Samia’s foreign visits target investment opportunities, not aid

Tanzania is actively shifting its economic strategy from reliance on foreign aid to attracting direct business and investment opportunities, a policy championed by President Samia Suluhu Hassan. This strategic pivot, articulated by Prof. Kitila Mkumbo, Minister of State in the President’s Office – Planning and Investment, underscores a commitment to fostering a private sector-led economy. The move is underpinned by significant legal and institutional reforms, including the enactment of the Investment and Special Economic Zones Act, 2025, and the consolidation of investment promotion under the Tanzania Investment and Special Economic Zones Authority (TISEZA). Legal practitioners must understand this evolving landscape, particularly concerning investment incentives, regulatory streamlining, and the nuanced approach to dispute resolution, as Tanzania positions itself as a competitive investment destination.

Tanzania is undergoing a profound economic reorientation, moving decisively away from a historical dependence on foreign aid towards an aggressive pursuit of business and investment opportunities. This strategic shift, spearheaded by President Samia Suluhu Hassan, was recently highlighted by Prof. Kitila Mkumbo, Minister of State in the President’s Office – Planning and Investment, during his presentation of the National Development Plan for the 2026/27 financial year in Parliament. Prof. Mkumbo emphasized that President Hassan’s foreign visits are specifically designed to attract capital and foster partnerships, rather than to solicit financial assistance, signaling a clear intent to build an economy driven by investment, trade, and robust private sector participation.

This policy direction is not merely rhetorical; it is being translated into tangible legal and institutional reforms aimed at creating a more conducive and predictable investment climate. For legal professionals advising clients on opportunities in Tanzania, understanding the contours of this new economic diplomacy is paramount. This article will delve into the statutory and regulatory framework supporting Tanzania's investment drive, analyze the implications of recent reforms, and discuss key considerations for practitioners navigating this evolving landscape.

Historically, Tanzania's economic development has, to varying degrees, relied on foreign aid. However, under President Samia Suluhu Hassan, there has been a concerted effort to pivot towards self-reliance through increased foreign direct investment (FDI) and enhanced private sector engagement. This commitment is reflected in the National Development Plan for the 2026/27 financial year, which prioritizes job creation, inclusive economic growth, and strategic investments as part of Tanzania's long-term transformation agenda under Vision 2050.

The legal framework governing investment in Tanzania has undergone significant evolution. The Tanzania Investment Act, Cap 38 R.E. 2002, previously served as the principal legislation, establishing the Tanzania Investment Centre (TIC) as the primary agency for investment promotion and facilitation. However, this framework has been superseded by the comprehensive Investment and Special Economic Zones Act, No. 6 of 2025 (the "2025 Act"), which repealed earlier legislation, including the Tanzania Investment Act, 2022, and the Export Processing Zones Act, 2002. The 2025 Act consolidates investment promotion, special economic zones, and investor facilitation under a single, integrated system, establishing the Tanzania Investment and Special Economic Zones Authority (TISEZA) as the new one-stop centre for investors. This institutional reform aims to reduce bureaucracy and streamline processes for both local and foreign investors.

The Investment and Special Economic Zones Act, 2025, and the establishment of TISEZA represent a critical legal and institutional overhaul designed to align Tanzania's regulatory environment with its investment-focused economic diplomacy. TISEZA's mandate is broad, encompassing the coordination, encouragement, promotion, and facilitation of investment, as well as advising the government on investment policy. It acts as a one-stop centre, assisting investors in obtaining necessary permits, licenses, approvals, and other legal requirements. The Authority also issues Certificates of Incentives to eligible investors, which unlock a range of fiscal and non-fiscal benefits.

Key investment incentives available under the new framework include tax reliefs and concessional tax rates under various tax laws, such as the Income Tax Act, Customs Tariff Act, and Value Added Tax Act. These can include VAT and import duty exemptions on capital goods, raw materials, and essential project inputs, as well as reduced import duty on project capital goods for priority sectors. Investors may also benefit from accelerated depreciation allowances, the ability to carry forward business losses, and guarantees against nationalization or expropriation without fair and prompt compensation. Crucially, the law guarantees the unconditional transferability of net profits, repayment of foreign loans, royalties, and proceeds from sales or liquidation of an enterprise in freely convertible currency. To qualify for TISEZA incentives, foreign investors generally require a minimum capital threshold of USD 500,000, while local investors require USD 50,000.

However, legal practitioners must also be mindful of certain nuances and potential challenges. While the 2025 Act aims for a unified framework, specific sectors like mining and petroleum have their own governing legislation (e.g., Mining Act, Cap. 123 R.E. 2019; Petroleum (Exploration and Production) Act). Furthermore, Tanzania's approach to investor-state dispute resolution has seen significant shifts. While the country is a member of the International Centre for Settlement of Investment Disputes (ICSID) and the Multilateral Investment Guarantee Agency (MIGA), providing avenues for international arbitration, recent legislative reforms, particularly in 2017 and 2018, have sought to limit international arbitration, especially in the natural resources sector and for Public-Private Partnership agreements, favoring local arbitration under Tanzanian law. This creates a complex environment where the choice of dispute resolution mechanism in investment agreements requires careful consideration. Additionally, non-citizens generally cannot hold a right of occupancy directly for agricultural land, and certain business activities are restricted for non-citizens under the Business Licensing Act.

The government's commitment to improving the business environment is further evidenced by the scrapping of over 232 nuisance taxes and levies and the amendment of 40 laws and regulations under the 'Blueprint' initiative. The President's Office – Planning and Investment, under Prof. Mkumbo, is actively shaping the country's long-term economic framework, including Vision 2050 and the Fourth Five-Year Development Plan (2026/27–2030/31), which targets significant private sector contribution to investment needs. This coordinated effort underscores a genuine drive to attract and facilitate both domestic and international investment across key sectors such as agriculture, manufacturing, tourism, energy, and infrastructure.

Tanzania's strategic pivot towards investment-led growth, championed by President Samia Suluhu Hassan and articulated through the National Development Plan for 2026/27, marks a significant juncture for the country's economic trajectory. The comprehensive reforms embodied in the Investment and Special Economic Zones Act, 2025, and the strengthened role of TISEZA as a one-stop investment facilitator, are designed to create a more predictable, transparent, and attractive environment for both local and foreign investors. The emphasis on economic diplomacy and the active pursuit of global partnerships underscore a pragmatic approach to national development.

For legal practitioners, this evolving landscape presents both opportunities and complexities. Advising clients requires a thorough understanding of the 2025 Act, the specific incentives available through TISEZA, and the revised capital thresholds for investment. Crucially, navigating the nuanced dispute resolution framework, particularly the limitations on international arbitration in certain sectors, demands careful contractual drafting and strategic foresight. Practitioners should closely monitor further regulatory pronouncements, especially those related to the implementation of Vision 2050 and the Fourth Five-Year Development Plan, as Tanzania continues its journey to become a leading investment hub in Africa. The government's commitment to continuous improvement of the business environment suggests that proactive engagement with the legal and policy changes will be key to successful investment in the country.