Tanzania’s construction industry is undergoing rapid expansion, transforming the country into one of Africa’s fastest-growing building markets, driven by large-scale infrastructure and rising housing demand.

A recent report projects the sector will grow from US$10.70 billion in 2025 to US$11.78 billion in 2026, before reaching US$19.01 billion by 2031, reflecting a strong 10.05% compound annual growth rate. The growth is anchored in Tanzania’s transition to lower-middle-income status and sustained investment in civil works and urban development.

Major infrastructure projects remain the backbone of construction activity, accounting for nearly 39% of sector spending. Flagship developments such as the Standard Gauge Railway (SGR) linking Dar es Salaam to inland neighbors and the near complete Julius Nyerere Hydropower Project are reshaping logistics and energy capacity, unlocking new industrial construction across the country.

At the same time, Tanzania’s acute housing deficit of about three million units is fueling a surge in residential construction. While Dar es Salaam leads demand, fast-growing cities including Mbeya, Geita, and Mpanda are witnessing new housing and mixed-use developments as urbanization accelerates. Government backed initiatives such as the Samia Housing Scheme and projects by the National Housing Corporation are expanding access to affordable homes and serviced land.

Commercial construction is evolving alongside infrastructure growth. Developers in Dar es Salaam are pivoting from single-use office buildings to mixed-use complexes combining retail, residential, and co-working spaces, while expanding transport networks including highways and port upgrades are boosting long-term demand for industrial facilities and logistics hubs.

With expanding financing tools such as infrastructure bonds and a steady pipeline of megaprojects, Tanzania’s construction sector is emerging as a central pillar of national development. Analysts say the projected jump from a $10.7 billion market in 2025 to nearly $19 billion by 2031 signals a maturing economy built on sustained infrastructure and housing construction projects.

Posted on : 16 Feb,2026