Why Tanzania is emerging as East Africa’s growth hub

DAR ES SALAAM:  TANZANIA is strengthening its position as one of East Africa’s influential countries, supported by political stability, improving governance performance, strategic geography and growing economic opportunities that continue to attract regional and global investors.

The latest Ibrahim Index of African Governance (IIAG) places Tanzania among the stronger governance performers in Eastern Africa, highlighting its relative strengths in security, state capacity, human development and foundations for economic growth.

With an overall governance performance score of about 58 points, Tanzania remains among the better-ranked countries on the continent, reflecting its ability to maintain functioning public institutions and a stable political environment.

According to the IIAG, Tanzania’s long-standing peace and stability remain among its biggest advantages, providing a foundation for economic development and regional cooperation.

“Unlike some countries in the region that have experienced prolonged political instability and internal conflicts, Tanzania has maintained a relatively peaceful environment since independence, strengthening investor confidence and supporting long-term development planning,” the report reads in part.

The index further noted that the stable environment has enabled the government to focus on infrastructure expansion, improving public services and implementing economic transformation initiatives aimed at positioning the country as a regional economic hub.

The report also identified Tanzania’s geographical location as one of its key strengths.

Located along the Indian Ocean, Tanzania serves as a gateway connecting East and Central Africa to international markets. The Port of Dar es Salaam plays a critical role in regional trade, handling cargo for several landlocked countries, including Zambia, Malawi, Rwanda, Burundi and the Democratic Republic of Congo.

Investments in roads, railways, ports and energy projects have further increased Tanzania’s importance as a transport and logistics centre.

According to the report, major infrastructure projects, including the Standard Gauge Railway (SGR), port expansion, and energy investments, are expected to improve trade efficiency and strengthen the country’s competitiveness.

Economically, researchers view Tanzania as one of East Africa’s emerging growth markets.

With a population of more than 60 million people, abundant natural resources and a growing consumer market, the country has become increasingly attractive to investors seeking opportunities in mining, agriculture, manufacturing, tourism, energy and digital services.

“The government’s efforts to improve the business environment have contributed to increased investor interest, with companies looking at Tanzania not only as a market but also as a production and regional distribution centre,” the report further reads.

The researchers also highlighted Tanzania’s mineral wealth, including gold and other strategic resources, alongside agricultural potential and expanding industrial activities, as key drivers of future economic expansion.

However, governance experts say Tanzania’s future success will depend on how effectively it addresses remaining challenges, particularly in transparency, accountability, and public participation.

While the country performs strongly in stability and state effectiveness, governance assessments continue to point to areas requiring improvement, including access to public information and strengthening accountability systems.

Analysts argue that economic growth must go hand in hand with stronger institutions to ensure development benefits reach a wider section of society, and public confidence in governance continues to improve.

Tanzania’s growing regional influence comes at a time when East Africa is experiencing increased competition for investment, trade, and economic partnerships.

Kenya remains the region’s leading commercial and financial centre, while Rwanda has built a reputation for efficient public administration and a business-friendly environment. Tanzania, however, combines the advantages of a large market, political stability, natural resources, and strategic geography.

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Such factors, according to the IIAG, are positioning the country as an important player in shaping East Africa’s economic future.

On the other hand, experts believe Tanzania’s next phase of development will depend on how effectively the country builds on its natural advantages and governance strengths to accelerate sustainable growth, create more jobs, expand industries and enhance its competitiveness in the region and beyond.