The Tanzanian government has launched a public review of its draft 2026 National Investment Policy, aiming to enhance the business environment, expand access to capital, and boost private sector participation in economic growth towards 2050. The proposed policy seeks to replace the 1996 National Investment Policy, which has guided the country's investment framework for three decades. This review aligns with the ambitions of Dira 2050, which expects the private sector to account for 70 percent of the investment required to achieve national development targets.
The review of the investment policy comes alongside preparations for a legal framework for private sector development, following the identification of gaps that need to be addressed to help businesses grow and access essential services. The Permanent Secretary in the Ministry of State in the President's Office (Investment), Dr. Fredy Msemwa, stated that the review aims to create an environment where the public and private sectors can collaborate to build the economy. He emphasized that the launch of Dira 2050 in July 2025 set new development targets, including increased investment and a greater contribution by the private sector.
Dr. Msemwa explained that the proposed policy will provide guidance for investment by both public and private sectors while clarifying their respective responsibilities in achieving national development goals. The review has identified challenges arising from the existence of formal and informal businesses, some of which remain outside formal systems and struggle to access credit, technology, markets, and expertise. These challenges can affect businesses' ability to expand, increase income, employ workers, and provide services that enable employees to benefit from social security systems.
The Tanzania Bankers Association (TBA) chief executive, Tusekelege Joune, emphasized the importance of formalizing small and medium-sized enterprises to improve their access to credit and other financial services. She noted that banks need reliable information on business operations, income patterns, and borrowers' ability to repay loans before making lending decisions. Many traders operating outside formal systems lack records to verify their income, creating barriers when seeking financing from financial institutions.
TBA's Joune suggested that electronic payment systems could help traders build transaction records that financial institutions could use to assess their creditworthiness and determine appropriate loan amounts. Representing the Tanzania National Chamber of Commerce (TNCC), Kelvin Nogodo stated that the draft policy addresses important issues affecting investment, including the business environment, access to capital, and land. He emphasized that the policy should provide strategies to increase domestic investors' participation in investment activities and help local companies benefit from opportunities created by projects implemented in the country.
Nogodo added that Tanzania needs a framework that enables foreign investment to generate wider benefits for the domestic economy by creating business opportunities for local firms and strengthening their participation in production. He emphasized that empowering domestic investors should not mean excluding foreign investors. The Tanzania Private Sector Federation (TPSF) executive director, Deogratius Massawe, stated that the review of the 1996 policy offers an opportunity to establish a new direction for attracting investment from both domestic and foreign sources.
Massawe emphasized that improving the business environment will be critical to mobilizing capital and encouraging investment across economic sectors to support Dira 2050. He noted that the private sector's views will help identify areas that need greater emphasis so that the policy can respond to investment challenges in the country. The public review of the draft policy provides an opportunity for stakeholders to outline their challenges and propose priorities for the new policy.
Key points
- The Tanzanian government seeks to increase private sector participation in economic growth towards 2050 through the draft 2026 National Investment Policy.
- The proposed policy aims to address challenges faced by formal and informal businesses in accessing credit, technology, markets, and expertise.
- The review of the investment policy aligns with the ambitions of Dira 2050, which expects the private sector to account for 70 percent of the investment required to achieve national development targets.
