Newsroom > Blog
Browse more
Secrets of Tanzania Momentum
By Renew Capital Marketing and Communications Team | Fri Oct 18 2024
Image: Sunset dhow ride back to Zanzibar
Tanzania is strategically positioned as a gateway to East African regional markets, offering significant potential for growth. While some may find the pace of development more measured than some of its neighbors, the country possesses abundant untapped resources that could drive a thriving startup ecosystem. The community is close-knit, providing a solid foundation for collaboration and support among entrepreneurs. The meet-ups we hosted and attended were filled with youthful energy, showcasing a promising entrepreneurial spirit.
The government has demonstrated a commitment to supporting tech, innovation and private sector growth, with legislative reforms aimed at improving the business environment. For instance, The Tanzania Investment Act, 2022 reduced the minimum investment capital required to access incentives (as outlined by the Tanzania Investment Center – TIC) for local investors to $50K and introduced enhanced online facilitation through the Tanzania Electronic Investment Window (TeIW), which began operations in October 2023. Additionally, the government launched a fintech sandbox earlier this year to boost the country's fintech ecosystem. Renew Capital remains optimistic about the potential for a stronger investment pipeline in Tanzania.
Driving through the countryside of Tanzania's mainland, there are miles of sisal fields.
Key Momentum Points
- Tanzania's Standard Gauge Railway (SGR) project aims to boost economic growth, regional integration, infrastructure development and national pride. In June 2024, the Tanzanian government launched the SGR project. It aims to facilitate faster, more efficient transportation of people and goods. Two routes have been in operation -– the Dar es Salaam to Dodoma route (approximately 450 km) and Dar es Salaam to Morogoro route (approximately 190 km).
Image Source: The Citizen
Importantly, the railway is expected to expand in East Africa and the Southern African Development Community (SADC), including countries such as – Burundi, Rwanda, Zambia, DRC, Mozambique and Malawi.
- Digital adaptation is accelerating: Since Tanzania launched 5G last year, usage grew to 15% of the population by Q2 2024. The Tanzania Communications Regulatory Authority’s (TCRA) June 2024 report further specified that 4G and 3G coverage had reached 83% and 89% of the population, respectively. This growth is crucial for boosting the country’s tech-enabled startup ecosystem.
- In 2024, Tanzania launched a fintech regulatory sandbox to boost the fintech ecosystem: On July 2024, the Bank of Tanzania published a sandbox regulation framework for fintech startups, aiming to reduce regulatory burdens and promote innovation while maintaining oversight for consumer protection, financial inclusion and financial system stability. The Fintech Regulatory Sandbox Regulations of 2024 outline eligibility criteria, application procedures and a nine-month testing period, aiming to increase Tanzania's fintech sector.
Dar es Salaam is Tanzania's principal port. It handles 95% of the country's international trade and has a capacity of 14.1 million dry and 6 million bulk liquid cargo. It serves landlocked countries such as Uganda, Zambia, DRC, Burundi, Rwanda, Malawi and Zimbabwe, making Tanzania a critical access point to the continent.
Final thoughts…
The Tanzanian economy is expected to grow in the coming years due to an improved business climate among other factors. For example, the real GDP growth rate is expected to increase from 5% in 2023 to approximately 6.5% by 2029, according to IMF projections, while inflation is expected to remain within the central bank's 5% target range.
For a host of reasons, Tanzania is a market to explore!
Tech Hubs
- Buni Hub: supports ideation and prototyping under the Tanzania Commission For Science And Technology (COSTECH)), a government agency supporting Tanzanian innovation and technological growth.
- DTBi: focuses on the commercialization under the COSTECH.
- Westerwelle Startup Haus Arusha: supports entrepreneurship and economic growth.
- PesaTech: is an accelerator program under UNCDF that specializes in Fintech.
- Funguo: is an accelerator program under UNDP that aims to scale and support startups. Currently, it has reached 934 startups.
- Vodacom Accelerator: has a digital accelerator program capacitating startups.
Innovation Nelson Mandela Hub: is a program under the Nelson Mandela Institute of science and technology University in Arusha, Tanzania. It supports startups or individuals starting from the prototype stage.
Go Deeper on Tanzania?
Interested in other African Startup Ecosystems? Download Renew Capital’s Factsheets on other Ecosystems. We’ll be adding new ones every few weeks!
Renew Capital is an Africa-focused impact investment firm that backs innovative companies with high-growth potential. Renew Capital manages investments made on behalf of the Renew Capital Angels, a global network of angel investors, foundations and family offices who seek financial returns and sustainable social impact. For the latest on investing in Africa, subscribe and follow us at our social links below.
Related Posts
