter not only for their direct contribution to economic output, but also for the opportunities they create across wider value chains,” she underscored.

A well-performing Stateowned enterprise can become a supplier, employer, exporter or anchor for private investment. Strategic public infrastructure can lower the cost of doing business and make new areas more attractive to investors.

The economic return from public ownership can therefore extend well beyond the balance sheet of an individual institution.

This is particularly evident in sectors such as agriculture, energy, transport and logistics, tourism and minerals, where investment can generate activity beyond the institutions directly involved.

The same principle applies to minerals. Tanzania’s expanding participation in mining projects illustrates how Government investment can secure a greater share of the value generated from the country’s natural resources.

Through the Office of the Treasury Registrar (OTR), Government currently holds shares in 16 mining projects, compared with 10 in 2024/25, while negotiations for a further nine projects are at the final stages.

The significance of such participation, however, should not be measured simply by the number of projects in which Government holds shares.

The more important consideration is whether these investments generate appropriate financial returns and contribute to wider national objectives. This is where the distinction between ownership and investment becomes important.

Ownership gives Government an interest in an asset. Investment creates an expectation that capital will be deployed in a way that produces a return or advances a clearly defined economic objective.

Government investment assets under the oversight of the OTR increased from 67.73 tr/- in 2020/21 to 92.28 tr/- in 2024/25, representing growth of 37.7 per cent over five years.

This expanding portfolio represents significant national wealth. It also raises an important question: how effectively is that wealth being converted into economic opportunity?

The answer cannot be found in asset ownership alone. It lies in the performance of the institutions responsible for managing and deploying those assets.

A public institution with valuable assets but poor operational performance cannot fully serve the economy. Likewise, an enterprise with limited capacity to invest, innovate or compete risks becoming a cost rather than a catalyst for growth.

This is why institutional performance is increasingly important in public investment management. The OTR has engaged 13 consulting firms to independently assess public institutions under its oversight and identify areas for improvement.

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The exercise began in January 2026, with the first phase completed. Its findings are expected to help identify areas where institutions can strengthen their performance and financial sustainability.

Financial sustainability is particularly important because an institution that continually depends on Government financing has less room to use its own resources for expansion and development.

Reducing unnecessary dependence can release resources for productive purposes while reducing pressure on the public budget. There are already indications that greater self-reliance is possible.

Over the past five years, dependence on Government subsidies by non-commercial public institutions has declined by an average of 12.8 per cent.

The Tanzania Railways Corporation has started meeting salary obligations from its own resources, while the Tanzania Petroleum Development Corporation and State Mining Corporation are already selfreliant.

The Tanzania Bureau of Standards is at the final stage of achieving a similar level of self-reliance.

For commercially oriented public institutions, greater financial self-reliance must also be accompanied by access to appropriate capital. A phased approach is being considered.

In the short term, covering one to two years, the focus is on reducing dependency, conducting annual performance assessments and introducing performance contracts for leadership and management.

Over three to five years, the strategy includes putting in place the capital required by suitable institutions, estimated at one trillion shillings, while considering development support in the form of equity capital rather than conventional grants.

Beyond five years, commercially viable institutions that meet the necessary requirements could potentially access capital markets through initial public offerings.

An initial study on selected institutions has been completed, with a number identified as potentially ready, while consultations with stakeholders are ongoing.

If implemented for suitable institutions, capitalmarket participation could provide access to a wider pool of capital for expansion while strengthening transparency, corporate governance and market discipline.

This is particularly relevant to Dira 2050 because the scale of investment required cannot be financed from Government resources alone.

Public institutions must therefore increasingly become catalysts for additional investment, using public capital to unlock private capital, create opportunities for investors, participate in regional markets and expand Tanzania’s productive capacity.

Their contribution should also be assessed beyond direct financial returns. Public institutions have an important role in expanding production, creating decent employment, increasing exports and foreign-exchange earnings, and strengthening the contribution of non-tax revenue to Government finances.

Their investments can also stimulate activity beyond their immediate sectors.

A strong logistics enterprise can support agriculture and manufacturing, while an efficient energy company can accelerate industrialisation. Similarly, a well-capitalised financial institution can expand access to finance for businesses.

Strategic investment in tourism can create opportunities across accommodation, transport, food production and other services. This is where the importance of critical sectors becomes clear.

Their performance can influence activity across wider parts of the economy, making the effectiveness of public investment in these areas important not only to individual institutions but to the broader development agenda.

The objective is therefore not simply to increase the size of the public sector, but to strengthen the capacity of public institutions to contribute meaningfully to national development.

That requires a corresponding change in how success is measured. For a public enterprise, success cannot be measured only by whether it survives another financial year.

It should also be assessed by whether it expands production, improves efficiency, creates employment, develops markets, attracts investment and generates appropriate financial returns. For Government as an investor, the same principle applies.

The measure of success is not simply the size of the portfolio, but the value generated from it — financial, economic and social.

The C-CEOs Forum 2026, under the theme “High-Performing SOEs for a Competitive, Inclusive and Resilient Economy: Advancing Dira 2050,” provides an important platform for examining what this means in practice. These are not simply matters of corporate administration. They are development issues.

The quality of leadership can determine whether an investment expands or stagnates; effective governance can determine whether public capital is protected and used productively; and strong management can determine whether an enterprise becomes competitive or remains dependent on Government support.

Ultimately, Dira 2050 will test Tanzania’s institutions not only by what they own, but by what they enable the economy to achieve.

The question for the next 25 years should therefore not simply be how much Government owns, but how effectively that ownership is being converted into production, jobs, investment, exports, innovation, revenue and opportunities for Tanzanians.

That is the transition from ownership to value creation — and it may prove to be one of the most important institutional shifts required to turn the ambitions of Dira 2050 into a productive, competitive and resilient Tanzanian economy