In a dramatic regulatory turn, the Tanzanian government has implemented a sweeping directive that effectively bars foreign entities from operating mobile money services within the country. The decision, which took effect immediately on Monday, was introduced through Government Notice â„–487A published on July 28, 2025. Framed as an effort to reserve certain sectors for citizens only, the announcement left many foreign fintech operators facing an uncertain and abrupt future.
Inside the New Regulation
Issued under the Business Licensing Act, the government’s directive explicitly lists 15 business activities now off-limits to non-citizens, including the booming mobile money transfer sector. The order mandates that licensing authorities are no longer permitted to issue or renew licenses for these activities if the applicant is not a Tanzanian citizen. Although existing licenses remain valid until expiration, no renewals will be granted, effectively ushering foreign players toward a slow but final exit.
Broad Scope and Strict Enforcement
The list of restricted business categories spans both traditional and modern enterprises, from retail trading and small-scale mining to parcel delivery and tour guiding. The inclusion of mobile money transfers is particularly significant, given the sector’s central role in Tanzania’s digital economy. The government has backed the order with steep penalties, including fines of up to TZS 10 million (approximately USD 3,800), jail time, and even revocation of visas for violators and those who aid them.
Implications for Fintech Expansion
The directive lands as a major blow to international fintechs that had earmarked Tanzania as a cornerstone in their pan-African expansion strategies. These companies, which often promote goals like financial inclusion and cross-border connectivity, now face regulatory roadblocks just as their models begin to gain traction. For many, the message from Dodoma is unmistakable: local ownership must come before global scale.
The Case of Nala and the Grey Zone
Perhaps the most compelling example of this shift's impact is Nala, the international remittance startup founded by Tanzanian entrepreneur Benjamin Fernandes. Despite being locally inspired and globally admired—having raised $40 million in Series A funding from investors like DST Global Partners and Acrew Capital—Nala may now find itself squeezed out of its home turf. The law’s language focuses on the nationality of the business operator rather than the founder, raising complex questions about compliance for firms backed by foreign capital.
Between Empowerment and Protectionism
The Tanzanian government maintains that the directive aims to empower local entrepreneurs and ensure that economic gains remain within national borders. Officials argue that citizen-only ownership in service-based businesses will help level the playing field for small operators and prevent market domination by foreign-backed firms. Critics, however, view the move as a form of protectionism that could deter much-needed foreign investment and stifle innovation.
Investor Confidence on Shaky Ground
From an international investment standpoint, the new directive may serve as a cautionary tale about regulatory unpredictability in emerging markets. Startups and venture capital firms watching from global tech hubs may now perceive Tanzania as a riskier environment for business operations. Reduced competition and the potential for service gaps are just some of the concerns being raised, especially for the end consumers these services were intended to benefit.
Navigating the Fallout
In the short term, the focus will likely shift toward legal consultations and strategic adaptations by affected companies. Many will seek clarity on whether the restriction applies to cross-border remittances or only local mobile money services. Others will likely pursue joint ventures with Tanzanian citizens to maintain a foothold in the market, leading to a rapid and possibly chaotic realignment of ownership structures.
Tanzania's decision to close off key sectors to foreign players marks a pivotal moment for its digital and economic future. While framed as a move to uplift local entrepreneurs, the broader implications could reshape investment dynamics and business confidence in the region. As foreign fintechs reassess their strategies, the balance between national empowerment and global collaboration hangs in the balance.