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How Tanzania can create more homegrown dollar billionaires
Mohammed ‘Mo’ Dewji, Tanzania's richest person, leads MeTL Group, a multibillion-dollar conglomerate spanning agriculture, manufacturing, and finance. PHOTO | COURTESY
What you need to know:
- While the number of millionaires has increased by 20 percent over the past decade, economists believe this figure could be much higher if the country had strategic policies to support fast-growing local investors capable of expanding into international markets.
Dar es Salaam. Tanzania is being urged to adopt deliberate economic policies to create dollar billionaires and strengthen its international economic influence.
According to a new wealth report, the country has only one dollar billionaire and a small pool of high-net-worth individuals.
The Africa Wealth Report 2023 reveals that Tanzania has 2,400 individuals with a net worth exceeding $1 million. Of these, only six have assets above $100 million, while the country has just one billionaire despite being East Africa’s second-largest economy.
While the number of millionaires has increased by 20 percent over the past decade, economists believe this figure could be much higher if the country had strategic policies to support fast-growing local investors capable of expanding into international markets.
“The government could significantly boost some of our wealthy entrepreneurs by matching or even partially matching their capital. That alone could reduce our reliance on imports,” said Dar es Salaam-based entrepreneur Amina Salum.
Experts point to the United States and China as examples of countries that have used state support to create global economic powerhouses. In 2024 alone, the US government allocated over $180 billion in subsidies to its domestic companies.
Firms such as Boeing, Intel, Amazon and Tesla have benefited from subsidies, tax exemptions and government-backed loans to support research, manufacturing and exports.
Such policies have enabled the US to remain a global tech leader, create millions of jobs and use multinational corporations as ambassadors of national influence.
China, through institutions like the China Development Bank, has extended low-interest loans and subsidies to companies such as CCCC and China Railway Engineering Corporation, enabling them to execute infrastructure projects across Africa and Asia.
Backed by their government, these companies have expanded aggressively, securing contracts in many countries, strengthening China’s global economic influence.
Level playing field no longer enough
Tanzania has long promoted a “level playing field” approach for all businesses. But analysts say this neutral policy risks holding back local firms with the potential to create wealth and export influence.
“Tanzania needs a strategy to support businesses that have proven capacity to create jobs, grow exports and increase tax revenues,” said Prof Abel Kinyondo, an economist at the University of Dar es Salaam.
He said targeted support could include direct financial subsidies, time-limited tax relief to reduce operating costs and credit guarantees to help companies access large-scale capital.
“Strategic preferential treatment works. Ethiopia is already applying it in aviation. Their national airline is now among the best in Africa because it enjoys specific government support,” he said.
Prof Kinyondo emphasised the need for strong oversight and transparency, saying only experienced, high-performing entrepreneurs should be considered for such support.
Another economist, Prof Dickson Pastory of the College of Business Education, said empowering local investors can also enhance national security by reducing dependency on external suppliers for essential goods.
“For crucial sectors, supporting domestic production guarantees supply. It also improves Tanzania’s competitiveness in the global economy,” he said.
While financial subsidies may be challenging for developing countries, Prof Pastory said tax exemptions could achieve similar results. “Reducing tax burdens allows businesses to expand and create more jobs, ultimately boosting national GDP,” he noted.
BoT support mechanisms already in place
The Bank of Tanzania (BoT) has on several occasions expressed willingness to support local businesses through the Export Credit Guarantee Scheme (ECGS) and the SME Credit Guarantee Scheme (SME-CGS). These aim to help private-sector players with bankable projects access financing even when they lack sufficient collateral.
In June 2023, at the height of the dollar shortage, BoT governor Emmanuel Tutuba said the central bank had taken steps to encourage domestic production and promote import substitution.
He said the BoT board had visited several strategic sites to assess opportunities to boost exports and foreign exchange earnings.
“We wanted to know what investors need to scale up production and exports, especially in terms of financial support.”
