DODOMA, Tanzania: Tanzania is rewriting its economic story. Where raw commodities once left the country with minimal benefit, local processing is now creating jobs, boosting revenues, and opening doors for global investors.
The government has implemented deliberate reforms to increase value addition and strengthen local content across key sectors: mining, industry, agriculture, and manufacturing.
These efforts are anchored in strategic frameworks like the Third National Five Year Development Plan (FYDP III), part of Vision 2025, which emphasizes competitiveness and industrialization as drivers of inclusive development.
The results are visible. In 2024, industry, including manufacturing and construction, contributed 28.7% of GDP, marking a long-term upward trend.
Mining’s share of GDP rose to 10.1% in 2024, up from 9.1% in 2023, reflecting stronger oversight, transparency, and formalized markets.
Local content regulations have been a key driver. Under the 2018 amended Local Content Regulations, goods and services are reserved for Tanzanian companies where possible.
In 2024, local procurement in mining reached 88% of total goods and services, rising from TZS 1.85 trillion in 2018 to TZS 4.41 trillion, while 97% of mining employees are now Tanzanians.
President Samia Suluhu Hassan frames this transformation as a strategy to ensure national resources benefit citizens directly.
“Tanzania will stop exporting raw concentrates and aim to become a trading hub for minerals in East and Central Africa by 2030, retaining value within the country,” President Samia said.
Agriculture and local processing
Agriculture, the backbone of Tanzania’s economy, is central to this strategy. By processing crops into higher-value products like flour and edible oils, farmers see better incomes and stable markets. As Amina Msuya from Morogoro explains: “We used to sell raw harvests for small sums. Local processing means fairer prices and more stable income.”
Fiscal policies reinforce this strategy. The 2025/26 national budget prioritizes inclusive economic transformation, domestic resource mobilization, and job creation.
Planning and Investment Minister Prof. Kitila Mkumbo noted that producing previously imported goods domestically could save over TZS 2.8 trillion annually, while surplus output can expand export markets.
Regional trade and integration
Tanzania’s reforms have strengthened its position in regional trade. In 2023, goods exports to African countries reached USD 2.65 billion, exceeding imports of USD 1.5 billion, demonstrating a favorable trade balance under frameworks like AfCFTA and the East African Community (EAC).
By 2024, exports climbed to USD 3.24 billion, placing Tanzania among the top ten African countries for intra-African export volumes.
Value-added exports are also growing. Under AfCFTA scenarios, agricultural and food value-added exports are projected to rise 13.2% over baseline levels, outpacing peers such as Ghana (4.1%) and South Africa (7.5%).
Intra-regional trade continues to expand, with EAC exports rising 47.3% in a 2025 quarter, highlighting Tanzania’s responsiveness to trade liberalization.
Opportunities for investors
Tanzania’s strategy opens multiple avenues for foreign investment:
- Agro-processing: Flour mills, oil refineries, food packaging to serve domestic and regional markets.
- Mining beneficiation: Smelting and refining opportunities, particularly in gold, graphite, and nickel. The sector could reach USD 6.6 billion by 2027, including downstream activities.
- Industrial infrastructure: Energy, transport, and mining-focused industrial parks improve long-term prospects.
Political stability, emphasis on skills development, and partnerships with local companies further strengthen Tanzania’s investment climate.
Challenges and forward-looking strategy
Despite growth, manufacturing’s GDP contribution still hovers around 8–10%, constrained by infrastructure gaps and reliance on imported inputs.
Ensuring local content regulations support deeper forward and backward linkages, such as domestic production of mining equipment, is critical to capture full value.
Tanzania’s approach contrasts with broader African trends, where raw commodity exports still dominate. By linking value addition, local content, and regional market access, Tanzania has positioned itself as a model for African industrialization.
A blueprint for Africa
Tanzania’s experience shows that coherent policies and incentives can transform raw resources into industrial wealth. For global businesses, it offers a platform to invest while aligning with local development, regional integration, and industrial growth.
Whilst Tanzania continues to deepen links across agriculture, industry, and mining, investors capable of bringing capital, technology, and partnerships can access long-term opportunities in a growing African economy.
Tanzania’s strategy offers a continental lesson: value addition and local content, backed by clear policies and investment frameworks, can turn natural resources into competitive industrial capacity.
