It is easy to find horror stories of doing business in .

In April, Acacia Mining, a London-listed gold producer, issued a press release denying that it was running a scheme in Tanzania following a tribunal ruling against it in the country.

Standard Chartered Bank, listed in London and Hong Kong, is meanwhile over the alleged extraction of funds from Independent Power Tanzania, an energy company.

Foreign diplomats are far from effusive in their praise for the country’s investment climate, despite the 7 per cent annual growth rate. “Ministers are walking the talk that a lot of the investment they’re doing, like building roads, will help facilitate private sector-led growth,” one says. “But we’re also seeing contradictory actions. There’s ingrained in many serving government officials a suspicion of the private sector and that skews how they look at it.”

Tanzania is ranked 139 out of 189 countries in the World Bank’s ease of doing business index. Sirili Akko, executive secretary of the Tanzania Association of Tour Operators, says the ranking is “fair”, citing the average of 128 days each year it takes his members to renew all the permits they require to operate.

A lack of policy certainty is exacerbating the situation. When became president in November he “came charging out of the blocks and the country didn’t know what had hit it,” in the words of one foreign investor.

He has clamped down on corruption and smuggling, imposed austerity measures and sought to increase tax revenues. Jayesh Shah, managing director of manufacturing conglomerate Sumaria Group and vice-chairman of the Confederation of Tanzania Industries, says: “There is bound to be some short-term pain because the government is trying to address the issues that were brushed under the table.”

Toby Bradbury, chief executive of London-listed miner Shanta Gold, also welcomes the push against corruption but adds: “The government now needs to settle down and provide direction.”

Mr Shah believes that it is going to be hard to change after decades of socialist administration. “I think it’s very difficult to get away from that socialist mentality and that distrust of the private sector,” he says. He argues that recent changes to the tax regime have made doing business “much harder”.

Government officials acknowledge there is “anxiety” among businesspeople but it is trying to reassure investors. “The socialist legacy that this country is proud of has moved on,” says Adolf Mkenda, permanent secretary of the trade and investment ministry. “We’ve realised that private investment is key to stimulating the economy.”

Statistics suggest that despite the negative stories, investors believe it is still worth investing in Tanzania. The Tanzania Investment Centre registered 551 projects worth $9.2bn between December and May, which compares favourably with the 458 projects worth $5.7bn registered in the six months before Mr Magufuli became president.

While Standard Chartered and Acacia are contesting the claims against them, they nonetheless appear to be committed to the country. Andrew Wray, Acacia’s chief financial officer, said in a video published on the company’s website in May that the challenges were “nothing I wouldn’t expect to see in a long-term relationship”. He added: “We’ve been in Tanzania for over 15 years and fully expect to continue for another 30 years.”