Tanzania at 64: How the private sector unlocked the impossible

What is ordinary today, such as buying stocks on a mobile phone, operating private banks, running transport companies, exporting crops freely, or owning multiple rental properties, was once restricted, heavily regulated, or outright illegal.

The shift from a state-controlled economy to a vibrant private-sector-led marketplace reflects both the resilience of Tanzanians and the profound policy reforms that unfolded across decades.

It is a story of dismantling old systems, building new ones, and learning—sometimes through painful lessons—that enterprise thrives best when the environment allows it.

When Tanzania adopted the Arusha Declaration in February 1967, the country committed to Ujamaa socialism: a philosophy of collective ownership and self-reliance.

This was soon translated into law, beginning with the National Bank of Commerce (Establishment and Vesting of Assets and Liabilities) Act, 1967, which nationalised all private commercial banks.

The 1970s and early 1980s brought additional constraints as the state deepened its hold over the economy.

Imports were subject to strict regulation, lengthy licensing, and severe foreign exchange controls. Businesses needed approval to access scarce foreign currency, which made even sourcing raw materials a bureaucratic ordeal.

Housing and private property faced similar restrictions. The Acquisition of Buildings Act, 1971, empowered the state to seize “excess” privately owned buildings.

The idea of owning several rental houses—or renting at market rates—cut against the grain of Ujamaa ideology.

Public transport was also nationalised. There were no private long-distance bus operators until the market began opening in 1983.

Broadcasting was similarly restricted under the Tanzania Broadcasting Services Act, 1976, which placed television and radio exclusively under state monopoly. Owning a private TV station or even a satellite dish was illegal.

Every day business operations required a government-issued license through the 1972 Business Licensing Act, which specified exactly what business one could run and where.

Trading staple crops like maize, rice, and cashew across regions was restricted through crop marketing boards. Doing so privately risked being accused of “economic sabotage”—a serious offence at the time.

Gold ownership was tightly regulated. It was only after the 1979 Mining Act that small-scale miners began receiving legal recognition.

And financial markets? They did not exist. A stock exchange was unimaginable; capital markets were absent.

Turn toward liberalisation

By the late 1980s, it had become clear that rigid controls were suppressing growth and innovation.

Macroeconomic instability, fueled by global oil shocks, droughts, and inefficient state enterprises, compelled policymakers to reassess their approach.

In 1988, the Nyirabu Commission was established to examine the challenges facing the financial sector. Its recommendations triggered a wave of transformative reforms.

The Banking and Financial Institutions Act (BFIA) of 1991 opened the door for private banks, both local and foreign, ending decades of state monopoly and marking the rebirth of financial pluralism in Tanzania.

This Act laid the foundation for everything from modern banking services to today’s mobile financial innovations. The Capital Markets and Securities Act of 1994 set the stage for securities trading. The Dar es Salaam Stock Exchange (DSE) was incorporated in 1996 and became operational in 1998.

 Today, it hosts 28 listed companies—22 Tanzanian and six cross-listed—allowing ordinary citizens to invest, save, and build wealth through equity markets.

Broadcasting liberalisation followed, with the Broadcasting Services Act of 1993, ending the state monopoly and ushering in an era of private TV and digital media.

Bit by bit, restrictions on property ownership, agriculture trade, mining, and entrepreneurship loosened. By the early 2000s, Tanzania had firmly embraced a mixed economy, with the private sector increasingly treated as a partner—not an adversary.

Private sector boom

One of the most visible outcomes of liberalisation has been the explosion of entrepreneurship across all sectors.

Today, Tanzanian traders fly daily to China, Dubai, and Turkey in search of goods. A young business class is emerging, driven by mobile banking, digital payments, and a fast-expanding logistics ecosystem.

This transformation, however, is not merely anecdotal. It reflects bigger structural changes that have repositioned the private sector at the centre of national growth.

Chief executive officer of the Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA), Mr Oscar Kisanga, says by 2025, operating environment for businesses has improved significantly, noting that the country's regulatory and administrative systems are now more predictable and more coordinated than ever before

According to him, government agencies, especially the Tanzania Revenue Authority (TRA)—have adopted digital systems that now communicate seamlessly, cutting bureaucracy and making compliance easier.

“Systems are now compatible. This is a major shift. It reduces delays and increases transparency,” he says.

Cross-border trade has also become significantly easier, supported by bilateral agreements, regional integration frameworks, and simplified customs procedures.

“Today, a trader can move goods across borders far more efficiently than before,” Kisanga notes.

He observes a powerful rise in women and youth entrepreneurs:

“When you board a plane, it’s full of Tanzanians, especially youth and women travelling to China, Dubai, and Turkey. They are awake. They are active. They are driving commerce.”

Mr Kisanga says the tourism boom has had a “huge multiplier effect,” stimulating hotels, tour operators, transport companies, restaurants, and suppliers across the value chain.

Agribusiness is expanding, supported by technology and improved market access. Manufacturing is growing, including small and medium industries. Mining has opened up through new refineries and the formalisation of artisanal miners.

He emphasises that policy reforms increasingly favour private-sector development, local content participation, and the inclusion of domestic firms in strategic national projects.

“With Vision 2050 putting the private sector at the centre of Tanzania’s long-term growth, the outlook is strong,” he says.

Tanzania National Business Council (TNBC), executive secretary, Dr Godwill Wanga, underscores the strengthening of structured dialogue between government and business.

“The shift in mindset has been significant. Government recognises the private sector not as an observer but as a key driver of national development,” he says.

He notes that this recognition runs from district offices to the national level.

Vision 2050 places the private sector at the heart of Tanzania’s future, promoting innovation, industrialisation, and employment creation.

Dr Wanga says the government increasingly invites private firms into major public projects, while focusing on essential services—an approach that mirrors global best practices.

He also highlights the rise in policy research: “Studies now inform reforms. When laws or regulations change, they are often based on evidence from these studies.”

Above all, he notes, political will has been crucial.

Dr Wanga says; “Facilitation has improved. Coordination has improved. There is clarity.”

Tanzania’s journey from state dominance to a mixed, private-sector-led economy has unlocked possibilities that once seemed distant.

The private sector now employs millions, drives innovation, builds industries, and shapes Tanzania’s presence in regional and global markets.