Overview of Extralegal Sector in Tanzania
The dominance of extralegal (informal) sector in Tanzania is an accumulation of historical events. During the colonial era, laws and rules allowed few people and in most cases foreigners to control the formal trade and land, and natives were left out to fend for themselves in the informal sector. This situation led to the existence of a dual system on property and business ownership where foreigners controlled property and business holdings that were legally secured and natives existed in the informal cycle. This situation persisted even after the post-independence attempts to unify business and property systems under public ownership through the Arusha Declaration of 1967.

Concerns that the informality in property and business ownership deprived the majority of Tanzanians access and opportunities present in the formal market led to the implementation of macroeconomic policy reforms and legal frameworks in the 1990s. However, the reforms did not manage to generate trickle down effects that would enable Tanzanians in the informal sector to own and run properties and businesses and benefit from the formal market system. As a result, majority of Tanzanians were left in the informal sector.

Extra-legality in business and property in Tanzania is exacerbated by four main factors. These include scattered institutional arrangements, complex laws, costly procedures needed for registering businesses and administrative barriers to the legal formation. Due to these setbacks Tanzanians in the extralegal sector have created their own systems of acquiring property rights and managing their transactions in property and business. These systems are termed as Archetypes.