New agreement set to give local startups a big boost
Dar es Salaam. The French-Tanzanian Chamber of Commerce (FTCC) and Sahara Accelerator – an impact accelerator supporting early-stage businesses – yesterday signed a memorandum of understanding (MoU) to support Tanzanian startups. Speaking during the signing ceremony at the French embassy in Dar es Salaam, FTCC president Christophe Darmois said under the pact, Tanzanian startup entrepreneurs would benefit from mentorship and exposure to French investors. FTCC, which was established four years ago, has 80 members – 40 from Tanzania and as many from France.
“By signing the MoU, we are aiming to encourage partnerships between French and Tanzanian companies with a view to boosting trade ties,” Mr Darmois said. The volume of trade between Tanzania and France was $81.1 million (about Sh186.5 billion) in 2021, according to official figures.
“We are optimistic that this partnership will help Tanzanian companies to have easy access to French markets and French companies to access Tanzanian markets,” Mr Darmois added. Sahara Ventures chief executive Jumanne Mtambalike said the partnership was a unique opportunity to add value to emerging Tanzanian businesses, especially those led by women and youth.
“This is a strategic opportunity as it will enable us to learn from more established businesses both in Tanzania and France,” he noted. One of the biggest challenges innovative startups in Tanzania were grappling with was difficulty in gaining access to mentorship and experience from the industry, Mr Mtambalike added.
“So, for us being part of the well experienced network of investors, we will stand a chance to be shaped in the right way.” Sahara Ventures is working to build innovation and technology entrepreneurship in Africa by strategically engaging with different ecosystem partners.
French ambassador to Tanzania Nabil Hajlaoui said the deal with Sahara Accelerator would enhance innovation and entrepreneurship in Tanzania. This, he explained, would be done through new opportunities for startup entrepreneurs, who would benefit from mentorship and exposure to French investors. On the other hand, Mr Hajlaoui added, through the partnership, French companies would benefit from the creativity of Tanzanian startups and knowledge of the local market.
“I’m very happy to see that young innovators are going to be included in the French-Tanzanian Chamber of Commerce,” he noted. To start with, the chamber will partner with 15 youth. “We will continue supporting this network (FTCC) as much as we can to strengthen our bilateral ties with Tanzania,” Mr Hajlaoui said. Innovation stakeholders have called for a multi-stakeholders framework to address challenges startups are grappling with. The chronic challenges include lack of capital and skills for innovation.
Tanzania Startup Association (TSA) CEO Zahoro Muhaji is on record urging the government to create an enabling business environment for start-ups. He said it was time the government considered reviewing some laws and regulations to align with the needs of startups. “We need enterprises which are innovative and can scale up fast,” Mr Muhaji said. Addressing youth in Mwanza on June 15, 2021, President Samia Suluhu Hassan pledged the government’s support for young entrepreneurs and innovators and their umbrella organisation, the TSA.
Despite the many factors, such as demand, capital and policies and regulations, the fintech ecosystem in Tanzania has developed rapidly in the last ten years. This is according to recent research by the UN Capital Development Fund (UNCDF) in Tanzania on the current landscape of fintech startups, their challenges and opportunities for growth.
A quick recap shows that startups in Tanzania raised $96 million (Sh220.48 billion) in investments in 2021. “There is a lot of room for capaciting and providing an enabling environment for the fintech startups to scale and grow,” says the report. A good startup ecosystem can be a big boost to innovation and youth employment.