The Need for Harmonisation: Why Tanzania’s Fragmented Competition Laws Are Stifling Investment
For investors evaluating opportunities in the United Republic of Tanzania, one of the most critical challenges they often face is determining which competition law regime applies to their business activities.
Tanzania presents a unique case in Africa. Although it is a single sovereign state, competition regulation is administered through separate legal frameworks in Mainland Tanzania and Zanzibar. This creates overlapping compliance obligations that can increase regulatory costs, delay transactions, and create uncertainty for businesses seeking to invest or expand across the country.
The issue is particularly significant at a time when African economies are increasingly pursuing regional integration and regulatory efficiency. Investors place greater value on predictability, consistency, and ease of doing business. In this context, Tanzania’s fragmented competition framework has become an important policy issue that warrants closer examination.
Tanzania’s Dual Competition Law Framework
The root of the fragmentation lies in Tanzania’s constitutional arrangement. Competition is treated as a non-Union matter, allowing Mainland Tanzania and Zanzibar to maintain separate competition laws and institutions.
Mainland Tanzania is governed by the Fair Competition Act, administered by the Fair Competition Commission. Zanzibar operates under the Fair Competition and Consumer Protection Act, enforced by the Zanzibar Fair Competition Commission. Although both regimes share the objectives of promoting fair competition and protecting consumers, they operate independently. They maintain separate notification requirements, review procedures, merger thresholds, enforcement mechanisms, and decision-making processes.
For businesses operating throughout Tanzania, this creates practical challenges. A merger, acquisition, joint venture, or market conduct matter may trigger scrutiny from both regulators, resulting in duplicated compliance obligations. Companies may need to prepare separate submissions, engage in separate regulatory processes, and satisfy separate requirements, despite undertaking a single transaction.
This duplication increases administrative burdens and can create uncertainty when regulators reach different conclusions or impose different conditions. Investors are therefore required to devote additional resources to regulatory management rather than to business growth.
Recognising these challenges, the Fair Competition Commission and the Zanzibar Fair Competition Commission signed a Memorandum of Understanding in September 2025 to strengthen cooperation and information sharing. While this development is positive, it does not remove the legal obligation to comply with both frameworks. The underlying fragmentation therefore persists.
The Cost of Fragmentation for Investors and Economic Growth
The existence of multiple competition regimes within a single jurisdiction has consequences that extend beyond regulatory administration. It directly affects investment decisions, transaction costs, and market efficiency.
Investors generally prioritise jurisdictions with clear, predictable regulatory requirements. When multiple regulators oversee the same transaction, the time and resources required to secure approvals increase significantly. Legal advisory costs rise, review timelines become less predictable, and the risk of conflicting regulatory outcomes grows.
This uncertainty can discourage investment, particularly among cross-border investors comparing Tanzania with competing investment destinations. Businesses may conclude that the costs and complexities of regulatory compliance outweigh the benefits of pursuing a transaction.
The challenge is particularly evident in mergers and acquisitions. Transactions involving businesses active in both Mainland Tanzania and Zanzibar may require duplicate notifications and parallel engagements with regulators. What should be a single approval process becomes multiple processes operating simultaneously.
Beyond individual transactions, fragmentation can undermine Tanzania’s broader economic competitiveness. As countries across Africa work towards greater regulatory harmonisation through initiatives such as the African Continental Free Trade Area and regional economic communities, investors increasingly expect streamlined regulatory processes, even though Tanzania is no longer a member of COMESA. Jurisdictions that maintain duplicative compliance structures risk appearing less attractive than those offering simpler, more coordinated frameworks.
The result is a hidden cost to investment and economic growth. While intended to safeguard competition, fragmented regulation can inadvertently create barriers that reduce market dynamism and discourage business expansion.
The Case for Harmonisation and a Single Compliance Pathway
The solution lies not merely in improving coordination among regulators but in pursuing genuine harmonisation of competition regulation across Tanzania.
Institutional cooperation is valuable, but it cannot fully address the challenges posed by separate legal frameworks. As long as businesses remain subject to multiple notification requirements and approval processes, regulatory duplication will persist.
A more effective approach would involve aligning substantive competition rules, merger thresholds, notification procedures, and enforcement practices across Mainland Tanzania and Zanzibar. Greater consistency would significantly reduce compliance costs while preserving regulators’ ability to address anti-competitive conduct.
Over time, policymakers may also consider establishing a unified competition review framework for transactions affecting both jurisdictions. Such a system would allow businesses to submit a single notification and undergo a single review process, while ensuring that the interests of both Mainland Tanzania and Zanzibar remain protected.
A harmonised framework would provide investors with greater certainty, enhance transparency, and make doing business easier. It would also strengthen Tanzania’s position as a regional investment hub and align with broader continental efforts to reduce regulatory barriers to trade and investment.
Ultimately, the objective should be simple. Investors operating within a single country should not face multiple layers of competition regulation for the same transaction. Tanzania has already taken an important first step by enhancing cooperation among its regulators. The next step should be to create a more coherent and integrated competition framework that supports investment, promotes economic growth, and provides a clear compliance pathway for businesses operating across the Union.