Tanzania Targets Sh2.8 Trillion Savings Through Local Production Boost

Daftar Isi

Tanzania's Ambitious Industrialization Drive

Tanzania is embarking on a bold industrialization initiative aimed at significantly reducing its dependence on imported goods. The government estimates that this shift could save over Sh2.8 trillion annually, aligning with the first phase of Dira ya Maendeleo 2050, the country’s long-term national development vision set to commence next year.

This strategic move, introduced by the Minister of State in the President’s Office (Planning and Investment), Prof Kitila Mkumbo, marks a pivotal change in Tanzania’s economic approach. It focuses on enhancing domestic manufacturing, redefining investment incentives, and addressing the growing issue of youth unemployment.

During an interview in Dar es Salaam on December 8, 2025, Prof Mkumbo outlined the government’s plan to target eight priority products from the 96 items worth Sh15 trillion imported in 2024. These products will be produced locally, aiming to replace imports and save Sh2.8 trillion annually.

“Our goal is to replace imports with local production,” he stated. “Starting next year, Tanzania will no longer need to import sugar. In fact, we will look for export markets for the surplus we produce.”

Sugar and edible oil are at the top of the priority list. Although Tanzania has processing plants for sunflower oil, the challenge lies in the shortage of raw materials. Prof Mkumbo emphasized the need for new investments to include contractual farming arrangements, similar to those used in the sugar sector.

Other targeted imports include wheat, dairy, beef, and fish from deep-sea and cage-based aquaculture. Tourism and real-estate development are also key areas, with plans to revitalize urban areas such as Vingunguti, Manzese, and Buguruni through public-private partnerships.

Investment Strategy and Economic Reform

To attract the necessary private-sector participation, Tanzania is reforming its investment climate. The One-Stop Facilitation Centre is being strengthened to streamline the process for obtaining permits and registrations. Investors can now obtain these in one place with full authority.

The Tanzania Investment and Special Economic Zones Authority (TISEZA) manages a national land bank of 170,176 hectares, including 78,444 hectares of large farms earmarked for agricultural investment. This initiative aims to reduce the challenge of land availability for investment significantly.

“Anyone with a large farm can now submit it to TISEZA, which will then secure investors for joint development,” said Prof Mkumbo. The country currently has 34 Special Economic Zones covering 22,623 hectares, with more planned as the government prepares to roll out a national investment platform and hold quarterly sessions with investors to resolve bottlenecks swiftly.

Investment projects will be prioritized based on job creation, export potential, and value-addition capacity, especially in mining, where policy dictates that investors must process minerals domestically before export.

Expert Perspectives and Challenges

Economist Prof Benedict Mongula described the plan as “logical and overdue” but warned that its success depends on investor confidence. “This requires the private sector to be central. The government must make the environment predictable, transparent, and cost-effective. Investment flows where confidence is strong.”

Industrial policy analyst Dr Neema Laurent noted that the Sh2.8 trillion target is achievable only if structural weaknesses are addressed. “We must invest heavily in agricultural technology, logistics, and skills development. Otherwise, factories will continue to face raw-material shortages.” She added that the policy’s biggest test will be its impact on youth unemployment, one of Tanzania’s most pressing socio-economic challenges.

Youth Employment and Inclusion

With over 900,000 young Tanzanians entering the labor market each year and only a fraction securing formal jobs, youth inclusion has become a pressing issue. Prof Mkumbo acknowledged the gap and outlined a strategy to “make young people feel part of the government’s economic agenda.”

A new youth investment program will be launched within EPZA zones, offering technical training, enterprise incubation, and access to seed capital. The government has already allocated 340 acres in Nala (Dodoma), Bagamoyo, Pwani, Mara, and Ruvuma for young graduates—particularly from technical universities—to start manufacturing ventures.

“We want to change the mindset that employment exists only in government,” he said. “Young people will be supported to form companies, access land, and link up with industrial investors.” Financial institutions have already agreed to participate, he added.

Political Stability and Long-Term Confidence

Prof Mkumbo emphasized that investment thrives on political stability, noting that Tanzania’s recent turbulence would be managed. “Every nation faces difficult moments. We will overcome ours and remain a united country.”

As Tanzania prepares to implement Dira 2050, the government’s import-substitution drive represents more than an economic reform—it is an effort to redefine the country’s development model. Success will depend on investor trust, policy consistency, and the country’s ability to harness the energy and innovation of its young population.

The goal is clear: a more self-reliant Tanzania that produces more, imports less, and creates jobs in the process.