Dar es Salaam police chief Lazaro Mambosasa also implicated foreigners in the crime, telling a press conference the assailants had "shot into the air" before bustling Dewji into their vehicle.
They drove into the hotel and opened fire before bundling Dewji into a auto and speeding off, said Dar es Salaam regional police commissioner Lazaro Mambosaso.
Reports from the scene suggest two white men and an unknown number of accomplices in two cars waylaid the prominent businessman as he walked into the exclusive Colosseum Hotel and Fitness Club, where he is a member.
"This kind of incident is new here", he added.
Mohammed Dewji, 43, who is said to have a fortune of $1.5bn (£1.1bn) and is the president of MeTL Group, which operates in about 10 countries across sectors ranging from agriculture to transport and food, was abducted as he entered a hotel gym.
"Three people have already been arrested but we can't divulge their identity for the moment", he said.
Dewji was born in Tanzania and studied at Georgetown University in the United States.
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Dewji was elected to parliament on the CCM ticket but did not seek re-election to his seat in the 2015 election.
He is also a shareholder in the famous Simba Club in Dar es Salaam.
The police boss said the suspects fired in the air as they drove away with Mr Dewji.
Forbes magazine in 2016 put Dewji's wealth at $1.5 billion.
The driver said the kidnappers shot in the air once to scare people away before whisking away Dewji to a waiting auto which sped towards Masaki.
Witnesses, including the guards manning the gate at the hotel, were being questioned, he said.
