LET’S BOOST INVESTMENT IN INNOVATION AND TECH

News of another milestone in Kenya’s innovation and technology space should encourage Tanzania to tighten its laces and scale-up development of the tech sector.

The fact that US tech company Microsoft chose neighbouring country Kenya as the ideal destination to set up Africa’s first Development Centre means there is something that is being done right by the Kenyan government and private sector players.

What this means for Tanzania is that opportunities for foreign investments are there, however, there are a number of things that ought to be done before any investor decides to step foot in the country.

It is well acknowledged that under President Samia Suluhu Hassan efforts are ongoing to make Tanzania top of mind when it comes to investing in Africa, but intentional efforts beyond political statements will lead to more tangible results.

Tanzania’s startup ecosystem and innovation space is very much in its infant stages; as such, it requires a lot of guidance through friendly regulatory processes if young entrepreneurs are to realise their dreams of running successful businesses.

Some of the lamentations gravitate towards the all-too-common bureaucratic processes and regulatory limitations. If we are to create a business environment that is accommodative to all forms of ventures in their different growth stages we will create an investment haven where big and small players all get to thrive.

There are many suggestions that have been put forward by experts in the field of innovation. Suggestions that are solution-based and aim to lift Tanzania’s dismal performance in this novel area.

Some of the more pertinent suggestions were voiced by Faith Pella, a Tanzanian fintech leader working in the mobile financial services space who is also a co-founder of a startup:

Pella suggested that there needs to be proper framework to guide disruptive technologies in the financial industry. The idea of ‘from regulation to innovation’.

She also talked about Tanzania having an enabling environment to allow for fintech startups to offer solutions with little or no restriction. “Things to look out to instead of restrictions: Consumer protection; data privacy; Bank of Tanzania (BoT) approval instead of license; BoT should allow partnership with incumbent companies,” she said.

It has also been suggested that suitable commercial banks need to become enablers and facilitators as a backbone to partner with fintech, SMEs and startups, with BoT being the pioneer of this drive.

Disruptive financial products

Fintech startups can become suppliers of disruptive financial products directly to banked and unbanked customers. In a county where financial inclusion and access to different goods and services is limited, having innovative ways to reach the millions of people out there who need the service is a possible reality and one that will truly transform the way society lives and ultimately boost the economy.

More to what Ms Pella said, something which the government needs to take keen interest on, is that sandboxes are okay but should not be restrictive.

Furthermore, the government and BoT need to launch technology initiatives that will ease the way people transact, thereby easing the process of doing business in Tanzania.

These are just a few suggestions to tackle the changing business and investment landscape.