Since the late 1990s, the Tanzanian government has improved the country's investment climate significantly with assistance from international donors. Markets have been liberalised and a number of public companies have been privatised with participation of foreign investors, contributing to greater inflows of FDI. Nevertheless, cumbersome bureaucracy is a major constraint on business operations in Tanzania, presenting opportunities for rent-seeking and encouraging corruption. Corruption is economy-wide, and measures to combat it are applied impartially to both foreign and domestic investors. Thus, corruption remains a major concern for foreign companies and investors in Tanzania. Although a number of high-profile corruption cases are ongoing and some have been concluded, the government continues to be criticised for slow progress on these grand corruption cases.

Positive developments in relation to corruption and investment:

• A positive step towards circumventing the regulatory burden faced by companies investing in Tanzania has been the establishment of the Tanzanian Investment Center (TIC).
• Tanzania has a comprehensive body of laws, regulations and oversight agencies intended to prevent, investigate and sanction corrupt practices.
• The government has dismissed some corrupt civil servants and a few senior officials, and is strengthening some anti-corruption regulations and institutions.
• A 2007 anti-corruption bill gave the government greater power to target abuses in procurement and money laundering, but critics claim it is insufficient.
• The government plans to review the Anti-Money Laundering Act of 2007 as part of the international efforts to curb the illegal practices in the financial sector.

Risks of corruption:

• In April 2010, the country's supreme audit institution released a report stating that, particularly in the area of public procurement, there continued to be major weaknesses in government internal controls and non-compliance with laws and regulations.
• Corruption persists in government procurement, privatisation, taxation, and customs clearance.
• It is particularly petty corruption in dealings with traffic police and customs and immigration officers that has been identified by foreign companies as an obstacle to investment. 
• The government's commitment to strengthening integrity has been seriously questioned given the extent of corruption within the country and corruption scandals involving ministers and leading members of political parties.
• It is reported that profitable and fast growing companies operating in the formal economy seem to attract the attention of corrupt government officials and are thus more vulnerable to corruption.