Tanzania is one of the most preferred destinations for foreign investment in Africa (it counts among the 10 biggest recipients of FDI in Africa). According to UNCTAD’s 2022 World Investment Report, FDI inflows to Tanzania reached USD 922 million in 2021 and showed an increase from the previous year (USD 685 million). In the same period, the total stock of FDI stood at USD 17.1 billion, around 24.4% of the country’s GDP. The manufacturing, mining, and energy sectors are the primary recipients of FDI in Tanzania. Other sectors such as agriculture, tourism, and infrastructure have also been attracting FDI in recent years. The country’s primary investors are China, India, Kenya, the United Kingdom, Mauritius, Oman, the United Arab Emirates, Canada, the United States, the Netherlands, South Africa, and Germany (data Invest Tanzania).
Investors are drawn to the country's commitment to implementing sound macroeconomic policies, its efficient privatization program and abundant natural resources. However, low levels of industrial development, environmental concerns, lack of transparency and poor compliance with legislation are barriers to investment. The business environment remains hampered by ineffective regulations. Labour regulations are not flexible enough to support a dynamic labour market. Foreign investment in land is limited and investment in other sectors can be screened. During John Magufuli's presidency (2015-2021), investor unfriendly policies have caused a growing mistrust of international investors, damaging the perception of Tanzania's business climate, which remains restrictive. In 2017, Tanzania approved new regulations in the mining sector that allows the government to tear up and renegotiate mining contracts, partially nationalise mining companies, introduce higher royalties, enforce local beneficiation of minerals and bring in strict local-content requirements, which undermined investor confidence. President Samia Suluhu Hassan affirmed her commitment to prioritising economic growth and strengthening Tanzania's economy through further development of the country's mining and quarrying sector. She also stressed the need for Tanzania to increase foreign investment to encourage growth, particularly in helium, gold and nickel mining and oil extraction. China and Tanzania have embarked on 19 multi-billion dollar projects. Among these projects, are the USD 11 billion port of Bagamoyo, and the 34 km road between Bagamoyo and Mlandizi, connecting the port to Tanzania's internal rail network and the Zambia Railway. Several foreign companies, including Statoil, BG Group, and ExxonMobil, are investing in natural gas exploration and production projects, while mining companies such as Barrick Gold, AngloGold Ashanti, and Acacia Mining are also investing in the country. Overall, Tanzania has a positive business climate for regional standards and ranks 94th out of 180 economies on the 2022 Corruption Perception Index and 83rd out of 176 on the 2023 Index of Economic Freedom.
|Foreign Direct Investment
|FDI Inward Flow (million USD)
|FDI Stock (million USD)
|Number of Greenfield Investments*
|Value of Greenfield Investments (million USD)
Source: UNCTAD - Latest available data.
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Strong points of investing in Tanzania include:
Weak points of investing in Tanzania include:
Foreign investors can benefit from many fiscal and non-fiscal incentives. These include:
Foreigners can acquire interests in a domestic company through purchase of its shares and assets. However, there are certain sector-specific restrictions. These include:
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Latest Update: December 2023