Building Tanzania’s Startup Ecosystem: Lessons from Nigeria and Kenya

Tanzania’s startup ecosystem has grown from 247 active startups in 2020 to more than 1,300 in 2026, supporting thousands of jobs. However, the sector is growing faster than the policy framework governing it. In response, Vice-President Deogratius Ndejembi has directed the country to develop a dedicated national startup policy within six months. Tanzania must use this period to build on its progress while addressing gaps that could constrain further growth. 

Experiences from other African markets offer a useful starting point. Nigeria has already enacted a Startup Act, while Kenya has spent years trying to do the same. Their experiences offer valuable lessons for Tanzania: define the problem clearly, make support accessible, and, importantly, avoid designing a framework that excludes the capital and businesses it aims to attract. 

Nigeria: Build a Framework Around Delivery 

Nigeria signed its Startup Act into law on 19 October 2022. At its centre is a startup ‘label’ that determines which businesses qualify for the framework and its incentives. Among other requirements, a startup must be a Nigerian limited liability company that has existed for no more than ten years. The Act links this designation to practical support, including tax relief, access to government grants and facilities, credit guarantees and investment incentives. It also established a Startup Investment Seed Fund with a statutory minimum annual contribution of ₦10 billion. The fund is intended to provide early-stage financing to labelled startups and support technology laboratories, accelerators, incubators and hubs. 

The lesson for Tanzania is not simply to replicate Nigeria’s incentives, but to make eligibility criteria and access to support clear. Nigeria has created a portal through which startups can obtain the label and access information on incentives and government services. The framework also brings government agencies and private-sector representatives together through a national council and consultative forum. This matters because a startup policy can easily become another government document that entrepreneurs know exists but cannot use in practice. 

Kenya: When Good Intentions Become Restrictive 

Kenya offers a different lesson. The National Assembly passed the Startup Bill, Senate Bill No. 14 of 2022, in January 2025, but it did not become law. Parliamentary records indicate that the two Houses passed different versions of the Bill, which subsequently entered the mediation process. As of 2026, the legislative process remains unresolved. 

The debate surrounding eligibility is particularly relevant to Tanzania. The Kenyan Bill proposes requirements related to Kenyan ownership and allocating at least 15% of expenditure to research and development. These provisions have drawn criticism because they could make it harder for startups with foreign investors or co-founders to qualify for the proposed benefits. This is an important consideration for Tanzania. Startups need domestic talent and ownership, but they also need external capital, technology and expertise. A policy built around rigid ownership thresholds risks confusing local participation with isolation from global investment. 

What Tanzania Should Get Right 

1. Define What Qualifies as a Startup

Tanzania should clearly define what qualifies as a startup. Vice-President Ndejembi is right to distinguish startups from conventional small and medium-sized enterprises (SMEs). A young business testing a scalable model, raising seed capital and developing new products faces different challenges from an established small retailer. However, the definition should be broad enough to accommodate different sectors and business models. 

2. Make Incentives Accessible

Tanzania already provides tax support for new businesses, and the 2026/27 reforms introduced a 12-month income tax holiday for qualifying newly registered taxpayers operating under the presumptive tax regime. The challenge for startup policy is ensuring entrepreneurs understand which incentives they qualify for, which agency administers them, and how quickly they can access them. 

3. Address the Actual Barriers to Growth

Tanzania’s startup ecosystem has identified taxation at the pre-revenue stage, high transaction costs, and regulatory delays as obstacles facing entrepreneurs. Addressing these challenges would be more consequential than simply creating another registration category. 

4. Strengthen Institutional Coordination

The Vice-President has directed the Ministry of Industry and Trade to coordinate the policy because startups operate across agriculture, health, energy, technology and other sectors. This approach makes sense. The priority should be better coordination among existing institutions rather than creating another layer of bureaucracy. 

5. Treat the Policy as an Investment Framework

Tanzania should approach the policy as an investment framework, not merely an entrepreneurship programme. Access to seed capital, venture capital, markets, and public procurement, alongside intellectual property protection and regulatory sandboxes, will determine whether startups can move from ideas to scalable businesses. 

Measure Success by What Changes for Founders 

The government has six months to develop the policy. That is enough time to produce a framework, but not enough to get the fundamentals wrong and start again. Nigeria demonstrates what a structured framework can offer, while Kenya illustrates the difficulty of reconciling domestic economic objectives with the needs of an ecosystem that depends partly on external capital. 

Tanzania can draw useful lessons from Kenya and Nigeria as it develops a framework tailored to its market. Success should not be measured by whether the policy is published within the given timeline, but by whether a Tanzanian founder can clearly identify, six months after publication, what has changed for their business.