Government sets six-month deadline for startup policy

The government has given the Ministry of Industry and Trade six months to complete a dedicated startup policy intended to improve access to capital, coordinate support across economic sectors and create conditions for innovative businesses to grow. Vice President Deogratius Ndejembi issued the directive yesterday when opening Startup Week in Dar es Salaam. He said the policy should distinguish startups from small and medium-sized enterprises (SMEs), enabling innovative businesses to expand into larger companies. The deadline revives hopes for a policy discussed since 2023 without a conclusive outcome. Mr Ndejembi pledged to monitor its preparation until it is completed. The policy vacuum has left entrepreneurs uncertain about the regulatory and financial environment in which they operate, and their prospects for securing investment. Mr Ndejembi said startups could expand, attract investment and create jobs, but needed policies tailored to their circumstances rather than frameworks designed for conventional businesses. “The policy should provide guidance on the participation of venture capital and other financial institutions in Tanzania’s market because startups need an environment that enables them to secure seed funding, develop their products and attract investors to inject additional capital as their businesses grow,” he said. He directed the Ministry of Industry and Trade to coordinate the policy process instead of leaving responsibility solely to the Ministry of Information and Communication Technology, which currently oversees startups. Mr Ndejembi said startups operated in several sectors, including health, agriculture and energy, making it necessary for coordination to fall under a ministry with a broader economic development mandate. “Technology is a tool that can be used, but these startups operate across different sectors. They therefore need to fall under the Ministry of Industry and Trade to accelerate the process, and I will follow up to ensure the policy is completed,” he said. To illustrate the potential of innovation, he cited an entrepreneur who collects discarded hair from salons and turns it into products. Such ventures, he said, could generate income while addressing environmental challenges if they received appropriate support. Access to finance remains one of the major obstacles facing startups, Mr Ndejembi said, noting that financial institutions often focus on lending risks and borrowers’ ability to provide collateral. As part of the proposed support measures, he suggested that the government identify an unused building vacated after government offices relocated to Dodoma and convert it into a shared startup centre in partnership with NMB Bank and telecommunications companies. The centre could provide workspace for entrepreneurs and give investors access to information about startups and commercially viable solutions, he said. Tanzania’s widespread mobile phone usage also offered opportunities for startups to reach customers across different sectors, he added. Meanwhile, NMB Bank plans to launch an innovation hub in January 2027 to help technology startups turn ideas into commercially viable solutions. NMB chief executive officer Ruth Zaipuna said the bank had invested more than Sh4 billion in the facility, which will provide workspace and business, operational and technological support for entrepreneurs. She said the hub was part of the bank’s efforts to build an ecosystem in which innovators could strengthen their businesses and reach more customers. The initiative builds on NMB Sandbox, established in 2021 to allow startups to test their solutions within the bank’s operating environment before taking them to market. Ms Zaipuna said six startups had already integrated their solutions into the bank’s systems and begun selling their products. Five more were expected to be connected before the end of 2026. NMB aims to increase the number of startups integrated into its systems to 30 by 2030, a target expected to help young businesses reach customers and create jobs. The startup sector is estimated to support about 144,000 jobs in Tanzania, comprising 20,000 direct positions and 124,000 through related economic activities. Tanzania Startup Association board chairman Paul Makanza said the figures demonstrated the sector’s growing contribution to the economy. He said the number of startups had risen from 247 in 2020 to more than 1,300 in 2026.