By Correspondent Peter Haule, Nairobi
Tanzania is stepping up efforts to mobilise domestic resources and attract private-sector capital through public-private partnerships (PPPs) as it seeks to finance development projects while reducing reliance on traditional government borrowing.
Deputy Finance Minister Laurent Luswetula said the government would use PPP arrangements and other domestic financing mechanisms to expand investment, particularly in sectors requiring significant long-term capital.
Deputy Minister Luswetula made the remarks during a high-level dialogue on financing for healthcare development at the High-Level Dialogue of Finance Ministers in Nairobi, Kenya. The session was moderated by Eric Meyer, a specialist from the US Treasury Department.
Representing Finance Minister Khamis Mussa Omar, Luswetula said PPPs would be an increasingly important mechanism for bringing private capital into development projects.
“Tanzania is ready to work with the private sector through long-term agreements to implement various projects. We welcome companies and investors to partner with the government in productive investments,” he said.
The government, he added, is seeking to create greater room for private investment as part of efforts to expand economic activity and strengthen the private sector’s role in national development.
More disciplined borrowing
Luswetula also signalled a more selective approach to government borrowing, saying loans would be directed towards projects capable of generating lasting economic and social benefits.
The government, he said, would prioritise strategic investments, particularly basic infrastructure and other capital projects with the potential to support long-term economic growth and strengthen the country’s capacity to service debt.
“We do not want to borrow simply because we want money. We borrow when an investment has long-term benefits and we are confident about how the debt will be repaid,” he said.
The approach is intended to ensure that borrowed funds are channelled into projects capable of delivering returns that justify their financing costs.
For investors, the shift towards PPPs could create opportunities in infrastructure and social sectors such as healthcare, where government demand is high but projects often require substantial upfront capital.
Domestic resources
Mr. Luswetula said Tanzania was also strengthening domestic revenue mobilisation as part of a broader strategy to increase its capacity to finance public services from within the economy.
He cited excise duty as one of the government’s instruments for both discouraging consumption of products that may have negative health effects and raising revenue to support healthcare services and infrastructure.
Revenue from such taxes, he said, forms part of efforts to broaden the national revenue base and increase the government’s capacity to finance social services.
Tanzania is therefore moving towards a financing model that combines domestic resources, co-financing and private-sector investment, rather than relying heavily on donor funding. The strategy places PPPs at the centre of a broader effort to bring private capital into projects traditionally financed through public funds, while maintaining greater discipline over government borrowing.
