WHEN a Tanzanian parliamentary committee recently exposed the extent of foreign dominance in Kariakoo, the country’s busiest commercial market, one statistic was particularly jarring: only 9.2% of the 9,380 companies registered with the Business Registrations and Licensing Agency (BRELA) had also been vetted and approved by the Tanzania Investment Centre (TIC) – the official gateway for foreign investment.
This gaping discrepancy exposes a dangerous loophole that threatens Tanzania’s economic integrity, distorts fair competition, and undermines national sovereignty. It is not just an administrative oversight. It is a systemic failure.
While BRELA continues to register businesses – foreign and local alike – TIC’s role in scrutinizing and guiding legitimate foreign investment is being bypassed.
The committee was formed on February 2, 2025 by the Minister of Industry and Trade, Dr. Selemani Jafo, in response to a directive by President Samia Suluhu Hassan. The 15-member ministerial committee was tasked with investigating the influx of foreign traders in Kariakoo Market.
Chaired by Prof. Edda Lwoga, Rector of the College of Business Education (CBE), the committee included representatives from key government institutions such as the Tanzania Revenue Authority (TRA), Immigration Department, Tanzania Investment Centre (TIC), Business Registrations and Licensing Agency (BRELA), and the Fair Competition Commission (FCC).
It was also tasked with assessing the impact of foreign traders on local businesses, identifying regulatory loopholes, and proposing measures to ensure that economic opportunities primarily benefit Tanzanians.
In one of its findings, the committee says that thousands of foreign-owned businesses, many operating in Kariakoo, have sidestepped regulatory checks designed to protect Tanzanian interests. This has resulted in a free-for-all that enables foreign traders to gain ground in sectors reserved for locals.
Worse still, this backdoor entry is often facilitated through the misuse of Tanzanian identities. The committee discovered a widespread practice of foreign-owned companies using local employees’ NIDA numbers to disguise their operations as Tanzanian-owned – creating a façade of compliance while displacing legitimate local entrepreneurs.
A market captured
Nowhere is this quiet economic infiltration more visible than in Kariakoo. Known as the heartbeat of Tanzania’s wholesale and retail economy, Kariakoo has become a case study in how weak enforcement, poor agency coordination, and unchecked foreign entry can transform a local trading hub into a playground for dominant foreign players.
While traders from Somalia, Nigeria, India, Pakistan, Britain, and Congo are present, it is the Chinese community that stands out – both in scale and influence. According to recent media reports, Chinese nationals account for up to 90% of all foreign traders in Kariakoo. Their dominance spans entire supply chains, from importation and wholesale to retail; giving them unmatched leverage over pricing and market access.
This control has serious consequences. Local traders report being priced out of the market as Chinese merchants sell goods below market rates and offer landlords higher rents or lump-sum payments known as kilemba to secure prime retail spots. The committee described this not just as unfair competition—but as structural exclusion.
Digital loopholes and silent invasions
Even the digital economy hasn’t been spared. The committee visited 29 online stores operating within Kariakoo – none were licensed. Out of 14 surveyed e-commerce platforms, 12 had no business licenses at all. This signals not just weak oversight, but a collapse of digital governance. This is a glaring contradiction in a nation promoting digitization as part of its development agenda.
But why has this situation persisted? The report implicates deliberate obstruction: unnamed individuals allegedly intervened to block investigations, suggesting high-level collusion and protectionism. When oversight is intentionally sabotaged, the issue moves from incompetence to institutional betrayal.
Systemic capture and policy blind spots
China’s growing presence in Tanzania, through large-scale infrastructure projects and government-endorsed investments, has been welcomed by state officials. But this macro-level cooperation seems to have created a blind spot at the microeconomic level.
The result is a regulatory vacuum where Chinese capital not only flows in unimpeded but also captures local markets like Kariakoo without appropriate scrutiny.
The dominance in Kariakoo is no longer just economic. It reflects a systemic capture of Tanzania’s commercial spaces. Chinese traders are not only outcompeting locals; they are reportedly shielded by actors powerful enough to disrupt official investigations.
This raises troubling questions: Are these traders simply opportunistic investors? Or is their dominance symptomatic of a deeper failure to distinguish between strategic foreign investment and exploitative market encroachment?
The way forward demands urgent action
Full integration between BRELA and TIC: No foreign business should be allowed to register without prior TIC clearance. This requires not only digital interoperability but political will.
Strict penalties for fraudulent registration: Those using Tanzanian nationals as fronts must face criminal prosecution. National identity documents must be safeguarded against abuse.
A comprehensive audit of foreign-owned businesses: The goal is not to chase away genuine investors but to expose those exploiting legal loopholes and undermining Tanzanian entrepreneurship.
Digital enforcement: The government must close the e-commerce loopholes that allow foreign traders to operate without licenses, taxation, or accountability.
A national reckoning
Foreign investment can be a blessing- when guided by fairness and law. But when left unchecked, it becomes a curse that hollow outs local industry, builds resentment, and erodes public trust.
The Kariakoo case forces Tanzania to confront a sobering question: “Are we building an economy for Tanzanians- or slowly selling it off in the name of investment?”
If the government fails to act, Kariakoo could become the blueprint for a broader national trend – one where Tanzanians become spectators in their own economy.
