How new Japan-Tanzania deal will boost startup ecosystem

THE startup landscape in Tanzania is set to experience a significant boost thanks to a newly expected project from Japan aimed at enhancing the country’s startup ecosystem.

This new collaboration comes as the Tanzanian government seeks to foster a more vibrant, tech-driven economy. The project, part of minutes of meeting, signed between the Ministry of Information, Communication and Information Technology (MICIT) and the Japan International Cooperation Agency (JICA) on September 13, 2024, will focus on creating a startup-friendly environment.

ICT Commission being the ICT promotion institution is the implementing agent of this project. The initiative, dubbed the “Project for Startup Ecosystem Enhancement Project in Eastern African Region,” is slated to begin in 2025 and run through 2028.

According to the minutes, the project will support the ministry in formulating a comprehensive Master Plan, including action plans for cultivating innovative startups and nurturing the overall startup ecosystem.

Pilot projects aimed at fostering innovation and building the capacity of key players within the startup sector will also be implemented. ICT Commission Director General, Dr Nkundwe Mwasaga, expressed optimism about the project’s potential impact.

“We are excited about today’s signing and look forward to a smooth commencement and productive implementation of the project,” he said.

This project is not Tanzania’s first foray into supporting startups. The country has made steady progress in building its startup ecosystem over the past few years, boasting over 54 operational innovation hubs. The private sector has played a key role in this development, but the government is now stepping in to provide a more coordinated approach.

“The MoU with JICA is a game-changer,” says tech expert and entrepreneur Sarah Kamati. “Tanzania has been absent from the top 10 African countries with the most robust startup ecosystems, but this initiative could help close that gap. It’s about time we adopted best practices from countries like Japan and integrated them into our unique context.” Indeed, Tanzania has been studying the experiences of countries that have advanced in amplifying their startup ecosystems.

This includes focusing on government policies, investment attraction, educational programmes and building infrastructure that allows startups to thrive. Building a thriving environment for startups The ICT Commission, the key stakeholder in this partnership, has been at the forefront of initiatives aimed at boosting the startup ecosystem.

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From promoting digital literacy to supporting the establishment of eight new Jamii ICT Innovation Hubs across various zones, the commission’s efforts have laid a strong foundation for this new collaboration.

The MoU with JICA will further complement these efforts by reviewing and analysing current startup-related policies and legislative frameworks. Recommendations will be made to ensure a more conducive environment for startups, which includes improved access to funding, business development services and market opportunities.

“The government’s engagement through MICIT and the ICT Commission is a testament to its commitment to building a vibrant startup ecosystem,” says Dr John Mlay, an economist specialising in digital economies.

PRESIDENT of the Inter-Parliamentary Union (IPU) and Speaker of the Tanzanian Parliament, Dr Tulia Ackson presents a symbolic representation of Tanzania’s “Big Five” heritage to Saqr Ghobash, Speaker of the Federal National Council (FNC) of the United Arab Emirates (UAE), during a ceremony in Abu Dhabi yesterday. (Photo courtesy of Bunge) TANZANIA enjoys an abundance of natural wealth, which offers tremendous investment opportunities for investors.

These include an excellent geographical location (six land locked countries depend on Tanzania ports as their cheapest entry and exit ports); arable land; world renowned tourist attractions (Serengeti, Kilimanjaro, Ngorongoro, and the Spice islands of Zanzibar); natural resources; a sizeable domestic and sub regional market; a wide local raw materials supply base; abundant and inexpensive skills; assurance of personal safety; warm friendly people and a suitable market policy orientation.

Again, the country enjoys high degree of investment security because of unparalleled political stability that is strife-free without ethnic division; excellent democratic rule that respects diversity of opinion and a strong tradition of constitutionality and rule of law.

The country has business-friendly Macro-Economic Stability with low inflation (4.2 per cent), stable exchange rates supported by unrestricted and unconditional transferability of profits, loan repayments, emoluments, royalties, fees and changes; Simplified bureaucracy, streamlined through the acclaimed services of the Tanzania Investment Centre which is a one-stop-facilitation agency of government serving registered investors and businesses; Successful economic liberalization measures commended by both the World Bank and the IMF with business-supportive legislation continually being improved through genuine dialogue between government and the private sector A well-balanced package of incentives to investors with additional negotiated benefits to strategic investors Rapidly emerging as the most effective entry point and gateway for trade into Eastern, Southern and Central Africa. Investment guarantees, and settlement of Disputes.

Investments in Tanzania are guaranteed against Political risks, Nationalization and Expropriation. Any foreign business operating in Tanzania may obtain credit from domestic financial institutions up to the limits established by the Bank of Tanzania.

Major banks like Standard Chartered, ABSA, Barclays, Citibank, Stanbic, Exim among others have invested in Tanzania. Existing investors are ready to expand their businesses in Tanzania as depicted in the recent survey conducted by Tanzania Investment Centre, Bank of Tanzania and the National Bureau of Statistics.

Why invest in Tanzania 6 EDITORIAL/ANALYSIS “By aligning national policies with global best practices and leveraging international partnerships, Tanzania can create an ecosystem that not only attracts local entrepreneurs but also draws international investment.

” The role of the private sector in driving Tanzania’s ICT agenda remains critical. Currently, ICT contributes 1.5 per cent to Tanzania’s GDP, a figure that could rise significantly with a more robust startup ecosystem. By creating a supportive environment for startups, Tanzania aims to attract both local and international investors, thereby accelerating economic growth. JICA’s Senior Assistant Director, Mr Mukai Naoto, highlighted the significance of the partnership.

“JICA is committed to working together with the government of Tanzania to address its challenges in the startup ecosystem so that the project outcomes would be realised for the benefit of the country and its people,” he stated.

Regionally, Tanzania is positioned 24th among lower-middle-income countries and 9th within Africa in ICT development. This is a promising start, considering the country’s superior performance across several pillars, including access, governance and regulation.

However, Tanzania is still playing catch-up with neighbouring countries like Kenya and Rwanda, which have made significant strides in leveraging ICT for economic growth. This new project, which arose from a request submitted by the Tanzanian government to Japan in July 2023, signifies the country’s readiness to tap into regional and international best practices.

The startup ecosystem in Tanzania has shown significant promise, with a 15 per cent increase in known startups and a 14.65 per cent growth in startup employment in 2022. This trend reflects not just an entrepreneurial spirit but also the growing digital landscape in the country.