By Alfred Zacharia
Tanzania’s economy is growing at a promising rate as the Bank of Tanzania expects the country’s economy to grow by 6 percent in 2025.
Zanzibar’s economy is projected to grow even faster, at 6.8 percent.
This growth comes from strong farming activities, big construction projects, better transport and supply systems, and stable power supply. Good government financial policies have also helped.
But despite this growth, many Tanzanians are still poor. Why is poverty still high if the economy is growing? Why is the growth not helping everyone?
These were the big questions discussed at a recent event held at the University of Dar es Salaam. The event, held on May 27, 2025, focused on how public-private partnerships (PPP) could help achieve Tanzania’s Vision 2050 goals.
The event was organized by the Public-Private Partnership Centre (PPPC) together with the Research and Education for Democracy in Tanzania (REDET).
Globally, the challenge of poverty remains high. A 2024 World Bank report shows that about 700 million people live in extreme poverty. That means they survive on less than 2.15 US dollars a day.
In Sub-Saharan Africa, which includes Tanzania, about two-thirds of the population lives in extreme poverty. That is over 67 percent of the region’s people.
In Tanzania, poverty is measured not just by money. It also includes access to services like education, health, electricity, and roads. Even as the economy grows, many people still lack these services.
Government statistics show the population is growing by 3.2 percent every year. The economy grows by around 5 percent a year. But the pace of poverty reduction is slow.
David Kafulila, Executive Director of PPPC, says public-private partnerships are key in helping the government tackle poverty.
He referred to a study by REPOA, a research institute in Tanzania. The study showed that if the agriculture sector grows by 10 percent each year for three years in a row, poverty could drop by half.
This is why Mr. Kafulila believes the government should focus more on social services like education and health. These areas help people improve their lives in the long term.
He also pointed out that while knowledge is important in today’s world, you can’t build knowledge without good infrastructure. That’s where PPPs can help.
“When the private sector helps with roads, ports, and other projects, the government can use its money to build schools and hospitals,” he said.
A World Bank report released on April 4, 2025, shows that the average income for Tanzanians is 1,149 US dollars a year. Most people work in farming. Agriculture contributes one-quarter of the country’s total economy.
When President Samia Suluhu Hassan took office in 2021, the agriculture budget was under TZS 300 billion. In 2025, it has increased to over TZS 1.2 trillion.
Economist Dr. Bravious Kahyoza says this rise in the agriculture budget helps reduce food prices. It also helps farmers earn more money. When people have more money, they spend more and help grow the economy.
Mr. Kafulila agrees the budget growth is a good move. He noted that irrigation coverage in Tanzania has expanded from 500,000 to 900,000 hectares. But he says this is still not enough.
Tanzania’s draft Vision 2050 encourages new ways of raising money, including PPPs, capital markets, and donations. The aim is to reduce reliance on public spending alone.
Dr. Kahyoza believes PPPs can help bring in more investment, technology, and job opportunities.
Globally, the United Nations has set 17 Sustainable Development Goals (SDGs). Goal Number 1 is to end poverty in all forms by 2030.
Tanzania’s 2024/25 national development plan also highlights the role of private investment. While the government funds big infrastructure, the private sector is expected to drive job creation and production.
Speakers at the Dar es Salaam event praised the work of the PPP Centre.
Dr. Kafigi Jeje noted that 184 local governments have been trained on PPPs. Over 2,800 leaders have taken part in capacity building.
Dr. George Malonga called for more education on PPPs. He said Tanzania needs to train people the same way it trains professionals in other fields.
Dr. David Rwehikiza added that such forums should bring together more leaders. “Let’s invite ministers and top officials to continue these discussions,” he said.
Tanzania is clearly on the right path. But economic growth alone is not enough. If poverty is to be defeated, the government must use every available tool—including PPPs.
With stronger partnerships, better planning, and smart use of resources, Tanzania can achieve its Vision 2050 goals and improve the lives of all citizens.
