Infrastructure investment policy in Tanzania

Better channelling investment toward infrastructure represents a central challenge for Tanzania, and the potential of infrastructure investment, both as a facilitator for development and as an attractive investment channel, remains underexploited. This chapter first charts the state of the country’s key infrastructure sectors, which suggests that electricity provision and the energy sector more broadly present particular challenges. Elaboration of very clear guidelines for development of the natural gas sector, which has high potential for meeting domestic energy generation challenges, has become highly necessary and the government has begun taking several steps in this regard. The regulatory and policy framework for infrastructure development and investment is then investigated in detail, with sector-specific examples. Persistent structural problems include a heavy dominance of inefficient parastatals in infrastructure provision, accompanied by a very poor track record for privatisation and private involvement in utilities in the past. Adequate implementation of the recent regulations for private sector involvement in public infrastructure provision, as well as placing parastatals in a more competitive environment, will be crucial in coming years.