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Digital shift boosts access to Sh42.6 trillion tender market

5 mins read

Digital shift boosts access to Sh42.6 trillion tender market

Habari za Dharura

October 30, 2026 Admin0

Dar es Salaam. The government has processed public tenders worth Sh42.6 trillion in three years through its electronic procurement system, potentially reducing the cost of doing business with the public sector and widening market access for local companies.

However, questions remain over whether the digital system has improved competition, strengthened compliance or delivered value for money.

The National e-Procurement System of Tanzania (NeST), which became operational in September 2023, has processed 430,643 tenders, according to the Public Procurement Regulatory Authority (PPRA) director general, Mr Dennis Simba.

Addressing journalists yesterday, Mr Simba said the digital platform has changed how public procurement is conducted by enabling suppliers to submit bids remotely, contracts to be signed electronically and tender securities to be verified through connected banking systems.

“Since the introduction of the NeST system, we have achieved major successes that reflect the development of our nation,” he said. The scale of the system is significant for the private sector, given that approximately 70 percent of the government budget is spent through public procurement, according to Mr Simba.

The shift to digital procurement is intended to improve transparency, competition and accountability while reducing the time and costs associated with government tendering. It also creates a central platform through which businesses can access opportunities across public institutions.

Under the Public Procurement Act of 2023 and its 2024 regulations, procurement processes are required to be conducted through NeST, which has become the main channel for advertising and processing government tenders.

Mr Simba said the system had eliminated the need for suppliers to travel to procuring entities to deliver physical tender documents, allowing businesses to participate from wherever they are.

“This has also reduced the cost and time required to participate in public procurement processes. Currently, a supplier can apply for a tender from wherever they are,” he said.

The authority reported that compliance with procurement laws rose from 65 percent in the 2023/24 financial year to 76 percent in 2024/25 and 79 percent in 2025/26, indicating progress in adherence to procurement procedures, although full compliance remains a challenge. The transition has also generated administrative savings. PPRA estimates that the system has prevented the printing of more than 288.57 million pages of tender documents, saving approximately Sh27.64 billion.

A study cited by the authority also found that the system contributed to reducing carbon dioxide equivalent emissions by 64,768 tonnes between the 2023/24 and 2024/25 financial years.

Beyond tender submissions, NeST allows contracts to be prepared, reviewed and signed electronically, including vetting through the Attorney General’s office, without printing physical documents. The system is connected to more than 30 other platforms, including banking, payment, licensing and professional registration systems, to facilitate document verification and reduce the risk of forged submissions.

NMB Bank is already directly connected to the system for verifying tender securities, while CRDB Bank and Tanzania Commercial Bank were in the final stages of integration, Mr Simba said.

A separate Bank Security Portal, introduced on October 1, 2026, had connected more than 36 banks, allowing them to issue and verify tender securities through NeST without integrating their systems directly.

The digital platform is also being used to implement policies aimed at increasing domestic participation in government procurement.

Mr Simba said, “Tenders worth up to Sh50 billion were reserved for local suppliers, while domestic bidders could receive a price preference of up to 10 percent in internationally competitive tenders.

Locally produced goods could also receive a preference of up to 15 percent over imported products”.

The provisions are intended to ensure that government spending supports domestic businesses, although their impact will depend on the extent to which local firms can meet tender requirements and secure contracts.

PPRA is also using NeST to expand procurement opportunities for groups that might otherwise struggle to access government business.

Public institutions are required to allocate 30 per cent of their procurement budgets to special groups comprising youth, women, older people and people with disabilities.

According to Mr Simba, 33,659 special groups had registered on the platform and secured tenders worth a combined Sh82.34 billion.

Youth groups accounted for Sh44.74 billion, women Sh33.15 billion, older people Sh3.78 billion and people with disabilities Sh680.21 million.

PPRA aims to increase the number of procurement-ready special groups to approximately 300,000 in line with Tanzania’s Development Vision 2050. Groups can be formed by three or more people and, according to the authority, can secure an individual tender worth up to Sh500 million.

To widen access further, PPRA has introduced the NeST Tenderer mobile application, which allows users to register, apply for tenders and track payments using smartphones.

However, the reported compliance rate of 79 per cent suggests that digitalisation alone has not eliminated weaknesses in procurement practices. The figures presented by PPRA also do not establish whether the reported savings have translated into lower overall project costs, improved quality of public works or faster payments to suppliers.

Those outcomes will be important in assessing whether the system is delivering value for money beyond making procurement processes more accessible and efficient.

PPRA is also exploring the potential registration of NeST in the carbon market, which Mr Simba said could generate more than Sh20 billion annually through carbon sales. Research on the proposal is still under way, making the amount a projected opportunity rather than realised revenue.

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