Mwigulu champions private sector, unveils major investment reforms in Dodoma

Tanzania's Prime Minister, Dr. Mwigulu Nchemba, has reiterated the government's commitment to fostering a highly investor-friendly environment, emphasizing deeper collaboration with the private sector and the systematic removal of business growth impediments. These pronouncements, made at the launch of a customs bonded warehouse in Dodoma, underscore recent legislative and policy reforms, notably the Tanzania Investment Act, 2022, and the establishment of the Tanzania Investment and Special Economic Zones Authority (TISEZA). The reforms aim to streamline investment processes, enhance incentives, and empower local investors, aligning with the nation's Vision 2050 for industrialization and economic competitiveness. Legal practitioners must note the evolving regulatory landscape, particularly concerning investment thresholds, incentives, and customs procedures.

Tanzania is actively repositioning itself as a premier investment destination in Africa, a commitment recently championed by Prime Minister Dr. Mwigulu Nchemba. Speaking at the inauguration of a customs bonded warehouse in Chamwino, Dodoma, the Prime Minister underscored the government's unwavering dedication to enhancing the investment climate through robust private sector engagement and the dismantling of barriers to business growth. This initiative is not merely rhetorical; it signals a profound shift in policy and regulatory frameworks designed to attract and retain both domestic and foreign capital.

The Prime Minister's statements highlight a strategic pivot towards recognizing the private sector as the indispensable engine of economic development, placing it on par with public sector contributions. This article delves into the legal implications of these pronouncements, examining the foundational statutes and recent reforms that underpin Tanzania's renewed investor-friendly stance. For legal professionals, understanding these developments is crucial for advising clients navigating Tanzania's evolving investment landscape, from new market entrants to established enterprises seeking to expand.

The legal framework governing investment in Tanzania has undergone significant transformation, with the most notable recent change being the enactment of the Tanzania Investment Act, No. 10 of 2022, which repealed the previous Tanzania Investment Act, No. 26 of 1997. This new Act serves as the primary legislation for promoting, coordinating, and facilitating investments, establishing the Tanzania Investment Centre (TIC) as a key institution. Further streamlining efforts culminated in the merger of the TIC and the Export Processing Zones Authority (EPZA) in 2025, creating the Tanzania Investment and Special Economic Zones Authority (TISEZA). TISEZA now functions as a unified 'one-stop centre' for investors, aiming to simplify bureaucratic processes and provide comprehensive support.

Complementing the investment legislation are various tax and customs laws, including the Income Tax Act, the Customs Tariff Act, the Value Added Tax Act, and the East African Community Customs Management Act (EACCMA) 2004. These statutes collectively define the fiscal and non-fiscal incentives available to investors, as well as the procedures for import, export, and warehousing of goods. The government's long-term economic blueprint, Vision 2050, provides the overarching strategic direction, emphasizing industrialization, increased domestic investment, and a competitive economy. This policy environment underscores a deliberate move towards fostering a more predictable and supportive regulatory regime.

The reforms championed by Prime Minister Nchemba are deeply embedded in the Tanzania Investment Act, 2022, and subsequent regulatory amendments. A key change introduced by the 2022 Act was the reduction of the minimum investment capital threshold for local businesses from USD 100,000 to USD 50,000, while the threshold for foreign investors remains at USD 500,000. This adjustment is indicative of the government's intent to empower local entrepreneurs and facilitate their participation in larger projects, a point explicitly made by the Prime Minister.

The establishment of TISEZA in 2025 marks a significant institutional reform, consolidating investment promotion and special economic zone administration under a single entity. This 'one-stop centre' approach is designed to reduce friction for investors by housing multiple government agencies and digitizing key services, thereby accelerating company registration, permit acquisition, and land designation. The Act also promotes amicable dispute settlement, allowing parties to utilize local and international avenues for resolution, which enhances investor confidence.

Investment incentives, crucial for attracting capital, are structured under various legal frameworks. The Tanzania Investment Act, 2022, defines incentives as tax reliefs and concessional tax rates available under the Income Tax Act, Customs Tariff Act, and Value Added Tax Act, among others. These include zero import duty on capital goods and raw materials for priority sectors, VAT deferment on project capital goods, and capital allowances. However, fiscal incentive certificates now expire after five years, though they are renewable, while non-fiscal incentives are valid for the project's lifetime. The government has also undertaken sweeping regulatory reforms, including the removal of over 270 fees and charges, to reduce the cost of doing business and enhance competitiveness.

The launch of a customs bonded warehouse, as highlighted by the Prime Minister, exemplifies the practical application of these reforms. Customs bonded warehouses are licensed facilities for storing imported dutiable goods without immediate payment of duties, regulated primarily by the East African Community Customs Management Act (EACCMA) 2004. These warehouses offer significant benefits, such as deferment of import duty and VAT, which is particularly advantageous for re-export trade or for managing cash flow. While these reforms are broadly welcomed, challenges persist, particularly concerning the consistent application of tax policies and regulations by the Tanzania Revenue Authority (TRA), although new procedures were instituted in 2024 to address these concerns.

The Tanzanian government, under the leadership of Prime Minister Dr. Mwigulu Nchemba, is demonstrably committed to cultivating a more attractive and efficient investment climate. The recent legislative and institutional reforms, particularly the Tanzania Investment Act, 2022, and the operationalization of TISEZA, represent a concerted effort to streamline processes, enhance incentives, and foster a robust private sector. The emphasis on empowering local investors and reducing regulatory burdens signals a strategic direction aimed at sustainable economic growth and industrialization in line with Vision 2050.

For legal practitioners, these developments necessitate a thorough understanding of the updated legal framework, including the nuances of investment thresholds, the scope and duration of incentives, and the streamlined procedures offered by TISEZA. Practitioners should closely monitor the implementation of these reforms, particularly how the new 'one-stop centre' functions in practice and how the Tanzania Revenue Authority (TRA) aligns its practices with the stated policy of investor-friendliness. Advising clients on the optimal structuring of investments, navigating customs procedures for facilities like bonded warehouses, and leveraging the expanded opportunities for local participation will be paramount in this evolving landscape.