Five things to look ahead for the entrepreneurship ecosystem in 2022

By Zahoro Muhaji

2021 was a good year for the Tanzanian entrepreneurship and innovation ecosystem. A quick recap shows that startups in Tanzania raised $96 million (Sh220.48 billion) in investments, an example of how startups can boost Foreign Direct Investments. On June15, 2021, in her speech addressing the youth in Mwanza, President Samia Suluhu Hassan mentioned and pledged her support for young entrepreneurs and innovators, together with their umbrella organisation, the Tanzania Startup Association(TSA).

This was the first time a sitting president recognized and pledged support for startups in public. The last one will be the town hall meeting of June 11, 2021, chaired by then ICT and Communication minister Faustine Ndugulile, to address challenges that face tech startups in Tanzania, first-time entrepreneurs and innovators had face-to-face with a minister to speak on their challenges and offer what they thought were potential solutions.

Fast forward, 2022 has started with optimism that it will be a good year, perhaps better than 2021. Among many other key developments set to happen in the entrepreneurship and innovation space, this article highlights five.

1. The startup policy

In 2021, Africa saw dozens of countries starting their plans to put in place sets of laws and regulations to foster the growth of startups. For example, Kenya’s startup Bill got approved by the senate, and the Nigerian Startup Bill was approved by the cabinet. In 2022, other African countries plan to introduce their versions of startup policies/acts, with Tanzania being one of those. To this end, TSA, in partnership with the Ministry of Investment, Industry, and Trade, engaged the Economic and Social Research Foundation (ESRF) for conducting a comparative baseline study on establishing the startup policy in Tanzania.

The study will present critical challenges affecting the business environment for startups in Tanzania, along with a set of clear and feasible recommendations for legislative reform to create a more business-friendly environment for startups in Tanzania. Further, the study will comprehensively review the existing legislative and regulatory challenges in light of the best pan-African practices, including Tunisia, Senegal, and Kenya.

The TSA and the Ministry will release the study in February 2022. After the study, a co-creation and drafting of the policy and policy guidelines are expected to follow.

2. The SMEs development policy

This is another piece of document which entrepreneurs who run Small and Medium Enterprises await. The current SMEs policy, which came out in 2003--19 years ago--is outdated and a new one is needed. The Ministry of Investment, Industry, and Trade is reviewing the 2003 SME Development Policy to update it. There is information that this policy will be tabled to the Cabinet within this first quarter of 2022.

3. The SMEs bank

Last year, in one of her speeches, President Hassan told the public that, among things that came up during her discussions with AfDB president Akinwumi Adesina, was the establishment of the Youth Bank. On January 8, The Citizen quoted President Hassan saying she had commenced discussions with AfDB to establish the bank. I am not sure how this will pan out, but financing is one challenge significantly facing youth-led businesses, most of those being SMEs and startups. We hope the President will close this deal with AfDB. We are excited already!

4. Framework for regulatory sandboxes

One resolution from the meeting with the former minister of ICT in 2021 was for the governmental sector regulators to establish regulatory sandboxes for digital products, services, and business models in Tanzania. The regulatory sandboxes will allow the digital innovators to live-test their innovations, which is highly crucial for entrepreneurs with a zeal to come up with new fresh ideas. Post the ministerial meeting in June 2021, there have been several meetings between the sector regulators and the private sector to align interests and co-create the framework for the sector regulators to implement. We hope in 2022, the regulatory sandboxes will be operational.

5. Development projects

In Tanzania, development partners have been among the key stakeholders in supporting the entrepreneurship and innovation ecosystem. For years, they have supported the local actors with grants funding and capacity building through initiatives and projects.

The good news is, they are set to keep doing so in 2022. Two projects worth keeping your eyes on:

I. Innovation for social change - Switzerland Embassy programme is expected to have a catalytic fund to finance innovative, impact-driven enterprises. The programme will also have a component for a conducive business environment for startups.

II. USAID has floated a tender for their new upcoming programme for strengthening the private sector. The programme will have a strong focus on youth-led businesses and startups.

Zahoro Muhaji is CEO with Tanzania Startup Association