Study: Women entrepreneurs struggle to access Tanzania’s

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Tanzania's preferential procurement policy—designed to give women-owned businesses competitive advantages in government contracts—is failing to deliver on its promise, according to new research that reveals systemic barriers preventing female entrepreneurs from capitalizing on these opportunities. For European investors seeking underexploited market niches in East Africa, this structural gap represents both a cautionary tale about policy implementation and a potential investment thesis.

Tanzania introduced preferential procurement policies specifically to address gender inequality in business access and to stimulate women's economic participation. The framework typically reserves a percentage of government tenders for women-owned enterprises and includes favorable evaluation criteria. On paper, this should have created a significant competitive advantage for qualified female business owners. In practice, the opposite has occurred: women entrepreneurs report difficulty navigating the procurement process, lacking awareness of available opportunities, and facing informal discrimination despite formal policy protections.

The research identifies several concrete obstacles. First, information asymmetries plague the system. Government tender announcements are not consistently publicized through channels that reach women-owned small and medium enterprises (SMEs). Many female entrepreneurs operate in informal networks with limited access to official government procurement portals. Second, compliance requirements—mandatory certifications, registration procedures, and documentation standards—create friction costs that disproportionately affect smaller operations, which women entrepreneurs are more likely to run. Third, and perhaps most damaging, implementation remains inconsistent. Some government agencies actively enforce preferential procurement; others treat it as advisory. This unpredictability undermines business planning and investment decisions.

For European investors, this situation warrants serious attention. Tanzania's government procurement market is substantial—annual spending exceeds $2 billion—and formal preferential procurement typically opens 10-20% of contracts to designated beneficiaries. The untapped opportunity here isn't merely altruistic; it's financial. Women-owned enterprises currently leave billions of shillings on the table due to access barriers. An investor entering this market faces two strategic options.

**Option One:** Invest in B2B service providers that solve the compliance and information problem. A digital platform aggregating government tenders, providing guidance on preferential procurement eligibility, and offering streamlined application support could capture significant value. Tanzania's mobile penetration (60%+) makes SMS and USSD-based solutions viable for reaching entrepreneurs with limited internet access.

**Option Two:** Partner directly with networks of women entrepreneurs to bid collectively on larger government contracts. This de-risks individual SME participation while improving success rates. Consortium bidding also addresses another barrier: the minimum financial thresholds that exclude women-owned microenterprises from competing independently.

The broader implication is that Tanzania's preferential procurement policy, while well-intentioned, demonstrates how policy frameworks without robust implementation infrastructure fail to achieve developmental goals. This pattern repeats across African markets and represents a persistent opportunity for investors who can bridge the gap between policy intent and execution reality.

European investors should also note the policy risk: as Tanzania's government becomes aware of low preferential procurement uptake, expect regulatory tightening, mandatory compliance audits, and potential contractor penalties. Early movers who establish compliant, women-entrepreneur-focused service offerings will capture disproportionate value.

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