2021 Investment Climate Statements: Tanzania

EXECUTIVE SUMMARY

The United Republic of Tanzania achieved lower-middle income country status in July 2020, which reflects two decades of sustained
macroeconomic stability. The country’s rich natural endowments and strategic geographic position fostered a diverse economy resilient
to external shocks. Tanzania’s economy fared better than many regional peers during the COVID-19 pandemic, but still suffered
significant losses due to decline in tourism and related services. The pandemic also compounded preexisting financial sector issues, and
private sector credit growth slowed while nonperforming loans continue to be high.

The Government of Tanzania welcomes foreign direct investment. However, over the past several years there was a marked
deterioration in the business and investment climate. Tanzania ranked 141 out of 190 countries on the 2020 World Bank Ease of Doing
Business Report, the lowest among its regional peers. According to the report, the biggest challenges lie in tax administration, opening
and closing businesses, and trading across borders. In recent years, aggressive and arbitrary tax collection policies targeted foreign
companies and individuals, and labor regulations make it difficult to hire foreign employees, even when the required skills are not
available within the local labor force. Corruption, especially in government procurement, privatization, taxation, and customs clearance
remains a concern for foreign investors, though the government has prioritized efforts to combat the practice.

On March 19, 2021, President Samia Suluhu Hassan became the sixth President of the United Republic of Tanzania, 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. The Government of Tanzania has signaled that new Investment Policy and
Investment Promotion legislation as well as changes to prevailing tax and labor regulations will be adopted in 2021. Hassan’s
government is also engaging in dialogue with stakeholders including private sector organizations and development partners to identify
measures to improve the business climate and win back investor confidence. 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.

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

Measure Year Index/Rank Website Address

TI Corruption
Perceptions Index 2020 94 of 180 http://www.transparency.org/research/cpi/overview
World Bank’s Doing
Business Report 2020 141 of 190 http://www.doingbusiness.org/en/rankings
Global Innovation
Index 2020 88 of 131 https://www.globalinnovationindex.org/analysis-indicator
U.S. FDI in partner 2020 USD 1,510 https://apps.bea.gov/international/factsheet/
country (historical Million
 stock positions)
World Bank GNI per
capita 2019 USD 1,080 http://data.worldbank.org/indicator/NY.GNP.PCAP.CD
Table 1: Key Metrics and Rankings

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

The United Republic of Tanzania welcomes foreign direct investment (FDI) as it pursues its industrialization and development agenda.
On her inauguration in March 2021, President Samia Suluhu Hassan identified removing obstacles to inward foreign investment as a key
priority, along with other measures to improve the overall business climate and rebuild trust between the private sector and government.
This follows declining FDI and investor confidence over the past six years. The 2020 World Investment Report indicates that FDI flows
to Tanzania increased from USD 1,056 billion in 2018 to USD 1.112 billion in 2019 (latest figures) but remain below 2015 levels.
Investors and potential investors note the biggest challenges to investment include difficulty in hiring foreign workers, unfriendly and
opaque tax policies, increased local content requirements, regulatory/policy instability, lack of trust between the GoT and the private
sector, and mandatory initial public offerings (IPOs) in key industries. In 2020 and 2021, the GoT recognized many of these concerns’
impact on both foreign and domestic investment and created a number of task forces and working groups to engage the private sector to
identify solutions. These efforts were renewed by President Hassan’s new government, and legislative and policy changes are anticipated
in 2021.

The United Republic of Tanzania has framework agreements on investment and offers various incentives and the services of investment
promotion agencies. Investment is mainly a non-Union matter, thus there are different laws, policies, and practices for the Mainland and
Zanzibar. Zanzibar updated its investment policy in 2019, while the Mainland/Union policy dates from 1996. Efforts to update the
Mainland Investment Policy and Investment Act are underway, but incomplete as of the date of this publication. International
agreements on investment are covered as Union matters and therefore apply to both regions.

The Tanzania Investment Center (TIC) is intended to be a one-stop center for investors, providing services such as permits, licenses,
visas, and land. The Zanzibar Investment Promotion Authority (ZIPA) provides the same function in Zanzibar.

The Government of Tanzania has an ongoing dialogue with the private sector via the Tanzania National Business Council (TNBC).
TNBC meetings are chaired by the President of the United Republic of Tanzania and co-chaired by the head of the Tanzania Private
Sector Foundation (TPSF). President Samia Suhulu Hassan reinvigorated this formal mechanism during her first months in office. There
is also a Zanzibar Business Council (ZBC), as well as Regional Business Councils (RBCs), and District Business Councils (DBCs).

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign investors generally receive treatment equivalent to domestic investors, but limits still persist in a number of sectors. There are no
geographical restrictions on private establishments with foreign participation or ownership, no limitations on number of foreign entities
that can operate in a given sector, and no sectors in which approval is required for foreign investment greenfield FDI but not for domestic
investment.
 However, Tanzania discourages foreign investment in several sectors through limitations on foreign equity ownership or other activities,
including aerospace, agribusiness (fishing), construction and heavy equipment, travel and tourism, energy and environmental industries,
information and communication, and publishing, media, and entertainment. In 2020, Tanzania relaxed but did not eliminate the foreign
ownership limitations in the mining sector.

Specific examples include the following:

 The Tourism Act of 2008 bars foreign companies from engaging in mountain guiding activities, and states that only
Tanzanian citizens can operate travel agencies, car rental services, or engage in tour guide activities (with limited exceptions).

 Per the Merchant Shipping Act of 2003, only citizen-owned ships are authorized to engage in local trade, a requirement that
can be waived at the Minister’s discretion. Furthermore, the Tanzania Shipping Agencies Act of November 2017 gives exclusive
monopoly power to the Tanzania Shipping Agency Corporation (TASAC) to conduct business as shipping agents, shipping regulator,
and licensor of other private shipping agencies. The Act also gives TASAC an exclusive mandate to provide clearing and forwarding
functions relating to imports and exports of minerals, mineral concentrates, machinery and equipment for the mining and petroleum
sector, products and/or extracts related to minerals and petroleum arms and ammunition, live animals, government trophies and any
other goods that the Minister responsible for maritime transport may specify. A 2019 amendment extended this exclusive mandate to
additional imports, including fertilizers, sugar (both industrial and domestic), cooking oil, wheat, oil products, liquefied gas and
chemicals related to the products. As of May 2021, the extended mandate has yet to go into effect following extensive objections for
private sector stakeholders.

 A 2009 amendment to the Fisheries Regulations imposes onerous conditions for foreign citizens to engage in commercial
fishing and the export of fishery products, sets separate licensing costs for foreign citizens and Tanzanians, and limits the types of
fishery products that foreign citizens may work with.

 Foreign construction contractors can only obtain temporary licenses, per the Contractors Registration Act of 1997, and
contractors must commit in writing to leave Tanzania upon completion of the set project. 2004 amendments to the Contractors
Registration By-Laws limit foreign contractor participation to specified, more complex classes of work.

 Foreign capital participation in the telecommunications sector is limited to a maximum of 75 percent.

 All insurers require one-third controlling interest by Tanzania citizens, per the Insurance Act.

 The Electronic and Postal Communications (Licensing) Regulations 2011 limits foreign ownership of Tanzanian TV
stations to 49 percent and prohibits foreign capital participation in national newspapers.

 Mining projects must be at least partially owned by the GoT and “indigenous” companies, and hire, or at least favor, local
suppliers, service providers, and employees. (See Chapter 4: Laws and Regulations on FDI for details.). Gemstone mining is limited to
Tanzanian citizens with waivers of the limitation at ministerial discretion. In February 2019, responding to low growth and investment
in the sector, the government revised the 2018 Mining Regulations to reduce local ownership requirements from 51 percent to 20
percent.

Currently, foreigners can invest in stock traded on the Dar es Salaam Stock Exchange (DSE), but only East African residents can invest
in government bonds. East Africans, excluding Tanzanian residents, however, are not allowed to sell government bonds bought in the
primary market for at least one year following purchase.
 Other Investment Policy Reviews

There have not been any third-party investment policy reviews (IPRs) on Tanzania in the past three years, the most recent OECD report
is for 2013. The World Trade Organization (WTO) published a Trade Policy Review in 2019 on all the East African Community states,
including Tanzania.

 WTO – Trade Policy Review: East African Community (2019)

 UNCTAD– Tanzania Investment Policy Review (2002)

 WTO – Secretariat Report of Tanzania https://www.wto.org/english/tratop_e/tpr_e/s384-04_e.pdf

 UNCTAD – Trade and Gender Implications (2018) –

Business Facilitation

The World Bank’s Doing Business 2020 Indicators rank Tanzania 141 out of 190 overall for ease of doing business, and 162nd for ease
of starting a business. There are ten procedures to open a business, higher than the sub-Saharan Africa average of 7.4. The Business
Registration and Licensing Agency (BRELA) issues certificates of compliance for foreign companies, certificates of incorporation for
private and public companies, and business name registration for sole proprietor and corporate bodies. After registering with BRELA,
the company must: obtain a taxpayer identification number (TIN) certificate, apply for a business license, apply for a VAT certificate,
register for workmen’s compensation insurance, register with the Occupational Safety and Health Authority (OSHA), receive inspection
from the Occupational Safety and Health Authority (OSHA), and obtain a Social Security registration number.

The Tanzania Investment Center (TIC) now sits under the Prime Minister’s Office (PMO), after being moved around several times in
recent years. The TIC is a one-stop shop which provides simultaneous registration with BRELA, TRA, and social security
( http://tiw.tic.co.tz/  ) for enterprises whose minimum capital investment is not less than USD 500,000 if foreign-owned or USD
100,000 if locally owned.

The government has been slow to implement its May 2018 Blueprint for Regulatory Reforms to improve the business environment and
attract more investors. The reforms seek to improve the country’s ease of doing business through regulatory reforms and to increase
efficiency in dealing with the government and its regulatory authorities. The official implementation of the Business Environment
Improvement Blueprint started on July 1, 2019, though there have been little tangible changes or advancements. President Hassan’s new
government identified implementation of the Blueprint as a priority for her term.

Outward Investment

Tanzania does not promote or incentivize outward investment. There are restrictions on Tanzanian residents’ participation in foreign
capital markets and ability to purchase foreign securities. Under the Foreign Exchange (Amendment) Regulations 2014 (FEAR),
however, there are circumstances where Tanzanian residents may trade securities within the East African Community (EAC). In
addition, FEAR provides some opportunities for residents to engage in foreign direct investment and acquire real assets outside of the
EAC.
2. Bilateral Investment Agreements and Taxation Treaties

Tanzania has bilateral investment treaties with 18 countries, and seven investment agreements with regional economic blocs. The
country is also a signatory to global investment instruments such as the International Centre for Settlement of Investment Disputes
(ICSID) Convention, the New York Convention, and the UN Guiding Principles on Business and Human Rights.

The U.S. and Tanzania do not have bilateral investment or taxation agreements. Tanzania is a member of the EAC, which signed a 2008
Trade and Investment Framework Agreement (TIFA) and a 2012 Trade and Investment Partnership (TIP) with the United States. Under
the U.S.-EAC TIP, the U.S. and EAC are seeking to expand trade, investment, and dialogue with the private sector.

3. Legal Regime

Transparency of the Regulatory System

According to the World Bank’s Global Indicators of Regulatory Governance ( https://rulemaking.worldbank.org/en/rulemaking ),
Tanzania scores low in regulatory governance with 1.25 out of 5 totals in transparency of regulatory governance (neighboring Kenya and
Uganda, by contrast, both score 3.25).

Tanzania has formal processes for drafting and implementing rules and regulations. Generally, after an Act is passed by Parliament, the
creation of regulations is delegated to a designated ministry. In theory, stakeholders are legally entitled to comment on regulations before
they are implemented. However, ministries and regulatory agencies frequently fail to provide adequate opportunity for meaningful input
as there is no minimum period of time for public comment set forth in law. Stakeholders often report that they are either not consulted or
given too little time to provide meaningful input. Ministries or regulatory agencies do not have the legal obligation to publish the text of
proposed regulations before their enactment. Sometimes, it is difficult to obtain the final, adopted version of a bill in a timely manner nor
is it always public information if and when the President signed the bill. Moreover, the government over the past few years used
presidential decree powers to bypass regulatory and legal structures.

The 2016 Access to Information law in theory grants citizens more rights to information; however, some claim that the Act gives too
much discretion to the GoT to withhold disclosure. Although information, including rules and regulations, is available on the GoT’s
“Government Portal” ( https://www.tanzania.go.tz/documents ), the website is generally not current and is incomplete. Alternatively,
rules and regulations can be obtained on the relevant ministry’s website, but many offer insufficient information.

Nominally, independent regulators are mandated with impartially following the regulations. The process, however, has sometimes been
criticized as being subject to political influence, depriving the regulator of the independence it is granted under the law.

Tanzania does not meet the minimum standards for transparency of public finances and debt obligations. See the Department of State’s
Fiscal Transparency Report: https://www.state.gov/2020-fiscal-transparency-report/
International Regulatory Considerations

Tanzania is part of both the East African Community and the Southern African Development Community (SADC) and subject to their
respective regulations. However, according to the 2016 East African Market Scorecard (most recent), Tanzania is not compliant with
several EAC regulations. Of note, Tanzania is the only EAC Member Country not to ratify the EAC’s 2013 Sanitary and Phytosanitary
Protocol (SPS).

Tanzania is a member of the International Organization for Standardization (ISO). The national standards body, the Tanzania Bureau of
Standards, was established in 1975. It has been most active in promoting standards and quality in process technology, including agro-
processing, chemicals and textiles, and engineering, including mining and construction.

Tanzania is a member of the World Trade Organization (WTO) and its National Enquiry Point (NEP) is the Tanzania Bureau of
Standards (TBS). As the WTO NEP, TBS handles information on adopted or proposed technical regulations, as well as on standards and
conformity assessment procedures. Tanzania does not notify all draft technical regulations to the WTO Committee on Technical Barriers
to Trade (TBT).

Legal System and Judicial Independence

Tanzania’s legal system is based on the English Common Law system. The first source of law is the 1977 Constitution, followed by
statutes or acts of Parliament; and case law, which are reported or unreported cases from the High Courts and Courts of Appeal and are
used as precedents to guide lower courts. The Court of Appeal, which handles appeals from Mainland Tanzania and Zanzibar, is the
highest court, followed by the High Court, which handles civil, criminal and commercial cases. There are four specialized divisions
within the High Courts: Labor, Land, Commercial, and Corruption and Economic Crimes. The Labor, Land, and Corruption and
Economic Crimes divisions have exclusive jurisdiction over their respective matters, while the Commercial division does not claim
exclusive jurisdiction. The High Court and the District and Resident Magistrate Courts also have original jurisdiction in commercial
cases subject to specified financial limitations.

Apart from the formal court system, there are quasi-judicial bodies, including the Tax Revenue Appeals Tribunal and the Fair
Competition Tribunal, as well as alternate dispute resolution procedures in the form of arbitration proceedings. Judgments originating
from countries whose courts are recognized under the Reciprocal Enforcement of Foreign Judgments Act (REFJA) are enforceable in
Tanzania. To enforce such judgments, the judgment holder must make an application to the High Court of Tanzania to have the
judgment registered. Countries currently listed in the REFJA include Botswana, Lesotho, Mauritius, Zambia, Seychelles, Somalia,
Zimbabwe, Swaziland, the United Kingdom, and Sri Lanka.

The Tanzanian constitution guarantees judicial independence. However, the degree of judicial independence has varied significantly in
the past few years, and many perceive that political interference in justice is a concern.

Regulations and enforcement actions are appealable, and they are adjudicated in the national court system.

Laws and Regulations on Foreign Direct Investment

Several laws and regulations enacted over the past six years affect the risk-return profile on foreign investments, especially those in the
extractives and natural resources industries. The laws/regulations include the Natural Wealth and Resources (Permanent Sovereignty)
Act 2017, Natural Wealth and Resources Contracts (Review and Renegotiation of Unconscionable Terms) Act 2017, Written Laws
(Miscellaneous Act) 2017, and Mining (Local Content) Regulations 2019. These acts were introduced by the executive branch under a
certificate of urgency, meaning that standard advance publication requirements were waived to expedite passage. As a result, there was
minimal stakeholder engagement. Stakeholders continue to call for revision to these laws.

Investors, especially those in natural resources and mining, express concern about the effects of these laws. Two laws apply to “natural
wealth and resources,” which are broadly defined and not only include oil and gas, but in theory, could include wind, sun, and air space.
Investors are encouraged to seek legal counsel to determine the effect these laws may have on existing or potential investments. For
natural resource contracts, the laws remove rights to international arbitration and subject contracts, past and present, to Parliamentary
review. More specifically, the law states “Where [Parliament] considers that certain terms …or the entire arrangement… are prejudicial
to the interests of the People and the United Republic by reason of unconscionable terms it may, by resolution, direct the Government to
initiate renegotiation with a view to rectifying the terms.”  Further, if the GoT’s proposed renegotiation is not accepted, the offending
terms are automatically expunged. “Unconscionable” is defined broadly, including catch-all definitions for clauses that are, for example,
“inequitable or onerous to the state.” Under the law, the judicial branch does not play a role in determining whether a clause is
“unconscionable.”

The Mining (Local Content) Regulations 2019 require that indigenous Tanzanian companies are given first preference for mining
licenses. An ‘indigenous Tanzanian company’ is one incorporated under the Companies Act with at least 20 percent of its equity owned
by and 100 percent of its non-managerial positions held by Tanzanians (this is an improvement from the 2018 regulations which required
51 percent Tanzanian ownership). Furthermore, foreign mining companies must have at least 5 percent equity participation from an
indigenous Tanzanian company and must grant the GoT a 16 percent carried interest. Lastly, foreign companies that supply goods or
services to the mining industry must incorporate a joint venture company in which an indigenous Tanzanian company must hold equity
participation of at least 20 percent.

The Tanzania Investment Center contains many relevant laws, rules, procedures, and reporting requirements for investors on its portal
at http://tanzania.eregulations.org , but it is not comprehensive.

Note: As of date of this publication, there were ongoing efforts to revise this legislation and accompanying regulations. Investors are
encouraged to contact the U.S. Embassy or to seek legal counsel with a firm operating in Tanzania.

Competition and Antitrust Laws

The Fair Competition Commission (FCC) is an independent government body mandated to intervene, as necessary, to prevent
significant market dominance, price fixing, extortion of monopoly rent to the detriment of the consumer, and market instability. The
FCC has the authority to restrict mergers and acquisitions if the outcome is likely to create market dominance or lead to uncompetitive
behavior.

Expropriation and Compensation

The constitution and investment acts require government to refrain from nationalization. However, the GoT may expropriate property
after due process for the purpose of national interest. The Tanzanian Investment Act guarantees payment of fair, adequate, and prompt
compensation; access to the court or arbitration for the determination of adequate compensation; and prompt repatriation in convertible
currency where applicable. For protection under the Tanzania Investment Act, foreign investors require USD 500,000 minimum capital
and Tanzanian investors require USD 100,000.

GoT authorities do not discriminate against U.S. investments, companies, or representatives in expropriation. There have been cases of
government revocation of hunting concessions that grant land rights to foreign investors, including a U.S.-based company with strategic
investor status. At least one factory with substantial U.S. investment reports that the GoT blocked the sale of its assets.

There are numerous examples of indirect expropriation, such as confiscatory tax regimes or regulatory actions that deprive investors of
substantial economic benefits from their investments. This is another area the GoT promised to address in 2021.

Dispute Settlement
ICSID Convention and New York Convention

Tanzania is a member of both the International Centre for Settlement of Investment Disputes (ICSID) and the Multilateral Investment
Guarantee Agency (MIGA). Tanzania is a signatory to the New York Convention on the Recognition and Enforcement of Arbitration
Awards.

A new Arbitration Act adopted in February 2020 replaces the 1931 Arbitration Act and is generally a replica of the English Arbitration
Act, 1996. The act supersedes the Public Private Partnership (PPP) (Amendment) Act, No. 9 of 2018 (the PPP Amendment Act) which
stated that PPP agreements are subject to local arbitration under the arbitration laws of Tanzania and must take place on Tanzanian soil.
With the change, however, the arbitrator body may be international. There was a similar semantic change to the Natural Wealth and
Resources (Permanent Sovereignty) Act, 2017 and the Natural Wealth and Resources (Review and Re-Negotiation of Unconscionable
Terms) Act, 2017 (collectively the Natural Wealth Laws) to again allow for international arbitration as long as they are governed by
Tanzanian law and the venue is in Tanzania. However, it is important to note that interpretations of this act vary among legal
practitioners and thus far, there has been no foreign arbitral body to travel to Tanzania.

Investor-State Dispute Settlement

Investment-related disputes in Tanzania can be protracted. The Commercial Court of Tanzania operates two sub-registries located in the
cities of Arusha and Mwanza. The sub-registries, however, do not have resident judges. A judge from Dar es Salaam conducts a monthly
one-week session at each of the sub-registries. The government said it intends to establish more branches in other regions including
Mbeya, Tanga, and Dodoma, though progress has stalled. Court-annexed mediation is also a common feature of the country’s
commercial dispute resolution system.

Despite legal mechanisms in place, foreign investors have claimed that the GoT sometimes does not honor its agreements. Additionally,
investors continue to face challenges receiving payment for services rendered for GoT projects. One high profile example of such a
dispute is that of a U.S.-based energy company, which in 2017 filed an application for ICSID arbitration seeking USD 561 million for
alleged breach of contract of a purchase power agreement. At the time of this publication, the dispute is ongoing.

International Commercial Arbitration and Foreign Courts

The common alternative dispute resolution (ADR) methods used in Tanzania are (1) Arbitration, (2) Mediation and (3) Settlement.
Arbitration is legislated by the Arbitration Act of 2020 which came into force in January 2021. The Arbitration Act is only applicable on
Mainland Tanzania.

There are two arbitration bodies in Tanzania; the Arbitral tribunal, where the parties agree on the number of arbitrators. If no agreement
is reached, the arbitral tribunal will have a sole arbitrator. The second body is the Commission for Mediation and Arbitration (MCA)
which deals specifically with labor issues i.e., employer and employee relations.

The new Arbitration Act emulates the United Kingdom’s model with some significant limitations. For example, the Act states that the
adjudication of the International Arbitration be physically in Tanzania. The law also introduces some mandatory provisions in which the
Arbitration Act shall be used regardless of the nature of the Arbitration. The Mandatory provisions deal with procedures such as stay of
proceedings, limitation of time, power of court to remove arbitrators, immunity of arbitrators, duties of the arbitral tribunal, expenses of
arbitrators, attendance of witnesses, enforcement of the award, and other provisions. It also amends existing laws which restrict
arbitration locales to Tanzania only using Tanzanian judicial bodies, such as Section 11 of the Natural Wealth and Resources (Permanent
Sovereignty) Act of 2017.

Bankruptcy Regulations

Tanzania has a bankruptcy law which allows for companies to declare insolvency. The insolvency process includes the appointment of
receiver managers, administrative receivers, or liquidators. In practice the process is very long and expensive. Preferential debts such as
government taxes and rents, outstanding wages and salaries, and other employee compensation take priority over other claims, including
those from creditors. Insolvent or illiquid companies may also seek the protection of the courts by seeking a compromise or arrangement
as proposed between a company and its creditors, a certain class of creditors, or its shareholders.

According to the 2020 World Bank’s Ease of Doing Business report, it takes an average of three years to conclude bankruptcy
proceedings in Tanzania. The recovery rate for creditors on insolvent firms was reported at 20.4 U.S. cents on the dollar, with judgments
typically made in local currency.

4. Industrial Policies

Investment Incentives

The Tanzania Investment Center (TIC) offers a package of investment benefits and incentives to both domestic and foreign investors
without performance requirements. A minimum capital investment of USD 500,000 if foreign owned or USD 100,000 if locally owned
is required. (At the time of this publication, the government was revising these incentives. Investors are advised to consult the TIC for
up-to-date information.)

Current investment incentives include the following:

 Discounts on customs duties, corporate taxes, and VAT paid on capital goods for investments in mining, infrastructure, road
construction, bridges, railways, airports, electricity generation, agribusiness, telecommunications, and water services.

 100 percent capital allowance deduction in the years of income for the above-mentioned types of investments – though there
is ambiguity as to how this is accomplished.

 No remittance restrictions. The GoT does not restrict the right of foreign investors to repatriate returns from an investment.

 Guarantees against nationalization and expropriation. Any dispute arising between the GoT and investors may be settled
through negotiations or submitted for arbitration.

 Allowing interest deduction on capital loans and removal of the five-year limit for carrying forward losses of investors.
Investors may apply for “Strategic Status” or “Special Strategic Status” to receive further incentives. The criteria used to determine
whether an investor may receive these designations are available on TIC’s website ( www.tic.co.tz/strategicInvestor ).

The government habitually introduces waivers through the Public Finance Act with the aim of attracting investment in certain targeted
sectors. In Financial Year 2019/2020, the government introduced a VAT exemption for the following items in order to encourage
investment: import of grain drying equipment; supply of aircraft lubricants to a local operator of air transportation; and imports
refrigerated by a person in horticulture for exclusive use in Tanzania Mainland. The GoT also introduced a reduction of corporate
income tax for new investors involved in the production of sanitary pads from 30% to 25% for two years, subject to the investor signing
a performance agreement with the government.

The Export Processing Zones Authority (EPZA) oversees Tanzania’s Export Processing Zones (EPZs) and Special Economic Zones
(SEZs). EPZA’s core objective is to build and promote export-led economic development by offering investment incentives and
facilitation services. Minimum capital requirements for EPZ and SEZ investors are USD 500,000 for foreign investors and USD 100,000
for local investors. Investment incentives offered for EPZs include the following:

 An exemption from corporate taxes for ten years.

 An exemption from duties and taxes on capital goods and raw materials.

 An exemption on VAT for utility services and on construction materials.

 An exemption from withholding taxes on rent, dividends, and interests.

 Exemption from pre-shipment or destination inspection requirements.

 SEZs offer similar incentives, excluding the ten-year exemption from corporate taxes.

The Zanzibar Investment Promotion Agency (ZIPA) and the Zanzibar Free Economic Zones Authority (ZAFREZA) offer the following
incentives:

CATEGORY “A” FREE ECONOMIC ZONE DEVELOPERS: DEVELOPMENT OF INFRASTRUCTURE

 The developer of a Free Economic Zone shall benefit to the following incentives: exemption from payment of taxes and duties for
machinery, equipment, heavy duty vehicles, building and construction materials, and any other goods of capital nature to be used for
purposes of development of the Free Economic Zone infrastructure.

 exemption from payment of taxes and duties for machinery, equipment, heavy duty vehicles, building and construction
materials, and any other goods of capital nature to be used for purposes of development of the Free Economic Zone infrastructure.

 exemption from payment of corporate tax for an initial period of ten years and thereafter a corporate tax, shall be charged at
the rate specified in the Income Tax Act.

 exemption from payment of withholding tax on rent, dividends ‘and interest for the first ten years.

 exemption from payment of property tax for the first ten years.

 remission of customs duty, value added tax and any other tax payable in respect of importation of one administrative vehicle,
ambulances, firefighting equipment and firefighting vehicles and up to two buses for employees’ transportation to and from the Free
Economic Zone.

 exemption from payment of stamp duty on any instrument executed in or outside the Free Economic Zone relating to
transfer, lease or hypothecation of any movable or immovable property situated within the Free Economic Zone or any document,
certificate, instrument, report or record relating to any activity, action, operation, project, undertaking or venture in the Free Economic
Zone.

 treatment of goods destined into Free Economic Zones as transit goods; and

 on site customs inspection of goods within Free Economic Zones.

CATEGORY “B” FREE ECONOMIC ZONES OPERATORS: APPROVED INVESTORS PRODUCING FOR SALE INTO
THE CUSTOMS TERRITORY

Approved Investors whose primary markets are within the customs territory shall be entitled to the: remission of customs duty, value
added tax and any other tax charged on raw materials and goods of capital nature related to the production in the Free Economic Zones.

 remission of customs duty, value added tax and any other tax charged on raw materials and goods of capital nature related to
the production in the Free Economic Zones.

 exemption from payment of withholding tax on interest on foreign sourced loan.

 remission of customs duty, value added tax and any other tax payable in respect of importation of one administrative vehicle,
one ambulances, firefighting equipment and firefighting vehicles and up to two buses for employees’ transportation into and from the
Free Economic Zones.

 exemption from pre-shipment or destination inspection requirements.

 on site customs inspection of goods within Free Economic Zones.

 access to competitive, modern and reliable services available within the Free Economic Zones; and
 subject to compliance with applicable conditions and procedures for foreign exchange and payment of tax whenever
appropriate, unconditional transfer through any authorized dealer bank in freely convertible currency of.

(i) net profits or dividends attributable to the investment;

(ii) payments in respect of loan servicing where a foreign loan has been obtained;

(iii) royalties, fees and charges for any technology transfer agreement;

(iv) the remittance of proceeds in the event of sale or liquidation of the licensed business or any interest attributable to the licensed
business; and

(v) payments of emoluments and other benefits to foreign personnel employed in Tanzania in connection with the licensed business.

CATEGORY “C” FREE ECONOMIC ZONE OPERATORS: APPROVED INVESTORS PRODUCING FOR EXPORT
MARKETS

1.
1. Approved Investors producing for export markets in non-manufacturing or processing sectors shall be entitled to
the:
2. subject to compliance with applicable conditions and procedures, accessing the export credit guarantee scheme.
3. remission of customs duty, value added, and any other tax charged on raw materials and goods of capital nature
related to the production in the Free Economic Zones.
4. exemption from payment of corporate tax for an initial period of ten years and thereafter, a corporate tax shall be
charged at the rate specified in the Income Tax Act.
5. exemption from payment of withholding tax on rent, dividends and interests for the first ten years.
6. exemption from payment of all taxes and levies imposed by the Local Government Authorities for products
produced in the Free Economic Zones for a period of ten years.
7. exemption from pre-shipment or destination inspection requirements.
8. on site customs inspection of goods in the Free Economic Zones.
9. remission of customs duty, value added tax and any other tax payable in respect of importation of one
administrative vehicle, ambulances, firefighting equipment and vehicles and up to two buses for employees’ transportation to
and from the Free Economic Zones.
10. treatment of goods destined into Free Economic Zones as transit goods.
11. access to competitive, modern and reliable services available within the Free Economic Zones; and
12. subject to compliance with applicable conditions and procedures for foreign exchange and payment of tax
whenever appropriate unconditional transfer through any authorized dealer bank in freely convertible currency of:

(i) net profits or dividends attributable to the investment.

(ii) payments in respect of loan servicing where a foreign loan has been obtained.
 (iii) royalties, fees and charges for any technology transfer agreement.

(iv) the remittance of proceeds in the event of sale or liquidation of the business enterprises or any interest attributable to the investment.

(v) payments of emoluments and other benefits to foreign personnel employed in Tanzania in connection with the business enterprise;
twenty percent of total turnover is allowed to be sold to the local market and is subject to the payment of all taxes. twenty percent of total
turnover is allowed to be sold to the local market and is subject to the payment of all taxes.

 twenty percent of total turnover is allowed to be sold to the local market and is subject to the payment of all taxes.

 hundred percent foreign ownership is allowed; and

 no limit to the duration that goods may be stored in the Freeport Zones.

2. For purposes of this section investors licensed primarily for export markets are investors whose exports are more than eighty percent
of total annual production.

Incentives and allowances outside Free Economic Zones

1. Approved investor investing outside Free Economic Zones, may be granted the:

exemption from payment of import duty, excise duty Value Added Tax and other similar taxes on machinery, equipment, spare parts,
vehicles and other input necessary and exclusively required by that enterprise during construction period indicated in the Investment
Certificate.

 exemption from payment of import duty, excise duty Value Added Tax and other similar taxes on machinery, equipment,
spare parts, vehicles and other input necessary and exclusively required by that enterprise during construction period indicated in the
Investment Certificate.

 exemption from payment of business license fee for the first three months of trial operation.

 corporate tax exemption for up to five years.

 hundred percent foreign ownership.

 hundred percent retention of all profits after tax.

 hundred percent allowance Research and Development; and

 hundred percent allowance for free repatriation of profit after tax.

2. Without prejudice to the provisions of paragraph 1 of this Part, approved investor investing in manufacturing sector may further be
granted the: exemption from payment of any tax on all goods produced for exports.

 exemption from payment of any tax on all goods produced for exports.
 exemption from payment of trade levy for raw materials and industrial inputs procured from Tanzania Mainland.

 exemption from payment of import duty, Value Added Tax and other similar taxes on raw and packaging materials during
project operations.

 exemption of Income Tax on interest on registered borrowed capital; and

 hundred percent allowance investment deduction on capital expenditure within five years.

3. Without prejudice to the provisions of paragraph 1 of this Part, Approved Investor investing in real estate business may also be granted
the: exemption of income tax on interest on borrowed capital.

 exemption of income tax on interest on borrowed capital.

 stamp duty exemption.

 hundred percent allowance investment deduction on capital expenditure within five years; and

 capital gains tax on properties sold or purchased.

Foreign Trade Zones/Free Ports/Trade Facilitation

Tanzania’s export processing zones (EPZs) and special economic zones (SEZs) are assigned geographical areas or industries designated
to undertake specific economic activities with special regulations and infrastructure requirements. EPZ status can also be extended to
stand-alone factories at any geographical location. EPZ status requires the export of 80 percent or more of the goods produced. SEZ
status has no export requirement, allowing manufacturers to sell their goods locally. There are currently 14 designated EPZ/SEZ
industrial parks, 10 of which are in development, and 75 stand-alone EPZ factories.

Performance and Data Localization Requirements

The Non-Citizens (Employment Regulation) Act (see Section 12 Labor Policies and Practices below) requires employers to attempt to
fill positions with Tanzanian citizens before seeking work permits for foreign employees, and to develop plans to transition all positions
held by foreign employees to local employees over time. (At the time of this publication, this Act is pending major revisions.)

Because the local content (LC) initiative cuts across all economic sectors, the government decided that oversight of LC development
should take a multi-sector approach, rather than being confined to a single ministry or sector. In 2015, the government directed the
National Economic Empowerment Council (NEEC) to oversee implementation of local empowerment initiatives. The objective of the
local content policy is to put local products and services – delivered by businesses owned and operated by Tanzanians – in an
advantageous position to exploit opportunities emanating from inbound foreign direct investments. In 2015, the GoT enacted The
Petroleum Act and, subsequently, issued The Petroleum (Local Content) Regulations 2017. Similarly, in 2017, the GoT amended mining
laws, issuing The Mining (Local Content) Regulations 2018. (See Chapter 4: Laws and Regulations on Foreign Direct Investment for
more on recent local content laws.)

Bank of Tanzania (BoT) regulations require banks to physically house their primary data centers in Tanzania or face steep penalties. The
Tanzanian Bankers Association is appealing the requirement as it is cumbersome, expensive, and contrary to industry best practices.
The GoT launched a USD 94 million national data center (NDC), which is operated by the GoT’s Telecommunications Corporation
(TTC). Under the Tanzania Telecommunications Corporation (TTC) Act 2017, the TTC plans, builds, operates and maintains the
“strategic telecommunications infrastructure,” which is defined as transport core infrastructure, data center and other infrastructure that
the GoT proclaims “strategic” via official public notice.

5. Protection of Property Rights

Real Property

All land is owned by the government and procedures for obtaining a lease or certificate of occupancy may be complex and lengthy. Less
than 15 percent of land has been surveyed, and registration of title deeds is handled manually, mainly at the local level. Foreign investors
may occupy land for investment purposes through a government-granted right of occupancy (“derivative rights” facilitated by TIC), or
through sub-leases from a granted right of occupancy. Foreign investors may also partner with Tanzanian leaseholders to gain land
access.

Land may be leased for up to 99 years, but the law does not allow individual Tanzanians to sell land to foreigners. There are
opportunities for foreigners to lease land, including through TIC, which has designated specific plots of land (a land bank) to be made
available to foreign investors. Foreign investors may also enter into joint ventures with Tanzanians, in which case the Tanzanian
provides the use of the land (but retains ownership, i.e., the leasehold).

Secured interests in property are recognized and enforced. Though TIC maintains a land bank, restrictions on foreign ownership may
significantly delay investments. Land not in the land bank must go through a lengthy approval process by local-level authorities, the
Ministry of Lands, Housing, Human Settlements Development (MoLHHSD), and the President’s Office to be designated as “general
land,” which may be titled for investment and sale.

The MoLHHSD handles registration of mortgages and rights of occupancies and the Office of the Registrar of Titles issues titles and
registers mortgage deeds. Title deeds are recognized as collateral for securing loans from banks. In January 2018, the GoT amended the
land law, requiring that loan proceeds secured by mortgaging underdeveloped land be used solely to develop the specific piece of land
used as collateral. The changes apply to general land managed by the MoLHHSD’s Commissioner for Lands, who must receive a report
from the lender showing how loan proceeds will be used to develop the land. The law does not apply to village land allocated by village
councils, which cannot be mortgaged to a financial institution.

Tanzania’s Registering Property rank in the World Bank’s 2020 Ease of Doing Business report deteriorated from 142 in 2018 to 146 in
2019 and 2020. According to the report, it takes eight procedures and 67 days to register property compared the Sub-Saharan Africa
average of 51.6 days.

Intellectual Property Rights

The GoT’s Copyright Society of Tanzania (COSOTA) is responsible for registration and enforcement of copyrighted materials, while
the Business Registrations and Licensing Agency (BRELA) within the Ministry of Trade administers trademark and patent registration.
It is the responsibility of the rights holders to enforce their rights where relevant, retaining their own counsel and advisors. The Fair
Competition Commission (FCC) promotes competition, protects consumers against unfair market conduct, and has quasi-judicial powers
to determine trademark and patent infringement cases. The FCC is also tasked with combating the sale of counterfeit merchandise.
However, the Tanzania Medicines and Medical Devices Authority (TMDA) handles counterfeit human medicines, cosmetics, and
packaged food materials, and its mandate is stipulated in the Tanzania Food, Drugs, and Cosmetics Act (TFDCA) as per the amendment
of 2019. Despite its efforts, limited resources make it difficult for the GoT to adequately combat counterfeiting.

Tanzania is not included in the United States Trade Representative (USTR) Special 301 Report or the Notorious Markets List.

For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles
at  http://www.wipo.int/directory/en/.   

6. Financial Sector

Capital Markets and Portfolio Investment

Tanzania’s Dar es Salaam Stock Exchange (DSE) is a self-listed publicly owned company. In 2013, the DSE launched a second-tier
market, the Enterprise Growth Market (EGM) with lower listing requirements designed to attract small and medium sized companies
with high growth potential. As of March 1, 2021, DSE’s total market capitalization reached USD 6.7 billion, a 36.1 percent drop from
December 2017 figure, with the drop is primarily attributed to the effects of the COVID 19 pandemic. The Capital Markets and
Securities Authority (CMSA) Act facilitates the flow of capital and financial resources to support the capital market and securities
industry. Tanzania, however, restricts the free flow of investment in and out of the country, and Tanzanians cannot sell or issue securities
abroad unless approved by the CMSA.

Under the Capital Markets and Securities (Foreign Investors) Regulation 2014, there is no aggregate value limitation on foreign
ownership of listed non-government securities. Only foreign individuals or companies from other EAC nations are permitted to
participate in the government securities market. Even with this recent development allowing EAC participation, foreign ownership of
government securities is still limited to 40 percent of each security issued.

Tanzania’s Electronic and Postal Communications Act 2010 amended in 2016 by the Finance Act 2016 requires telecom companies to
list 25 percent of their shares via an initial public offering (IPO) on the DSE. Of the seven telecom companies that filed IPO applications
with the CMSA, only Vodacom’s application received approval.

As part of the Mining (Minimum Shareholding and Public Offering) Regulations 2016, large scale mining operators were required to
float a 30 percent stake on the DSE by October 7, 2018. Currently, no mining companies are listed on the DSE.

Money and Banking System

Tanzania’s financial inclusion rate increased significantly over the past decade thanks to mobile phones and mobile banking. However,
participation in the formal banking sector remains low. Low private sector credit growth and high non-performing loan (NPL) rates are
persistent problems. The NPL ratios further deteriorated with the COVID 19 pandemic.

According to the IMF’s most recent Financial System Stability Assessment, Tanzania’s bank-dominated financial sector is small,
concentrated, and at a relatively nascent stage of development. Financial services provision is dominated by commercial banks, with the
ten largest institutions being preeminent in terms of mobilizing savings and intermediating credit. The report found that nearly half of
Tanzania’s 45 banks are vulnerable to adverse shocks and risk insolvency in the event of a global financial crisis.
(Source: https://www.imf.org/en/Publications/CR/Issues/2018/12/04/United-Republic-of-Tanzania-Financial-Sector-Assessment-
Program-Press-Release-Staff-Report-46418 )

The two largest banks are CRDB Bank and National Microfinance Bank (NMB), which represent almost 30 percent of the market. The
only U.S. bank is Citibank Tanzania Limited. Private sector companies have access to commercial credit instruments including
documentary credits (letters of credit), overdrafts, term loans, and guarantees. Foreign investors may open accounts and earn tax-free
interest in Tanzanian commercial banks.

The Banking and Financial Institution Act 2006 established a framework for credit reference bureaus, permits the release of information
to licensed reference bureaus, and allows credit reference bureaus to provide to any person, upon a legitimate business request, a credit
report. Currently, there are two private credit bureaus operating in Tanzania – Credit Info Tanzania Limited and Dun & Bradstreet Credit
Bureau Tanzania Limited.

Foreign Exchange and Remittances

Foreign Exchange

Tanzanian regulations permit unconditional transfers through any authorized bank in freely convertible currency of net profits,
repayment of foreign loans, royalties, fees charged for foreign technology, and remittance of proceeds. The only official limit on
transfers of foreign currency is on cash carried by individuals traveling abroad, which cannot exceed USD 10,000 over a period of 40
days. Investors rarely use convertible instruments.

The Bank of Tanzania’s new Bureau de Change regulations with stringent requirements came into force in June 2019. The regulations
include a minimum capital requirement of TZS 1 billion (Approx. USD 431,000) and a non-interest-bearing deposit of USD 100,000
with the Bank of Tanzania (the regulator). Regulations also require the business premises to be fitted with CCTV cameras, and new
stringent procedures and policies for detecting and reporting money laundering and terrorism finance. The Bank of Tanzania closed more
than ninety percent of all forex shops in the country, stating that they did not pass inspection for compliance with these requirements. In
response, commercial banks and Tanzania Posts Corporation were licensed to provide forex services.

The value of the Tanzanian currency, the shilling, is determined by a free-floating exchange rate system based on supply and demand in
international foreign exchange markets. However, Interbank Foreign Exchange Market (IFEM) and the rates quoted by commercial
banks and exchange bureaus often vary considerably. There are anecdotal reports that the Bank of Tanzania has artificially fixed the
exchange rate.
The last Article IV Executive Board Consultation was on March 18, 2019. The GoT did not consent to publication of the report and
discussions for an IMF staff monitored program are stalled.

Remittance Policies

There are no recent changes or known plans to change investment remittance policies that either tighten or relax access to foreign
exchange for investment remittances.

Sovereign Wealth Funds

Tanzania does not have a sovereign wealth fund.

7. State-Owned Enterprises

Public enterprises do not compete under the same terms and conditions as private enterprises because they have access to government
subsidies and other benefits. SOEs are active in the power, communications, rail, telecommunications, insurance, aviation, and port
sectors. SOEs generally report to ministries and are led by a board. Typically, a presidential appointee chairs the board, which usually
includes private sector representatives. SOEs are not subjected to hard budget constraints. SOEs do not discriminate against or unfairly
burden foreigners, though they do have access to sovereign credit guarantees.

Specific details on SOE financials and employment figures are not publicly available.

As of June 2019, the GoT’s Treasury Registrar reported shares and interests in 266 public parastatals, companies and statutory
corporations. (See the Treasury Registrar financial statements for the year ending June 2019 – https://www.tro.go.tz/ripoti-za-fedha/ )
Privatization Program

The government retains a strong presence in energy, mining, telecommunication services, and transportation. The government is
increasingly empowering the state-owned Tanzania Telecommunications Corporation Limited (TTCL) with the objective of
safeguarding the national security, promoting socio-economic development, and managing strategic communications infrastructure. The
government also acquired 51 percent of Airtel Telecommunication Company Limited and became the majority shareholder. In the past,
the GoT has sought foreign investors to manage formerly state-run companies in public-private partnerships, but successful
privatizations have been rare. Though there have been attempts to privatize certain companies, the process is not always clear and
transparent. The GoT currently has 20 companies/assets awaiting privatization.

8. Responsible Business Conduct

The GoT’s National Environment Management Council (NEMC) undertakes enforcement, compliance, review, and monitoring of
environmental impact assessments; performs research; facilitates public participation in environmental decision-making; raises
environmental awareness; and collects and disseminates environmental information. Stakeholders, however, have expressed concerns
over whether the NEMC has sufficient funding and capacity to handle its broad mandate.
 There are no legal requirements for public disclosure of RBC, and the GoT has not yet addressed executive compensation standards. Dar
es Salaam Stock Exchange (DSE) listed companies, however, must release legally required information to shareholders and the general
public. In addition, the DSE signed a voluntary commitment with the United Nations Sustainable Stock Exchanges Initiative in June
2016, to promote long-term sustainable investments and improve environmental, social, and corporate governance. Tanzania has
accounting standards compatible with international accounting bodies.

The Tanzanian government does not usually factor RBC into procurement decisions. The GoT is responsible for enforcing local laws,
however, the media regularly reports on corruption cases where offenders allegedly avoid sanctions. There have also been reports of
corporate entities collaborating with local governments to carry out controversial undertakings that may not be in the best interest of the
local population.

Some foreign companies have engaged NGOs that monitor and promote RBC to avoid adversarial confrontations. In addition, some of
the multinational companies who are signatories to the Voluntary Principles on Security and Human Rights (VPs) have taken the lead
and appointed NGOs to conduct programs to mitigate conflicts between the mining companies, surrounding communities, local
government officials and the police.

Tanzania is a member of the Extractive Industries Transparency Initiative (EITI) and in 2015 Tanzania enacted the Extractive Industries
Transparency and Accountability Act, which demands that all new concessions, contracts and licenses are made available to the public.
The government produces EITI reports that disclose revenues from the extraction of its natural resources.

Investors should be aware of human and labor rights concerns in the minerals and extractives sector, as well as agriculture. In May 2021
there was a high-profile USD 6 million out of court settlement for alleged breaches of human rights associated with third-party security
operations at the Williamson Diamond Mine in Tanzania, which is 25% owned by the Government of Tanzania and 75% owned by
Petra (UK). Petra (UK) agreed to pay claimants and committed to invest in programs dedicated to providing long-term sustainable
support to the communities living around the Mine. Petra is also establishing a new and independent (“Tier 2”) Operational Grievance
Mechanism (“OGM”). It will be managed by an independent panel and operate according to the highest international standards, as set
out in the United Nations Guiding Principles on Business and Human Rights.

Additional Resources 

Department of State

 Country Reports on Human Rights Practices;

 Trafficking in Persons Report;
 Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-
Users for Products or Services with Surveillance Capabilities and;
 North Korea Sanctions & Enforcement Actions Advisory

Department of Labor
 Findings on the Worst Forms of Child Labor Report;
 List of Goods Produced by Child Labor or Forced Labor.
 Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
 Comply Chain.

9. Corruption

Tanzania has laws and institutions designed to combat corruption and illicit practices. It is a party to the UN Convention against
Corruption, but it is not a signatory to the OECD Convention on Combating Bribery. Although corruption is still viewed as a major
problem, former President Magufuli’s focus on anti-corruption translated into an increased judiciary budget, new corruption cases, and a
decline in perceived corruption, especially low-level corruption. This improvement is partly attributed to instituting electronic services
which reduce the opportunity for corruption through human interactions at agencies such as the Tanzania Revenue Authority (TRA), the
Business Registration and Licensing Authority (BRELA), and the Port Authority.
Tanzania has three institutions specifically focused on anti-corruption. The Prevention and Combating of Corruption Bureau (PCCB)
prevents corruption, educates the public, and enforces the law against corruption. The Ethics Secretariat and its associated Ethics
Tribunal under the President’s office enforces compliance with ethical standards defined in the Public Leadership Codes of Ethics Act
1995.
Companies and individuals seeking government tenders are required to submit a written commitment to uphold anti-bribery policies and
abide by a compliance program. These steps are designed to ensure that company management complies with anti-bribery polices.
The GoT is currently implementing its National Anti-Corruption Strategy and Action Plan Phase III (2017-2022) (NACSAP III) which
is a decentralized approach focused on broad government participation. NACSAP III has been prepared to involve a broader domain of
key stakeholders including GoT local officials, development partners, civil society organization (CSOs), and the private sector. The
strategy puts more emphasis on areas that historically have been more prone to corruption in Tanzania such as oil, gas, and other natural
resources. Despite the outlined role of the GoT, CSOs, NGOs and media find it increasingly difficult to investigate corruption in the
current political environment.
The GoT’s anti-corruption campaign affected public discourse about the prevailing climate of impunity, and some officials are reluctant
to engage openly in corruption. Some critics, however, question how effective the initiative will be in tackling deeper structural issues
that have allowed corruption to thrive.
Transparency International (TI), which ranks perception of corruption in public sector, gave Tanzania a score of 38 points out of 100 for
2020 and 37 points for 2019. The Afrobarometer report estimates that between 2015 and 2019 the corruption increase in the previous 12
months was only 10% in Tanzania, the lowest in Africa. While for the same period, 23% of the respondents voted that Tanzania is doing
a bad job of fighting corruption, again the lowest in Africa. 32 percent of the respondents also noted that business executives are corrupt,
up from 31 percent in 2015.
Resources to Report Corruption
The Director General
Prevention and Combating of Corruption Bureau
P.O. Box 4865, Dar es Salaam, Tanzania
Tel: +255 22 2150043
Email:  dgeneral@pccb.go.tz 
Executive Director
Legal and Human Rights Centre
P.O. Box 75254, Dar es Salaam, Tanzania
Tel: +255 22 2773038/48
Email: lhrc@humanrights.or.tz 

10. Political and Security Environment

Since gaining independence, Tanzania has enjoyed a relatively high degree of peace and stability compared to its neighbors in the region.
Tanzania has held six national multi-party elections since 1995, the most recent in October 2020 which saw the ruling party’s candidates
win by vast majorities. There were serious doubts about the credibility of the October 2020 elections on the Mainland and Zanzibar, as
there were for byelections in 2018 and 2019. Zanzibar, particularly experienced political violence several times since 1995, including in
2020.

Following the untimely death of President Magufuli (elected in October 2020) in March 2020, a peaceful transfer of power to Vice
President Samia Suhulu Hassan took place in accordance with constitutionally mandated procedures. President Hassan continues to
follow the CCM ruling party’s “manifesto and has begun to lay out her own priorities, which include a reset on international relations
and an effort to revive the private sector and attract foreign investment.

Tanzania is generally free from violent conflict, however, there are ongoing concerns about insecurity spilling over from neighboring
countries, particularly religious extremism from the Tanzania-Mozambique border. There are a significant number of refugees from
crisis and conflicts in neighboring Democratic Republic of the Congo and Burundi, and the continuing violence in neighboring
Mozambique has resulted in Mozambican citizens seeking refuge across the border in southern Tanzania.

11. Labor Policies and Practices

Despite Tanzania’s large youth population, there is a shortage of skilled labor and gaps remain in professional training to support
industrialization. Only 3.6 percent of Tanzania’s 20-million-person labor force is highly skilled. On the regional front, Tanzania, Uganda,
Rwanda and Kenya have committed to the EAC’s 2012 Mutual Recognition Agreement of engineers, making for a more regionally
competitive engineering market.
In Tanzania, labor and immigration regulations permit foreign investors to recruit up to five expatriates with the possibility of additional
work permits granted under specific conditions. The Non-Citizens (Employment Regulation) Act 2015 introduced stricter rules for hiring
foreign workers. Under the Act, the Labor Commissioner must determine if “all possible efforts have been explored to obtain a local
expert” before approving a non-citizen work permit. In addition, employers must submit “succession plans” for foreign employees,
detailing how knowledge and skills will be transferred to local employees. Non-citizens may be granted two-year work permits,
renewable up to five years, while foreign investors may be granted ten-year work permits which may be extended if the investor is
deemed to be contributing to the economy and well-being of Tanzanians. The process for obtaining work permits remains immensely
bureaucratic, opaque at times, and slow. (At the time of publication, revisions to this act are pending in Parliament.)
Mainland Tanzania’s minimum wage, which has not changed since July 2013, is set by categories covering 12 employment sectors. The
minimum wage ranges from TZS 100,000 (USD 45) per month for agricultural laborers to TZS 400,000 (USD 180) per month for
laborers employed in the mining sector. Zanzibar’s minimum wage is TZS 300,000 (USD 135), after being increased from TZS 150,000
(USD 68) in April 2017.
Mainland Tanzania and Zanzibar governments maintain separate labor laws. Workers on the Mainland have the right to join trade
unions. Any company with a recognized trade union possessing bargaining rights can negotiate in a Collective Bargaining Agreement. In
the public sector, the government sets wages administratively, including for employees of state-owned enterprises.
Mainland workers have the legal right to strike, and employers have the right to a lockout. The law restricts the right to strike when doing
so may endanger the health of the population. Workers in certain sectors are restricted from striking or subject to limitations. In 2017, the
GoT issued regulations that strengthened child labor laws, created minimum one-year terms for certain contracts, expanded the scope of
what is considered discrimination, and changed contract requirements for outsourcing agreements.

The labor law in Zanzibar applies to both public and private sector workers. Zanzibar government workers have the right to strike as long
as they follow procedures outlined in the Employment Act of 2005, but they are not allowed to join Mainland-based labor unions.
Zanzibar requires a union with 50 or more members to be registered and sets literacy standards for trade union officers. An estimated 40
percent of Zanzibar’s workforce is unionized. (See Chapter 4: Laws and Regulations on Foreign Direct Investment for more on recent
local content laws.)

12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance and Development Finance Programs

In 1996, the U.S. Overseas Private Investment Corporation (OPIC), the predecessor agency to the U.S. International Development
Finance Corporation (DFC), signed an incentive agreement with the GoT. The Ministry of Foreign Affairs has in principle agreed that
the existing OPIC agreement will allow for the International Development Finance Corporation (DFC) to operate in Tanzania. The
current portfolio includes projects in agriculture, energy, health care, micro-finance, and logistics. In addition, the DFC inherits USAID’s
Development Credit Authority (DCA)’s active portfolio including guarantees to several banks to encourage lending to small and
medium sized enterprises.
Tanzania is also a member of the World Bank’s Multilateral Investment Guarantee Agency (MIGA), which offers political risk
insurance and technical assistance to attract FDI. 13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Host Country USG or international USG or International Source of Data:  BEA;

Statistical source* statistical source IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross
Domestic Product (GDP) $63 63.177
(USD) 2019 billion 2019 billion www.worldbank.org/en/country
Foreign Direct Host Country USG or international USG or international Source of data:  BEA;
Investment Statistical source statistical source IMF; Eurostat; UNCTAD, Other
U.S.  FDI in partner BEA data available at
country (USD, stock  $1,510 https://apps.bea.gov/
positions) N/A N/A 2019 million international/factsheet/
 BEA data available at
Host country’s FDI in the https://www.bea.gov/international/
United States (USD, direct-investment-and-multinational-
stock positions) N/A N/A 2019 $1 million enterprises-comprehensive-data
UNCTAD data available at
Total inbound stock of https://stats.unctad.org/
FDI as % host GDP N/A N/A 2019 1.7% handbook/EconomicTrends/Fdi.html
Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* Source for Host Country Data: host country data not publicly available.

Table 3: Sources and Destination of FDI

There is no data for Tanzania in the IMF’s Coordinated Direct Investment Survey (CDIS).

According to the Bank of Tanzania, the top sources for inward foreign investment into Tanzania are South Africa, Canada, Nigeria,
Netherlands, United Kingdom, Mauritius, Kenya, United States, Vietnam, and France.

Data on outward direct investment is not available.

Table 4: Sources of Portfolio Investment

There is no data for Tanzania in the IMF’s Coordinated Direct Investment Survey (CDIS)