Report

Tanzania Construction Market Analysis

The Tanzania construction market stands at USD 10.7 billion in 2025 and is projected to reach USD 17.4 billion by 2030, advancing at a 10.2% CAGR. Momentum stems from Tanzania's lower-middle-income transition, steady public spending, and a reform agenda that now attracts deeper private capital. Infrastructure projects such as the Standard Gauge Railway and Julius Nyerere Hydropower Project continue to dominate order books, while affordable housing policies, green building incentives, and modern construction methods provide new demand layers. Growing urban populations, particularly in Dar es Salaam, expand the pipeline for residential and mixed-use schemes, and the gradual adoption of prefabrication is beginning to compress project cycles. At the same time, material-price volatility and pockets of skilled-labour shortages weigh on near-term margins, nudging developers toward closer supplier partnerships, wider use of local inputs, and more formal training programs. Competitive intensity remains high, with international contractors leading megaprojects and local firms consolidating around mid-sized civil works.

Tanzania Construction Market Trends and Insights



Sustained Government Infrastructure Investment and Expansion of Public-Private Partnerships (PPPs)

Tanzania's 2024/25 budget prioritizes flagship civil works, and revisions to the PPP Act have removed key procedural frictions, prompting an uptick in registered projects and accelerating job creation. The Tanzania Electronic Investment Window shortens lead times for approvals, while the scrapping of 374 minor fees trims project overheads. Robust PPP pipelines are emerging across rail, energy, and logistics corridors, giving private operators a clearer revenue-risk profile that aligns with multilateral lending guidelines. These frameworks underpin the Tanzania construction market's ability to mobilize long-tenor finance, improve cost recovery, and accommodate life-cycle maintenance provisions.

Rising Urbanization and Government-Backed Affordable Housing Initiatives Across Major Cities

Dar es Salaam's population of nearly 5 million and a national housing deficit of 3 million units underpin the case for scaled residential delivery. Funding flowing to the Samia Housing Scheme and National Housing Corporation projects broadens mortgage access and stimulates institutional demand for serviced land trade.gov. Pension-fund-backed Watumishi Housing Investment is replicating a rent-to-own model across 19 regions, illustrating how the Tanzania construction market now absorbs diversified financing channels. Rising disposable incomes, coupled with new zoning rules that encourage higher-density projects, further support multi-family and mixed-use formats.

Volatility in Construction Material Prices Driven by Global and Regional Disruptions

Cement prices rose to USD 7.5 per bag even as capacity climbed past 9.1 million tonnes, highlighting supply-chain and tax-related distortions thecitizen.co.tz. Steel inputs mirror this pattern. Although upstream projects such as Liganga iron ore and Mchuchuma coal aim to localize production, the Tanzania construction market remains vulnerable to import duty shifts and logistics bottlenecks. Developers respond by negotiating index-linked contracts, batching material orders earlier, and exploring alternative aggregates to manage cost exposure.

Other drivers and restraints analyzed in the detailed report include:

Steady Growth in Power Generation and Transmission Infrastructure to Meet Energy Demand / Nationwide Scale-Up of Transport Infrastructure Including Roads, Rail, Ports, and Airports / Skilled Labour Shortages Across Engineering, Project Management, and Technical Trades /

For complete list of drivers and restraints, kindly check the Table Of Contents.

Segment Analysis

Infrastructure accounted for 39% of 2024 spending, giving the segment the single largest Tanzania construction market share. The World Bank's USD 200 million backing for the Dodoma Integrated and Sustainable Transport project underscores ongoing multilateral support and is forecast to lift city output by 2% once completed. Such investments positions infrastructure to deliver an 11.5% CAGR until 2030. This growth path hinges on corridor connectivity gains, spill-over benefits from port expansion, and the maturing PPP framework that channels private capital into toll roads and logistics parks. The Tanzania construction market therefore views infrastructure as both demand stabilizer and innovation testbed, particularly for digital project-management systems.

Residential construction ranks second by value. The government seeks to close a 3 million-unit deficit through policy incentives and public land release. Mortgage reforms, combined with National Housing Corporation projects valued at USD 400 million, expand credit penetration, while mixed-income projects broaden addressable demand. Commercial space trails both sectors and grapples with 70% office occupancy in Dar es Salaam, leading landlords to pivot toward flexible floorplates and co-working formats. Retail supply is increasingly bundled into mixed-use precincts, as exemplified by Peninsula Plaza's USD 12 million scheme. These dynamics echo a gradual repositioning within the Tanzania construction market as developers adopt multi-asset risk hedging.

New construction retained an 84% share in 2024, reflecting the Tanzania construction market size bias toward foundational infrastructure and new housing stock. At a projected 10.3% CAGR, new projects will remain the primary earnings engine, anchored by the Annual Development Plan that allocates USD 6.3 billion for civil and social facilities. Public agencies prefer greenfield builds to meet stringent capacity benchmarks, while private developers deploy new schemes to capture first-mover pricing in emerging districts.

Renovation work is comparatively small yet strategically important. Port-upgrade contracts such as the Kigoma Port refurbishment worth USD 16.7 million focus on throughput gains and safety standards. Building-retrofit demand is rising too, with corporate tenants requesting energy audits ahead of lease renewals. Although margins can be higher, project fragmentation and legacy-building documentation challenges limit scale. Nonetheless, targeted incentives for energy-efficient retrofits could widen the revenue base for specialized contractors within the Tanzania construction market.

The Tanzania Construction Market Report is Segmented by Sector (Residential, Commercial and Infrastructure), by Construction Type (New Construction and Renovation), by Construction Method (Conventional On-Site and Modern Methods of Construction), by Investment Source (Public and Private) and by Region (Dar Es Salaam, and More). The Report Offers Market Size and Forecasts in Value (USD) for all the Above Segments.

List of Companies Covered in this Report:

Advent Construction Ltd / Estim Construction Co. Ltd / Becco Limited / Salem Construction Limited / Mohammedi Builders Ltd / China Civil Engineering Construction Corporation (CCECC) Tanzania / Yapi Merkezi / Arab Contractors (Osman Ahmed Osman & Co.) / CRJE (EAST AFRICA) Ltd / Group Six International Ltd / Milembe Construction Co. Ltd / Nordic Construction Company Ltd / Skol Building Contractors Ltd / Masasi Construction Co. Ltd / Stirling Civil Engineering Ltd / Mota-Engil Africa / Khato Civils (T) Limited / Megha Engineering & Infrastructures Ltd (MEIL) / Sinohydro Corporation Ltd / Imperial Construction Company Ltd /

Additional Benefits:

The market estimate (ME) sheet in Excel format /
3 months of analyst support /