Tanzania is on a roll. The Sefue Commission's 284 tax reform recommendations last week were the most comprehensive rethink of the country's fiscal architecture in a generation. This week the conversation moved to the investment climate.
On March 27, the government convened a high-level meeting in Dar es Salaam to validate MKUMBI II — the Second Blueprint for Regulatory Reforms to Improve the Business Environment and Investment. The timing is deliberate: Tanzania registered 842 investment projects worth $7.7 billion in 2024 — the highest value since 1991 — and is targeting $15 billion in annual inflows.
Sustaining that trajectory requires a regulatory environment that keeps pace. Shikana Investment and Advisory was among the expert stakeholders consulted.
What we observed on March 27 was genuinely different from prior years — and left us with a concern the blueprint's architects have not yet resolved.
The blueprint builds on a predecessor that delivered: over 600 levies eliminated, 94 restrictive laws repealed, $9.3 billion in revenue from over 900 registered projects in 2024. MKUMBI II now proposes 246 reform actions across 11 priority areas.
The urgency is arithmetical — GDP grew 5.9 percent on the Mainland in 2025, but Vision 2050's $1 trillion economy demands at least 10 percent annual growth, with the private sector contributing more than 70 percent of it. An IMF study published in 2025 found Tanzanian firm managers spend 14 percent of their time navigating regulations — nearly double the Sub-Saharan African average of 8 percent.
That is a direct drag on productivity. What the numbers still obscure is structural legal problems investors encounter long before the revenue stage.
Tanzania operates, in regulatory terms, as two jurisdictions within one framework — Mainland and Zanzibar maintain separate licensing regimes, different registration requirements, and in some sectors, divergent rules on foreign equity participation.
MKUMBI II commits to harmonising procedures, but harmonisation of procedures is not harmonisation of legal effect. Which framework governs a dispute? Which regulator has primacy in a contractual breakdown? MKUMBI II does not answer these questions. It should.
The tone on March 27 was the most consequential thing about this meeting. Minister Prof. Kitila Mkumbo did not celebrate progress. He named public institutions as architects of the problem: regulatory authorities must be held accountable when the environment they oversee remains unfavourable.
He acknowledged a mutual distrust calcified into paralysis — government perceiving business as a tax evasion risk; business perceiving government as a licensing toll booth. Tanzania's reform conversation is focused, in significant part, on what the state must change.
Here is the specific legal risk investors should price right now. MKUMBI II's 246 reform actions will be accompanied by an implementation plan and monitoring framework — documents that do not yet exist in final form.
Investment agreements with Tanzanian state entities frequently include stabilisation clauses: provisions locking in the regulatory environment at the time of investment and protecting against adverse changes in law. When that environment is in active flux — as it is during a reform cycle of this scale — a clause written today against MKUMBI II's current draft may not reflect the baseline that applies when implementation begins. FDI inflows reached $1.6 billion in 2023 and are trending upward — but investors entering this transition without counsel tracking the regulatory baseline are carrying exposure they have not priced.
The gap I did not hear addressed is enforcement standing. A reform repealing a law nationally does not automatically bind a district licensing officer in Mwanza or a port authority official in Tanga.
Without a formal mechanism giving businesses legal standing to challenge non-compliance — and imposing consequences on officials who perpetuate superseded practices — the blueprint's 246 actions risk becoming 246 intentions.
I advise clients to conduct regulatory due diligence not only at the national policy level, but at the level of the specific authority they will interface with. The gap between what Dar es Salaam legislates and what Mwanza implements has cost investors real money. It cannot be ignored.
None of this is an argument against investing in Tanzania. The macro fundamentals are solid, reform sequencing is coherent, and political will appears genuinely present. However, a blueprint is a set of intentions, not a legal instrument.
The investors who will benefit most are those who enter with rigorous legal structuring, jurisdiction-specific due diligence, and counsel who understand the distance between a ministerial commitment and a binding regulatory obligation.
A case is not yet a contract. In Tanzania right now, the case is becoming compelling, but the contract still needs careful drafting.
Amne Suedi is Managing Director of Shikana Investment and Advisory, Honorary Consul of Switzerland to Tanzania, and Chair of the Switzerland-Tanzania Chamber of Commerce. Contact at [email protected]
