Tanzania Eyes Financial Hub Status, But Can It Overcome Hurdles?

According to International Monetary Fund (IMF) data, Tanzania is projected to become a $100 billion economy by 2027, nearly double what it was 10 years ago. It’s progression that comes at a time of momentum. The East African nation is expected to grow by 5.9% this year, followed by 6.1% the following year, and 6.3% in 2028.

Amid these strong growth prospects, the Tanzanian government is actively seeking to attract foreign investment, through setting up its own International Financial Center (IFC), in Dar es Salaam.

Announced in early June during the 38th Executive Committee meeting of the Tanzania National Business Council, the motives “appear to be centered on positioning the country as a regional financial hub capable of attracting international capital and financial institutions,” says Amran Bhuzohera, an economist and investment consultant at Tanzania Investment and Consultant Group Ltd (TICGL).

Dissecting Tanzania’s shallow markets, Bhuzohera reminds FORBES AFRICA that government securities “account for more than 85% of the bond market”.

While a detailed implementation plan is yet to materialize, the next step will likely be a regulatory framework, finalizing governance structures and incentive mechanisms.

In the case of the IFC, which requires alignment between stakeholders, policies, and institutional readiness, Bhuzohera believes it could “take some time before becoming fully operational”.

The IFC’s impact could be monumental in strengthening ties between Tanzania and the international financing community, but Fergus Kell, Research Fellow at Chatham House’s Africa Program, questions “how it will avoid the duplication of mandates with existing institutions such as the Tanzania Investment Center”.

So, while “Tanzania is searching for new initiatives that can reenergize investor interest after a prolonged period of political instability,” Kell adds, doubts remain about the country’s capacity for rapid implementation.

Announcements are easy; it’s the execution that alters the future. That being said, the IFC marks a step in the right direction, potentially transforming Tanzania into one of the region’s most attractive bets.