Housing Finance in Tanzania

Overview

This profile is also available in French here.

To download a pdf version of the full 2021 Tanzania country profile, click here.

Situated in the Eastern region of Africa, Tanzania is a union of Tanganyika (Mainland) and Zanzibar (Island). Along with six other African countries, Tanzania is among the 10 fastest growing economies, globally. An increase in gross national income per capita, from TSh2.3 million (US$1 020) in 2018 to TSh2.5 million (US$1 080) in 2019, earned the country the status of a lower-middle-income country (LMIC). Tanzania’s 12.3 million households are largely distributed in the urban centers of Dar es Salaam, Mwanza, Arusha, and Dodoma. The housing backlog is over three million, with an annual production requirement of 200 000 units. Forty percent of this deficit is estimated to be in urban Tanzania. The urban population makes up 35% of the total population, is expected to grow by a further 15% by 2030.

Key challenges for the housing sector include high costs of formal finance, as well as a limited supply of affordable housing. A substantial number of Tanzania’s houses are built by informal developers, in unplanned settlements, ―50% of the urban population live in densely populated informal settlements. Only 30% of the population has access to basic sanitation, while 36% have access to electricity and 57% basic water provision. Tanzania maintained growth (2.1%) during the pandemic, largely driven by a booming construction sector. The economy is expected to grow by 4.1% in 2021 and by 5.8% in 2022. Despite the growth, poverty rates remain high, especially for those in the bottom 40% of the income pyramid. The income gap between households is widening fast in urban areas.

Although there was no large-scale economic response at the onset of the pandemic, the Bank of Tanzania lowered the policy rate from 7% to 5%, to support credit and bolster economic growth. The government allocated TSh74.4billion (US$32.1million) in social protection to vulnerable households. Fiscal stimulus packages, following the pandemic, were less than one percent, and fiscal debt remains below the country’s target of below gross domestic product (GDP).

Given the relocation of the government’s administrative functions, housing projects are increasingly being concentrated in the city of Dodoma. Overall, housing delivery declined in the last year due to the impacts of the pandemic. The National Housing Corporation (NHC)recently secured funding to continue with its stalled housing projects in Dar es Salaam and is actively trying to expand its delivery of low-cost housing, through cross subsidisation and localisation of manufacturing capacity for building materials―which area major construction cost driver.

“Find out more information on the housing finance sector of Tanzania, including key stakeholders, important policies and housing affordability:”


Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2021 edition, which has up-to-date profiles for 55 African countries.

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