Tanzania is set to introduce its first-ever Islamic finance law, a move expected to position the country as a key regional player in the fast-growing global Sukuk and Sharia-compliant banking market.
The proposed legislation, currently being finalized by the Ministry of Finance and the Bank of Tanzania (BoT), seeks to provide a clear legal framework for Islamic financial products, attract new investors, and enhance financial inclusion among Tanzania’s unbanked Muslim population.
Speaking in Dar es Salaam earlier this week, Bank of Tanzania Governor Emmanuel Tutuba confirmed that the law is in its final stages and will soon be tabled before Parliament.
“This law will provide a solid foundation for the growth of Islamic finance in Tanzania,” Governor Tutuba said. “It will ensure that all financial institutions offering Sharia-compliant products operate under uniform regulations and standards.”
He noted that Tanzania has witnessed rising interest in Islamic finance, both from local investors and international institutions looking to diversify portfolios in East Africa’s expanding capital market.
According to the BoT, at least six Tanzanian banks currently offer Islamic banking windows, with demand for such products growing steadily over the past five years.
The introduction of a dedicated law is also expected to pave the way for the issuance of Sukuk — Islamic bonds structured to comply with Sharia principles, which prohibit interest-based transactions.
Analysts say the Sukuk market offers Tanzania a new opportunity to raise funds for infrastructure and social development projects while appealing to investors seeking ethical and interest-free instruments.
“Sukuk could become an important source of long-term financing for projects such as roads, energy, and housing,” said Dr. Fatma Khamis, a financial economist at the University of Dar es Salaam. “This reform aligns Tanzania with global Islamic finance trends and enhances its attractiveness to Gulf and Asian investors.”
Globally, the Islamic finance industry is valued at over $4 trillion, with the Sukuk market alone exceeding $800 billion in outstanding assets, according to a 2025 report by the Islamic Development Bank (IsDB).
Beyond capital markets, the forthcoming law aims to expand access to affordable and ethical banking products, particularly among Tanzania’s Muslim-majority regions such as Zanzibar, Tanga, and Coastal areas.
The government believes that formalizing Islamic banking regulations will help integrate more citizens into the formal financial system — a critical step toward achieving Vision 2050’s goal of inclusive economic growth.
“Financial inclusion is not just about numbers; it’s about fairness and choice,” said Deputy Minister for Finance, Hamza Hassan Juma. “This law will allow Tanzanians of all faiths to choose financial services that align with their values.”
Tanzania joins several African nations, including Nigeria, Kenya, and South Africa, that have enacted similar frameworks to tap into Islamic finance as a new engine for economic growth.
Kenya introduced its Islamic Finance Policy in 2023, while Nigeria’s Sukuk issuances have successfully funded major infrastructure projects such as highways and schools.
Regional financial experts view Tanzania’s entry into this space as a strategic step that could transform Dar es Salaam into a competitive hub for Islamic finance in East and Central Africa.
The Bank of Tanzania and the Ministry of Finance are now working with the Attorney General’s Chambers and stakeholders from both the banking and religious sectors to finalize the draft law before its presentation to Parliament early next year.
Once enacted, the law will be accompanied by detailed regulations and capacity-building initiatives for financial institutions to ensure smooth implementation.
“We are not reinventing the wheel,” Governor Tutuba emphasized. “We are learning from international best practices while ensuring the law reflects Tanzania’s economic realities and cultural values.”
As global attention turns to sustainable and ethical finance, Tanzania’s forthcoming Islamic finance law marks a historic step toward diversifying the nation’s financial sector and aligning it with global standards.
If effectively implemented, the law could open a new chapter in Tanzania’s economic development — one that balances profitability with inclusivity, ethics, and long-term stability
