Tanzania Targets 70% Private Sector Financing for 2027/28 Development Plan
Tanzania expects the private sector to finance approximately 70 per cent of its TZS89.3 trillion National Development Plan for the 2027/28 financial year, placing businesses and investors at the centre of its economic transformation agenda. The Minister of State in the President’s Office for Planning and Investment, Professor Kitila Mkumbo, presented the proposal to Parliament in Dodoma on Wednesday, 28 October 2026. According to The Citizen, private investment is expected to contribute TZS62.3 trillion, with the Government providing TZS20.7 trillion and commercially operated public corporations a further TZS6.3 trillion.
The financing model follows the 70:30 arrangement under Tanzania’s Fourth National Five-Year Development Plan (FYDP IV), supporting the country’s Development Vision 2050 ambitions for economic transformation, productivity gains, and improved living standards. The Government targets 6.6 per cent economic growth in 2027, up from 5.9 per cent in 2025, and aims to increase job creation to 1.7 million, up from 981,000 in 2025.
Investment & Private Sector Participation
Prof. Mkumbo reported that Tanzania registered 934 investment projects valued at approximately TZS 33.04 trillion in 2025/26, with the potential to create 307,743 jobs. A further 243 projects, worth approximately TZS 9.09 trillion, were registered in the first quarter of 2026/27, with manufacturing accounting for 57.2 per cent of new investments. The Government has also identified 131 projects for implementation through public-private partnerships (PPPs), including the Kariakoo Commercial Centre, the Bus Rapid Transit system, and projects involving the Tanzania-Zambia Railway Authority (TAZARA).
To attract more private investment, the Government plans to reduce investment risks, improve access to information, and expedite business decision-making. It will also implement the second Blueprint for Regulatory Reforms to Improve the Business Environment and Investment Climate, known as MKUMBI II. Priority sectors include agriculture, manufacturing and mining, with opportunities in mineral processing, horticulture, aquaculture, textiles, garments, edible oils, and value addition in cashew nuts, sugar and wheat.
Infrastructure & Social Development Priorities
The plan targets an installed electricity generation capacity of 4,804 megawatts by June 2028, up from 4,606.14 megawatts in September 2026. Cargo transported through the Central Railway is expected to reach one million tonnes in 2027/28, compared with 810,000 tonnes in 2026/27. The Government also plans to prepare for universal secondary education from 2028 and to increase health insurance coverage to 32.38 per cent of the population in 2027/28, up from an estimated 25 per cent in 2026/27. Implementation will involve seven flagship programmes, 38 anchor projects and 34 value-chain areas.
Implementation & Financing Challenges
Parliament’s Budget Committee has warned that outstanding government payments, delayed projects and weaknesses in public expenditure could undermine implementation. Committee Chairperson Mashimba Ndaki reported that arrears owed to suppliers, contractors and service providers totalled TZS6.58 trillion in June 2025, up from TZS3.228 trillion in June 2022. Payments owed to road contractors totalled TZS1.299 trillion in 2025, with delays reportedly forcing some contractors to abandon construction sites and driving up project costs.
The committee also identified delays affecting major projects, including the Ruhudji and Rumakali hydropower schemes, the Liganga iron ore and Mchuchuma coal projects, and the Engaruka soda ash project. Manufacturers face additional constraints, including expensive and unreliable electricity; limited access to long-term financing; outdated technology; and overlapping regulatory authorities. The committee recommended improving the power supply, expanding long-term credit, and strengthening support for industries processing locally available raw materials.
The Government collected TZS55.5 trillion in 2025/26, against a target of Sh56.49 trillion, while expenditure reached TZS55.6 trillion. The committee also cited audit findings showing that TZS6.94 billion allocated to projects was redirected to other uses in 2024/25, underscoring the need for stronger expenditure oversight.
The proposed plan places private investment at the centre of Tanzania’s next development cycle. Its success will depend on the Government’s ability to address regulatory and infrastructure constraints, improve public financial management, and create conditions that encourage businesses to commit the capital needed to meet the ambitious financing target.