This Investment Climate Assessment is based on an analysis of data collected in the Investment Climate Survey of manufacturing firms in Tanzania. The survey was conducted between April and July 2003 by the World Bank and the Economic and Social Research Foundation (ESRF) in Dar es Salaam, in collaboration with the National Bureau of Statistics (NBS). The assessment compares measures of firm performance and the investment climate in Tanzania with similar measures in Kenya, Uganda, India, and China. The report makes policy recommendations that include reducing the burden of taxation, improving the performance of the power sector, enhancing the effectiveness of financial services and access to credit, reducing corruption, maintaining macroeconomic stability, improving ties to the international economy, and increasing productivity.