<h1>Secrets of Tanzania Momentum</h1><figure class="image"><img src="/uploads/TZ_20b5289fec.png" alt="A fisherman guides his boat at sunset, escorting passengers back to Zanzibar after a picturesque lake ride in Tanzania."></figure>Image: Sunset dhow ride back to ZanzibarTanzania 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,&nbsp;<a href="https://dailynews.co.tz/tz-enjoys-investment-boom/">The Tanzania Investment Act, 2022</a> 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.<figure class="image"><img src="/uploads/Linkedin_Templates_11_2e83a919ea.png" alt="Vast miles of lush sisal fields stretch across the countryside of Tanzania's mainland, showcasing the agricultural landscape."></figure>Driving through the countryside of Tanzania's mainland, there are miles of sisal fields.<h2>Key Momentum Points</h2><ul><li>Tanzania's Standard Gauge Railway (SGR) project aims to boost economic growth, regional integration, infrastructure development and national pride. In&nbsp;<a href="https://www.thecitizen.co.tz/tanzania/news/national/tanzania-set-to-launch-sgr-services-4655934">June 2024</a>, the Tanzanian government launched the SGR project. It aims to facilitate faster, more&nbsp;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).&nbsp;</li></ul><figure class="image"><img src="/uploads/Linkedin_Templates_18_cf51859c3d.png" alt="An impressive view of the improving railway infrastructure in Tanzania, featuring a train on the tracks amidst scenic landscapes."></figure>Image Source:&nbsp;<a href="https://www.thecitizen.co.tz/tanzania/news/national/tanzania-ready-for-sgr-services-launch-between-dar-es-salaam-and-dodoma-on-july-25-4679416">The Citizen</a>Importantly, the railway is expected to&nbsp;<a href="https://www.thecitizen.co.tz/tanzania/news/national/tanzania-to-boost-intra-africa-trade-with-sgr-expansion-4710098">expand</a> in East Africa and the Southern African Development Community (SADC), including countries such as – Burundi, Rwanda, Zambia, DRC, Mozambique and Malawi.&nbsp;<ul><li>Digital adaptation is accelerating: Since Tanzania&nbsp;<a href="https://www.thecitizen.co.tz/tanzania/news/business/tanzania-s-5g-coverage-rapidly-expands-to-15-percent--4699090">launched</a> 5G last year, usage grew to 15% of the population by Q2 2024. The Tanzania Communications Regulatory Authority’s (TCRA)&nbsp;<a href="https://www.tcra.go.tz/uploads/text-editor/files/Communication%20Statistics%20report%20for%20end%20of%20June%202024_EN_1721315046.pdf">June 2024 report</a> further specified that 4G and 3G coverage had reached&nbsp;<a href="https://www.thecitizen.co.tz/tanzania/news/business/tanzania-s-5g-coverage-rapidly-expands-to-15-percent--4699090">83% and 89%</a> of the population, respectively. This growth is crucial for boosting the country’s tech-enabled startup ecosystem.</li><li>In 2024, Tanzania launched a fintech regulatory sandbox to boost the fintech ecosystem: On&nbsp;<a href="https://www.clydeco.com/en/insights/2024/08/the-fintech-regulatory-sandbox-regulations-2024">July 2024</a>, 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.</li></ul><figure class="image"><img src="/uploads/TZ_3_038dceb737.png" alt="A Tanzanian woman hands cash to a mobile money agent, highlighting the growth of fintech in Tanzania's financial landscape."></figure><a href="https://www.ports.go.tz/index.php/en/dar-es-salaam-port">Dar es Salaam&nbsp;</a>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.&nbsp;Final thoughts…The Tanzanian economy is expected to&nbsp;<a href="https://www.imf.org/en/Publications/CR/Issues/2024/06/25/United-Republic-of-Tanzania-Third-Review-Under-the-Extended-Credit-Facility-Arrangement-and-550949">grow</a> 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&nbsp;<a href="https://www.imf.org/en/Publications/CR/Issues/2024/06/25/United-Republic-of-Tanzania-Third-Review-Under-the-Extended-Credit-Facility-Arrangement-and-550949">6.5%</a> by 2029, according to IMF projections, while inflation is expected to remain within the central bank's&nbsp;<a href="https://drive.google.com/file/d/1QeMZMyI_-PpeIG-KYdrH4MmyC1rVO8jw/view?usp=drive_link">5%&nbsp;</a><a href="https://www.imf.org/en/Publications/CR/Issues/2024/06/25/United-Republic-of-Tanzania-Third-Review-Under-the-Extended-Credit-Facility-Arrangement-and-550949">target</a> range.&nbsp;For a host of reasons, Tanzania is a market to explore!&nbsp;<h3>Tech Hubs</h3><ul><li><a href="https://www.costech.or.tz/bunihub">Buni Hub</a>: supports ideation and prototyping under the&nbsp;<a href="https://www.costech.or.tz/">Tanzania Commission For Science And Technology (COSTECH)</a>), a government agency supporting Tanzanian innovation and technological growth.&nbsp;</li><li><a href="https://teknohama.or.tz/">DTBi</a>: focuses on the commercialization under the COSTECH.</li><li><a href="https://www.linkedin.com/company/westerwelle-startup-haus-arusha/?originalSubdomain=tz">Westerwelle Startup Haus Arusha</a>:&nbsp;supports entrepreneurship and economic growth.</li><li><a href="https://www.pesatechafrica.com/">PesaTech</a>:&nbsp;is&nbsp;an accelerator program under UNCDF that specializes in Fintech.</li><li><a href="https://funguo.org/">Funguo</a>: is an accelerator program under UNDP that aims to scale and support startups. Currently, it has reached 934 startups.</li><li><a href="https://www.vda.co.tz/">Vodacom Accelerator:</a> has a digital accelerator program capacitating startups.</li></ul>Innovation Nelson Mandela Hub: is a program under the<a href="https://nm-aist.ac.tz/"> Nelson Mandela Institute of science and technology University</a> in Arusha, Tanzania. It supports startups or individuals starting from the prototype stage.Go Deeper on Tanzania?<ul><li><a href="https://latest-api.renewcapital.com/uploads/FINAL_Tanzania_Fact_Sheet_1a0d49728a.pdf" target="_blank" rel="noopener noreferrer">Tanzania's Startup Ecosystem Fact Sheet</a></li><li><a href="https://www.google.com/maps/@-6.756524,39.1765061,12z/data=!4m2!11m1!2s5Q-w_tnFSTOizJTBasGPQg?entry=ttu&amp;g_ep=EgoyMDI0MTAxNC4wIKXMDSoASAFQAw%3D%3D" target="_blank" rel="noopener noreferrer">Tanzania's Startup Ecosystem Google Map</a></li></ul>Interested in other African Startup Ecosystems? Download Renew Capital’s Factsheets on other <a href="https://www.renewcapital.com/newsroom/the-momentum-of-african-startup-ecosystems-in-a-snapshot" target="_blank" rel="noopener noreferrer">Ecosystems</a>. We’ll be adding new ones every few weeks!&nbsp;

Explore Tanzania's startup ecosystem, highlighting government initiatives, fintech growth and the Standard Gauge Railway project driving economic momentum.


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Secrets of Tanzania Momentum

Renew Capital's operations have expanded to nine African countries, spanning four regions. We aim to provide insight into Africa's startup scene, along with the opportunities and challenges it presents through a series of blogs from our team on the ground. If you share our passion for developing entrepreneurship in Africa, we invite you to check out our&nbsp;<a href="https://www.renewcapital.com/careers">open roles</a>.&nbsp;<h1>How I See My Ecosystem: Tanzania’s Entrepreneurial Scene Tackling Local Challenges</h1>Insights from ML Kidaha, Renew Capital Investment and Project Manager based in Dar es Salaam, Tanzania.&nbsp;<figure class="image"><img src="/uploads/TZ_Linked_In_fd3d58377e.png" alt="Q&amp;A session with Renew Capital's Investment and Project Manager in Dar es Salaam, Tanzania, discussing insights on Tanzania’s entrepreneurial scene and addressing local challenges."></figure><figure class="image"><img></figure>Tanzania has a population of over 67 million people, making it one of the most populous countries in Africa. This vibrant and youthful nation is also one of the continent's fastest-growing economies. ML Kidaha, Renew Capital investment and project manager for Tanzania sheds light on the startup scene in the country, citing that the community-oriented culture of Tanzania, embodied by the Umoja spirit of togetherness, drives the success of the business community.What unique characteristics and advantages does Tanzania's startup scene offer?Tanzania has a lot of untapped opportunities to take advantage of especially since it is under the radar of the global startup community. The country's population of over 67 million people, rapidly growing cities like Dar es Salaam and its strategic location bordered by the Indian Ocean, as well as the vast&nbsp;<a href="https://globalsiasar.org/pt-br/node/249">freshwater</a> resources of Lake Victoria to the north, Lake Tanganyika to the west and Lake Nyasa (Lake Malawi) to the southwest, make it an attractive place to do business. These features also make Tanzania a suitable market to test validation for both product-to-market fit and scalable market opportunities for adaptation across multiple African countries with similar characteristics.&nbsp;Tanzania’s young population is eager to learn and adapt and this contributes to the vibrant, moldable, startup ecosystem we’re seeing. Success in the Tanzanian context is tied to understanding and aligning with the local culture and people. For example, thriving businesses can be found in a wide variety of locations, catering to a wide range of income brackets. Due to Tanzania's background as a socialist state and its community-focused culture, business requires a collaborative, courteous approach. Understanding the local demographics and building partnerships with them is key.&nbsp;Tanzania is known for its safety and peaceful environment, which can provide a secure foundation for startups to operate.&nbsp;What are the most common obstacles that Tanzanian startups face?Funding is a major obstacle for Tanzanian founders as well as the lack of systems to support business growth and help entrepreneurs scale their businesses. Despite ongoing capacity-building efforts, there is a shortage of technical assistance and systems in place to assist entrepreneurs in becoming investor-ready or taking their businesses to the next level. Additionally, there are bureaucratic processes and red tape that can slow down progress.&nbsp;Entrepreneurs often rely on cash injections from friends and family rather than formal institutions to address funding challenges. However, they lack guidance on how to optimize these resources and are not able to use their funds wisely to achieve business growth.&nbsp;In the context of Tanzania's startup ecosystem, what role do young people – and young women in particular – play in shaping the future of the country's entrepreneurship and innovation landscape?The youth, comprising over 60% of Tanzania's population, have a significant role in shaping the economic future of the country. With rapidly growing cities and a tech-savvy mindset, young people are at the forefront of digital adaptation. The increasing number of internet users reflects this positive trend. This shift towards digital adaptation highlights the need for more tech-enabled businesses.&nbsp;Women contribute significantly to nurturing businesses and play a crucial role in decision-making processes. Moreover, with over 50% of the population being women, there will be a growing demand for products and services that cater to their specific needs.&nbsp;Could you please provide us insight into your journey in the investment sector?I majored in finance in the U.S. where I developed a strong interest in the field. I started my career in financial services, focusing on financing small businesses, entrepreneurs and investment properties, especially in commercial real estate. Later, I worked at Goldman Sachs in their private wealth management division. After that, I gained valuable experience in management consulting at one of the Big 4 accounting firms in Tanzania, across various industries. This gave me a comprehensive understanding of the Tanzanian landscape and reinforced my desire to work in investments.&nbsp;

Insights from ML Kidaha, Renew Capital Investment and Project Manager based in Dar es Salaam.