Tanzania is quickly Overtaking Kenya to become East Africa's Powerhouse.

While Kenya has historically been East Africa’s economic leader, Tanzania’s recent successes paint a picture of a country steadily taking the lead across multiple sectors.

Introduction:
Tanzania is on track to become East Africa’s largest economy, with the International Monetary Fund (IMF) projecting it will overtake Kenya in GDP within the next few years. However, what many fail to realize is that Tanzania has already surpassed Kenya in several critical areas—silently, quickly, and sustainably.

In 2024, President Ruto of Kenya commended Tanzania for surpassing Kenya as Uganda’s biggest exporter, yet what often goes unnoticed is that Tanzania has already become the largest exporter to the Democratic Republic of Congo, Moreover, Tanzania has already outpaced Kenya in government technology adoption (GovTech) and Tanzania introduced mobile money interoperability in 2014—while Kenya is trying to integrate M-Pesa into PesaLink in 2025, A full decade ahead.

This ascent is not accidental. Tanzania’s strategic location, growing population, and improving governance have positioned it as a model of steady progress in the region. While Kenya has historically been East Africa’s economic leader, Tanzania’s recent successes paint a picture of a country steadily taking the lead across multiple sectors.

How Tanzania is Leading Today

1. Mining that benefits the people and the country:

Tanzania’s mining sector is a powerhouse. The country is Africa’s 4th largest gold producer, with significant reserves of nickel, graphite, and rare earth elements critical to global technologies. Tanzania’s exclusive claim to Tanzanite, a gemstone unique to the country, further solidifies its dominance and the authority is serious about taxes.

You see, Strategic reforms ensure that mining revenues benefit citizens and Infrastructure improvements, like the Standard Gauge Railway and Dar es Salaam Port, make resource exports more efficient.

2. A Fintech Leader with True Interoperability, Inclusion and Competition

Tanzania has outpaced Kenya in mobile money competition and inclusion, particularly with its world-class interoperability programs since 2014 and now TIPS and TanQR as live national payment switch—allowing seamless transfers across networks like M-Pesa, Tigo Pesa, and Airtel Money, TIPS and TanQR.

Key achievements:

• High mobile money penetration, providing access to financial tools for millions.

• Cross-border payment solutions supporting regional trade.

• Innovation in digital payments, including pay-as-you-go solar energy and utility bill integrations.

3. Tourism: Africa’s Top Destination

While Kenya’s safari tourism is well-known, Tanzania’s diverse offerings have quietly outshone its neighbor. Attractions like the Serengeti, Mount Kilimanjaro, Zanzibar, and the Ngorongoro Crater consistently draw global travellers.

Key achievements:

• Faster post-pandemic recovery due to marketing and government support.

• High visitor satisfaction driven by investment in accessibility and conservation.

4. Infrastructure: Building for the Future

Tanzania’s infrastructure investments are in billions of dollars and are transforming the country into a regional hub now and they position it for future dominance.

• The Standard Gauge Railway links with neighboring nations, boosting trade.

• Dar es Salaam Port is East Africa’s logistics leader, rivaling Kenya’s Mombasa.

• Energy projects like the Julius Nyerere Hydropower Plant are powering industrial growth and sustainability.

Bagamoyo Port, which is under development, will soon surpass Dar es Salaam and Mombasa in capacity, cementing Tanzania as a regional trade hub.

5. GovTech: A Digital Governance Pioneer

Tanzania has already leapfrogged Kenya in digital governance, ranking 2nd in Africa on the World Bank’s GovTech Maturity Index. Systems like online tax platforms and mobile government services demonstrate how the country is leveraging technology to improve governance. The e-Government Authority (eGA) has spearheaded digital service digitization, cybersecurity reinforcement, and platform interoperability within public institutions, marking a paradigm shift towards more integrated and transparent government operations.

6. Regional Trade: Leading the Charge in East Africa

Tanzania has already emerged as the regional leader in cross-border trade within the East African Community (EAC). With its key infrastructure investments and strategic positioning, Tanzania has gradually overtaken Kenya in trade volumes, with its ports and rail systems becoming increasingly critical to the regional economy.

In November 2024, President William Ruto of Kenya publicly acknowledged Tanzania’s growing influence in regional trade, hailing the country for taking the lead in facilitating trade across East Africa. This is particularly evident with Tanzania’s Port of Dar es Salaam, which has successfully captured a significant portion of Uganda’s trade that would have otherwise gone through Kenya’s Mombasa port.

Key achievements:

• The Port of Dar es Salaam has been handling increasing volumes of trade, especially as Uganda and Rwanda rely more on Tanzanian ports rather than Mombasa, further establishing Tanzania as the trade hub for East Africa.

• The Standard Gauge Railway (SGR) is enhancing regional trade by linking Tanzania to neighboring countries like Uganda, Rwanda, and Burundi, making it a key transit route.

• Tanzania’s improved infrastructure, including new road and rail projects, has helped reduce transport costs and improved regional connectivity, positioning the country at the heart of East Africa’s logistics network.

Tanzania’s rise as a trade leader in the region is not just the result of government investments but also a reflection of its strategic economic positioning. With its strategic location bordering eight countries and offering direct access to the Indian Ocean, Tanzania is well on its way to becoming the regional powerhouse for trade in East Africa.

What’s Driving Tanzania’s Success?

Population: Tanzania’s young and growing population is a significant advantage, providing a dynamic labor force and a large domestic market for goods and services.

Strategic Location for Trade: Bordering eight countries and with access to the Indian Ocean, Tanzania is a natural trade hub for East and Southern Africa. Improved rail, road, and port infrastructure have maximized this geographic advantage.

Improving Governance: Under President Samia Suluhu Hassan, Tanzania has embraced economic reforms, international partnerships, and enhanced fiscal management, boosting investor confidence.

Areas Where Tanzania Needs to Catch Up

1. Startup Financing: Despite its achievements, Tanzania’s startup ecosystem lags behind Kenya’s. Nairobi is still East Africa’s innovation hub, attracting the lion’s share of venture capital and housing thriving tech communities.

2. Real Estate and Hospitality: While tourism thrives, Tanzania’s real estate and hotel development trails Kenya. Nairobi remains the preferred destination for international hotel chains and urban developments.

3. Airlines and Hub Operations: Tanzania’s airline industry struggles to match Kenya Airways’ dominance. Julius Nyerere International Airport, while improving, lacks the connectivity and passenger volumes of Nairobi’s Jomo Kenyatta International Airport.

4. Foreign Worker Policies": Restrictive policies on foreign workers limit Tanzania’s ability to attract global talent and expertise, particularly in emerging sectors like tech and finance.

The Road Ahead: Tanzania’s Quiet Revolution

Tanzania’s rise is no longer a quiet secret. With the IMF projecting it will surpass Kenya in GDP within five years, the country’s achievements in mining, mobile money, tourism, and infrastructure prove that it’s already ahead in key areas. What sets Tanzania apart is its sustainable approach to growth, focusing on long-term prosperity rather than quick wins.

The future is Tanzania’s to claim. If the country addresses challenges in startup financing, real estate, aviation, and foreign worker policies, it will not only surpass Kenya but redefine leadership in East Africa.

The quiet revolution has begun. Tanzania is already leading in several areas, and with its improving infrastructure, governance, and economic fundamentals, it will soon claim its spot as the powerhouse of East Africa.