Tanzania - Country Commercial Guide
Investment Climate Statement

This information is derived from the State Department's Office of Investment Affairs’ Investment Climate Statement.

Last published date: 2022-12-14

The U.S. Department of State Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world.  They analyze a variety of economies that are or could be markets for U.S. businesses.

Topics include Openness to Investment, Legal and Regulatory systems, Dispute Resolution, Intellectual Property Rights, Transparency, Performance Requirements, State-Owned Enterprises, Responsible Business Conduct, and Corruption.

These statements highlight persistent barriers to further U.S. investment.  Addressing these barriers would expand high-quality, private sector-led investment in infrastructure, further women’s economic empowerment, and facilitate a healthy business environment for the digital economy.  To access the ICS, visit the U.S. Department of State Investment Climate Statement website.

Executive Summary – 2022 Tanzania Investment Climate Statement

The United Republic of Tanzania achieved lower-middle income country status in July 2020, following two decades of sustained economic growth. The country’s solid macroeconomic foundation, sound fiscal policies, rich natural endowments, and strategic geographic position have fostered a diverse economy resilient to external shocks. This proved critical as the COVID-19 pandemic resulted in an economic downturn, though Tanzania avoided a more severe pandemic-induced recession.

The Government of Tanzania (GoT) welcomes foreign direct investment. In March 2021, President Samia Suluhu Hassan assumed the presidency following the death of President John Pombe Magufuli. In her first months in office, President Hassan promised reforms to improve the business climate and identified attracting foreign investment as a key priority. This commitment to increasing investment has continued throughout her tenure and economic issues remain at the forefront of the administration’s policies, strategies, and goals. President Hassan’s government has sought to engage stakeholders, including local private sector organizations and development partners, to improve the business climate and regain investor confidence. Consistent with this shift in rhetoric, significant changes to improving the business environment and investment climate have been made over the past year: improving the complex, and sometimes inconsistent, work permit issuance process for foreign workers and investors; streamlining Tanzania Investment Center (TIC) operations; disbandment of the special ‘Tax Task Force’ previously associated with heavy-handed and arbitrary tax enforcement; and strengthening regional trade cooperation.

However, while several laws have been reviewed, business climate legislative reforms have not yet been sweeping. There remain significant legislative obstacles to foreign investment such as the Natural Resources and Wealth Act, Permanent Sovereignty Act, Public Private Partnership Act, and the Mining Laws and Regulations. Despite pledges by President Hassan and senior government officials, these have yet to be resolved; rather, the administration has selectively eased the application of these laws. The primary business and investment challenges lie in tax administration; opening and closing businesses; inconsistent institutions compounded by corruption and requests for “facilitation payments” at many levels of government; late payment issues; and cross-border trade obstacles. In recent years, aggressive and arbitrary tax collection policies targeted foreign and domestic companies and individuals alike, and tough labor regulations made it difficult to hire foreign employees, even when the required skills were not available within the local labor force. Corruption, especially in government procurement, taxation, and customs clearance remains a concern for foreign investors, though the government has prioritized efforts to combat the practice.

The country’s drastic and improved shift in its acknowledgement of and approach to COVID-19 in 2021 led to the creation and implementation of a national COVID-19 response plan that addressed both health and socio-economic impacts of the pandemic. Tanzania has reengaged with the international community to support implementation of its robust national pandemic response plan with key pillars for improving data sharing, welcoming vaccines, and conducting vaccination outreach campaigns.

Sectors traditionally attracting U.S. investment include infrastructure, transportation, energy, mining and extractive industries, tourism, agriculture, fishing, agro-processing, and manufacturing. Other opportunities exist in workforce development, microfinance solutions, technology, and consumer products and services.

See link for a full 2022 Investment Climate Statement.