The government of Tanzania has unveiled plans to finance 70 percent of its 2027/28 budget through the private sector, with businesses and investors expected to play a crucial role in the country's economic transformation agenda. According to the Minister of State in the President's Office for Planning and Investment, Prof Kitila Mkumbo, the private sector will contribute Sh62.3 trillion of the Sh89.3 trillion required to implement the 2027/28 National Development Plan.
The government's contribution will be Sh20.7 trillion, while commercially operated public corporations are expected to invest Sh6.3 trillion. This financing model follows the 70:30 arrangement under the Fourth National Five-Year Development Plan (FYDP IV), aimed at expanding private sector participation and reducing reliance on public funding. The plan targets economic growth of 6.6 percent in 2027, up from 5.9 percent in 2025.
Prof Mkumbo presented the proposed plan in Parliament, highlighting the importance of private investment in achieving the country's long-term ambitions under Dira 2050. He noted that 934 investment projects worth $12.5 billion were registered in 2025/26, with the potential to create 307,743 jobs. A further 243 projects worth $3.44 billion were registered in the first quarter of 2026/27, with manufacturing accounting for 57.2 percent of the new investments.
The government has identified 131 projects for implementation through public-private partnerships (PPPs), 10 of which are already underway. These include the Kariakoo Commercial Centre, the Bus Rapid Transit system, and the Tanzania-Zambia Railway Authority (Tazara). To attract more investors, the government plans to reduce investment risks, improve access to information, and speed up decisions affecting businesses.
The government will implement the second Blueprint for Regulatory Reforms to Improve the Business Environment and Investment Climate, known as MKUMBI II. Agriculture, manufacturing, and mining are expected to drive production, exports, and employment. Priority areas include mineral processing, horticulture, aquaculture, edible oils, textiles, and garments, alongside increased production and value addition in cashew nuts, sugar, and wheat.
Infrastructure targets include raising installed electricity generation capacity to 4,804 megawatts by June 2028, from 4,606.14MW in September 2026, and increasing cargo transported through the Central Railway to one million tonnes in 2027/28, from 810,000 tonnes in 2026/27. The government also plans to move towards universal secondary education from 2028 and increase health insurance coverage to 32.38 percent of the population in 2027/28.
Despite the ambitious targets, Parliament's Budget Committee has warned that government arrears, delayed projects, and weaknesses in public spending could undermine the development agenda. The committee chairperson, Mashimba Ndaki, noted that outstanding payments to suppliers, contractors, and service providers had more than doubled to Sh6.58 trillion in June 2025, from Sh3.228 trillion in June 2022.
Key points
- The private sector is expected to contribute 70 percent of the 2027/28 budget.
- The government aims to achieve economic growth of 6.6 percent in 2027.
- The plan targets the creation of an average of 1.7 million new jobs.
