Investment Opportunities in Water and Sanitation Sector in Tanzania

Water is one of the country’s most important natural resources. Tanzania is not only endowed with some of the world’s largest lakes, it is also covered with a myriad of rivers and basins. Many of the country’s sectors rely on water as a major input of production, but two sectors stand out as being particularly reliant on water: the agriculture and the energy sectors. As revealed by the government budget speech, just about 1 percent of the 29 million hectares available for cultivation in the country is irrigated. Increasing the water supply to those fields through irrigation would positively affect the growth rate of the sector and the productivity in crop production as a whole. In addition, around 59 percent of the country’s electricity is produced by hydro-energy, making it by far the first source of energy production. A close monitoring of the dams and plants and the water flow reaching those facilities will be crucial in order to stabilize the electricity supply in the coming years.

Provision of safe water and good quality sanitation facilities is of primary importance to ensure the well-being of the people. At present, the share of the population with access to safe drinking water stands at 57.8 % in rural areas and 86 % in urban areas. Based on the World Bank WDI data, Tanzania has a long way to go with regard to its performance in the provision of safe water services. Particularly, in parts of the Central Region, women and children still commute long distances every day to fetch water. Around 11 percent of the rural population has no access to sanitation facilities, compared to 1.5 percent in the urban areas.

Knowing the need to significantly increase investments in water supply and resources infrastructure in the nation, the Government set numerous operational objectives designed to improve water and sanitation sector, such as expansion of irrigation land, ensure reliable water supply to key production sectors and services (agriculture and industry), stabilization of hydro power generation, ensure reliable water sources for domestic use as one of the indirect production factors towards economic development. Specific opportunities in this sector, based on Government intervention initiatives, are prevalent in terms of:

• Strengthen water resources management to cater for social-economic activities (irrigation, hydropower generation, industrial, domestic use and for ecosystem)
• Scale-up rural water supply services.
• Improve water supply services in Dar es Salaam and other major cities like Dodoma, Tanga, Arusha, and Mbeya.
• Enhance water supply services in district and small towns
• Increase water supply services in regional centers
• Improve sanitation facilities in urban and rural areas
• Advance water pollution control and monitoring.