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Tanzania - Dar es salaam

1Economic outlook

Tanzania has been a bright prospect for economic activity in East Africa. Projected GDP growth remains robust at 6.7 percent in 2018 and 6.9 percent in 2019. However, a surge in foreign investment in 2009 waned in 2016. This partly reflects falling commodities prices, but underlines unease over policy uncertainty.

2Markets and trends

Tanzania has ambitious plans to develop the port at Dar es Salaam into a major centre for transporting imported goods to landlocked neighbouring countries.

Recent projects include the expansion of Julius Kambarage Nyerere International Airport and improvements to the Voi Taveta road connecting Kenya to Tanzania. The government has also signed an agreement with Uganda for a USD3.55bn oil export pipeline through Tanzania. There are plans for rail improvements including the USD1.9bn construction of the 336km Standard Gauge Railway from Morogoro to the capital, Dodoma.

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Key Facts
Tendering: Lukewarm
Market: Warmer
Cost escalation 2017–18: 6.0%
Cost escalation 2018–19: 5.0%
Contractor’s margin: 6.0%
Preliminaries: 8.0%
Location factor (USD): 47.3
PPP coefficient: 1,392.3

 

 

3Future outlook

Tanzania’s future depends heavily on more investment in infrastructure, building a skilled workforce and managing urbanisation. Public investment, particularly in infrastructure projects, is expected to boost growth in the future.

Its political stability since the 1960s has made it attractive to foreign investment. But recently concerns have emerged. The US State Department’s Investment Climate Statements for 2017 noted “increasing uncertainty in government policies has recently raised questions about the business climate and long-term prospects for investment in Tanzania”

 

 


This content is part of the International construction market survey 2018

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