Introduction
According to the Budget Speech delivered by the Ministry of the President’s Office – Planning and Investment on 24 April 2025, a total of 2,175 investment projects were registered between 2021 and 2024. These projects are expected to generate 650,674 jobs and attract total investment capital amounting to USD 25.53 billion. While investment levels continue to grow, compliance remains a significant challenge. Many investors are losing substantial amounts of hard-earned money due to failure to comply with legal requirements. In this article, I focus on the growing number of unnotified mergers and acquisitions (M&A), particularly in light of the recent Budget Speech delivered by the Minister of Industry and Trade on 14 May 2025.
M&As are complex transactions that can significantly impact businesses and markets. In Tanzania, the Fair Competition Act, 2003 (FCA) and the Competition Rules, 2018 regulate these transactions to ensure fair competition and protect consumer interests. Failing to comply with these regulations can lead to severe penalties, including hefty fines and personal liability for directors and officers.
In Tanzania, two-prong tests determine whether an M&A transaction requires approval. It is, therefore, essential to engage a legal advisor to assess these tests before formally advising on whether the transaction in question requires competition clearance.
Market Trend: Uncleared Mergers
According to the Budget Speech for the Ministry of Industry and Trade, presented to the National Assembly for the fiscal year 2025/2026, in the 2024/2025 financial year, the FCC significantly increased its oversight over competition and merger control matters. A total of 27 competition-related cases were under review, with seven already concluded. Among these, 16 cases involved mergers that were implemented without prior FCC approval, a growing concern for the regulator. This trend indicates that failure to notify the FCC of notifiable mergers is becoming a critical compliance issue. The FCC is actively investigating such transactions and taking corrective measures to ensure parties adhere to the legal framework.
In addition, the FCC reviewed 51 merger notifications, of which 35 were approved, 31 unconditionally and 4 subject to conditions. The mergers originated from the following sectors:
- Agriculture (9),
- Manufacturing (9),
- Finance (4),
- Health (2),
- Lands and Construction (5),
- Entertainment and Sports (1),
- Mining (5),
- Trade (2),
- Tourism (2),
- Communications (4), and
- Services (3).
In addition, the remaining 15 applications are still under different stages of review. These developments demonstrate the FCC’s sharpened focus on enforcement and its commitment to promoting transparency, fairness, and competition in Tanzania’s economy. Businesses are strongly encouraged to conduct proper merger clearance assessments and engage the FCC proactively to avoid regulatory risk.
As a note, according to the budget speech for the financial year 2024/2025, only 10 unnotified mergers were under investigation by the FCC as of March 2024. Conversely, based on the 2025/2026 budget speech, the FCC handled 16 cases of unnotifiable mergers. This shows a 60% increase in such cases compared to the previous years.
Penalties for implementing an M&A Deal without competition clearance
In terms of section 60(1) of the FCA, read together with the Finance Act, 2020, parties that implement a merger without obtaining approval from the FCC risk attracting an administrative penalty of between 5% and 10% of their combined annual turnover derived from sources in mainland Tanzania.
Under Section 60(2) of the FCA, if the FCC can reasonably quantify the damage (e.g. financial harm or loss of income) suffered by a person due to an offence, such as gun-jumping, the convicted party may be required to pay twice that amount to the affected person, in addition to other penalties.
Furthermore, where the FCC is satisfied that a person has acquired shares or other assets (and that the acquisition created or strengthened a dominant position) in contravention of the FCA, it may make a compliance order at any time within three years after the acquisition: requiring the acquirer to dispose of some or all of the shares/assets; declaring the acquisition void and requiring the acquirer to transfer some or all of the shares/ assets back to the vendor; and requiring the vendor to refund to the acquirer all the amounts received in respect of the acquisition.
Conclusion
Before initiating, transferring, or executing any M&A transaction, it is essential to consult with experienced legal advisors to determine whether the proposed transaction requires competition clearance from the relevant regulatory authorities. Engaging legal counsel at an early stage helps to identify and address any potential competition law concerns, avoid delays, and ensure full compliance with applicable legal and regulatory requirements.
Read more analysis by Amiri Sharifu
