Tanzania Posts $3.2 Billion in New Investments as Special Zones Fuel Manufacturing Push

Tanzania closed the second quarter of 2025 with a capital surge few expected.

The Tanzania Investment Centre, now folded into the new Tanzania Investment and Special Economic Zones Authority (TISEZA), registered 250 projects worth US $3.22 billion, (nearly 8 trillion Tanzanian shillings) a near doubling of capital inflows from the same quarter a year earlier. The projects are forecast to create 35,756 jobs and have positioned the country’s evolving network of Special Economic Zones as the backbone of a manufacturing-led growth strategy.

The figures mark one of the strongest quarterly investment performances in a decade and underscore a strategic pivot: to turn land, logistics and policy incentives into the raw material for industrial transformation.

The Numbers Behind the Surge

TISEZA’s bulletin shows total registered capital rising to US $3.22 billion, up sharply from US $1.64 billion in Q1. Foreign Direct Investment accounted for 78.8 percent, or US $2.54 billion, led by investors from China, the UAE, Mauritius and India. Domestic investment contributed US $681 million.

Manufacturing remained the largest draw, followed by construction and agriculture.

While project count stayed roughly flat, capital intensity rose, implying larger ticket sizes and a shift toward higher-value facilities such as logistics hubs, industrial plants and export processing units.

“This is not just more projects; it’s deeper capital,” said an official involved in TISEZA’s new One Stop Facilitation Centre, where investors process permits and tax exemptions under one roof.

The SEZ Equation

Central to the story is the re-engineering of Tanzania’s industrial geography.

The country’s SEZ pipeline, Bagamoyo (151 ha), Kwala (100 ha), Nala (607 ha) and Buzwagi (1,333 ha) is being marketed as the new foundation of export-driven growth.

Each site is linked to major logistics corridors. Bagamoyo anchors coastal exports; Kwala connects to the Standard Gauge Railway and dry-port system; Nala in Dodoma leverages its central location and access to government institutions; Buzwagi in Shinyanga pivots mining infrastructure toward value-addition industries.

Investors locating within these SEZs enjoy a suite of fiscal incentives that rival peer markets in Kenya or Ethiopia: free or serviced land, import-duty and VAT exemptions on plant and raw materials, and up to 10 years of corporate tax holiday for export-oriented operators. Building permits are promised within 24 hours via TISEZA’s Premier Investors Service Centre.

Policy Continuity and Reform

The 2024 TISEZA Act consolidated the Tanzania Investment Centre and the Export Processing Zones Authority into a single agency, aiming to streamline decision-making and give investors predictable channels of contact with regulators.

The reform also hardened compliance rules. New projects must demonstrate 30 percent Tanzanian ownership, employ local workers, and begin operations within 12 months of licensing. Minimum investment thresholds were raised to US $10 million for foreign investors and US $5 million for domestic firms, signaling an emphasis on scale.

These conditions are designed to temper speculative land-holding and force projects to deliver tangible assets quickly.

Capital Deepening, Job Ratios

The quarter’s data reveal a notable structural shift. Capital inflows have expanded faster than projected employment, indicating more automation and higher productivity per worker.

For policymakers, the trade-off is acceptable: larger industrial plants with long gestation periods but stronger multiplier effects through supply chains. For workers, it means the need for technical and vocational training to meet the demands of more sophisticated manufacturing.

Economists caution that the shift could widen the skills gap unless human-capital investments keep pace. “The data show more money per project but fewer jobs per dollar,” said a Dar es Salaam-based analyst. “The policy test is whether Tanzania can match that capital with matching skills.”

Risks Beneath the Headline

Despite the upbeat figures, several warning lights flash.

First, investor concentration remains high. A handful of large projects account for a major share of capital, leaving the pipeline exposed to execution risk if any one falters.

Second, the new SEZs will require sustained public spending on roads, power and water to convert promised land into functional industrial parks.

Third, global financial conditions could tighten. With U.S. and European interest rates still elevated, project financing costs remain above pre-pandemic levels.

TISEZA has responded by marketing blended-finance models that combine private equity, export-credit and development-finance instruments to de-risk infrastructure.

Investor Opportunity

For corporates seeking a regional manufacturing foothold, Tanzania now competes directly with Kenya’s Athi River and Ethiopia’s Hawassa Industrial Parks.

Its advantage lies in logistics: deep-water access via Dar es Salaam and Bagamoyo ports, rail connectivity to the Central Corridor, and growing power reliability as hydro and gas capacity expands.

Agro-processing, building materials, light manufacturing and energy-related equipment are early candidates. Projects located inside SEZs benefit from tariff-free exports under the African Continental Free Trade Area and East African Community agreements.

Investors outside SEZs can still access fiscal incentives through TISEZA’s National Investment Window, but without the corporate-tax holiday.

The New Bureaucracy

The One Stop Facilitation Centre (OSFC) and the Premier Investors Service Centre (PISC) have already become operational. In Q4 2025, they handled 67 investor visits, assisting with bank-account openings, immigration clearances and permit processing. Traffic through TISEZA’s e-Regulations portal has risen sharply, led by users from the United Kingdom, Canada and South Africa.

For institutional investors, these administrative shortcuts may be as valuable as the tax breaks themselves. In a region often slowed by bureaucracy, predictable licensing is a competitive asset.

Outlook

Tanzania’s Q2 performance has shifted the conversation from potential to execution. The government has built the policy scaffolding: consolidated agencies, serviced land and a single incentive code. The next challenge is ensuring infrastructure delivery and local-skills readiness.

If momentum holds, Tanzania could capture a share of the global manufacturing relocation now spilling from Asia into Africa. For investors able to navigate local-content rules and structure projects with disciplined phasing, the country’s SEZs offer what few markets in the region can match, scale, access and time-to-operation.

As TISEZA’s Act puts it, “Tanzania’s opportunities have never been brighter.” Investors appear to agree.