Josephine Christopher is a senior business journalist for The Citizen and Mwananchi newspapers
Mwananchi Communications Limitted
Dar es Salaam. Tanzania is seeking to shield local innovators from a continent-wide funding slowdown after African start-ups recorded one of their weakest January performances in recent years.
Data published by Africa: The Big Deal, an independent newsletter and research platform tracking start-up financing across the continent, show that African ventures raised a combined $174 million in January 2026 from deals worth $100,000 and above.
The figure marks a sharp decline from the $276 million raised in January 2025 and falls below the 12-month monthly average of $263 million.
None of the headline transactions involved East African start-ups.
Last month’s largest deals were concentrated in North and West Africa. Egypt’s fintech valU secured $64 million in debt financing from the National Bank of Egypt, while Nigerian mobility financing start-up MAX raised $24 million through a mix of equity and asset-backed debt. Other sizeable equity rounds included NowPay in Egypt ($20 million), Morocco’s proptech firm Yakeey ($15 million), Terra Industries ($12 million) and Côte d’Ivoire-based fintech Cauridor (more than $10 million).
In Tanzania, officials say domestic policy measures are expected to cushion the local innovation ecosystem.
The Director General of the Tanzania Commission for Science and Technology (COSTECH), Dr Amos Nungu, said the government has demonstrated firm commitment to expanding funding opportunities for youth and innovation-driven enterprises.
He cited President Samia Suluhu Hassan’s pledge of a Sh200 billion youth development fund during the 2025 General Election campaign, which has since been delivered.
On February 5, 2026, Prime Minister Mwigulu Nchemba handed over a Sh200 billion cheque to the Minister of State in the President’s Office for Youth Development, Mr Joel Nanauka, fulfilling the commitment to allocate capital to empower youth and women entrepreneurs.
Dr Nungu added that COSTECH continues to collaborate with local and international partners to help innovators access financing.
“Soon about seven young Tanzanian innovators will benefit from nearly Sh1.3 billion in funding provided in partnership with CRDB Bank Plc,” he said.
He noted that several government programmes, implemented through relevant ministries, are aimed at strengthening innovation financing and building the capacity of young entrepreneurs.
Global appetite shifts towards AI
Industry players, however, warn that global funding trends could reshape local prospects.
Education technology innovator Mr Given Edward said technology adoption in Tanzania is accelerating, driving stronger demand for digital solutions.
“Technology adoption is moving very fast. More people are interested in using tech for their products. With growing internet penetration, expanding mobile money usage, integrated payment systems and increased digital awareness, there is a bigger appetite for digital products,” he said.
He described Tanzania’s funding environment as “more interesting” in 2026 compared to previous years but cautioned that global investor priorities may present new hurdles.
“Funding flows from global appetite and trickles down to local markets. Right now, global appetite is leaning heavily towards artificial intelligence, and Tanzania does not yet have sufficient AI-driven solutions at scale. That may slightly affect start-up funding in 2026,” he said.
Mr Edward stressed that capital will remain available, though founders may need to align more closely with global technology trends to stay competitive.
Fewer deals, higher bar
The January slowdown suggests investors are becoming more selective, favouring fewer but larger and more strategic transactions. While Africa’s funding landscape remains more active than pre-2023 levels, the decline in deal count points to heightened scrutiny.
For Tanzania, analysts say the task will be to translate policy commitments and domestic funding mechanisms into scalable, investment-ready ventures capable of attracting both local and international capital.
Strengthening investor readiness, diversifying into high-growth segments such as artificial intelligence and climate technology, and improving regulatory efficiency will be critical if Tanzania is to capture a larger share of continental venture capital in 2026.
Despite the subdued continental start to the year, local stakeholders remain cautiously optimistic that structured public support and expanding digital demand will help Tanzanian start-ups navigate a tighter funding environment.
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