This paper presents strategic visions, scenarios and action plans for enhancing Tanzania Power Systems towards next generation Smart Power Grid. It first introduces the present Tanzanian power grid and the challenges ahead in terms of generation capacity, financial aspect, technical and non-technical losses, revenue loss, high tariff, aging infrastructure, environmental impact and the interconnection with the neighboring countries. Then, the current initiatives undertaken by the Tanzania government in response to the present challenges and the expected roles of smart grid in overcoming these challenges in the future with respect to the scenarios presented are discussed. The developed scenarios along with visions and recommended action plans towards the future Tanzanian power system can be exploited at all governmental levels to achieve public policy goals and help develop business opportunities by motivating domestic and international investments in modernizing the nation’s electric power infrastructure. In return, it should help build the green energy economy.