Legal and regulatory challenges and market opportunities in the cosmetics sector in Tanzania

For this pilot study, New Markets Lab (NML) assessed how the implementation of the legal and regulatory system governing the Tanzanian cosmetics sector contributes to public policy goals and impacts the ability of firms to take advantage of market opportunities.

This project’s unique aim is to consider regulation in relation to firm outcomes as well as broader public sector goals, such as consumer protection and manufacturing and job creation. The practical implementation of regulation is a key focus of the study, and the final report considers the number of entities involved in a process, their governance, and, where applicable, their incentives, and features, such as the practical implementation of the product registration process. The final study also responds to the key issues facing public and private sector actors, as identified through stakeholder consultations.

Under this pilot project, NML conducted a comprehensive assessment of the Tanzanian policies, laws, and regulations governing the cosmetics sector, including through consultations with public and private sector stakeholders.

• The main regulatory processes with which the private sector has flagged as challenges are (1) product registration, (2) establishment of manufacturing, (3) importation, and (4) customs valuation.
• NML found that different regulatory approaches are available to advance goals of domestic market development (specifically increased manufacturing and job creation) and consumer protection. Within these regulatory approaches, some regulatory functions could be shifted to later intervention points in the value chain and away from market entry.
• Additionally, numerous Ministries and institutions regulate the cosmetics sector, and complicated regulatory processes and overlapping mandates have caused unnecessary burdens on cosmetics firms trying to grow their business.
• NML, in consultation with stakeholders, has identified several areas of regulation that could be streamlined or where duplicative regulatory steps could be eliminated.

These findings aim to support a more efficient allocation of public sector resources and ease regulatory burdens on firms (particularly on small- and medium-sized enterprises), while also facilitating the achievement of policy objectives that can applied to similar industries like food and pharmaceuticals.

Increasing understanding of how law and regulation work as a system and are implemented in practice can have profound impact on economic opportunity and sustainable development.