Tanzania’s $10 Billion Standard Gauge Railway Drives Economic Transformation, Boosts Local Industry and Regional Trade

Dodoma, Tanzania — The Tanzanian government has highlighted the transformative impact of the newly operational Standard Gauge Railway (SGR) on the nation’s economy, after an investment of $10 billion (about Sh23 trillion). Since opening the Dar es Salaam–Dodoma line this June, the SGR has already transported 645,421 passengers and generated Sh15.695 billion, according to Prof. Kitila Mkumbo, Minister of State for Planning and Investment.

The ambitious railway project, developed by the Tanzania Railways Corporation (TRC), aims to connect Dar es Salaam to key regional cities such as Mwanza, Kigoma, and Katavi, and extend into neighboring nations including Rwanda, Burundi, Uganda, and the Democratic Republic of Congo. Spanning over 2,561 kilometers, the SGR is set to bolster Tanzania’s role as a regional logistics hub in East and Southern Africa.

“This project is set to boost business and attract investment by cutting transport times and costs, driving growth in domestic and international trade,” Prof. Mkumbo announced during the presentation of the proposed Development Plan for 2025/26. 

Economic Impact and Job Creation

Beyond reducing transport costs and enhancing trade, the SGR has catalyzed significant employment opportunities and industrial growth. Since construction began in May 2017, the railway project has created over 30,000 direct jobs and an estimated 150,000 indirect jobs, reshaping Tanzania’s economic landscape.

One of the most immediate benefits is the reduction in travel time. The Dar es Salaam–Dodoma route now takes just three and a half hours by train compared to the ten-hour bus journey, marking a substantial improvement for both personal and commercial transportation.

Local Manufacturing Boost

The SGR has also spurred demand for locally produced materials, notably cement and steel, thereby stimulating the manufacturing sector. Prof. Mkumbo emphasized that the railway’s impact extends beyond transportation, serving as a “driving force for local industry.” Over 2,460 companies have engaged in project-related contracts, valued at Sh3.69 trillion.

International Trade and Investment

Designed to facilitate smooth cross-border trade, the SGR supports Tanzania’s ambition to become a continental logistics hub. Since 2023, the SGR corridor has attracted 519 investment projects through the Tanzania Investment Centre, with a capital inflow totaling $4.59 billion and an anticipated creation of 115,566 new jobs. 

“This railway is not only a transport system; it’s our bridge to greater economic growth and Tanzania’s future as a regional trade hub,” Prof. Mkumbo remarked, underscoring the government’s commitment to transforming Tanzania into a leading logistics powerhouse.

With its electric-powered operations, the SGR also contributes to road safety and environmental sustainability, aligning with Tanzania’s broader goals of green development and enhanced cross-border connectivity. 

As the railway continues to expand its network across East Africa, Tanzania is set to cement its role as a crucial trade and transport hub, unlocking growth opportunities for both the nation and the region.