Tanzania has recorded a remarkable digital transformation in the last decade, becoming one of the fastest countries in Africa in applying digital technologies in almost all aspects of human life. 

GMSA, a global non-profit industry organisation that represents the interests of mobile network operators, said in a 2019 report dubbed “Digital transformation in Tanzania: The role of mobile technology and impact on development goals” that Tanzania was one of the most advanced mobile money markets in Sub-Saharan Africa.

Five years later, today, more people are connected and use digitized services than ever before in our country, and you can clearly validate this by observing how we communicate today. 

Telecom subscriptions in Tanzania have seen massive growth over the past decade, increasing from 32 million in 2014 to 80.7 million by September 2024. This growth has pushed telecom penetration—a measure of the number of active SIM cards compared to the population—to 111% as of December 2023. In simple terms, this means that for every 10 people, there are 11 SIM card subscriptions. 

The trajectory is the same to internet subscribers which is a key in digital transformation. Data from the regulator shows internet subscription has been growing at 9.8% annually. Internet subscribers have increased to 39.3 million subscribers in June 2024 from 25.8 million in 2019, with 99.6% of them using mobile wireless. 

This fast uptake of telecom and internet-based services by consumers, indicates that digital technologies, if well applied, can really help the country in addressing pressing socioeconomic challenges.

Nukta Africa CEO Nuzulack Dausen sharing his digital insights to 10 female online media journalists who attended a certain training at Jamii Media

Digital transformation improves lives

For example, currently people living in rural areas, who had no access to financial services before, are now using mobile money to send and receive money as well as paying their bills. We are also witnessing Tanzanians engaged in informal businesses accessing health and other types of insurance through their mobile phones such as the famous VodaBima. 

In education, digital technologies are helping children, immediate graduates and elders to learn new knowledge and skills through dozens of e-learning platforms. Some of these platforms such as E-Fahamu, Smart Darasa, Silabu, Kozica, and others are offering unique knowledge and skills from primary school pupils to experienced persons working in corporations. 

Students with no adequate teachers and teaching facilities in their schools can now learn science, technology and mathematics subjects online and acquire knowledge the same or even more than those who learn in person.

Digital transformation has also improved good governance. The government has invested massively in digital and e-government services. Many government institutions are using digital technologies in issuing licenses, paying and receiving bills and serving citizens online. Digital services have reduced bureaucracy in accessing public services, thereby decreasing chances of corruption and service delays. 

Behind these life-saving digital technologies, are innovative businesses that are working hard to find effective digital solutions for us. As we use their digital services, they also grow their businesses through various business models, opening up new economic opportunities for others by offering employment as staff, contractors, or service agents. 

Nukta Africa CEO shares insights on harnessing innovation for growth, live at East Africa Radio. Photol Mercy Masinga / Nukta Africa

The digital transformation journey we are witnessing today has been highly influenced by convergence of telecommunications, broadcasting, computers, digitalisation of services and policies, laws, and regulations governing the information and communication sector. It has been an output of many stakeholders led by the government, service providers and consumers. 

But even as Tanzania makes progress in digital transformation among its peers in Africa, it would have been much further than it is today. To reach there, the government and other stakeholders have to fix some unfriendly policies, laws, processes and behaviors which delay fully digital transformation. 

Improve political willingness to emerging technologies

The first issue is to improve political willingness in adopting and applying emerging technologies. As a country we have done our best in some areas, and we have failed in the others. If you look closely, you will find that some of the failures were not due to technical teams failing to innovate but because the ideas were not well comprehended by politicians, automatically missing the buy-in. 

One of the good examples is implementation of the postcodes which are very important in boosting e-commerce. Postcodes were first gazetted in June 2012, but it took 10 years to be fully implemented under special operation to ensure the residential addresses of everyone are recorded properly for the 2022 national census. 

The operation, which facilitated the raising of street signs and house numbers in the country including in rural areas, were highly championed by H.E. the President Samia Suluhu Hassan, her cabinet especially the then Minister of Information, Communication and Information Technology, Nape Nnauye and other regional and local government leaders. I’m worried that without such political buy-in we would not have many street addresses by now.  

There could be more solutions or initiatives which are key to digital transformation which are pending because they have lacked political buy-in. It is important to have regular dialogue between experts from the private and government sectors with politicians on the benefits and risks of technologies so that the latter can be more aware of the solutions. 

Proactiveness is key in digital transformation

Second, the government needs to be more proactive rather than reactive on digital transformation. It has come to my attention that not all government institutions and officials are embracing digital transformation.  While other institutions such as the Business Registration and Licencing Agency (Brela) and TCRA are faster in delivering services such as licenses, there are other institutions and public officials who do not care about digital systems. They will do the best to sabotage or to bypass digital systems as they challenge their status quo.

While other regulators are studying how to create regulations which maximize the use of digital technologies such as Artificial Intelligence to increase efficiency while minimizing risks in their sectors, others are still using old laws, paperwork and busy reacting to new technologies by tough regulations sometimes without involving key stakeholders. 

For example, one of the bodies which regulates content creation, Copyright Society of Tanzania (Cosota), is working under a very old legal framework. The organisation is discharging its duties by using a law with more than 20 years dubbed Copyright and Neighbouring Rights Act, 1999 and its regulations the Copyright and Neighbouring Rights (Registration of Members and their works) Regulations 2005.

The current laws and regulations used by Cosota might be relevant in many areas but in the digital era it needs enactment of the new laws and regulations that would protect artists’ works from emerging digital exploitations such as data used to train AI models. So much has changed since it was enacted, and new opportunities are emerging everyday which might not be really regulated. 

Uneven adoption and regulations make some sectors benefit more from digital technologies while others suffer, automatically discouraging private investment in those areas. Those who adopt quickly save citizens and businesses better. For example, the quick adoption of M-Mama, a program that Vodacom has been heavily involved in for a decade, by the ministry of health and President’s Office Regional Administration and Local Government (PO-RALG), is saving the lives of many people in our country. M-Mama connects pregnant women and newborns to emergency care in across Tanzania

Again, there might be many life-saving solutions that are pending their implementation just because there is no law or regulation that allows its application in Tanzania. In such a case the government in consultation with stakeholders can create quick guidelines based on important available data while working on a more comprehensive legal framework

Overtaxing digital services will slow digital adoption 

Lastly, it is important to be careful in taxing digital services. Everyone who cares about improving government revenues, understands that Tanzania’s tax base is very narrow, and we need to do more for our country. However, any decision to tax application of new technology should be based purely on costs and benefits analysis. 

We learned the hard way in July 2021 when the government introduced mobile money levies before a series of reductions in September 2021, July 2022 and September 2022. Studies show some mobile money users reduced the usage because it was far beyond their willingness to pay for the service. 

GSMA’s Tanzania Mobile Money Levy Impact Assessment published in September 2023 revealed that consumers showed an aversion in using mobile money since the introduction of the levy despite providers’ efforts to reduce the impact on the users by lowering their fee tariffs. 

The assessment further showed the introduced levy reduced mobile money revenue sharply from TZS 73 to 61 billion (-16%) per month between June and August 2021, to only stabilise to around TZS 65 billion from October 2021. 

While the situation is recovering after the government decision to reduce some of the levies and completely abolishing others like peer-to-peer transfers, still, the mobile money revenue would have been higher today than the recorded figures if there were no tax interruptions. The interruptions have affected not only telecoms, consumers, and the government, but other digital entrepreneurs such as e-commerce whose business growth especially increase in users and revenue depends on lower electronic transactions costs. 

As I said earlier in this article, Tanzania can lead in digital transformation in Africa, but the government and all stakeholders need to embrace usage of digital technologies by improving the operating environment while working together to minimise risks and challenges including cybercrimes. Regulators should be enablers and not barriers and private sectors should commit themselves to serve the nation for good through innovative solutions while creating sustainable revenues. 

Nuzulack Dausen is the Chief Executive Officer of Nukta Africa, a digital media and technology company in Tanzania. He is a seasoned journalist who covers business, economics, technology and data for local and international media.