The East-African economies annual growth rates indicate active economic growth, an indication that these countries’ desire to transform their economies to middle-income status is attainable. This potential growth is key to link the entrepreneurial activities so as to open more employment opportunities and foster innovation. However in developing countries, SMEs face unfriendly environment to sustain such growth something denying these SMEs a room to flourish . When both entrepreneurial and investment activities increase, inequalities are minimized through increased real income, eventually the well-being of the people are improved, consequently underwriting the economic prosperity of a country. Hence, setting an ideal enviroment for entrepreneurial activities to foster economic growth cannot be overemphasized. This study aims to amplify the relationship between entrepreneurship and an economic growth in a country targeting middle income status. A documentary review approach was used as the main methodology and the findings from various literatures and other sources relating to the field of study indicate that in Tanzania entrepreneurship and investment in general face particular challenges such as: weak institutions, poor infrastructure, unsuitable laws and regulations that make it difficult to sustain economic growth. Therefore, improving macroeconomic policies, eliminating various red tape with regards to formalization of private entreprises should be prioritized. The study recommends that Tanzania should give special attention to conducive business environments and quality forms of investments in line with desired transformation path to enhance economic growth and ultimately graduate to middle-income economy.