By Adonis Byemelwa
Dar es Salaam— As Singapore President Tharman Shanmugaratnam concluded a three-day state visit to Tanzania on Wednesday, June 10, officials from both countries hailed a new era of economic cooperation.
However, behind the optimism surrounding newly signed agreements and investment pledges lies a harder question: why have commercial ties remained so volatile despite decades of diplomatic engagement?
Speaking at the Tanzania-Singapore Business and Investment Forum in Dar es Salaam on Tuesday, President Tharman framed the partnership as a response to mounting global economic uncertainty.
“We know the international order, especially the international trading order, is not what it used to be. It is more uncertain, and that uncertainty is likely to endure,” he said.
“In such a world, the answer must be to diversify, to build new corridors of opportunity and wider, more resilient supply chains,” he added, presenting deeper engagement between East Africa and Southeast Asia as a strategic necessity rather than a diplomatic aspiration.
The message resonated with Tanzanian President Samia Suluhu Hassan, who promoted her country as a stable gateway to regional markets stretching across East, Central and Southern Africa. “Tanzania greatly values your experience in industrialisation, logistics, urban planning and investment promotion,” she said.
However, the economic data cited during the forum underscored the distance between ambition and reality. Trade between the two countries rose from $74 million in 2020 to $299 million in 2023 before falling sharply back to $74 million in 2024, a reversal that neither side publicly explained.
“This volatility tells us that our trade structures are not yet resilient, and we must adopt deliberate measures to address the discrepancies,” President Samia acknowledged. Her remarks amounted to one of the clearest admissions that the relationship remains vulnerable to economic shocks despite growing political goodwill.
The decline raises questions about whether a broad commercial foundation supports bilateral trade or remains dependent on a limited number of transactions. Without greater transparency regarding the causes of the collapse, it is difficult to determine whether the downturn reflects temporary disruptions or deeper structural weaknesses.
Forum participants celebrated the signing of a Double Taxation Avoidance Agreement, alongside memoranda on carbon credits, trade facilitation, and skills development. Such agreements can lower barriers to investment, but their effectiveness ultimately depends on implementation rather than ceremony.
Singapore’s development model holds considerable appeal for policymakers across Africa. The city-state transformed itself from a small trading port into one of the world’s leading financial and logistics centres, creating a template many developing economies seek to emulate.
For Tanzania, the attraction extends beyond capital. Officials hope Singaporean investment will accelerate industrialisation, improve logistics networks and strengthen integration into global supply chains at a time when multinational companies are seeking new markets and production hubs.
Whether those benefits materialise, however, depends on the quality of investment rather than its quantity. Foreign capital can generate jobs and infrastructure, but economists increasingly evaluate whether projects transfer skills, create local suppliers and foster long-term domestic competitiveness.
Officials noted that Singapore has registered 36 investment projects in Tanzania worth more than half a billion dollars since 1997, creating over 3,000 jobs. The figures suggest a meaningful presence, yet they provide little insight into wages, productivity gains or the extent to which local businesses have benefited.
Questions also remain regarding planned cooperation in carbon-credit markets, an area attracting growing international attention. Supporters view such projects as a source of climate finance, while critics warn that weak oversight can leave local communities bearing costs while investors capture most of the rewards.
Perhaps the most consequential development to emerge from the visit was support for negotiations toward a Free Trade Agreement between Singapore and the East African Community. If concluded, it would mark Singapore’s first trade agreement with an African partner and the bloc’s first with a non-African counterpart.
President Tharman welcomed the initiative, saying it would “open new pathways for trade and investment between East Africa and Southeast Asia.” The agreement could expand market access and strengthen commercial links between two regions seeking greater resilience amid geopolitical fragmentation.
However, trade agreements rarely distribute benefits evenly. While exporters and investors often gain from expanded access, domestic industries can face heightened competition, forcing governments to balance openness with the protection of strategic sectors.
Private-sector leaders sought to emphasise partnership over extraction. “We are not here to extract value. We are here to build it together with Tanzanian partners,” said Mark Lee, acting chairman of the Singapore Business Federation.
Angelina Ngalula, president of the Tanzania Private Sector Federation, argued that the next phase of the relationship must be measured in results rather than declarations. “The government can open doors. It is the businesses that must walk through them,” she said.
Her remarks captured the challenge confronting both countries. Diplomatic momentum is abundant, but the success of Tanzania-Singapore relations will ultimately depend on whether trade becomes less volatile, investments become more productive, and economic gains are more broadly shared than they have been in the past.
