Dar es Salaam — THE DDC Kariakoo Business Complex towers above one of East Africa's busiest commercial districts as a reminder of a development idea Tanzania embraced more than two decades ago.
Built on a 42,260-squarefoot plot at an investment cost of 37.25bn/-, the project transformed a public asset into a modern commercial centre capable of generating long-term economic value.
In doing so, it captured the essence of what policymakers envisioned when they placed public-private partnerships (PPPs) at the centre of Tanzania's development strategy.
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As Vision 2025 reaches its conclusion, the project offers an opportunity to assess a question that has shaped economic policy for much of the past two decades: did PPPs deliver the transformation that their architects envisaged?
The answer begins with the Vision itself
When the country launched Development Vision 2025, policymakers recognised that achieving middle-income status, expanding infrastructure and accelerating industrialisation would require investment far beyond what public resources alone could finance.
The state would remain an important driver of development, but the private sector was expected to play a larger role in mobilising capital, technology and managerial expertise.
That thinking culminated in the National PPP Policy of 2009 and the PPP Act of 2010, which established the legal and institutional framework for partnerships between government and private investors.
The policy was based on a straightforward premise: The Treasury could not singlehandedly finance the roads, railways, ports, power plants, hospitals and industrial projects required to transform the economy.
PPPs were, therefore, conceived as a mechanism to bridge financing gaps while improving efficiency and accelerating project delivery.
Minister of State in the President's Office (Planning and Investment) Professor Kitila Mkumbo, said PPPs remain central pillar for implementing the national development plan.
"We cannot achieve our targets without the private sector. PPPs are the bridge between aspiration and achievement," Prof Mkumbo said.
Importantly, the PPP policy also identified many of the challenges that would later emerge. Weak institutional capacity, inadequate project preparation, limited long-term financing and insufficient experience in negotiating complex contracts were recognised as potential obstacles even before implementation gathered pace.
The first major test came with the First Five-Year Development Plan (FYDP I), launched in 2011.
The plan placed PPPs at the centre of efforts to unlock the country's economic potential and support annual growth rates of around 8.0 per cent.
Transport, energy, mining, industry and urban development were identified as priority sectors where private investment would complement public spending.
The list of proposed projects was ambitious. Although the country enacted its PPP law in 2010, implementation remained largely dormant for over a decade.
Momentum only accelerated in 2023, marking a turning point in project structuring and financing. Since then, PPP agreements worth more than 8.5 tri/- have been signed, spanning transport, logistics, urban redevelopment and cross-border projects such as a 1.4 billion US dollars regional rail infrastructure deal.
Railway modernisation, rehabilitation of the Central Line, improvements to the TAZARA network and studies for regional rail corridors were expected to attract private participation.
Port expansion projects in Dar es Salaam and proposals for deep-water ports sought to strengthen the country's position as a regional trade gateway.
Energy became one of the most active areas of the PPP agenda. Gas-fired power plants, transmission infrastructure and natural gas investments were earmarked for private participation as Tanzania sought to address chronic power shortages and support industrial growth. Industrialisation initiatives also relied heavily on PPP arrangements.
Special Economic Zones, industrial estates, SME support facilities and agro-processing projects were designed to leverage private investment while creating employment and expanding productive capacity. Mining featured prominently as well.
The government sought joint ventures to redevelop mineral assets, promote value addition and strengthen linkages between the mining sector and the broader economy.
Yet, midway through implementation, policymakers acknowledged that PPPs and foreign direct investment had not been aggressively pursued.
Infrastructure bottlenecks, regulatory challenges and shortages of skilled personnel limited progress, while many projects struggled to move from concept to execution.
Singapore President Tharman Shanmugaratnam said during his three-day state visit recently that investor confidence is built on predictable regulations and strong institutions rather than PPP arrangements alone.
"Governments should refrain from undertaking projects that can be more efficiently executed by the private sector and instead focus resources on developing high-quality human capital," President Shanmugaratnam said.
The President of Singapore discussed PPPs because his country is among the world's leading examples of successful public-private partnerships.
This success is built on investor confidence, underpinned by stable institutions, policy predictability and a reliable investment environment.
The gap between ambition and implementation became one of the defining characteristics of the Vision 2025 PPP experience.
PPP Centre Chief Executive Officer, Mr David Kafulila, said transparency is helping to attract investors through a national pipeline of projects.
"The pipeline is about transparency and coordination. It shows investors where opportunities lie and gives confidence that the government is serious about partnerships," Mr Kafulila said.
"We need practical solutions that can be launched as pilot projects and demonstrate the benefits of these partnerships."
Even so, the PPP agenda continued to expand. In healthcare, plans emerged for a specialised Spine Injury Treatment and Rehabilitation Centre designed to provide advanced treatment and rehabilitation services for patients from Tanzania and across Eastern and Central Africa.
The proposed facility would accommodate 160 beds and provide specialised services ranging from spinal injuries and neurological disorders to post-surgical rehabilitation and treatment for severe burns and amputations.
The project reflected a broader effort to extend PPPs beyond economic infrastructure into social services, where growing demand was placing pressure on public resources.
Thus, Medical Association of Tanzania (MAT) President, Dr Mugisha Nkoronko, said PPPs can address service gaps and improve access to specialised healthcare.
"We need to ask what the private sector can do more efficiently, what innovations it can bring, and how partnerships can strengthen healthcare services at all levels," Dr Nkoronko said.
Natural gas distribution provided another example. The Tanzania Petroleum Development Corporation (TPDC) proposed a PPP arrangement to distribute natural gas to households, industries, institutions and vehicles in Dar es Salaam, Mtwara and Lindi.
Under the model, private investors would finance, construct, operate and maintain the infrastructure through long-term concession agreements before transferring the assets back to the state.
Urban transport became another frontier
The Dar es Salaam Rapid Transit system sought to tackle worsening congestion in Tanzania's commercial capital while improving mobility and reducing pollution.
Phase Three of the project was designed to connect the city centre, Kariakoo, TAZARA and Gongo la Mboto through a network of dedicated bus corridors, stations and feeder services capable of transporting thousands of passengers daily.
Collectively, these projects demonstrated the breadth of the country's PPP ambitions under Vision 2025.
Association of Private Health Facilities in Tanzania (APHFTA) Vice-Chairman, Dr Mahmood Mringo, emphasised that PPPs go beyond financing.
"Partnerships allow us to combine government responsibility with private-sector innovation and investment to achieve better outcomes for citizens," Dr Mringo said.
Yet, by the launch of the Second Five-Year Development Plan (FYDP II) in 2016, the government concluded that PPP arrangements had not generated the level of investment originally anticipated.
The plan called for stronger institutions, better project preparation and reforms aimed at creating a pipeline of bankable investments capable of attracting private capital.
The National Development Corporation was assigned a greater role in structuring projects and identifying investors, while policymakers sought to strengthen legal and regulatory frameworks governing partnerships.
The experience yielded an important lesson. Successful PPPs depend not only on policy commitments but also on institutional capacity.
Investors require predictable regulations, transparent procurement systems, credible project preparation and clear mechanisms for sharing risks and rewards.
Senior corporate lawyer, Dr Eve Hawa Sinare warned that legal certainty and energy shortages remain major obstacles to investment.
"Investors need assurance that contracts will be honoured and disputes resolved fairly. Clear laws and predictable enforcement are essential," Dr Sinare said.
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"No meaningful development can be achieved without adequate electricity. Energy is the backbone of industrial growth and the economy at large."
Viewed through that lens, the DDC Kariakoo Business Complex stands out because it demonstrates what can happen when those elements come together.
It represents a practical application of the principles that underpinned the PPP agenda from the beginning: leveraging public assets, mobilising private capital and creating infrastructure capable of generating economic returns.
The broader record of Vision 2025 is more nuanced
The country succeeded in creating the legal and institutional foundations for PPPs through the 2009 Policy, the 2010 Act and subsequent regulations. Private participation expanded in sectors such as energy, telecommunications, transport and real estate.
The country also achieved lower-middle-income status during the Vision period. The University of Dar es Salaam economist, Dr Richard Mbunda, called for stronger support for project development.
"Increasing PPP implementation requires investing in project preparation, including strengthening the PPP Facilitation Fund," Dr Mbunda said.
At the same time, many flagship projects progressed more slowly than expected, and the scale of private investment often fell short of the ambitions contained in national development plans. If Vision 2025 is judged solely by the number of completed PPP projects, the verdict may appear mixed.
But if it is judged by whether it established the framework that allows government and private investors to work together in financing national development, its contribution is more substantial.
Tanzania Ship Agents Association (TSAA) Chairman, Mr Daniel Mallongo, urged local firms to participate more actively in large-scale projects.
"Local companies can join forces to implement major projects. This will keep capital in the country and create employment opportunities for Tanzanians," Mr Mallongo said.
The DDC Kariakoo Business Complex offers a glimpse of what the architects of Vision 2025 had in mind when they placed PPPs at the centre of Tanzania's development agenda.
The unfinished task is ensuring that such projects become a standard feature of economic transformation rather than exceptional examples of what is possible.
