TOWARDS REALIZING THE STARTUP ECONOMY IN TANZANIA
A brief account
“We need to understand the potential of startup companies in terms of job creation, attracting investment, and most importantly, solving our current and future challenges.” Dr. Hassan Mshinda
Recently, Tanzania has witnessed a rapid surge in startups across different sectors. This movement, however, is relatively young, as startup culture and practices have never been a common phenomenon in Tanzania.
Tanzania has been performing well as a tier two country outside the Big Four (Nigeria, Kenya, South Africa, and Egypt) in the African startup ecosystems as ranked by The Big Deal in the past few years.
In the past three years, Tanzania has witnessed increased activities between investors and startups. There are several deals above the $10 Million mark; Zola Electric ($ 90 Mn), Kopa Gas ($ 25 Mn), EAFrica Group ($ 12 Mn), Nala ($ 10 Mn), and of recent Ramani ($36Mn) that have been secured.
While this is a considerable achievement and a step in the right direction, Tanzania has much to do to catch up to reach the level of leading African countries; however, the good news is that Tanzania has all the ingredients to become among Africa’s most competitive startup ecosystem countries.
In understanding the potential of Tanzanian startups, essential questions to ask are; What is holding us back? How can we address barriers? What next for the Tanzania startup ecosystem towards realizing the startup economy? What ought to be done to strengthen the startup ecosystem?
During the buildup to Sahara Sparks #PotentialUnleashed22 week, Sahara Ventures launched a report titled “TOWARDS REALIZING THE STARTUP ECONOMY IN TANZANIA; CHALLENGES AND OPPORTUNITIES,” co-authored by three Saharans, Mercy Ndunguru, Dr. Ntimi Mtawa, and Jumanne Mtambalike. This report briefly describes the opportunities and challenges facing the startup ecosystem in Tanzania. It sheds light on what is happening in the matured African startup ecosystem and what Tanzania can learn from them.
The report highlights several issues from opportunities, challenges, and lessons from the big four countries.
Here are some of the takeaways;
Tanzania is well-positioned to offer opportunities for those interested in establishing startups. Evidence suggests that Tanzania is on the right path toward digital transformation. Technology is heralded for enabling startups to operate and grow (Shashikala, 2017).
In Tanzania, the startup ecosystem terrain still needs to be developed in terms of numbers, innovative ideas, coverage, awareness, and a broader understanding of the values of startups. Such provides unique opportunities for startups to capitalize on the uncultivated startup ecosystem.
Tanzania needs to revisit the role of the Diaspora in supporting local businesses. One of the reasons for the success of Nigeria’s startup ecosystem is the role played by Diaspora communities. The country is among the African countries with the most substantial linkages to the US and the UK startup ecosystems, encouraging investment opportunities in their local ecosystem. Startups are global businesses that flourish through a strategic collaboration between and among different startup ecosystems.
Tanzania needs to encourage more positive trends and news emerging from our Startup Ecosystem and celebrate those success stories. Investors look for activities in the ecosystem before they develop an interest in a specific ecosystem. It would help if you recognized the media Engagement and Positive PR that different countries have to promote their startup ecosystems.
In Tanzania, government compliance with laws and regulations is still challenging, and most startups are grappling with government compliance issues such as establishment requirements, operations regulations, and tax demands. Due to this, some startups operate in secrecy and cannot enjoy the benefit of opportunities in the public domain.
Sahara Ventures prepared this insight report as a culmination of its experience of working with startups and engaging with African startup ecosystems, as well as a synthesis of insight reports generated by different African organizations.
Sahara Ventures has over seven years of experience working with startup ecosystems across the African continent. On average, Sahara Ventures engages with over 300 startup companies and organizations working with startups across the continent through Sahara Accelerator and the annual flagship event, Sahara Sparks, one of Africa’s most reputed startups and investor platforms.
You can read the report titled “TOWARDS REALIZING THE STARTUP ECONOMY IN TANZANIA; CHALLENGES AND OPPORTUNITIES” through
