Will 2023 be an evolving year for local start-ups?

Dar es Salaam. Tanzania is set to improve the technology sector by 2023 as policies and rules to guard and guide start-ups are currently underway.

Speaking to technology stakeholders, 2022 has been a positive year that has seen evolvement in start-ups in terms of funding and open dialogues that have addressed improving the sector.

Speaking to The Citizen, Zahoro Muhaji, Chief Executive Officer (CEO) of Tanzania Startup Association said that such improvements are a highlight to how start-ups will be thriving next year.

“2022 has been a year of growth and recovery for many start-ups in the country after the impacts of the pandemic. As of now, we cannot pinpoint the performance of these tech businesses because we are still compiling data for a report that will be launched early next year,” he detailed.

“Many start-ups have scaled up this year in terms of funding and some have even crossed borders and gone international with their businesses.”

With new policies that are expected to be effective from 2023, Mr Muhaji shared that they will be assisting start-up founders in terms of capital, funding, and guidance that they have lacked in the past years, 2022 included.

Reflecting on the recent announcement made by the President of Kenya, Mr William Ruto who said that a start-up bill that will enhance funding of start-ups will be taken to parliament early next year; Mr Muhaji said that Tanzania should look at it as an example to support start-ups as they can push for innovation and development in the country.

“Our country has to embrace readiness in start-up funding as much as they have in other funds that are currently operating. There is no political will to make that move. When such an environment is built, it also becomes easier for global tech players such as Google and Microsoft who have invested in countries like Kenya and South Africa to consider Tanzania,” he detailed.

He advised start-ups to brand their businesses more, as this gap has resulted in some of them not seeing the profits of their work.

“Every business depends on advertisements to scale up. Most start-ups in the country lack the will to promote their businesses and it is high time they change that so that it profits both them and Tanzania’s technology sector,” he said.

According to the co-founder of Sheria Kiganjani, Neema Magimba; with this year coming to an end, start-ups have to revisit their goals and ensure their connection to solving problems in their society is in a manner that will create an environment within their localities as well as with the world.

“It is very important for them to take note of their growth pace as well as the impact of their work in the society because through these, start-ups will create not only awareness but also room for opportunity, growth, and understanding between them and their communities,” she explained.

To create that environment in 2023, Ms Magimba urged the government and technology stakeholders to form regulations and authorities that will register start-ups as well as regulate them in accordance.

“One of the challenges Sheria Kiganjani faced when it was established in 2018 was the place to register ourselves. We were the first legal tech company in the country and at the time it was difficult to identify the type of entity to register our company with. Such challenges make it difficult for well-established tech companies to invest in Tanzania. The government has to play a role in changing this,” she said.

She however appraised the growth of the technology ecosystem in Tanzania as she pointed out that there have been a lot of conversations that hint to a changing technology arena in 2023.

“Despite the fact that is the beginning, it has triggered a lot of changes and one of them is the development of policies by the TSA. These conversations that question how things that can be done in Tanzanian are definitely going to bring about positive impact in the near future,” she emphasized.

Ms Magimba encouraged start-ups to trust their visions and be resilient as they explore their journey.

“They have carefully looked for ways to bring their vision to life. While Tanzania’s pace towards technological advancement is slow compared to other African countries like Kenya, Nigeria and South Africa, this should motivate them,” she said.

However, for Kusilika Agiriwe, COO of Smartdarasa, this year has been a progressive one for most of the start-ups in the country.

“It has been an amazing year for most of the start-ups because in this year, there are things that have happened in the ecosystem that have levelled up the growth scale of technology in the country. These things include a lot of start-ups getting funds for their projects through a number of events that have been held throughout the year,” he detailed.

Mr Agiriwe further explained that a number of start-ups were also given a window to pitch their ideas through the Sahara Sparks Funding.

“There have also been competitions in and out of the country in which start-ups like Smartdarasa and Dawa Mkononi from Tanzania have taken part in,” he hinted.

Mr Agiriwe advised start-ups to create value that will enhance growth and attract investors instead of only chasing angel investors.

“Start-ups play an important role in the digital economy of the country because they impact other sectors directly and indirectly. This deserves a call for emphasis to the government and other stakeholders to support start-ups because they can assist in developing other sectors in the country,” he said.

Commenting on the situation of start-ups in 2023, Ng’winula Kingamkono, founder of Tunzaa said that some start-ups have not performed to their full potential because local grants and incubators are hesitant to fund start-ups that receive foreign investments.

“This results in having limited resources to meet up the production costs required to run the business,” he explained.

He further unveiled that another reason is the slow adoption of the product due to scepticism from Tanzanians towards online businesses as a result of a few preceding e-commerce businesses misusing their platforms.

“We are not well exposed to the e-commerce world yet, therefore a lot that people need to understand and get accustomed to it before fully utilising its potential,” he detailed.

Mr Kingamkono advised start-ups who have experienced this to expand and explore other nearby markets that have the potential to accommodate their products.

“There should also be a start-up fund that could help to attract talented entrepreneurs and innovators to the country, which could further support the development of the country’s technology and innovation sector,” he stressed.