Tanzania’s digital economy
As experts have predicted, United Republic of Tanzania is on cause to overtake Kenya as the region’s largest economy in the next few years and that will have a huge impact on its digital economy.Most executives in Tanzania know the nation is poised for growth and is well-positioned to leverage digital solutions to make that happen. The challenge is selecting the right strategy.The ever-growing Internet and smartphone penetration in Tanzania coupled with a large and productive young population are in Tanzania’s favor for developing its digital economy. Consider the statistics that are available,Tanzania’s Internet penetration is roughly 30 percent of the total population and growing thanks to the government’s broadband plan. Among the more than 35 million mobile phone users, the forecast of smartphone users in the country is to grow to 25 million people in 2017 from around 15 million people this year, according to recent studies by the country’s industry regulator.Today almost 40 percent of Tanzania’s population is under the age of 15 and with a current median age of 19 years old, that means the potential workforce is growing.These demographics are the basis for great potential for a myriad of business. Banks should be leveraging mobile banking and internet solutions and pairing up with retailers for more consumer friendly payments and customer services. Major industrial employers ranging from mining to consumer goods manufacturers could be leveraging digital solutions to streamline operations and efficiencies, be it in how they pay staff to how they handle data management.Intuitively, this sounds right. But again, it comes down to strategy. As a person with such experience, doesn’t advocate digital for the sake of digital. It needs to be right for the nation, the market, the company and the individual user. As a Tanzania policy, for example, governments should support measures to achieve full employment when its workforce is young and growing. And leveraging digital to create an infrastructure and augment the workforce to help build commerce in Tanzania might be a wise policy approach.How does this work? Consider how businesses in other emerging markets like Kenya, Nigeria and South Africa have leveraged digital solutions to enable growth.
A Kenyan bank, has just launched a highly sophisticated mobile app that provides customers with personalised offers and advice based on their location and spending history. It uses GPS to inform customers who have opted in about special offers if they are close to a store, provides saving suggestions and estimates how much customers will have in their account for the rest of the month based on past spending. Checking on the app, it was clear that it can be used for money transfers and cash withdrawals without cards which is good for commerce and, of course, good for the bank. Another example of this can be found at Kenyan bank called CBA, which launched a quick loan app that allows its customers to obtain a loan and to have the money transferred directly into their accounts within minutes. Customers just need to log into the app, enter the amount they need and select the number of instalments, and in a few seconds they know if the loan is approved or not, they can then confirm the agreement with their PIN code, and money is immediately available in their account.Such services are about businesses interacting with each other on a digital level.The Outlook of the technology trends in Tanzania I believe will have the greatest impact on enterprises during the next five years would have pioneering enterprises tapping into a broad array of other digital businesses, digital customers and even digital devices at the edge of their networks to create new digital ecosystems.That means supporting companies that are willing to use digital to transform themselves and the economy by operating as ecosystems and not just as individual corporate entities. In my view, the possibilities don’t need to be complex. Tanzanian companies should be working with banks to streamline compensation digitally and even retailers should be leveraging mobile phone companies and or banks to offer better targeted and seamless services to customers.Tanzanian businesses need to think outside of the box about how they can interact together, how they can leverage their individual strengths and expertise and then connect up to offer better services to customers. Digital should be an enabler in Tanzania, which as the statistics indicate, is poised to take a leadership role if as a nation it so chooses and demystify the notion that their northern neighbours are better in technology than them.