By Correspondent Peter Haule
Tanzania is reviewing its Public Procurement Act, Cap 410, in a move aimed at increasing the participation of local companies, supporting domestic production and ensuring that public spending contributes more directly to economic growth under Development Vision 2050.
The review is also intended to assess whether existing provisions favouring domestic suppliers, contractors and service providers are delivering the intended benefits, while identifying legal and administrative barriers that may be limiting their participation in government tenders.
Acting Commissioner for Public Procurement Policy in the Ministry of Finance, Alex Haraba, outlined the objectives during a stakeholder consultation meeting in Dar es Salaam, where participants from the public procurement and supply chain sectors were invited to submit recommendations on the proposed reforms.
Haraba said public procurement was an important instrument for achieving Vision 2050, particularly through its potential to stimulate local production, expand business opportunities, create employment and strengthen the private sector.
“Public procurement has a significant role because it is one of the channels through which the government can stimulate domestic production, promote businesses, create jobs and expand economic opportunities for citizens,” he said.
The review comes as the government seeks to build a competitive and inclusive economy, improve the business and investment climate and increase the contribution of private enterprises to national development.
Turning public spending into local economic opportunities
Public procurement represents a major channel through which government expenditure reaches businesses. The effectiveness of the system therefore has implications beyond the acquisition of goods, works and services: it can influence the growth of domestic industries, the development of suppliers and the ability of small businesses to compete for public contracts.
Haraba said the government had already established a policy framework for strengthening supply chain management through the National Supply Chain Management Policy 2025 and its implementation strategy covering 2025 to 2035.
The current legal framework includes the Public Procurement Act, Cap 410, 2023 edition, the Public Procurement Regulations of 2024 and subsequent amendments. These instruments contain provisions intended to increase the participation of local businesses in public procurement.
Among the opportunities are national and exclusive preferences for domestic suppliers, preference for locally manufactured goods, and arrangements allowing local companies to participate in contracts through joint ventures and subcontracting.
However, the ministry wants stakeholders to assess how these provisions work in practice and whether local manufacturers, suppliers, contractors and service providers are benefiting sufficiently.
“ It is important to listen to stakeholders’ experiences, identify legal and operational challenges and obtain recommendations for improving the existing system to increase local participation, promote domestic businesses and strengthen fair competition in public procurement,” Haraba said.
The consultations are expected to examine ways of expanding opportunities for local companies, improving access for manufacturers and small and medium-sized enterprises, making better use of preference schemes, joint ventures and subcontracting, and removing unnecessary barriers in tendering processes.
SMEs and manufacturers in focus
For smaller businesses, access to government procurement can provide an opportunity to secure contracts, expand production, create jobs and build a track record that may help them compete in wider markets.
But the extent to which these opportunities translate into sustainable business growth depends on how procurement rules are implemented, how accessible tender processes are and whether local firms have the capacity to meet contract requirements.
The review therefore provides an opportunity to examine whether existing preference arrangements are sufficiently accessible to smaller enterprises and domestic producers.
It also raises questions about the practical challenges local companies face when competing for public contracts, including the requirements for bidding, partnerships and subcontracting. The ministry did not provide details of specific proposed amendments or quantify the current share of public procurement awarded to local firms.
Haraba said the proposed changes to the law, regulations, guidelines and other directives should reflect the actual needs and experiences of stakeholders operating within the procurement and supply chain system.
He said the recommendations gathered during the consultations would help the government develop a framework that enables the private sector to participate more effectively in national development.
Balancing local participation and value for money
Increasing local participation will also require the procurement system to maintain transparency, efficiency, fair competition and value for money.
Preference schemes can create opportunities for domestic firms, but their effectiveness depends on clear rules, consistent implementation and the ability of local suppliers to deliver goods and services that meet required standards, costs and timelines.
Haraba said a sound public procurement and supply chain system should promote transparency, efficiency, fair competition, value for money and the effective use of domestic resources while supporting Vision 2050.
The challenge for policymakers will be to ensure that efforts to favour local businesses strengthen productive capacity rather than weaken competition or increase the cost of public projects.
The review is therefore significant not only for businesses seeking government contracts, but also for public institutions responsible for ensuring that taxpayers’ money delivers the intended development outcomes.
GIZ backs stakeholder consultations
Umehani Khetri, an adviser with the German Development Agency (GIZ) in Tanzania, which is funding part of the stakeholder consultation meetings, welcomed the initiative.
She said procurement played an important role in development and commended the government for bringing stakeholders together to share their views.
Khetri said such consultations helped promote transparency and participatory systems, which are important in supporting development.
The government is expected to use the views and recommendations gathered from the meetings to inform improvements to the public procurement and supply chain framework. For domestic businesses, the key test will be whether the review produces practical changes that make public contracts more accessible, strengthen local production and enable Tanzanian companies to compete fairly while delivering value for public money.
