Introduction

Tanzania remains one of East Africa’s most strategically positioned economies, offering investors a combination of political stability, vast natural resources and ongoing regulatory reforms. The current administration has ushered in a more open and investor-friendly policy era, which marks a shift from the restrictive business climate of earlier years.

Over the past three years, there has been a notable progress in liberalising the investment environment, simplifying tax administration and modernising business laws. These developments have generated renewed confidence among local and international investors alike. Particularly promising areas include natural resources, energy, infrastructure, agribusiness, tourism and digital finance.

The government’s emphasis on public-private partnerships, combined with legal reforms in taxation, land use, and investment protection, demonstrates a clear commitment to fostering sustainable economic growth.

Macroeconomic and Political Landscape

Tanzania’s economic fundamentals have remained stable despite global volatility. According to the Bank of Tanzania’s Monthly Economic Review (April 2024), GDP growth for 2023 stood at 5.2%, with projections for 2024 and 2025 ranging between 5.5% and 6%, driven by strong performances in the construction, mining and services sectors. Inflation has remained relatively contained at 3.6% as of March 2024, aided by food supply stability and prudent monetary policy.

Politically, the environment has become more accommodating to business interests. The government has resumed dialogue with the private sector through platforms like the Tanzania National Business Council (TNBC). Engagement with stakeholders is no longer symbolic but a functional part of policy design and implementation. These developments have reduced policy unpredictability and improved investor sentiment.

Tanzania’s stable leadership and gradual re-engagement with bilateral and multilateral partners have restored donor confidence and encouraged inflows of both aid and private capital. However, systemic challenges such as delays in licensing and occasional inconsistencies between national and sectoral policies still present obstacles.

Legal and Regulatory Developments

Recent legislative changes have focused on harmonising business regulations, streamlining investment processes, and modernising tax and dispute resolution procedures. These reforms are being implemented across key regulatory institutions.

Investment regulation

The Tanzania Investment Act, 2022 replaced the 1997 legislation with the aim of aligning investment policies with international best practices. The new law designates the Tanzania Investment Centre (TIC) as the primary facilitator for both domestic and foreign investors. It expands investment guarantees, simplifies permit issuance and introduces the category of “strategic investment”, which offers expedited services and bespoke incentives for projects of national significance.

In addition, investors now benefit from online application platforms launched by the TIC and the Business Registration and Licensing Agency (BRELA), reducing processing time and enhancing transparency.

Additionally, the Written Laws (Miscellaneous Amendments) Act, 2024 brought sweeping reforms to Tanzania’s investment climate through the addition of Section 29A in the Tanzania Investment Act, which affirms the country’s commitment to non-discriminatory treatment of foreign investors. The new provision guarantees that foreign investors shall enjoy treatment equal to that of Tanzanian investors in relation to the establishment, acquisition, development, management, operation and disposal of investments in the country.

A progressive trend in Tanzania’s legal landscape is the establishment of a formal investor grievance redress mechanism under the new Section 32A of the Tanzania Investment Act. This reform provides a structured platform for addressing investor complaints arising from the conduct, action or decisions of government institutions in relation to investments. Investors may file complaints with the TIC if aggrieved by any governmental act or decision related to their investment.

Tax law reforms

Tanzania has continued to amend its tax laws through annual Finance Acts. The Finance Act, 2023 introduced adjustments in withholding tax obligations, clarified the digital services tax for non-resident providers, and further mandated the use of Electronic Fiscal Devices (EFDs) and the Electronic Filing System (EFS). These changes are geared toward closing tax loopholes, increasing voluntary compliance, and enhancing revenue collection efficiency.

The Tax Administration (General) Regulations, 2022 have restructured objection and appeal procedures, allowing taxpayers to contest assessments more efficiently and with fewer administrative burdens. The government has also enhanced the operational independence of the Tax Revenue Appeals Board and the Tax Revenue Appeals Tribunal to reinforce taxpayer rights.

Sector-Specific Trends

Natural resources and energy

Tanzania’s mining sector continues to be a cornerstone of the economy, particularly with growing demand for gold, graphite and rare earth minerals. The government, through the Minerals Policy of 2023, has placed a premium on local beneficiation, joint ventures with state entities and environmental compliance.

Recent revisions to the Mining Act have increased state participation through equity in large-scale mines and mandated that a portion of mineral smelting be done locally.

In the energy sector, there is a deliberate shift toward diversification. Natural gas remains a priority, especially in relation to the proposed LNG project in Lindi, which is undergoing final negotiations with Shell and Equinor. Simultaneously, renewable energy is receiving more attention. The Energy and Water Utilities Regulatory Authority (EWURA) has issued guidelines to facilitate licensing for off-grid solar and mini-hydro operators.

Infrastructure and construction

Public infrastructure investment remains a key pillar of Tanzania’s economic strategy. Major ongoing projects include the Standard Gauge Railway (SGR) linking Dar es Salaam to the interior, road upgrades under TANROADS, and airport expansions in Dodoma and Mwanza.

The Public Private Partnership (PPP) Act, last amended in 2023, aims to simplify procurement processes, allow for unsolicited proposals under specific conditions, and enhance risk-sharing frameworks. Investors in construction must remain mindful of local sourcing obligations and approval processes, especially in state-led projects.

Agriculture and agribusiness

Agriculture contributes roughly 27% to GDP and employs a majority of the rural population. To attract investment, the government has rolled out the Agriculture Sector Development Programme – Phase II (ASDP II), which emphasises irrigation development, market access and private sector-led agro-processing.

The Ministry of Agriculture has also expanded its e-registration of farmers and input suppliers to improve access to subsidies and inputs. However, investors often face challenges related to fragmented land tenure systems and underdeveloped rural logistics.

Despite these obstacles, demand for investment in cold chain systems, food processing and export-oriented agribusiness remains high.

Financial services and fintech

The financial sector has witnessed rapid digitisation, with over 60% of Tanzanians accessing financial services via mobile platforms, according to the FinScope Tanzania 2023 Survey. The Bank of Tanzania (BoT) continues to license digital lenders, e-money issuers and sandbox participants under the National Payment Systems Act.

In 2023, the BoT published a consultation paper on the feasibility of launching a Central Bank Digital Currency (CBDC), underscoring its commitment to embracing digital financial ecosystems. However, fintech operators must comply with growing regulatory demands around data privacy, anti-money laundering and consumer protection.

Tourism and hospitality

Tourism is recovering from the COVID-19 downturn, with arrivals reaching 1.8 million in 2023, according to the Ministry of Natural Resources and Tourism. Tanzania is now positioning itself as a premium eco-tourism destination, promoting high-value, low-impact models to protect biodiversity and cultural heritage.

The government has streamlined the visa application process, enhanced destination marketing, and offered tax incentives to investors in sustainable tourism facilities. Notably, Zanzibar’s tourism policy now supports investment in green hotels and cultural tourism projects.

ESG Considerations

Environmental, social and governance (ESG) factors are becoming increasingly central to investment appraisal in Tanzania. Regulatory authorities now require stricter compliance with environmental impact assessment (EIA) obligations, especially for projects in extractives and infrastructure.

The National Environmental Management Council (NEMC) has issued new guidelines to improve monitoring, audit and public consultation procedures. Companies operating in the energy, mining and tourism sectors are expected to adhere to sustainability commitments, including local community engagement and climate risk mitigation.

Multinational investors are increasingly expected to adopt CSR initiatives, and while there is no consolidated ESG reporting framework yet, the trend suggests a gradual move toward mandatory disclosures.

Dispute Resolution and Legal Risk

Tanzania continues to reform its dispute resolution mechanisms to offer greater certainty for commercial actors. The Arbitration Act, 2020, which aligns with the UNCITRAL Model Law, provides a modern framework for both domestic and international arbitration. The law reinforces party autonomy, confidentiality and enforceability of arbitral awards.

The establishment of specialised divisions such as the Commercial Court within the High Court has also improved the efficiency of complex commercial litigation. However, challenges persist in enforcement timelines and the capacity of lower courts to handle technically complex matters.

Alternative dispute resolution (ADR) is increasingly being promoted by institutions such as the Tanzania Institute of Arbitrators (TIArb) and the Tanzania International Arbitration Centre (TIAC), though uptake among SMEs remains modest.

Outlook and Opportunities

Tanzania’s investment trajectory is positive, bolstered by a maturing legal framework, steady macroeconomic performance and a political climate conducive to reform. While structural inefficiencies remain, the government’s appetite for legal modernisation and public-private collaboration signals a favourable outlook. Opportunities are expected to deepen in renewable energy and natural gas; value-addition in agriculture and minerals; digital financial services; tourism infrastructure and eco-ventures; and logistics and transportation development.

For prospective investors, Tanzania presents a dynamic and evolving legal landscape. Careful navigation of the regulatory environment, coupled with local partnerships and proactive compliance, will be key to sustained business success.