Why Tanzania Needs More Business Incubators and Accelerators?

Tanzania is at a turning point. With a growing economy, a young population, and new opportunities under regional and global trade agreements, the country has the potential to build a vibrant entrepreneurial ecosystem. However, to unlock this potential, Tanzania needs stronger support systems for startups and small businesses. This is where business incubators and accelerators come in.

1. Empowering the Youth

A high number of Tanzanian' population are under 35; Tanzania is full of youth with energy and ideas. Yet, formal employment cannot absorb all graduates and job seekers. Business incubators can help young people turn their ideas into real companies, while accelerators can scale those businesses into sustainable employers. Instead of waiting for jobs, youth can become job creators. Example: Sahara Spark in Dar es Salaam has supported hundreds of young entrepreneurs by offering training, mentorship, and access to investors. Many startups that passed through Sahara’s programs have grown into stable businesses.

2. Reducing the Failure Rate of SMEs

Research shows that many Tanzanian SMEs collapse within the first five years due to a lack of skills, weak management, and limited access to finance. Incubators provide training, office space, and mentorship, while accelerators connect startups with investors and markets. This hands-on support improves survival rates and creates more resilient enterprises. Example: Seedspace Tanzania (Seedstars) has worked with startups in fintech, health-tech, and agri-tech, helping them secure investment and refine their models to survive beyond the early years.

3. Driving Innovation and Digital Growth

From mobile money services like M-Pesa and TigoPesa to new e-commerce platforms, Tanzania is already embracing digital solutions. But many startups lack the expertise to fully use technology. Incubators can help entrepreneurs adopt innovations, while accelerators can support the scaling of solutions in fintech, agri-tech, health-tech, and renewable energy. Example: DTBi (Dar Teknohama Business Incubator) has supported tech entrepreneurs by offering ICT-focused incubation, helping young innovators build solutions that address local challenges in agriculture, health, and finance.

4. Attracting Investors

Investors are often hesitant to back early-stage businesses in Tanzania because of high risk. Incubators and accelerators prepare entrepreneurs to be “investment-ready” by improving governance, financial management, and pitching skills. This builds investor confidence and increases the flow of capital into Tanzania’s private sector. Example: Startups graduating from Sahara Accelerator programs have been able to secure funding from local banks, angel investors, and even international venture capital funds.

5. Supporting National Industrialization Goals

The government’s Third Five-Year Development Plan (FYDP III) focuses on industrialization, job creation, and value addition. Business incubators can nurture startups in manufacturing, agriculture, and services, while accelerators help them grow into industries that support national goals. This aligns entrepreneurship with Tanzania’s long-term development agenda.

6. Competing in Regional and Global Markets

As a member of the East African Community (EAC) and the African Continental Free Trade Area (AfCFTA), Tanzania has access to a market of over 1.4 billion people. Incubators can prepare businesses for cross-border trade, while accelerators help startups scale regionally. This positions Tanzanian entrepreneurs to compete globally, not just locally.

Outlook

Tanzania has the resources, talent, and ambition to build a thriving entrepreneurial ecosystem. But without more business incubators and accelerators, too many startups will struggle to survive or grow. By investing in these support structures, Tanzania can create jobs, foster innovation, attract investment, and position itself as a hub for entrepreneurship in East Africa.