Tanzania’s Digital economy
After holding a successful election in October last year, United Republic of Tanzania economy is expected to grow at an average 7 per cent annually according to estimates published recently. Most business executives in Tanzania know the largest country in East Africa is poised for growth and is well-positioned to leverage digital solutions to make that happen.However, 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 available, Tanzania’s Internet penetration is roughly 32 percent of the total population and growing thanks to the government’s broadband plan that has seen more than 10,000 kilometres laid across the vast country. Among the more than 30 million mobile phone users, the forecast of smartphone users in the country is to grow to 13 million people in 2017 from around 7.9 million people in January 2015.Today almost 30 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 in Dar Es Salaam,Mwanza, Arusha and Moshi 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 like a brilliant idea. But bottom line, it comes down to strategy. Contador Harrison 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 Tanzanian policy, for example, government 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 have leveraged digital solutions to enable growth. Kenyan bank, KCB, has a highly sophisticated mobile app that provides customers with personalised offers and advice. I know of a bank that is developing an App that will help its users use GPS to inform them 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. It will be used for money transfers and cardless cash withdrawals and this is good for commerce and, of course, good for the bank that is working on it.The future of financial services will be beyond being a utility and be more integral to a person’s everyday life. Tanzanian banks need to bring on board very innovative mobile apps that will provide their customers with similar location-past-spending based personalised offers.
In addition, they should be planning to launch a quick loan app that allows their customers to obtain a loan and to have the money transferred directly into their accounts within minutes just like Kenyans banks namely Commercial Bank of Africa, Equity Bank and Kenya Commercial Bank are already doing. Time has come when customers just need to log into the app, enter the amount they need and select the number of installments, and in a few seconds they know if the loan is approved or not and 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 2016 annual outlook of the technology trends in Tanzania that I believe will have the greatest impact on enterprises during the next few years would be 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 Tanzania companies that are willing to use digital to transform themselves and the economy by operating as ecosystems, not just as individual corporate entities, and driving the emergence of the digital economy. In my own thinking, possibilities of achieving this aren’t complex. Tanzania companies should be working with banks to streamline compensation digitally while retailers need to leverage 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 country it so chooses under the stewardship of John Pombe Magufuli, the President of United Republic of Tanzania.