E-commerce Can Boost Tanzania’s Economy, UNCTAD Say

According to the United Nations Conference on Trade and Development (UNCTAD), the United Nations (UN) body dealing with trade, investment, and development issues, Tanzania is well-positioned to integrate into the global digital economy.

In its recent report titled “United Republic of Tanzania Rapid eTrade Readiness Assessment“, the UNCTAD explains that e-commerce has the potential to boost Tanzania’s economy by creating fresh employment opportunities, diversifying sources of income and creating new value chains.

As a coastal economy bordering eight countries, six of which are nearly or completely land-locked, Tanzania is well-situated to expand as a regional trade hub.

E-commerce has the potential to boost the country’s economy by creating employment, diversifying sources of income, and creating new value chains.

For Micro, small and medium-sized enterprises (MSMEs) in particular, which contribute to 27 of the GDP and employ over 5.2 million people, digital technologies provide the potential to improve access to new and existing markets and customers. There is also immense development potential in tourism.

The UNCTAD acknowledges that the Government of Tanzania has taken key steps to develop the country into a regional e-commerce hub. Digitalization of government services is advancing, and the Government is investing resources into enhancing the overall business environment.

Despite this, Tanzania has yet to adopt a stand-alone e-commerce policy or strategy, and e-commerce is not mainstreamed into the national or sectoral trade development strategies. E-commerce development is not currently on the agenda of existing.

Internet penetration is also a challenge being as little as 25-30%. Most Tanzanians access the internet through their mobile phones, and although mobile data prices are reasonably low, they remain unaffordable for segments of the population that mostly reside in rural areas, resulting in a large gap in Internet use between urban and rural areas.

The UNCTAD suggests that the Government of Tanzania takes an integrated approach to policy action, with a clear focus on mainstreaming e-commerce into national development planning and engaging more strongly with the private sector.

The Tanzanian legal and regulatory environment also needs to be upgraded to meet the needs of the evolving digital economy.