Manufacturing set to spur Tanzania’s economic transformation

MANUFACTURING is poised to play a pivotal role in Tanzania’s ambition to build a one trillion US dollar-economy by 2050, creating jobs, adding value to local resources, boosting exports and accelerating the country’s transition to an industrialised economy.

As Tanzania seeks to attain upper-middle-income country status and raise per capita income to 7,000 US dollars, the sector is expected to be a key driver of economic transformation under the country’s longterm development framework, Dira 2050, launched by President Dr Samia Suluhu Hassan in July 2025.

With Tanzania’s population projected to exceed 118 million by 2050, expanding manufacturing capacity will be critical to meeting rising domestic demand, creating employment opportunities and strengthening the country’s competitiveness in regional and global markets.

However, growing the economy from its current nominal GDP of approximately 87–95 billion US dollars according to 2025/26 projections cited by the International Monetary Fund (IMF) to one trillion US dollars within the next 25 years will require sustained economic expansion, greater investment in productive industries and a stronger focus on transforming locally available raw materials into higher-value finished goods.

Achieving a one trillion US dollar- economy by 2050 will require sustained economic expansion, with nominal GDP growing by an average of approximately 10–11 per cent annually, depending on the starting point and exchange-rate movements.

To achieve this ambition, Tanzania has identified nine key transformative sectors expected to drive long-term prosperity and sustainable growth.

Dira 2050 provides a framework for identifying and prioritising sectors that can harness the country’s abundant resources, improve livelihoods and sustain economic progress.

Nine transformative sectors

The nine sectors identified as having the potential to drive Tanzania’s transformation by 2050 are agriculture, tourism, construction and real estate, mining, the blue economy, sports and the creative industries, the financial sector, services and manufacturing.

The framework adopts a balanced approach, focusing on sectors that can diversify economic growth while generating substantial employment opportunities.

Its flexible design also allows Tanzania to respond to emerging challenges and opportunities, ensuring that development priorities remain relevant in a changing global economy.

As the country works towards its development vision, prioritising sectors with significant economic, social and environmental benefits will be essential to achieving inclusive and sustainable growth.

Among these sectors, manufacturing stands out for its potential to create jobs, increase exports, add value to local resources and strengthen the linkages that connect different parts of the economy.

Banking on the manufacturing sector Given the country’s limited resources and the broad ambitions of Dira 2050, prioritising investments is essential.

Manufacturing has been identified as a transformative sector because of its potential to accelerate economic change over the next 25 years.

The vision establishes a structured approach to selecting priority sectors based on their capacity to create employment, increase exports, strengthen sectoral linkages, generate public revenue and add value to raw materials.

This approach seeks to balance rapid economic growth with long-term objectives of inclusion, sustainability and economic resilience.

Resources are expected to be channelled towards activities that deliver tangible results while supporting sustained development. One of manufacturing’s principal advantages is its employment multiplier effect.

As Tanzania’s population grows, the country needs sectors capable of generating jobs not only directly but also across interconnected industries.

Manufacturing can stimulate employment in agriculture, transport, logistics, packaging, trade and other supporting activities, thereby broadening its contribution to the labour market. The sector also has considerable export potential.

By producing goods that meet international market demand and developing reliable trade networks, Tanzania can diversify its export base, increase foreign exchange earnings and strengthen its participation in regional and global value chains.

Another important consideration is manufacturing’s ability to strengthen forward and backward linkages. These connections can link local suppliers of raw materials and intermediate goods to manufacturers, distributors and domestic and international markets.

Stronger linkages can support local enterprises, improve economic resilience and promote more balanced development. Value addition is equally important.

Processing locally available raw materials into higher-value finished products can improve productivity, strengthen competitiveness and accelerate industrialisation.

It can also stimulate innovation and diversify the economy away from excessive reliance on unprocessed commodities. Finally, manufacturing can contribute to domestic revenue mobilisation.

By expanding productive activity, formalising businesses and broadening the tax base, the sector can help finance national development priorities, reduce dependence on external financing and support fiscal sustainability.

The prioritisation of transformative sectors will be reviewed periodically to ensure that their relevance and contribution to Tanzania’s socioeconomic development remain aligned with national objectives and changing circumstances.

Status of Tanzania’s industrial sector

According to the National Bureau of Statistics (NBS) Census of Industrial Production 2023 Analytical Report, published in May 2026, Tanzania’s industrial establishments are predominantly single-unit businesses rather than enterprises operating through multiple branches.

The report shows that single establishments accounted for 97.6 per cent of all industrial establishments. Head offices accounted for 1.3 per cent, while branch establishments represented 1.1 per cent.

“Single establishments accounted for the largest share of industrial establishments in both Mainland Tanzania and Zanzibar, compared to head offices and branch establishments. This indicates that most businesses operate as independent units rather than multi-branch enterprises, reflecting a dominance of small and standalone firms within the industrial structure,” the report states.

The census recorded 57,684 industrial establishments, comprising 4,535 large establishments and 53,149 small establishments. Manufacturing accounted for the largest number, with 55,391 establishments.

Mining and quarrying followed with 1,891, while water supply, sewerage, waste management and remediation activities accounted for 274.

Electricity, gas, steam and air-conditioning supply accounted for the remaining 128 establishments. Mainland Tanzania had 54,084 establishments, including 4,228 large and 49,856 small establishments.

Zanzibar accounted for 3,600 establishments, of which 307 were large and 3,293 were small. Manufacturing establishments produce goods for domestic consumption and export.

They range from micro and small enterprises to large industrial plants operating in areas such as food processing, beverages, textiles, leather, chemicals, cement, metal products and pharmaceuticals.

Of the 55,391 manufacturing establishments recorded nationally, food products accounted for 40.4 per cent, wearing apparel for 20.7 per cent, furniture for 14.1 per cent, and fabricated metal products, excluding machinery and equipment, for 12.2 per cent.

Each of the remaining manufacturing activities accounted for less than 10 per cent of the total. In Mainland Tanzania, manufacturing accounted for 51,886 establishments, representing 95.9 per cent of all industrial establishments.

Food products led the manufacturing activities at 42.3 per cent, followed by wearing apparel at 20.5 per cent, furniture at 13.6 per cent, and fabricated metal products, excluding machinery and equipment, at 11.8 per cent. Each of the remaining activities accounted for less than five per cent.

These figures highlight the importance of manufacturing to Tanzania’s industrial base.

However, the concentration of establishments in a relatively small number of activities also points to opportunities for diversifying production, expanding the range of manufactured goods and strengthening the capacity of local enterprises.

Manufacturing as a pillar of economic growth

Over the next 25 years, manufacturing is expected to become a cornerstone of Tanzania’s economic growth and diversification.

Although agriculture has long been the backbone of the economy, heavy reliance on the sector exposes the country to risks associated with climate change, price fluctuations and shifts in global markets. Expanding manufacturing could help reduce these vulnerabilities and strengthen economic resilience.

The sector currently contributes 8.1 per cent of GDP and records annual growth of approximately eight per cent, according to figures cited in the development discussion.

Its potential multiplier effects extend across industries, from agro-processing to the production of construction materials.

Expanding domestic manufacturing could increase local value addition, reduce reliance on imports where competitive domestic production is viable, improve export performance and create employment.

Tanzania’s ambition is to become a globally competitive manufacturing hub by leveraging population growth, technological advances and its agricultural base.

With the population projected to exceed 118 million by 2050, demand for goods and services is expected to increase, creating opportunities for domestic producers to serve a growing market.

However, realising this potential will depend on the country’s ability to expand productive capacity and compete effectively with imported goods.

Technological advances and a stronger agricultural base will be important drivers of this transformation. To unlock the sector’s full potential, Tanzania must address infrastructure gaps, regulatory complexities and limited access to finance.

Strengthening industrial policies, improving the business environment and developing a skilled workforce will also be essential to attracting domestic and foreign investment.

Moving from the export of raw materials towards the production of processed and finished goods would further enhance Tanzania’s position in regional and global markets.

Building on stability for inclusive growth Chama Cha Mapinduzi (CCM)’s 2025–2030 election manifesto also emphasises accelerating economic transformation, developing infrastructure, improving social services and strengthening institutions.

The manifesto identifies industrial transformation as a key driver of economic growth, with an emphasis on modernising the economy by adding value to locally available resources instead of relying primarily on raw-material exports. It sets a target of increasing annual growth in the industrial sector to nine per cent by 2030.

As one of the drivers of economic development, the sector is expected to generate multiplier effects across agriculture, trade, livestock and other industries while expanding employment opportunities.

CCM projects that the broader development agenda will help create 8.5 million jobs and strengthen revenue collection, with the revenue-to-GDP ratio targeted at 15.6 per cent by 2030.

Presenting his office’s budget estimates for the 2026/27 financial year in Dodoma, the Minister of State in the President’s Office (Planning and Investment) said the implementation of Dira 2050 and the Long-Term Development Plan 2026/27–2050/51 would focus on structural transformation.

He said the approach would be driven by sustainable growth in production, expanded industrial capacity, stronger capital formation and deeper integration into regional and international markets.

Achieving these objectives, the minister said, would require high-value economic activities supported by efficient production systems, innovation and a business environment capable of attracting and retaining both domestic and foreign investment.

“Priority is given to providing actionable research-based evidence to strengthen competitiveness, improve investment responsiveness, enhance industrial capacity, promote trade and improve export competitiveness,” he said.

The minister also reported that 60 projects had been registered through Special Economic Zones (SEZs), with major investments directed towards industry.

The projects were expected to attract 499 million US dollars (about 1.3tri-) in investment and create 8,434 jobs. Between July 2025 and March 2026, a total of 45 expansion projects were registered, compared with 36 during the corresponding period of the previous financial year.

In addition, four projects were registered in Special Economic Zones, with a combined value of 145.34 million US dollar (about 383.7bn/-).

The projects are expected to invest in several sectors, particularly the value addition of agricultural products such as avocados and cashew nuts.

They are also expected to create 4,411 jobs and generate estimated exports worth 128.85 million US dollars (about 340,16bn/-).

Reviewing the SEZ framework

In the 2026/27 financial year, the President’s Office plans to ensure that implementation of the Fourth Five-Year Development Plan (FYDP IV), which operationalises Dira 2050, delivers fundamental economic transformation and moves Tanzania closer to becoming a globally competitive industrialised country.

To support this ambition, the office plans to conduct a comprehensive review of the guidelines governing the management and development of Special Economic Zones.

The review will assess the implementation and effectiveness of existing incentives and identify areas for improvement.

Particular attention will be given to ensuring that the incentives attract major strategic investments capable of transforming industry, supporting small and medium-sized enterprises and expanding employment opportunities for young people.

The office also plans to designate special investment areas for young people under the Youth Industrial Special Economic Zones programme.

The initiative is intended to provide access to land for establishing industries and industrial sheds. The proposed areas include Nala in Dodoma, covering 100 acres; Musisiri-Iramba in Singida, 100 acres; Kwala in Pwani, 20 acres; Bunda in Mara, 100 acres; Songea in Ruvuma, 100 acres; and Bagamoyo in Pwani, 20 acres.

Young people will be able to invest individually or in groups and participate in a range of economic activities.

The initiative could help address some of the barriers facing young entrepreneurs, particularly access to industrial land and suitable premises.

Its impact will depend on implementation, infrastructure provision, access to finance and the availability of reliable markets.

Ministry’s plans to strengthen manufacturing

As Tanzania begins implementing Dira 2050, the Ministry of Industry and Trade is also planning measures to strengthen manufacturing and support the ambition of building a one trillion-dollar economy by 2050.

Presenting the ministry’s 2026/27 budget estimates in the National Assembly in Dodoma, Minister for Industry and Trade Judith Kapinga said the ministry would establish and develop industrial infrastructure, conduct research in priority industrial sectors and continue completing the industrial database.

During the financial year, the ministry will also pursue initiatives aimed at strengthening small-scale industries and supporting the growth of small and medium-sized enterprises.

The planned measures include coordinating the establishment and development of industrial clusters for small and medium-sized entrepreneurs across the country, promoting infrastructure development in designated areas, encouraging the formalisation of businesses and helping entrepreneurs access domestic and international markets.

These interventions are expected to strengthen the productive capacity of local enterprises and improve their participation in industrial value chains.

Ultimately, Tanzania’s ambition to achieve a US$1 trillion economy by 2050 will depend not only on the expansion of manufacturing but also on the sector’s ability to generate productive employment, increase exports, improve productivity and add value to local resources.

Achieving these objectives will require sustained investment, effective implementation of industrial policies, a skilled workforce and stronger links between manufacturers and domestic suppliers.

If these conditions are met, manufacturing could play a decisive role in transforming Tanzania’s economic structure and advancing its development ambitions under Dira 2050.