Tanzania, private sector mull fund for start-ups

Tanzania's startup ecosystem is gaining momentum as the government collaborates with the private sector to introduce a special fund aimed at providing pre-seed and seed funding to startups. Zahor Umuhaji, the CEO of the Startup Association in Tanzania, shared insights on the positive developments in the ecosystem during an interview with CNBC Africa. The ecosystem is rapidly evolving with an influx of new startups entering the market and regional players expanding their presence in Tanzania. Recent reports indicate that startups in Tanzania attracted $96 million in investments in 2021, reflecting a growing interest in the sector. The number of innovation hubs in the country has also increased significantly, showcasing the vibrant entrepreneurial landscape. The government's support for startups is evident through its commitment to investing in a startup sandbox and waiving fees for communication resources for startups. Additionally, plans are underway to establish funds dedicated to providing financial support to startups, addressing the critical need for access to finance in the region. Despite funding challenges, Tanzania is making strides in enhancing its startup ecosystem by working on regulatory frameworks and policies to create a conducive environment for innovation and investment. The government has already allocated significant funds to support entrepreneurs, with initiatives benefiting special groups such as youth, women, and people with disabilities. Furthermore, discussions are underway to draft a startup policy that will pave the way for a startup act in the near future. To attract more investors, Tanzania startups need to enhance their visibility and showcase success stories to build investor confidence. By positioning themselves as investable entities and leveraging the support from the government and private sector, startups in Tanzania have the potential to drive job creation, innovation, and revenue generation. With the recent accession of Tanzania to the African Continental Free Trade Area (AfCFTA), startups in the country have a unique opportunity to tap into the vast market and scale their businesses across borders. However, there is a need for increased awareness and information sharing about the opportunities presented by AfCFTA to ensure that startups and SMEs can maximize the benefits of the trade agreement. Overall, the future looks promising for Tanzania's startup ecosystem, with concerted efforts from both the government and the private sector to support and nurture the growth of innovative businesses in the country.