Tanzania’s roads and railways are not the best in the region, but the government is making an active effort to change that with the support of development finance institutions (DFIs). The African Development Bank (AfDB) recently approved a $232.5 million loan for a Tanzania-Kenya Road project. Roads and railways are the key to improving distribution and life in Tanzania and to broadening regional integration, says one ADB insider, but most East African governments cannot afford it without DFI money.
The growing improvement in roads and railways across East Africa opens opportunities for logistics in a country where urbanization stands at about 30 percent, and many farms operate at a significant distance from the ports in Dar es Salaam. Fuel and electricity prices have undermined logistics and warehousing generally in Africa, but the changing dynamics around these two factors in Tanzania in the near future should boost returns. Prices for both fuel and electricity should slowly starting decreasing with new investments in each sector. As they drop, manufacturing and industrials will grow, giving way to a demand for logistics and warehousing for a multitude of sectors.