Tanzania: East Africa’s new economic powerhouse

DAR ES SALAAAM: THE majority of those who have conducted a critical analysis and assessment of our economic region’s trajectories would concur with my assertion that Kenya has long been the economic leader of East Africa.

But for now, Tanzania is rewriting the regional playbook that might take decades even to reach. Tanzania is on course to surpass Kenya in GDP and in many other respects, a view that has also been expressed by the Kenyan president himself, who, at the EAC Heads of State Summit, openly stated that ‘Tanzania has overtaken Kenya and that I must commend them for the progress they are making’.

The acceptance of such a situation by a top leader in the commercial competition and development of our nation is a clear indication that the Kenyan sitting president has discerned the music played by Tanzania to ensure its economy remains strong and continues to progress.

This is a significant matter. Kenya’s president is to be commended for recognising this and acknowledging that the investments being made, along with the continued support of Tanzania and its strategic objectives under the 2050 vision, are yielding results.

Tanzania’s momentum, built on a solid foundation, is undeniable across technology, trade, and sound governance. Tanzania’s ports, primarily Dar es Salaam, have attracted strategic investors and now handle a higher volume of regional trade than Kenya’s Mombasa.

Improved logistics infrastructure has become a critical entry point for Malawi, Zambia, Uganda, South Sudan, Rwanda, and the Democratic Republic of Congo (DRC). Its logistics dominance is being solidified by substantial infrastructure projects, such as the Standard Gauge Railway and the upcoming Bagamoyo Port, as cemented by Dr Samia’s visit to Tanzania in February 2026, when she briefed the public about a recent meeting with the newly sworn-in Ugandan president in Dar es Salaam.

In addition to enhanced logistics infrastructure, Tanzania is the fourth-largest gold producer in Africa and has reserves of critical minerals, such as nickel, graphite, niobium, and rare-earth minerals, which are now recognised globally as game changers of evolving technologies in high-tech industries.

Efficiency in taxation has increased government revenue, and, in my view, reforms have ensured that these revenues benefit citizens. Additionally, a more transparent business environment has been established.

Tanzania’s fintech sector is equally remarkable, having implemented genuine mobile money interoperability a decade before Kenya. To those who may not be aware, TIPS and TanQR, Tanzania’s national payment switch, facilitate seamless cross-network transactions, thereby enabling large-scale financial inclusion and ensuring that every citizen of Tanzania has access to financial services.

In addition, tourism has continued to thrive, particularly in the aftermath. Dr Samia’s regal tour, which continues to demonstrate to the world that Tanzania is the economic hub of our region, stands in stark contrast to assertions by others that iconic landmarks such as Kilimanjaro fall within their territorial jurisdiction.

As a result of the aggressive post-pandemic recovery efforts, renowned organic tourist destinations such as Serengeti, Kilimanjaro, and Zanzibar are luring recordbreaking visitor numbers.

In the meantime, Tanzania’s government technology (GovTech) reforms are among the most advanced in Africa, ranking second across the continent in the World Bank’s GovTech Maturity Index. These achievements will take Kenya many years to catch up to, after losing the top position due to its own mishandling of the economy, which led the World Bank to rank Kenya as the 10th poorest nation in the world.

When one hears that Tanzania is a new economic powerhouse in the EAC bloc, the message is clear: Tanzania’s socio-economic transformation is driving economic dominance by attracting substantial investment and leading intraregional trade.

Tanzania is quietly pursuing economic supremacy and undergoing an eyecatching socioeconomic transformation. From an economic perspective, it is undeniably even.

Tanzania’s trade performance has been recognised by Kenyan President William Ruto. I believe that trade is merely one of the economic drivers that Tanzania has achieved, and the International Monetary Fund (IMF) projections indicate that, at the current rate of economic expansion, Tanzania will surpass Kenya by far to become the largest economy in the East African Community (EAC) in less than a decade.

The architects have laid the foundation for all previous leaders, including those who have since passed away. President Samia Suluhu Hassan, who favours a subtle yet rigorous approach, is surprising many with her ability to guide the Tanzanian economy toward prosperity by breaking boundaries once dominated by male circles.

Although the results are apparent, Tanzania’s GDP growth has averaged 5.5 percent over the past decade, making it one of the world’s fastest-growing economies. This growth is also attributed to other factors, including peace and stability. Despite the disturbances experienced during the general election, which were instigated by unnecessary organised chaos, Tanzania, like other nations that have faced such a situation, is back on its feet, forging ahead economically.

As it stands, Tanzania is one of the few African countries where investors can plan for the long term without concern about unforeseen political upheavals. Crucially, Tanzania has become a hub for foreign direct investment (FDI) because of strategic interventions and critical economic reforms, which have been accompanied by political stability.

In 2023, global FDI flows decreased by approximately 2 percent, and FDI into Africa decreased by approximately 3 per cent due to weakened global investment conditions, according to the UN Conference on Trade and Development (UNCTAD) World Investment Report 2024. Tanzania was one of the few African economies to see inflows rise, with FDI increasing by approximately 5.9 per cent to approximately 1.34 billion US dollars in 2023, compared with 1.26 billion US dollars the previous year. The stock of foreign direct investment was just under 20 billion US dollars, despite the broader downturn.

Further good news and an update: according to the UNCTAD World Investment Report 2025, FDI into Tanzania increased significantly in 2024, reaching approximately 1.72 billion US dollars, a 28.3 per cent increase from 1.34 billion US dollars in 2023. This makes Tanzania one of the fastest-growing FDI destinations in East Africa and places it among the top 15 African countries by total inflows.

This expansion indicated ongoing investor confidence, fostered by enhanced investment policies and facilitation initiatives. In general, Tanzania meets all the criteria for an FDI centre and, importantly, has met most of its SDG targets ahead of schedule.

This may not be well received by Kenyans; however, Tanzania’s ascent has been discreet but is no longer concealed. Tanzania’s economic leadership in East Africa is being redefined by its combination of prudent reforms, transparency, coordinated understanding, good governance, infrastructure investment, and regional integration, championed by no one else but Dr Samia Suluhu Hassan.