Digital reforms are improving compliance, cutting administrative costs and expanding opportunities for Tanzanian businesses, while new figures reveal the scale of the economic potential in government contracts.
By Peter Nyanje
The public public procurement system is becoming an increasingly important platform for business growth, with 430,733 tenders worth TSh42.6 trillion awarded through the National e-Procurement System (NeST), according to the Public Procurement Regulatory Authority (PPRA).
The figures highlight the economic significance of reforms designed to make government contracting more transparent, accessible and efficient, while creating opportunities for domestic businesses, small enterprises and groups traditionally excluded from formal markets.
Presenting the authority’s performance and achievements before editors in Dar es Salaam today, Director General Denis Simba said the introduction of electronic procurement, alongside the Public Procurement Act, 2023, and its regulations of 2024, had helped improve compliance, reduce administrative costs and widen participation in public contracts.
The reforms come at a time when Tanzania is seeking to strengthen domestic industries, expand private-sector investment and mobilise resources to achieve its Development Vision 2050 ambitions.
Mr. Simba was speaking during a forum organized by the Office of Treasury Registrar (OTR) which usually give various government institutions opportunity to detail their activities through the media.
Simba noted that approximately 70 percent of the government budget was channelled through public procurement. With the 2026/27 national budget standing at TSh62.3 trillion, the scale of spending involved underlines why the sector matters to businesses across the economy.
NeST changes the rules of engagement
One of PPRA’s most significant achievements according to Simba has been the development and rollout of NeST, which officially began operating in September 2023.
The system enables suppliers to register, access tender opportunities and submit bids electronically. It also supports electronic payments, contract management, catalogues and reverse auctions.
According to Simba, compliance with procurement legislation rose from 65 percent in 2023/24 to 76 percent in 2024/25 and 79 percent in 2025/26.
Although the figures show progress, they also indicate that compliance remains incomplete. Closing the remaining gap will require continued oversight, stronger institutional capacity and consistent enforcement of procurement rules.
The digital platform has also reduced the administrative burden on suppliers. Businesses no longer need to travel to procuring entities simply to deliver tender documents, potentially lowering the cost of pursuing government contracts, particularly for companies based outside major commercial centres.
Simba said NeST had prevented the printing of more than 290 million sheets of tender-related documents, generating estimated savings of TSh28 billion.
The platform’s integration with more than 30 other systems has further reduced the need for businesses to submit multiple supporting documents. Information can instead be retrieved from relevant institutions, helping simplify verification and reduce opportunities for forged documentation.
The authority has also introduced a Bank Security Portal, operational since October 1, 2026, through which more than 36 banks had been connected to facilitate the issuance and verification of tender securities.
Simba told the editors that these developments could make procurement more accessible, although their long-term value will depend on system reliability, effective dispute resolution and the ability of businesses to use digital services confidently.
Local firms gain a stronger position
PPRA is also using procurement rules to increase the participation of Tanzanian businesses in public spending.
“The law provides preferential arrangements for domestic suppliers and locally produced goods. These include reserving eligible tenders worth up to TSh50 billion for Tanzanian-owned companies, subject to the applicable legal requirements,” he said.
Local suppliers competing in international tenders may also qualify for a preference of up to 10 per cent, while locally produced goods can receive a price preference of up to 15 per cent against imported alternatives, he noted.
“The measures are intended to help domestic businesses compete for contracts, strengthen local manufacturing and retain more economic value within Tanzania,” he clarified.
Special groups secure TSh82.34 billion
Another important measure outlined by the PPRA boss is the requirement for public institutions to allocate 30 percent of their procurement budgets to designated special groups, including youth, women, older people and persons with disabilities.
Simba reported that 33,659 groups had registered on NeST, comprising 16,133 youth groups, 16,070 women’s groups, 767 groups representing older people and 689 groups of persons with disabilities.
Together, the groups had secured contracts worth TSh82.34 billion.
“Women’s groups accounted for TSh33.15 billion, followed by youth groups with TSh4.74 billion and groups representing older people with TSh3.78 billion. Groups of persons with disabilities had secured contracts worth approximately TSh680 million,” he said.
The figures suggest that public procurement is beginning to provide a route into formal business for groups that might otherwise struggle to access larger markets.
PPRA’s ambition is to expand participation to 300,000 active special groups under the broader goals of Development Vision 2050.
Simba said the intention was to help groups progress from relatively small contracts towards more established businesses, eventually graduating into the wider private sector as their capacity grows.
OTR sees procurement as a development tool
The Office of the Treasury Registrar views effective procurement as central to accountability across public institutions and corporations.
Representing the office, Sabato Kosuri said PPRA was an important partner in ensuring that public resources were used properly, procurement complied with the law and spending delivered value for money.
He described public procurement as a key instrument for implementing development projects, providing social services and building infrastructure.
Kosuri also linked procurement reform to Tanzania’s long-term economic ambitions, saying stronger oversight could reduce the loss of public resources, improve accountability and create more opportunities for private-sector participation.
Effective procurement, he argued, could expand markets for domestic businesses and manufacturers, encourage industrial development and support job creation.
His remarks underline a wider point: procurement reform is not simply an administrative exercise. It can influence how public investment translates into economic activity, business expansion and employment.
Transparency remains the next test
PPRA says NeST has received international recognition, including an African public procurement award in 2024 and further recognition among digital government initiatives in 2026. The system has also attracted interest from other African countries seeking to learn from Tanzania’s experience.
The authority has continued capacity-building programmes for procurement officers, suppliers, students, journalists and other stakeholders. Simba reported that, between July 2023 and September 2026, approximately 200,000 public-sector employees and 20,000 suppliers had received training, alongside more than 20,000 participants from special groups. These efforts are important because digital systems cannot deliver their full benefits without users who understand the rules and institutions that enforce them.
