Mwinyi sets course for diversified Zanzibar economy

ZANZIBAR: ZANZIBAR is stepping up efforts to diversify its economy and strengthen its position as a leading investment destination, with government leaders and international partners rallying behind the islands’ growth agenda at the Zanzibar Investment Summit 2026.

Opening the summit in Zanzibar yesterday, President Hussein Mwinyi (pictured) said the government is pursuing a strategy aimed at reducing dependence on tourism, while unlocking opportunities in high-growth sectors capable of delivering sustainable and inclusive economic development.

While tourism remains a cornerstone of Zanzibar’s economy, supported by growing international recognition and increasing visitor arrivals, Dr Mwinyi said long-term economic resilience requires a broader and more diversified economic base.

“Sound economic management requires us to reduce exposure to external shocks by building a balanced and productive economy,” he said.

President Mwinyi identified manufacturing, digital services, renewable energy, agro-processing and the blue economy as priority sectors with significant potential to drive investment, create jobs and support sustainable growth.

He noted that diversification is particularly important in addressing employment challenges among the growing youth population while ensuring long-term prosperity for the islands. Dr Mwinyi also highlighted a series of reforms aimed at improving the business environment, including modernisation of land administration systems, expansion of digital government services, reduction of bureaucratic hurdles and strengthened legal protections for investors.

“Investor confidence is built on stability, predictability and justice,” he said.

“We are creating an environment where both local and international investors can operate under transparent rules and equal opportunities.” According to the president, Zanzibar currently hosts more than 800 registered investment projects worth over 9 billion US dollars (about 23.44tri/- ).

These investments are being supported through initiatives such as the Zanzibar Investment Promotion Authority (ZIPA) One Stop Centre, which brings together key government services to facilitate business operations and investment approvals.

The economy is currently growing at 7.3 per cent, while inflation has remained stable at approximately 4.1 per cent, indicators that reflect improving macroeconomic stability and the positive impact of ongoing reforms.

Speaking at the summit, European Union representative Dorota Panczyk Piqueray described Zanzibar as an emerging economic hub with strong potential for sustainable investment and reiterated the bloc’s support for the islands’ development ambitions.

She said the EU’s partnership with Tanzania and Zanzibar focuses on promoting inclusive growth, job creation and economic diversification through initiatives aligned with national development priorities and the EU’s Global Gateway strategy.

“Our message is clear: Zanzibar is open for sustainable business, and the European Union stands ready to connect European companies with local partners,” she said.

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The EU is already supporting several development projects in Zanzibar, including programmes aimed at improving water and sanitation services, expanding access to renewable energy and strengthening blue economy value chains. Through a €110 million (about 333bn/-) programme, the bloc is also supporting aquaculture development, tourism skills training and improved access to finance for businesses.

Energy and digital connectivity emerged as key areas for future cooperation, with growing interest from European investors in solar, wind and battery storage projects, as well as plans to explore the extension of major digital infrastructure, including submarine cable connections.

Minister for Labour, Economic Affairs and Investment Shariff Ali Shariff said the summit offers an important platform for building partnerships and converting investment opportunities into concrete projects.

He noted that discussions during the three-day event are focusing on innovation, industrialisation, job creation and expanding the participation of local enterprises and young people in economic development.

The summit also witnessed the signing of several strategic agreements, including a memorandum of understanding between ZIPA and Afreximbank aimed at strengthening investment financing and trade facilitation. Another agreement was signed with the American Chamber of Commerce in Tanzania to enhance business linkages between Zanzibar and the United States.

In addition, the government launched a new digital land mapping system for Special Economic Zones, a move expected to improve transparency and simplify access to investment-ready land. Mr Shariff said the initiatives underscore Zanzibar’s determination to modernise its investment framework and position itself among Africa’s most attractive investment destinations.

Participants are also taking part in business-to-business and business-to-government meetings, site visits and policy dialogues designed to transform investor interest into tangible partnerships and projects. As Zanzibar charts its next phase of development, leaders say the focus remains on building a diversified, resilient and inclusive economy anchored by strong international partnerships.

“We are not simply attracting investment,” Dr Mwinyi said. “We are building a globally respected investment destination and inviting partners to grow with us.