Tanzania adopts global models for venture capital, private equity reforms

In May 2025, government officials, regulators, and ecosystem stakeholders visited India and Ghana to study how those countries established inclusive and scalable frameworks for venture capital and private equity investments.

The delegations included representatives from the Capital Markets and Securities Authority (CMSA), the ministry of Finance, the Tanzania Revenue Authority (TRA), and the Tanzania Startup Association (TSA). 

Head of Programmes and Operations at the Tanzania Startup Association (TSA), Mr Praygod Japhet, who was among the delegates, said both countries offered valuable insights.

“India’s SEBI framework and SIDBI’s Fund of Funds showed us the power of structured regulation and government-backed capital in attracting private investors. Ghana, on the other hand, showed us the importance of local ownership, transparency, and the role of pension funds in growing the ecosystem,” he said.

He added that Tanzania is well-positioned to adapt these lessons to its own environment by localising the approach while preserving global standards.

With this foundation, Tanzania is currently finalising long-awaited regulations for venture capital and private equity. “These regulations are expected to clarify fund structures, define investor categories, protect interests of limited partners, and enable diverse fund types to operate within the country,” he said.

The regulations also pave the way for the operationalisation of the Tanzania Venture Capital Fund (TVCF), a Fund-of-Funds model where government capital serves as an anchor to attract more private investors.

At the same time, the implementation of the National Startup Policy 2025–2029 is set to provide incentives, regulatory support, and institutional backing for early-stage enterprises.

The missions to India and Ghana have not only influenced the direction of reforms but also inspired Tanzania to embrace hybrid models that balance innovation with oversight.

In India, the delegation interacted with SEBI, which regulates Alternative Investment Funds (AIFs) through tiered frameworks. They also engaged with SIDBI’s Fund of Funds for Startups, which has mobilised billions of dollars into India’s startup ecosystem by anchoring public funds and crowding in private capital.

In Ghana, the team met with the Securities and Exchange Commission, the Ghana Stock Exchange, and the Venture Capital Trust Fund, whose design relies on locally raised capital and a strong emphasis on governance. Particularly notable was Ghana’s ability to unlock pension fund investments into private equity and venture capital through legislative and institutional reforms.

“Tanzania hopes to replicate and improve on these models by ensuring that its own TVCF is governed independently, operates transparently, and aligns with both public policy goals and commercial viability,” he said. According to him, officials at CMSA and the Ministry of Finance have indicated that governance structures for the fund will incorporate lessons learned abroad, including how to select fund managers, conduct due diligence, and ensure accountability. These efforts have sparked optimism across the local startup community. CEO of Smart Africa Group, Edwin Bruno, said Tanzania’s latest moves represent a significant shift.

“This is the most serious effort I’ve seen in aligning Tanzania with global venture capital trends. When policies are informed by international models but tailored for our realities, the result is an ecosystem that works. If executed well, these reforms could bridge the financing gap for startups that have long relied on grants or informal funding,” he said.

For his part, CEO of Sahara Ventures, Jumanne Mtambalike, believes Tanzania is finally approaching the tipping point.

“We’ve been talking about venture capital for years, but now we have a policy, regulations in the pipeline, and a fund structure being built. If these efforts converge, Tanzania’s startup ecosystem will change dramatically in the next few years,” he said.

He also emphasized the need to align regulations with startup realities, cautioning against overly complex structures that might deter emerging fund managers or investors.

While co-founder of Plate AI, a health-tech startup, Janeth Kareen Kilonzo, sees the changes as transformational.

“Access to capital has been our biggest hurdle. Traditional financiers don’t understand startups, and there haven’t been real VC options locally. A functioning venture capital fund backed by the government would mean more than just money—it would be validation,” she said.

Her company, which supports people with non-communicable diseases through digital tools, has struggled to raise early-stage capital in Tanzania despite interest from external partners.

For Kilonzo, the reforms offer a chance to grow companies that solve real problems, and scale beyond borders.

“With real funding opportunities and supportive regulation, we’re not just dreaming anymore—we’re building,” she said.

On top of that, a serial entrepreneur Michael Nyamwero shares the enthusiasm but adds a word of caution. He believes policy clarity must be matched by speed and simplicity.

“Startups don’t have the luxury of waiting years for reforms to kick in. Everything from fund registration, licensing, tax incentives to disbursement timelines must be fast and responsive. If we complicate the process, we risk killing the momentum before it starts,” he said.