SMEs and Startups make up the largest proportion of the private sector companies active in Tanzania.
With the ongoing advancement of technologies, there has been an increasing number of startups with innovative products, solutions, and business models in Tanzania.
The most recent country-wide study published by the Tanzania Startup Association (TSA) in April 2022 reveals a 15% increase in the number of known startups, growing from 587 in 2021 to 673 in 2022.
Between 2020 and 2021, the number of startups in Tanzania surged significantly, rising from 247 to 587.
This substantial growth can be attributed to several factors, such as an extended government hiring freeze that led many young professionals, including recent graduates, to explore self-employment and entrepreneurship opportunities.
Also, expanding internet access and digital technology in Tanzania have enabled more individuals to launch and scale their businesses
Of all startups identified, 25.9% are in professional services and consulting, including software as a service, followed by agri-tech (16.6%) and fintech (7.2%).
Emerging sectors include E-commerce/Retail Tech (6.6%) and health tech (5.3%).
Dar es Salaam remained the top startup hub in Tanzania, hosting 66.56% of all startups.
Arusha secured second place with an increase from 6% in 2021 to 8.13% in 2022, while Mbeya also grew from 2.6% to 4.22%. The remaining 21.09% of startups are based in different cities nationwide.
The Tanzanian startups employed 89,509 people in 2022, from 78,071 in 2021, resulting in an average employment capacity of 133 per startup.
Despite their positive impact on the economy of Tanzania, startups face numerous challenges, such as access to funding, investments, talent, support, and regulatory barriers.
This situation limits Tanzanian startups from attaining their full potential and creating an enabling environment can significantly unlock the potential for investment, economic growth, transfer of technology, job creation, and contribution to the country’s development.
Last Updated: 28th April 2023