Tanzania

Tanzania’s digital ecosystem underwent considerable change during former President Magufuli’s 2015-2021 rule. Internet infrastructure expansion was prioritized, but last-mile connectivity gaps persist. Citizens enjoy more widespread 2G and 3G coverage, but Tanzania lags behind its regional counterparts. Low levels of digital literacy and a lack of locally relevant content undermine inclusive adoption of digital technologies. An important legacy of the Magufuli era was the constriction of civic and online spaces. While there has been greater openness after March 2021, prospects for amending or repealing the restrictive laws are uncertain. The digital economy is in early stages of development. Mobile financial services drive digital financial services (DFS) uptake. The payments infrastructure is well established, but growth is undermined by high and inconsistent taxes. The startup ecosystem requires additional funding sources, mentorship opportunities, and increased coordination among different actors.

The Tanzania DECA took place between May 2022 and October 2022. It included desk research, consultations with USAID/Tanzania, and 10 weeks of key informant interviews, two of which were conducted in-country. The research involved 76 interviews with stakeholders from civil society, academia, the private and public sectors, international development organizations, and USAID/Tanzania implementing partners. The DECA was guided by USAID/Tanzania’s 2020-2025 Country Development Cooperation Strategy (CDCS), which includes three strategic priorities:

1. Foundational skills of children below age 15 improved
2. Empowerment, productivity, and engagement of Tanzanians aged 15 to 35 increased
3. Capacity of state and non-state actors strengthened to benefit future generations

Pillar 1: Digital Infrastructure and Adoption

• A substantial last-mile connectivity gap exists, particularly in rural areas. Fiber backbone development is owned by the government and last-mile connectivity is perceived by the government to be done by the private sector.

• Policy and regulation enable the expansion of digital infrastructure and forthcoming policies such as the ICT Act intend to enable increased use of that infrastructure.

• A large usage gap exists, which the government attributes to high device costs. Other factors including low levels of digital literacy and lack of locally relevant content also contribute.

Pillar 2: Digital Society, Rights, and Governance

• There was a constriction of the online civic space and digital rights under the late President Magufuli. With the entry of President Hassan in March 2021, there has been greater openness. However, prospects for amending or repealing the restrictive laws are uncertain.

• The lack of a data governance framework and the criminalization of circumvention technologies curtails anonymity online and facilitates surveillance. A data protection bill is expected to be passed in 2023. Its implementation could indicate how the Hassan administration approaches regulation of the digital space.

• Local civil society is weak and requires support to organize, advocate, and raise awareness about digital rights. International digital rights advocacy CSOs stand in solidarity with local CSOs.

• The government let go of multistakeholder internet governance in 2018 when it became the sole stakeholder on the internet Domain Name System (DNS). The government enforces the use of the .tz domain, and maintains stringent registration policies.

• The GoT is committed to digital government transformation as shown by a move toward interoperable systems and new citizen-facing platforms. The government develops innovative digital solutions in-house, working with development partners.

Pillar 3: Digital Economy

• Despite regulatory gaps, Tanzania has a conducive regulatory environment for digital financial services (DFS) and mobile financial services continue to spur sustained adoption. Digital savings and lending are proving to be compelling use cases. The payment infrastructure is well established, including account-to-account interoperability, but taxes on DFS are detrimental to ecosystem growth.

• Alternative distribution channels targeting the last-mile have increased DFS reach, but some rural areas remain underserved. There are some concerted efforts to reach underserved population segments including women, youth, rural dwellers, and low-income earners.

• Tanzania is home to an active tech startup ecosystem, but growth is hampered by policy and regulatory vacuums, limited funding, and uncoordinated enablers.

• E-commerce is slowly gaining ground, but gaps in the policy and regulatory landscape may delay growth.

• Initiatives to support the growth of the digital talent pool are diverse but siloed and there are no modalities for assessing progress.

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