Beyond mortgage finance, significant opportunities for growth in housing microfinance exist in Tanzania, according to the Centre for Affordable Housing Finance in Africa (CAHF).
Tanzania’s construction sector generated USD 6.7 billion (14% of GDP) in 2018 compared to USD 4 billion in 2014, representing an increase of 68%.
According to the Bank of Tanzania (BoT), the growth in the construction sector was attributed to growing public investments (construction of standard gauge railway, bridges, airports, and roads, expansion of ports), as well as on-going rehabilitation of metre-gauge railway.
Tanzania’s real estate sector contributed 4% to the country’s real GDP in 2018 with USD 1.4 billion, compared to USD 1.2 billion in 2014. This represents an increase of 17% mostly driven by the increasing demand for urban accommodation.
Tanzania’s water supply, sewerage, and waste management activity contributed nearly 1% to the country’s GDP in 2018 with USD 205 million, compared to USD 164 million in 2014, representing an increase of 25%.
According to the country’s 2025 Development Vision, investments in Tanzania’s infrastructure, particularly in the development of the road network, must be the Government’s top priority.
The WB’s Infrastructure Projects in Tanzania
In 2018, the WB enhanced the Tanzania Country Partnership Framework 2018-2022 (CPF) which outlines more intensive engagement in priority areas including transport.
The WB’s current portfolio in Tanzania includes 20 projects with a total commitment of USD 4.07 billion, most of which is dedicated to transport development.
In April 2014, the WB approved the Intermodal & Rail Development Project of Tanzania to support the development of reliable railway infrastructure on the Dar es Salaam-Isaka section of the East African Central Corridor, mainly by building new terminals and reconstructing bridges. According to the WB, the Intermodal & Rail Development Project will consequently help to promote agricultural trade and job creation across the country.
In March 2015, the WB approved the Dar es Salaam Metropolitan Development Project to improve urban services in Dar es Salaam by upgrading and building priority roads and drainage systems.
The AfDB’s Infrastructure Projects in Tanzania
The focus of the projects funded by the AfDB in Tanzania is mostly on infrastructure development and governance.
In 2019, the AfDB approved a USD 272.12 million loan to Tanzania for the construction of a new international airport in the capital Dodoma. Work will be carried out over four years and will include a passenger terminal, a runway, air navigation equipment.
In the same year, the AfDB approved a EUR 345 million financing package for road construction in Tanzania and Kenya. The road is a key component of the East African transport corridors network, connecting Tanzania and Kenya. Producers, manufacturers, and traders will be able to move goods more quickly and cheaply.
Last Update: 8th September 2020
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