Hassan Magulumali
Tanzania’s private sector is expected to contribute TSh 62.3 trillion out of the TSh 89.3 trillion required to implement the 2027/28 National Development Plan, highlighting its growing role in driving the country’s economic transformation agenda.
The government is expected to contribute TSh 20.7 trillion through the national budget, while commercially operated public corporations are projected to invest TSh 6.3 trillion.
Presenting the proposed plan to Parliament, the Minister of State in the President’s Office for Planning and Investment, Professor Kitila Mkumbo, said private sector investment would be central to achieving the objectives of Tanzania’s National Development Vision 2050.
He described the private sector as an engine of economic transformation, noting that the Fourth Five-Year Development Plan (FYDP IV) adopts a financing structure in which the private sector contributes 70 percent and the public sector 30 percent.
The plan targets economic growth of 6.6 percent in 2027, up from 5.9 percent in 2025, while aiming to create an average of 1.7 million new jobs, compared with 981,000 jobs generated in 2025.
Investment and Priority Sectors
Professor Mkumbo reported that 934 investment projects worth US$12.5 billion were registered during the 2025/26 financial year, with the potential to generate 307,743 jobs.
During the first quarter of 2026/27, another 243 projects valued at US$3.44 billion were registered, with manufacturing accounting for 57.2 percent of the investment.
The government has also identified 131 projects suitable for implementation through Public-Private Partnerships (PPPs), with 10 already at various stages of implementation. These include the Kariakoo Business Centre, the Bus Rapid Transit (BRT) system and the Tanzania-Zambia Railway Authority (TAZARA).
Priority investment areas include agriculture, manufacturing and mining, alongside value addition in minerals, horticulture, aquaculture, edible oil production, textiles and clothing, as well as the processing of cashew nuts, sugar and wheat.
The government also plans to improve the investment climate by reducing investment risks, increasing access to information and speeding up business-related decisions through the Second Action Plan for Improving the Business Regulatory Framework and Investment Environment (MKUMBI II).
The country’s electricity generation capacity is projected to increase to 4,804 megawatts by June 2028, from 4,606.14 megawatts recorded in September 2026.
Cargo transported through the Central Railway Line is expected to reach one million tonnes in 2027/28, up from 810,000 tonnes in 2026/27.
In the education sector, the government plans to introduce free secondary education starting in 2028. It also aims to increase health insurance coverage to 32.38 percent of the population in 2027/28, from the current 25 percent.
The development plan comprises seven major programmes, 38 flagship projects and 34 value chains. Government institutions have been directed to align their strategic plans with Vision 2050 by June 2027.
Despite the ambitious targets, Parliament’s Budget Committee has warned that rising government debt, project delays and weaknesses in public financial management could undermine implementation.
Committee Chairperson Mashimba Ndaki said outstanding payments owed to suppliers, contractors and service providers had more than doubled, rising from TSh 3.228 trillion in June 2022 to TSh 6.58 trillion in June 2025.
Road contractors alone were owed TSh 1.299 trillion in 2025, with delayed payments forcing some contractors to suspend work on project sites.
The committee also raised concerns over delays affecting major strategic projects, including the Ruhudji and Rumakali hydropower projects, the Liganga iron ore and Mchuchuma coal projects, and the Engaruka soda ash project.
It further noted that the manufacturing sector’s contribution to Gross Domestic Product (GDP) declined from 6.8 percent in 2024 to 5.9 percent in 2025.
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To address these challenges, the committee recommended improving electricity supply, expanding access to long-term financing, supporting domestic processing industries and strengthening irrigation and agricultural infrastructure.
On public finances, the government collected TSh 55.5 trillion in revenue during 2025/26 against a target of TSh 56.49 trillion, while expenditure reached TSh 55.6 trillion.
The committee urged stronger expenditure controls and improved management of borrowed funds, revealing that TSh 6.94 billion had been diverted from designated projects during the 2024/25 financial year.
The successful implementation of the 2027/28 development plan will therefore depend not only on the scale of planned investment but also on effective financial management, timely project execution and stronger collaboration between the public and private sectors.
