A Dissertation Submitted in Partial Fulfillment of the Requirements for the Degree of Master of Business Administration in Cooperate Management (MBA-CM) of Mzumbe University.This entails the description of the study on assessing the environmental and economic effect of plastic bag banning in Tanzania. The study was mainly led by three specific objectives which resulted into research questions answered to provide the facts which bridged the identified gap. The objectives of the study include determining the environmental effects caused by the ban of the plastic bags; to show the economic effects culminating from the banning of plastic bags in Tanzania; and to explore challenges that arose as a result of the plastic bags ban in Tanzania. Exploratory design was used since the study was subjective and qualitative performed in Ilala Municipal Council. The study was conducted through primary data whereas sample of 100 respondents was used through key informant and groups. Data were gathered through interviews and focus group discussion (FGD) whereas the collected information from the field were analyzed using content analysis which were also narratively described together with respondents’ quotations to validate the results. The findings of the study indicated that on the environment outcomes; the ban was adequate and rational decision because it has wiped out completely the plastic bags in the surroundings and the localities. This shows that the decision is useful to protect, safeguard, preserve and assure sustainability in the environment. Despite that, the decision has the source of including items in the purchasing with green component since it is a major achievement in Tanzania for such compliance to be issued. With the economic effects, the outcome has been negative because lots of economic destructions have occurred as a result of the situation. This is due to the fact that all manufacturing entities as factories for the bags were suddenly cease to exist. Also, employees used to work in such companies and or factories lost their jobs and works, revenues to the government severely declined since the factories were active and the products was in high demand always. Moreover, on challenges the situation has been worse as well because value chain has been affected, taxation to the government has been affected, the situation has caused extra cost to the customers as they purchase products and the quality of the products has also been poor. The implication of the results is that banning of the plastic bags has had several effects with some positive and some bad though negative outcome is seen to prevail. The study recommended that the ban is adequate and good since it has more positive results than the negative implication which is advantageous to the nation.