David Kafulila, the founding Executive Director of the Public-Private Partnership Center (PPPC), has carved out a unique career path, transitioning from politics into public administration—a move that is far from conventional.
In an exclusive interview with The Chanzo, he shared insights into his journey, experiences, and the vital role of Public-Private Partnerships (PPP) in Tanzania’s economic development.
"The typical trajectory is that one starts as a public servant and later ventures into politics. However, my case was different," Kafulila explained.
"I began as a Member of Parliament (2010–2015) before transitioning into administration. My first role in public service was as Regional Executive Secretary under the Fifth Phase Government, followed by my appointment as Simiyu Regional Commissioner under the Sixth Phase Government. After a year in that role, I was reassigned to serve as the Commissioner of the PPP Division within the Ministry of Finance," he added.
Kafulila emphasized that his transition from politics to administration has given him a unique perspective on the interplay between political decision-making and technical execution.
"Many major political decisions rely heavily on technocrats. Even within ministries, while a minister can make policy shifts, the core policy formulation is done by experts. For instance, the PPP policy was developed by technocrats," he noted.
Recognizing the growing importance of PPPs, Kafulila and his team advocated for a dedicated institution to efficiently manage these complex projects.
"PPP was initially a department under the Ministry of Finance, but given the scope of its responsibilities, we realized that it required a specialized institution. This led to the establishment of the PPPC in 2024, although the concept had existed since 2014," stressed.
Public-Private Partnerships involve long-term contracts where the government collaborates with private sector players to execute projects traditionally managed by the state.
"For example, while the government is responsible for building markets, railways, and ports, it can engage the private sector to finance, construct, and operate these projects, ensuring efficiency and reducing the financial burden on the state," he said.
Kafulila outlined three fundamental reasons why PPPs are essential: attracting private capital, advancing technology, and improving management and efficiency.
He explained that many governments, including Tanzania’s, face budgetary constraints, making it difficult to finance large-scale infrastructure projects.
Engaging private investors ensures that critical projects proceed without relying solely on public funds.
The private sector also possesses superior technology compared to government institutions, enabling faster and more efficient project implementation.
Moreover, private sector management practices tend to be more streamlined and effective than those in the public sector, leading to better service delivery.
Kafulila also highlighted the growing global debt crisis as a key driver behind the need for PPPs.
According to the 2024 IMF report, the world’s total debt stands at over $315 trillion, nearly three times the global GDP of around $110 trillion. While Tanzania’s debt is rising, it remains lower than many of its regional counterparts.
Governments worldwide are under pressure to meet public expectations in infrastructure, healthcare, and education, making PPPs a practical solution to ease the financial strain.
PPPs provide a strategic approach for developing countries like Tanzania to leverage private sector investment in infrastructure while allowing the government to focus on essential social services.
"For example, in education, healthcare, and nutrition—key pillars for building human capital—government intervention remains crucial. However, in infrastructure projects such as ports, railways, and markets, the private sector can play a significant role," he explained.
A notable example is the technological improvements at the Dar es Salaam Port following DP World’s investment.
"Previously, over 30 ships would be queued up at the port, but this number has now dropped to just seven. It’s not that the port lacked capacity; rather, the efficiency brought by the private sector has significantly improved operations," he pointed out.
Kafulila referenced an April 2014 Oxford Review report, which found that institutional efficiency contributes 25% to a nation’s wealth, while the labor force accounts for 62% and natural resources only 5%.
"This demonstrates the crucial role that efficiency plays in economic growth, particularly in Africa, where better institutional management can significantly boost economic performance," he stated in the interview.
Kafulila clarified that PPPs differ from privatization.
"Under PPPs, assets remain government-owned, while the private sector invests, builds, and operates them. Privatization, on the other hand, involves the complete transfer of ownership to private entities. For instance, if a railway is entirely privatized, costs could become prohibitive. However, with a PPP model, the government retains ownership while benefiting from private sector efficiency," he explained.
Kafulila sees immense potential in PPPs for Tanzania.
"PPPs reduce government expenditure, generate tax revenues, create jobs, and promote local investment. Even at the regional level, numerous PPP projects are underway. For example, in local markets, private firms construct and operate facilities, sharing revenue with the government. This reduces the financial burden on the state while ensuring better management," he said.
Tanzania prioritizes local participation in PPP projects.
"When foreign investors generate profits, they often repatriate them, whereas local investors reinvest within the economy. This is not a political argument but an economic reality. The broader concept of local content ensures that the domestic economy benefits through financial transactions and tax audits," he said.
Currently, over 80 PPP projects are in various stages of implementation.
"Take, for instance, the Bus Rapid Transit (BRT) system. While two companies—one local and one foreign—operate in the sector, the ideal scenario would be full local participation. Similarly, a 100% Tanzanian-owned company is constructing a business complex in Kariakoo," he said.
While Kafulila acknowledges the challenges of full local ownership, he emphasizes the benefits of joint ventures.
According to him, during economic transitions, partnerships between local and foreign investors help build capacity and experience. For example, in the IPTL project, a local company held 30% of shares while the foreign partner provided the necessary capital.
Such collaborations enable local firms to eventually stand on their own.
Kafulila stressed the importance of choosing private sector partners that contribute positively rather than creating additional challenges.
"For instance, the BRT system initially faced difficulties, highlighting the need for careful selection of investors. Our goal is to prioritize local firms, with foreign companies being a last resort," he pointed out.
A case in point is the Kibaha-Chalinze highway project of which the 78-kilometer, four-lane road is estimated to cost $350 million (over TZS 800 billion).
"Out of nine bidding companies, eight were from China and one from Turkey. Notably, there were no bidders from Europe, Africa, or Tanzania. This illustrates the need for a strong local private sector that can compete in major projects," he said.
Kafulila’s insights shed light on the transformative potential of PPPs in Tanzania. By balancing political oversight with technical expertise, he has championed an approach that leverages private sector strengths while ensuring government ownership. As Tanzania continues to navigate economic challenges, PPPs stand out as a viable solution for sustainable development.
