Digital economy key to youth employment

DAR ES SALAAM: TANZANIA’S growing digital economy is rapidly emerging as a critical driver for youth employment, offering new pathways to tackle the country’s persistent unemployment challenges and paving the way for sustainable economic growth and social stability.

An Economist-cum-banker investment, Dr Hilderbrand Shayo said that digital entrepreneurship holds great potential to reduce youth unemployment in Tanzania, but without inclusive policies and systemic investment, it risks remaining out of reach for the majority.

Dr Shayo told the Daily News yesterday that while the country is making steady progress in building digital infrastructure, social and economic barriers still limit access particularly for young women and rural youth.

“Tanzania’s young population is a national asset,” he said. “But without targeted support, many of them will be left behind in the digital economy.”

With over 60 per cent of the population under the age of 25, Tanzania has one of the youngest demographics in Africa.

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According to Dr Shayo, this presents an opportunity for innovation, gig work and technology-driven business models, especially as traditional employment options continue to shrink.

The growth of digital infrastructure is also encouraging. Data from the Tanzania Communications Regulatory Authority (TCRA) shows that national digital coverage is projected to exceed 50 per cent by 2025.

This has been driven by the expansion of mobile data services and the rollout of 4G and 5G networks across urban and semi-urban areas.

Mobile money systems such as M-Pesa, Tigo Pesa and Airtel Money have also made it easier for young entrepreneurs to transact, run online businesses and launch fintech startups. These platforms are laying the foundation for a low-capital, high-impact digital economy.

The government efforts, through programmes like the Digital Tanzania Project, the National Youth Fund and various ICT incubation hubs including DTBi, COSTECH and Sahara Ventures have further shown commitment to fostering digital skills and entrepreneurship.

These initiatives are aligned with Tanzania’s Vision 2050 and the Third Five Year Development Plan (FYDP III), which both position the digital economy as a key driver of industrialisation and employment.

Tanzania’s integration into the East African Community (EAC) and the African Continental Free Trade Area (AfCFTA) has also expanded the potential market for local digital entrepreneurs to over 1.2 billion people.

According to Dr Shayo, this regional advantage enables faster and more cost-effective scalability compared to traditional business models.

However, he warned that several key challenges must be addressed. Despite widespread phone ownership, digital literacy remains low, especially in rural areas.

Skills such as coding, digital marketing and data analytics are not yet part of the standard curriculum in most public education systems.

“Digital entrepreneurship does not just about own a smartphone. It’s about knowing how to build and manage platforms, understand digital markets and create value through technology,” he said.

Access to finance is another hurdle. Many young people lack the collateral, credit history, or business accounts needed to secure loans. Venture capital and angel investing are still emerging in Tanzania, leaving most startups dependent on personal savings or small grants.

Dr Shayo emphasised that digital entrepreneurship, while promising, is not a one-size-fits-all solution. For it to deliver widespread impact, he called for greater investment in digital education, rural connectivity and startup-friendly financial systems. He also urged policymakers to ensure women and marginalised groups are not left behind.

“Digital entrepreneurship can be a powerful tool but only if it is inclusive, practical and supported by a full ecosystem,” he said.

As Tanzania continues to embrace digital transformation, experts agree that deliberate action is needed to bridge the digital divide. Without this, the promise of digital growth may benefit only a few, while the majority remains on the sidelines of the country’s digital future.