| Vital statistics |
|---|
| location: East Africa |
| neighbor: Mozambique, Malawi, Zambia, Democratic Republic of the Congo, Burundi, Rwanda, Uganda, and Kenya |
| Capital: Dodoma |
| Population (2024): 69.3 million |
| Official languages: English and Swahili |
| GDP per capita (2023): $1,224 |
| GDP growth (2024, expected): 5.4% |
| Inflation (2024, expected): 3.2% |
| currency: Tanzanian shilling |
| Investment Promotion Agency: Tanzania Investment Centre |
| Available investment incentives: Tax credits, reduced tax rates, and tax credits; Reductions in customs duties and corporate taxes; 75% exemption from import duties on capital goods; granting rights derived from land; No restrictions on transfers; Guarantees against nationalization and expropriation; A basket of incentives in export processing zones and special economic zones; investment guarantees; Five automatic immigration quotas; Signatory to the African Continental Free Trade Area; Member of the East African Community, the Southern African Development Community, and the Common Market for Eastern and Southern Africa |
| Ranking in the Corruption Perceptions Index (2023): 87/180 |
| Political risks: Violence escalates in the run-up to the 2025 elections; corruption; instability between neighboring countries; Muzzling the opposition and freedom of the media; weak public institutions; mixed human rights; Religious tensions between the Zanzibar archipelago and the mainland |
| Security risks: High levels of unemployment and underemployment; high levels of inequality and poverty; terrorist threats; Intolerance towards the LGBTQI+ community; Violent crimes: Assault, sexual assault, robbery, burglary, and car theft are common |
| Pros |
|---|
| Suitable geographical location |
| Large mineral reserves |
| Huge local and regional market |
| Tourism assets (national parks, coastline) |
| Vast agricultural lands |
| cons |
|---|
| Barriers to cross-border trade |
| Low level of industrial development |
| High public debt |
| Low level of human capital |
| Bureaucratic red tape |
Sources: Allianz, UK Foreign and Commonwealth Office, International Monetary Fund, Moody’s, Standard & Poor’s, Fitch, US State Department, World Bank, COFIS, UNCTAD/UN, BMI, Transparency International, Britannica, World Factbook To the CIA, the World Health Organization.
For more information about Tanzania, click here to read Global Finance Country reports page.
The country’s social and economic transformation has accelerated at an unprecedented pace over the past decade. The architects were the late President John Pombe Magufuli, who pursued an agitated and highly controversial approach, and his successor President Samia Suluhu Hassan, who favored a subtle but assertive style.
The results are clear. GDP growth has averaged 5.5% over the past ten years, making Tanzania one of the fastest growing economies in the world. The momentum continues, with growth expected to reach 5.4% in 2024 and 6% in 2025.
“Tanzania has a good reputation for peace and stability compared to (other) countries in East Africa,” says Tinda Msingili, head of banking and finance at the Tanzania law firm of Clyde & Partners. This places Tanzania among the few countries in Africa where investors can plan for the long term without fear of sudden political unrest.
Stable democracy, accompanied by decisive economic reforms and interventions, has resulted in Tanzania emerging as a hotbed of foreign direct investment. Investors are flocking to the country to exploit opportunities in sectors such as mining, energy, agriculture, tourism, manufacturing, transportation and commercial real estate.
UNCTAD’s 2024 World Investment Report shows that while FDI inflows to Africa fell by 3% in 2023, Tanzania stood out. Inflows increased by 6.3% between 2021 and 2022, reaching about $1.3 billion from about $1.2 billion. The total stock of foreign direct investment reached about $20 billion in 2023, from $18.6 billion in 2022.
Government data paints an impressive picture. The Tanzania Investment Center (TIC) reported that in the 2023/24 financial year, the country generated net foreign direct investment of $3.5 billion.
The steady increase in inflows was no mere coincidence. Aside from political stability and economic reforms, factors such as strategic location, abundant natural resources, infrastructure expansion, investment incentives, and a growing local and regional market are among the factors that make Tanzania so attractive.
One crucial reform was the enactment of the Tanzania Investment Act 2022, which was instrumental in streamlining company registration processes, enhancing transparency, enhancing efficiency, and reducing bureaucratic hurdles.
But what is most important is creating an environment of certainty for investors. Some areas stand out. The first is to protect existing contracts, which is critical for long-term investment planning.
The second is dispute resolution and arbitration, ensuring that investors have a reliable and impartial dispute resolution platform. Given that Tanzania has been at loggerheads with foreign investors in the mining sector due to the arbitrary cancellation of retention licenses in 2018, this is important.
In 2023, the state paid Winshear Gold $30 million to expropriate the company’s gold mine concession. It is also fighting other cases at the International Center for Settlement of Investment Disputes, where various companies are collectively seeking $300 million for wrongful termination of licenses.
Another gain from the new investment law is the creation of a fair and investor-friendly framework for repatriating profits. As long as foreign companies fulfill all tax obligations and issue a dividend notice, they can repatriate profits without any penalty.
“This law represented a major shift in the government’s rhetoric towards investments and the business community,” notes Imani Muhengo, head of financial research and analysis at financial brokerage and investment advisory firm Alpha Capital. He adds that by lowering the minimum capital requirement to $500,000 for foreign investors, Tanzania has become an affordable destination.
Aside from regulatory reforms, Tanzania has also pumped huge resources into improving infrastructure, including roads, ports and railways, to make doing business easier. The $2.9 billion Julius Nyerere hydropower project, funded largely from internal resources, is nearing completion. With a capacity of 2,115 megawatts, it will significantly reduce energy costs.
Tanzania has also invested in a standard gauge railway linking the port of Dar es Salaam with neighboring Uganda, Rwanda, Burundi and the Democratic Republic of the Congo. The new railways reduced the cost of freight by 40% and enhanced efficiency. Tanzania is expected to become the preferred gateway to the East African Community, at the expense of Kenya.
The country’s standing received a major boost in October when it joined the US-facing Lobito Corridor railway project linking Angola, Zambia and the Democratic Republic of the Congo. The project, which will cost more than $4 billion, will connect the Atlantic coast to the Indian Ocean.
Abundant natural resources
When it comes to minerals, Tanzania is a hotspot. It includes more than 40 different types of minerals, including gold, diamonds, silver, tanzanite, iron ore, copper, nickel, cobalt, graphite and uranium, in addition to natural gas.
Government data shows that the mining sector accounts for 9.1% of GDP, generating $3.3 billion in 2022. Profits are expected to double to $6.6 billion by 2027. To ensure Tanzania benefits from these resources, the government is demanding a 16% free interest rate on All of them. project.
