Dar es Salaam, Tanzania | Tanzania is preparing to formalise its Islamic finance sector with the introduction of its first dedicated legal framework, representing a major step for the country’s banking, insurance, and capital markets. Bank of Tanzania Governor Emmanuel Tutuba confirmed that a draft Islamic finance policy is now ready for parliamentary review, signalling a regulatory breakthrough for Shariah‑compliant offerings.
Historically, Tanzania’s financial system has been governed by regulations designed for conventional interest‑bearing products. Over recent years, several amendments including changes to the Finance Act and new banking regulations have begun to accommodate non‑interest financial instruments. The forthcoming legislation aims to consolidate oversight across products such as Sukuk (Islamic bonds), Takaful (Islamic insurance), and halal investment funds under a unified legal and regulatory framework.
The timing reflects growing investor interest: Tanzania’s sukuk market has already seen multiple issuances, including a quasi‑sovereign sukuk programme in Zanzibar and successful corporate sukuk deals. These developments have attracted regional and international attention, adding momentum to the push for a formal Islamic finance law.
Key features expected in the draft policy include: consolidated regulation for Islamic banking, clarity on tax treatment and Shariah governance, and clear rules for capital‑market instruments tailored to Shariah‑compliant assets. Both domestic and foreign investors are watching closely as the policy could open new capital‑market avenues and broaden financial inclusion for faith‑based and ethical investors.
While excitement builds, experts caution that regulatory detail will matter. Gaps remain in areas such as Islamic real‑estate investment trusts (iREITs), listing standards for Shariah‑compliant securities, and robust supervisory mechanisms. The success of the new law will depend on how well regulators align frameworks with market realities, ensure transparency, and build institutional capacity.
For Tanzania, the move offers more than just financial innovation. It signals a potential shift in how the economy attracts long‑term capital, supports inclusive finance, and deepens integration into global Islamic finance markets. If implemented effectively, the law could position Tanzania as a leading hub for Shariah‑compliant finance in East Africa.