Tanzania Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in tanzania, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Construction
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Overview

Tanzania in recent years has witnessed growth in the construction industry. This includes both private projects such as residential and commercial real estate as well public projects such as construction of roads, railways, bridges, water systems, telecommunications, and air transport networks to name a few.

There has been a consistent, yearly increase in government spending on infrastructure this past decade which has acted as a stimulant for continued inflows of investments in the construction industry. The infrastructure sector has been the key beneficiary of 2021-22 budget as Tanzania commences the third phase of country’s Five-Year Development Plan (FYTDP III).

Projects to be financed by the government under the plan include the construction of the Standard Gauge Railway (included in the TZS 1.19 trillion allocated for railways), construction of Julius Nyerere Hydropower Project (2,115 MW) (included in TZS 2.34 trillion allocated to power projects), strengthening Air Tanzania Company Ltd, and construction of Crude Oil Pipeline Project from Hoima (Uganda) to Chongoleani, Tanga (Tanzania), and the Busisi bridge in Mwanza.

As of 2020, construction contributed 14.4 percent to the country’s GDP.

Leading Sub Sector

Real Estate

Tanzania’s real estate sector contributed 3.1 % to the country’s real GDP with USD 1.5 billion in 2019, compared to USD 1.2 billion in 2015, an increase of 25%. The large residential housing market is dominated by individual homebuilders who account for over 70% of the total supply.

Housing demand is increasing by about 200,000 units annually, with the current housing deficit estimated at about 3 million units, according to Tanzania Ministry of Lands, Housing and Human Settlements Development.

Commercial real estate is also on the rise as the country emerges as a middle-income economy. Dar es Salaam is the main area of office and retail activity with a retail stock of 153,000 sqm. The main premium malls are Mlimani City Mall in Mwenge, Aura Mall in Upanga, and Mkuki Mall in Kisutu.

The formal retail sector in Dar es Salaam remains undersupplied presenting investors with an opportunity for growth.

Transport

Tanzania transport consists of surface transport (road and railways), inland waterways (lakes and rivers), air transport and sea transport. It is estimate that the sector contributed 8.1% percent to the country’s GDP in 2018 with USD 3.8 billion.

Improving the transportation infrastructure is a key priority for the Government of Tanzania. Improving the nation’s roads, ports, railways and airport infrastructure is critical for the country to improve its internal and external trade and commercial activities as Tanzania strives to become a middle-income country. 

Institutions such as World Bank and African Development Bank continue to support Tanzania in achieving its infrastructure development goals through provision of grants and credits.

Roads

According to Tanzania’s 2025 Development Vision, the government has prioritized development of road networks which is the most widely used form of Transport carrying over 90% of passengers and 75% of cargo in the country.

The road network in Tanzania currently comprises 86,472 kilometers of roads, of which 12,786 kilometers are trunk roads, 21,105 kilometers are regional roads and the remaining 52,581 kilometers are district, urban and feeder roads.

Tanzania National Roads Agency (TANROADS) is managing the national road network of about 33,891 kilometers, comprising 12,786 kilometers of trunk and 21,105 kilometers of regional roads.

Rail

This is another important mode of transport linking regions within and outside Tanzania. Tanzania railway is operated by two railway systems, Tanzania Railway Corporation and Tanzania Zambia Railways (TAZARA).  

The new standard gauge railway is under construction to replace the old inefficient meter gauge railway system. The railway system will link Tanzania with neighboring countries of Rwanda and Uganda and through these two, to Burundi and the Democratic Republic of the Congo, as part of East African Railway Master Plan.

Up until February 2020, the government of Tanzania was using locally generated funds and short-term temporary loans to fund the construction of the first two phases of this standard gauge railway project.

In February 2020, the government received a syndicated loan worth US$1.46 billion, towards the completion of the first two phases of the national SGR. The financing package has Standard Chartered as lead arranger and the Export Credit Agencies of Denmark and Sweden, as major funding sources. The combined contract value for the first two phases is US$2.35 billion with US$950 million worth of funding to be organized by the Tanzania Ministry of Finance and the remaining US$1.45 billion by Yapı Merkezi.

Air: The government has also made effort to develop the air transport in the country through constructing of new airports and terminals. In 2019, the AfDB approved a USD 272.12 million loan to Tanzania for the construction of a new international airport in the capital Dodoma. The new airport will be built in the district of Msalato, 12 kilometers from the capital Dodoma. The new facility is expected to handle at least 50,000 aircrafts and one million passengers per year.

Ports: Tanzania Ports Authority (TPA) is implementing several major projects as outlined in the National Ports Master Plan (PMP). The study laid out long term strategy for Tanzanian Ports to create capacity for the expected demand. One of such projects is the Dar es Salaam Maritime Gateway Project (DMGP).

DMGP plans to improve port effectiveness and efficiency by converting the port into a world class port with optimized efficiency to accommodate the calling and reception of larger vessels.

Port modernization projects include but are not limited to strengthening and deepening of berths 1-7 and RORO terminal, dredging of entrance channel, turning circle and harbor basin, strengthening and deepening berths 8-11, and constructing a new terminal jetty.

Opportunities

With improvements and upgrades foreseen in every sub-sector listed above, interested U.S. firms should continually scan the web resources listed below for tenders and upcoming opportunities.  In the near term, the Tanzania Investment Center has noted several areas of opportunity in their Investment Guide.  Highlights include:

  • Development of inland container depots and international container operations at Mwanza, Kigoma, Tabora, Morogoro, Arusha, Tanga, Shinyanga, Dodoma and Mpanda.
  • Opportunities for rail rolling stock and locomotives.
  • Building of hotels at regional airports.
  • Building shopping complexes and lounges at the international airports.

Potential Investment Area at Dodoma International Airport include

  • Aircraft maintenance hangar,
  • Convention center,
  • Shopping mall,
  • Four-star hotel.

Resources 

Ministry of Transport

Tanzania Ports Authority (TPA)

Tanzania Road Agency (TANROADS)

Tanzania Airport Authority (TAA)

Tanzania Railway Limited (TRL)
Tanzania Investment Center (TIC)

African Development Bank (AfDB)

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