VISION 2050: Tanzania plans deeper PPPs adoption

DODOMA: THE Public-Private Partnership Centre (PPPC) is set to introduce a new strategy aimed at strengthening the capacity of government institutions to effectively implement Public-Private Partnerships (PPPs).

This new strategy will align with Tanzania’s newly launched National Development Vision 2050.

In an exclusive interview with Daily News, PPPC Executive Director Mr David Kafulila revealed that the strategy will prioritise key sectors such as energy, aviation, ports, railways and logistics, which have been identified as critical to Tanzania’s ambition of transforming into a 1 trillion US-dollar economy by 2050.

“We are developing sector-specific PPP strategies for aviation, ports and railways to ensure institutions adopt the model fully, especially for large-scale infrastructure projects requiring significant capital and modern expertise,” said Mr Kafulila.

Mr Kafulila said that energy will be the cornerstone of the new strategy.

The PPPC is actively engaging institutions such as the Tanzania Electric Supply Company Limited (TANESCO) and the Ministry of Energy to promote deeper adoption of PPP mechanisms, with future investments aligned to the country’s Energy Master Plan.

The strategy calls for increased private sector participation across the entire power value chain, not just generation, but also transmission and distribution, which are currently dominated by the public sector.

He disclosed that legal amendments are underway to open up the transmission segment to private investors, a move expected to unlock capital, accelerate infrastructure delivery and integrate new technologies.

“Funding is only one benefit of PPPs,” he noted.

“They also bring efficiency, innovation and faster execution, which are critical enablers for large-scale development.”

The strategy also focuses on diversifying the energy mix, especially through renewable energy sources such as solar, wind and hydroelectric power, to enhance long-term energy security and sustainability.

This is crucial as electricity demand continues to rise due to population growth, urbanisation and industrial expansion.

Beyond energy, the strategy places high importance on urban transport, particularly commuter rail systems in rapidly growing cities such as Dar es Salaam and Dodoma.

“Investing in urban rail will ease congestion, improve mobility and align with Tanzania’s smart city ambitions,” Mr Kafulila said.

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Likewise, modernising regional railway networks through PPPs is expected to lower transport costs, enhance the efficiency of goods and passenger movement and boost regional trade integration.

Mr Kafulila noted that these sectoral strategies are underpinned by substantial legal reforms, most of which were enacted in 2023, to make Tanzania’s PPP environment more predictable, attractive and investor-friendly.

Among the key changes are the introduction of new engagement models beyond the traditional solicited and unsolicited proposals.

For the first time, direct negotiations are legally recognised, especially for projects deemed of urgent strategic importance.

This allows government institutions to negotiate directly with investors without undergoing lengthy competitive tendering processes, provided the national interest is safeguarded.

Another new model introduced is the “Special Arrangement,” which permits both public and private entities to jointly identify, propose and implement projects.

This co-creation approach is designed to bypass bureaucratic delays and enhance project execution speed, particularly for priority sectors.

These two additions, namely direct negotiation and special arrangements now complement the traditional methods and bring the total to four legally endorsed PPP engagement models.

Further, the amended PPP Act now allows for international arbitration as a dispute resolution mechanism.

This provision is especially reassuring for foreign investors, who may hesitate to commit resources unless they are guaranteed legal protection beyond Tanzania’s domestic court system.

Other reform provisions include government capital contributions for economically viable but commercially unbankable projects and government guarantees such as traffic guarantees for toll road projects or other public infrastructure with unpredictable revenue flows.

These reforms collectively signal a significant shift in how Tanzania approaches private sector collaboration, aiming to reduce investment risk and attract more diverse participation.

According to Mr Kafulila, these measures are already bearing fruit.

Currently, Tanzania has 84 PPP projects at various stages of implementation.

These projects span sectors such as energy, transport, education, healthcare, agriculture and housing.

The cumulative value and impact of these projects demonstrate the growing investor confidence in Tanzania’s PPP framework.

They also highlight the importance of PPPs as a financing mechanism, particularly at a time when public budgets are under pressure and traditional funding sources taxation and external borrowing are increasingly constrained.

Mr Kafulila argued that PPPs are vital not only for mobilising capital but also for improving public sector performance.

Through such partnerships, public agencies can gain access to modern business models, technical expertise and a culture of accountability that enhances service delivery.

He further explained that managerial efficiency, often under emphasised, is a critical enabler of economic transformation.

Public institutions that operate efficiently are more likely to attract investment, deliver better services and meet development goals.

Strategic engagement with the private sector, therefore, is not just a financial decision it is a systemic shift toward performance-oriented governance.

When officiated the launch of the new National Development Vision last week, President Samia Suluhu Hassan directed all government institutions to revisit their operational frameworks, legal instruments and sectoral policies to ensure alignment with private sector engagement objectives under the new national vision.