By Peter Nyanje
While global foreign direct investment (FDI) contracted sharply in 2024, the Common Market for Eastern and Southern Africa (COMESA) defied the trend, recording a historic 154 percent surge in inflows to US$65 billion.
The numbers, detailed in the COMESA Investment Report 2025, are impressive – but for Tanzania, they raise an uncomfortable strategic question: is the country fully positioned to benefit from this regional investment momentum, or is it at risk of missing out?
Tanzania is not a member of COMESA, yet it is geographically, economically and logistically intertwined with several of its fastest-growing investment destinations, including Kenya, Uganda, Zambia and the Democratic Republic of the Congo (DRC).
These countries are increasingly shaping regional supply chains, infrastructure corridors and investment flows – often with direct implications for Tanzania’s competitiveness.
Kenya attracted US$1.5 billion in FDI in 2024, cementing its role as a regional services and logistics hub. Uganda benefited from strong inflows into energy and extractives, while Zambia recorded one of the fastest investment growth rates, driven largely by mining and infrastructure. The DRC, meanwhile, continues to pull in capital linked to minerals critical for the global energy transition.
For Tanzania, this shift matters. Investors are no longer looking solely at national fundamentals. They are assessing regional connectivity, market access, and policy interoperability.
COMESA’s renewed push to harmonise investment rules and modernise its Common Investment Area agreement has reduced regulatory friction for cross-border projects, making the bloc more attractive for large-scale, long-term capital.
Tanzania, by contrast, has focused heavily on strengthening national control over strategic sectors – a policy direction that has stabilised state revenues but also raised concerns among some foreign investors about predictability. While reforms under President Samia Suluhu Hassan have improved the investment climate, competition for capital is intensifying.
The infrastructure race is a case in point. COMESA economies are attracting significant international project finance into energy, transport and logistics. Egypt, Kenya and Zambia are integrating renewable energy projects into regional power pools, enhancing bankability and reducing investor risk. Tanzania has invested heavily in flagship projects such as the Julius Nyerere Hydropower Project, the Standard Gauge Railway and port upgrades at Dar es Salaam, but integration with regional systems remains uneven.
As the African Continental Free Trade Area (AfCFTA) investment protocol takes shape, Tanzania’s challenge is no longer about bloc membership – it is about regional alignment. If COMESA economies continue to dominate infrastructure-linked investment, Tanzania risks becoming a transit economy rather than a value-capturing hub.
The opportunity, however, remains substantial. Tanzania’s strategic location, political stability and large domestic market position it well to plug into COMESA-driven value chains, particularly in logistics, agri-processing and energy transmission. Doing so will require faster regulatory reforms, deeper cross-border coordination and a clearer investment narrative aimed at regional and global capital. COMESA’s investment boom is not a threat – but it is a warning. Tanzania must move decisively to ensure it remains competitive in a region where capital is increasingly selective and mobile.
