Over the past two decades, Zanzibar has steadily evolved its approach to public-private partnerships (PPPs), moving from a traditional tender-based procurement system toward a more dynamic strategic engagement model.
Today, partnerships are no longer treated simply as contractual arrangements but as vital engines for sustainable growth, economic diversification, and national development.
This transformation, accelerated under the leadership of H.E. Dr. Hussein Ali Mwinyi, has repositioned Zanzibar as an emerging hub for investment-ready projects, delivering tangible benefits across infrastructure, healthcare, energy, and the blue economy.
With a modernized legal framework, a proactive institutional setup, and a clear commitment to transparency and inclusion, Zanzibar’s PPP story is no longer just about building projects, it is about building a resilient, prosperous future.
To better understand this remarkable PPP revolution, we sought out Hon. Shariff A. Shariff, Minister of State, President’s Office – Labor, Economic Affairs and Investment, who graciously shared his reflections on Zanzibar’s journey and achievements.
- Could you describe how Zanzibar’s legal framework for PPPs evolved?
Zanzibar’s Public-Private Partnership (PPP) journey reflects a broader evolution in the nation’s economic development strategy, shifting from reactive tender-based models to strategic and transformative partnerships.
For an island economy like Zanzibar, services play a major role, and infrastructure programs are fundamental to unlocking broader economic potential.
Toward the end of the 1990s, Zanzibar placed greater emphasis on strengthening key infrastructure sectors such as ports, airports, electricity, water supply, and healthcare to drive growth and enhance service delivery. Public financing alone could not meet the rising development needs, making private sector engagement not just necessary, but urgent.
The Revolutionary Government of Zanzibar took early steps to lay the legal foundation for private sector participation, culminating in the enactment of the Concession Projects Act No. 1 of 1999. This marked the beginning of Zanzibar’s PPP journey, initially focused on mobilizing private investment to fill essential infrastructure gaps.
As the economy and infrastructure needs evolved, so too did the government’s approach to PPPs. In 2014, a formal PPP Policy was launched to provide strategic direction and consistency, followed by the enactment of the Public-Private Partnership Act No. 8 of 2015.
These milestones moved Zanzibar beyond ad-hoc concessions toward a more structured and rules-based PPP framework. The introduction of PPP Regulations in 2017 further strengthened operational aspects, enhancing transparency, sustainability, and investor confidence.
Today, under the dynamic leadership of His Excellency Dr. Hussein Ali Mwinyi and the Eighth Phase Government, Zanzibar has accelerated its shift toward transformative partnerships.
To further modernize and energize the PPP environment, significant amendments to the PPP Act No. 8 of 2015 were introduced in 2021 and 2022. These reforms were aimed at enhancing flexibility, streamlining project execution, and making Zanzibar more attractive to private investors, and include:
- Allowing direct negotiations for technically sound unsolicited proposals, as outlined in Section 23 of the PPP Act.
- Empowering implementing authorities to engage qualified transaction advisors, ensuring projects are well-prepared and bankable.
- Establishing a Government Negotiation Team to coordinate, structure, and fast-track high-priority strategic PPP projects.
- Creating a dedicated Ministry for Investment, tasked with spearheading investment promotion and strengthening institutional coordination.
- Authorizing public authorities to hire transaction advisors for the development and packaging of investment-ready projects.
- How effective has the current PPP legal and regulatory framework been in facilitating private sector participation?
Zanzibar’s current PPP legal and regulatory framework has proven to be highly effective in facilitating private sector participation. The amendments made in 2021 and 2022 to the PPP Act No. 8of 2015 have been especially impactful.
These changes allowed for the direct award of unsolicited proposals for strategic projects, significantly improving the efficiency of our engagement with private investors. The establishment of a dedicated Ministry of Investment has further enhanced coordination and focus on investment-related initiatives.
Additionally, empowering implementing authorities to engage transaction advisors has ensured that projects are better structured, bankable, and attractive to the market. The formation of a Government Negotiation Team has helped streamline the review and approval process, resulting in faster turnaround times and more effective execution.
Together, these enhancements have led to a notable increase in interest and participation from both local and international private sector players.
To date, more than 29 private sector entities and development partners have actively engaged with Zanzibar’s PPP Unit, expressing interest and submitting proposals, many under Section 23 of the PPP Act, which allows for unsolicited proposals.
- How many PPP projects were initiated, approved, or implemented in Zanzibar so far?
Under the dynamic leadership of His Excellency Dr. Hussein Ali Mwinyi, Zanzibar has witnessed significant momentum in the advancement of Public-Private Partnership (PPP) projects.
We have initiated over 20 PPP projects both solicited and unsolicited submitted by credible private sector entities. Some of the key projects initiated are:
- Design, Build, Finance, Operate, Maintain, and Transfer (DBFOMT) of the Passenger Terminal and Ro-Ro Port.
- Design, Build, Finance, Operate, Maintain, and Transfer (DBFOMT) of the Fumba Container Port.
- Management and Operation of Terminal 3 at Abeid Amani Karume International Airport (AAKIA).
- Management and Operation of Malindi Container Port.
The year 2024 has been a landmark period for Zanzibar’s PPP program. Notable achievements include:
- Implementation of the Fumba Port Project in Unguja.
- Implementation of the Mkoani Port Project in Pemba.
- Electronic Health Network Zanzibar (EHNZ) PPP
- Management and Operation of District Hospitals
- Management and Operation of Water Services.
- Operations and Management of the New Amaani Complex.
- Development of the Conventional Buoy Mooring (CBM) Facility at Mangapwani, facilitating safe and efficient offshore petroleum handling operations.
- Construction of a Landing Site and Fish Market at Malindi,
The infrastructure sector, particularly ports and airports, along with healthcare, have witnessed the most significant traction.
- How do these PPP projects contribute to national development priorities such as job creation, infrastructure development, and economic diversification?
PPP projects are central to driving Zanzibar’s national development priorities. They play a vital role in generating employment during both the construction and operation phases, promote knowledge and technology transfer to Zanzibari businesses and personnel that build long-term local capacity.
Estimates suggest that over 10,000 direct jobs have been created through these projects, with a significant number of indirect jobs emerging in the supply chain, local services, and related industries. Employment is sustained not only during the construction phase but also through long-term operations and maintenance.
In addition, these initiatives are crucial for upgrading and expanding our infrastructure, a key enabler of sustainable economic growth.
- How is the government ensuring that PPPs promote local content, skills development, and the participation of Zanzibari businesses in large projects?
The Revolutionary Government of Zanzibar is deeply committed to ensuring that Public-Private Partnerships (PPPs) serve not only as vehicles for infrastructure and service delivery but also as catalysts for local economic empowerment, skills development, and the active participation of Zanzibari businesses.
To achieve this, our PPP contracts are intentionally structured to prioritize local content development and the integration of Zanzibari enterprises.
A number of concrete strategies have been implemented to achieve these goals:
- Local Content Clauses: PPP contracts incorporate specific provisions requiring foreign partners to subcontract services or procure goods from local companies whenever feasible.
- Joint Ventures and Special Purpose Vehicles (SPVs): We encourage the establishment of joint ventures between international investors and local firms within SPV structures.
- Skills Transfer and Workforce Training: PPP agreements are carefully designed to include mandatory skills development components. Contractors are required to implement workforce training programs, ensuring that Zanzibaris gain technical knowledge and expertise throughout the project lifecycle.
- Promotion of Local SMEs: We have embedded SME-focused provisions within our procurement processes. Our Requests for Qualifications (RFQs) and Requests for Proposals (RFPs) include evaluation criteria that reward bidders who demonstrate a strong commitment to involving local subcontractors and service providers.
- Use of Local Materials and Labor: Wherever practical, PPP projects prioritize the use of local materials and labor, supporting domestic industries and creating employment opportunities for the local workforce.
- Facilitating Strategic Partnerships: The government actively facilitates connections between international investors and Zanzibari companies, fostering opportunities for capacity building, technology transfer, and long-term collaboration beyond individual projects.
- Which sectors are currently prioritized for PPP investment?
We have prioritized several key sectors for PPP investment, recognizing their potential to drive economic growth and improve the quality of life for our citizens. These sectors include;
- Energy, where we are investing in renewable resources and grid modernization;
- Tourism and Hospitality, with a focus on sustainable development and enhanced visitor experiences;
- Logistics, to improve our port and transportation infrastructure;
- Healthcare, to expand access to quality medical services;
- ICT, to enhance connectivity, promote digital inclusion and support Zanzibar’s transition toward a Digital Economy; and
- Blue Economy to leverage our strategic coastal location
Major Infrastructure Projects Set to Redefine Zanzibar’s Growth Trajectory, ahead to 2025 and beyond
Zanzibar’s infrastructure transformation, anchored by over $2.3 billion in investment, is reshaping the islands’ development landscape across multiple sectors:
• Aviation: New airports in Pemba and Nungwi, and Terminal 4 at AAKIA.
• Maritime and Industrial: A dry dock facility at Mangapwani, a fishing port at Bumbwini, and an industrial park.
• Technology and Urbanization: A $700 million Data Center and Cyber City in Fumba, and major housing and city projects in Kikwajuni and Bawwani.
• Healthcare and Public Services: A specialized hospital in Binguni, a modern abattoir in Kisakasaka, public transit buses, and waste management initiatives.
• Sports and Recreation: Operation of the new Amaan Complex Stadium.
- How is the government working with development partners and financial institutions to de-risk PPP investments, especially in capital-intensive sectors?
We view our development partners as long-term collaborators in our growth journey and deeply value their continued support in unlocking transformative investments that will shape Zanzibar’s future.
The Revolutionary Government of Zanzibar is committed to fostering a conducive environment for sustainable Public-Private Partnerships (PPPs), particularly in capital-intensive sectors critical to our long-term development vision.
To this end, we are working proactively with development partners and financial institutions to identify and implement de-risking mechanisms that enhance project bankability and investor confidence.
Our approach includes innovative financing models that help mitigate financial and operational risks for private investors. These tools are especially important where upfront capital requirements are significant.
- What institutional mechanisms are in place to ensure transparency, accountability, and sustainability in PPP projects in Zanzibar?
Our ministry is firmly committed to ensuring that transparency, accountability, and sustainability are at the heart of every Public-Private Partnership (PPP) initiative in Zanzibar.
To achieve this, we have established a robust institutional framework that guides the development, negotiation, and implementation of all PPP projects, ensuring they serve the public interest and support long-term national goals.
Key institutions, including the PPP Department, the Office of the Attorney General, the Government Negotiating Team (GNT), Implementing Authorities, the Ministry of Finance, and the PPP Technical Committee, work together to uphold high standards of governance across the entire project lifecycle.
Our legal foundation, mandates open and competitive tendering processes for all projects. This ensures fairness, minimizes risks, and fosters public trust by promoting a level playing field for all participants.
Equally important is our approach to public engagement. We have adopted a multi-faceted communication strategy, including public forums, media campaigns, and digital platforms, to keep citizens informed about project goals, anticipated benefits, and implementation progress.
- How are sustainability and community benefit requirements built into PPP agreements?
Sustainability and community benefit considerations are embedded at the very heart of our Public-Private Partnership (PPP) agreements, they are not afterthoughts, but foundational elements from project inception to completion.
Every PPP project in Zanzibar is required to undergo rigorous Environmental and Social Impact Assessments (ESIA) to ensure alignment with both local regulatory frameworks and international best practices. These assessments help identify potential impacts early and guide the integration of sustainability measures throughout the project’s planning, design, construction, and operational phases.
We incorporate contractual provisions that explicitly safeguard the environment and guarantee that surrounding communities experience tangible benefits from the projects. These include commitments to community engagement, employment opportunities, local procurement, and improved access to essential services.
Additionally, we enforce robust monitoring and evaluation mechanisms to ensure that all social and environmental commitments are upheld over the entire lifecycle of the project.
- Can you share examples where environmental or social considerations have reshaped a PPP design?
A prime example is the Passenger Terminal and Ro-Ro Project at Mpigaduri. The initial site earmarked for development was a mangrove-covered area, an ecologically sensitive zone crucial to Zanzibar’s marine ecosystem and coastal resilience.
From the outset, environmental sustainability was prioritized in the planning process. Rather than proceeding with conventional site clearing, the project underwent a comprehensive environmental assessment which led to a fundamental redesign.
The private partner, through the Special Purpose Vehicle (SPV), Zanzibar Ferry Development Company (ZF Devco), was required to relocate and conserve the mangroves, integrating them meaningfully into the final infrastructure design.
Today, these mangroves are not only preserved, they are envisioned as a permanent environmental feature of the completed terminal, enhancing both the project’s climate resilience and ecological value.
- How does the government engage with investors post-award to ensure smooth implementation and address emerging issues?
Following the award of a PPP project, the Government, through the President’s Office – Labor, Economic Affairs and Investment, remains fully committed to supporting private sector partners throughout the implementation phase. Our engagement does not end at contract signing; rather, it marks the beginning of a collaborative journey toward successful project delivery.
Through the PPP Department, we provide proactive facilitation and coordination support to ensure that private partners can operate efficiently. This includes assisting with critical processes such as securing permits, licenses, exemptions, visas, and access to investment incentives.
Our goal is to minimize administrative delays, create a seamless experience for investors, and maintain strong alignment between all parties involved. This hands-on approach also helps to prevent potential disputes and ensures that project expectations are clearly understood and consistently met.
As the PPP environment must continually evolve to meet the needs of all stakeholders, we maintain regular dialogue with investors, government institutions, and other key actors. Through consultations, periodic review meetings, and project debriefs, we foster a spirit of collaboration, ensuring that emerging challenges are addressed promptly and effectively.
Moreover, we place strong emphasis on post-project evaluations. These assessments allow us to capture valuable lessons, identifying what has worked well and where adjustments are necessary. The insights gained directly inform ongoing improvements to our policies, legal frameworks, and internal procedures, ensuring that Zanzibar’s PPP system becomes more resilient, responsive, and investor-friendly with each project completed.
- What are the major challenges the government has faced in implementing PPPs, and how are these being addressed?
Under the visionary leadership of His Excellency Dr. Hussein Ali Mwinyi, the Zanzibar PPP program has made significant strides. However, like any emerging market, we have encountered several challenges that test our resolve, and I am confident that we will turn these challenges into opportunities for growth and progress.
Initially, limited understanding of the PPP model within government and the private sector slowed decision-making and stakeholder engagement. To address this, the PPP Department launched awareness campaigns and impactful workshops. Using television, online platforms, and other media, we are building broad understanding of PPPs’ role in driving sustainable development.
Another challenge has been the lack of capacity in project preparation, particularly in structuring, financial modeling, and risk assessment. To address this, the PPP Department is strengthening skills across sectors. It also established the PPP Project Development Fund to support early-stage activities like feasibility studies and advisory services.
We acknowledge that regulatory delays and coordination issues between different government institutions have created bottlenecks that slow down the pace of project execution. To overcome regulatory delays and coordination challenges, we are streamlining processes and strengthening collaboration among government institutions.
Despite these hurdles, our vision for Zanzibar’s future remains clear: a prosperous, inclusive, and resilient economy powered by partnerships between the public and private sectors.
- What would be your parting message to investors and stakeholders interested in Zanzibar’s PPP and development journey?
Zanzibar’s future is incredibly bright. Under the visionary leadership of His Excellency Dr. Hussein Ali Mwinyi, we have built a strong, transparent, and investor-friendly environment that is already delivering transformational results.
In the next 5 to 10 years, we see Zanzibar emerging as a regional leader in public-private partnerships, driving sustainable growth across key sectors like infrastructure, healthcare, energy, and the blue economy.
My parting message to investors is simple: Zanzibar is open, ready, and eager to partner with visionary players who share our ambition for inclusive and resilient development. We invite you to explore the opportunities, align with our national vision, and reach out to our Ministry for any support you may need. Together, we can build a prosperous future.
