1. Recycling Batteries for Rural Electrification
WAGA (the Wanted Garage), a Tanzanian startup founded by Gibson Kawago, has made progress in its mission to provide affordable power solutions to off-grid communities.
Last week, Gibson announced a tenfold increase in WAGA’s daily production capacity. The company now manufactures 400 lithium-ion cells and 25 off-grid home battery packs per day.
This growth stems from WAGA's innovative approach to recycling discarded lithium-ion batteries, a method Kawago developed after growing up in rural Iringa without reliable electricity. The company's PAWA packs can power four lamps and charge two mobile phones for 24 hours, addressing a critical need in Tanzania where only 37.7% of the rural population had access to electricity in 2020, according to the World Bank.
WAGA's expansion has been supported by the FUNGUO Programme, which is is a joint initiative of the European Union (EU), United Nations Development Programme (UNDP), and the UN Capital Development Fund (UNCDF). This backing shows the growing interest in sustainable energy solutions for Africa, where 597 million people lacked electricity access in 2021, as reported by Statista.
The startup’s progress aligns with Tanzania's wider efforts to increase rural electrification. The government's Rural Energy Agency (REA) has connected 5,481 villages to the national grid as of early 2024, bringing the total to 11,843 electrified villages, or 96.14% of all villages nationwide. However, the need for off-grid solutions remains critical in remote areas.
WAGA's success also points to the potential of the circular economy in addressing Africa's energy challenges. By repurposing discarded batteries, the company not only provides cheap power but also tackles the growing issue of electronic waste. The Global E-waste Monitor 2020 reported that Africa generated 2.9 million metric tons of e-waste in 2019, with only 0.9% formally collected and recycled.
Looking ahead, WAGA faces the challenge of scaling its operations while maintaining quality and affordability. The company will need to navigate Tanzania's regulatory frameworks for recycling and energy production/distribution laws, as well as compete with other prominent off-grid solar solutions such as Jaza Energy and Zola Electric. Nevertheless, WAGA's growth demonstrates the potential for locally-developed, sustainable technologies to address Africa's energy needs.
2. Fintech Acceleration in Tanzania
The PesaTech Accelerator, now in its second cohort, continues to improve Tanzania's rising fintech ecosystem. Launched by the UNCDF in 2022, the program aims to prepare post-revenue and growth-stage fintech startups for investment and strategic partnerships.
The 2024 cohort, which began in November 2023 and runs until September 2024, builds on the foundation laid by the first program. In 2023, PesaTech offered a comprehensive curriculum covering legal issues, business modeling, marketing, and technical development. The program facilitated interactions with potential investors and partners, including Vodacom's M-Pesa, MFS Africa, and Standard Chartered Ventures.
This year's program, funded by the EU and the Embassy of the Kingdom of the Netherlands, is implemented in partnership with Anza Entrepreneurs and NMB Bank. It offers participants access to NMB's fintech sandbox, a seed fund of at least $5,000, and connections to Anza's investor network.
The accelerator's focus on fintech aligns with Tanzania's growing digital financial services (DFS) market. Mobile money subscriptions in the country reached 55.7 million in June 2024, with Vodacom's M-Pesa holding a 30.5% market share, followed by Tigo Pesa at 28.5%, accordy to Moneypedia. However, challenges remain: only 13% of adults on mainland Tanzania use digital merchant payments monthly, according to recent data from FSDT.
PesaTech's efforts complement other initiatives in Tanzania's tech ecosystem. The number of startups in the country grew from 587 in 2021 to 842 in 2023, a 43.4% increase. These ventures created over 112,000 jobs by 2023, up 53.7% from 78,071 in 2021. However, funding remains a challenge, with investments dropping from $80.575 million in 2022 to $48.4 million in 2023.
The accelerator's impact extends beyond individual startups. By promoting innovation in DFS, PesaTech contributes to Tanzania's wider financial inclusion goals. The country has made progress, with 77% of adults having access to formal financial services in 2023, up from 65% in 2017. Yet, disparities persist, particularly in rural areas where access lags behind urban centers.
As PesaTech moves forward, it will need to address several challenges. These include bridging the urban-rural divide in financial services and helping startups attract sustainable funding in a tightening global investment climate. The program's success will be measured not just by the growth of individual companies, but also by its contribution to building a strong, inclusive financial ecosystem in Tanzania.
3. Zanzibar's Tech Ambitions
The first edition of ‘Zanzibar Tech Summit’, is scheduled for August 17, 2024. It represents an important milestone in the island's efforts to diversify its economy beyond tourism. This event is part of the broader "Silicon Zanzibar" initiative launched in 2022, which aims to transform the archipelago into a tech hub for Africa.
Zanzibar's push into technology comes at a time of gradual decentralization in Tanzania's tech scene. While Dar es Salaam remains the primary hub, its dominance is waning. In 2022, 66.56% of Tanzanian startups were based in Dar, but this figure dropped to 56.47% by 2023.
The summit, to be held at Fumba Town's Pavilion, will feature entrepreneur speeches, discussions on emerging technologies, and networking opportunities. It aligns with Zanzibar's recent policy initiatives, including a Digital Health Strategy (2021-2026), a Digital Economy and Statistics Map, and a Digital Government Strategy launched in 2023.
These efforts have already borne fruit. In November 2023, the Indian Institute of Technology (IIT) Madras established its first international campus in Zanzibar. Princeton University has also partnered with the African School of Economics to deliver STEM and social science courses on the island.
However, Zanzibar faces significant challenges in its tech ambitions. The island lags behind mainland Tanzania in several key metrics. There are only 84 mobile phones per 100 islanders, compared to around 334 SIM cards per 100 inhabitants in Dar es Salaam. Digital merchant payment adoption is also lower, with just 2% of Zanzibari adults using "Lipa Namba" monthly, versus 13% on the mainland.
Infrastructure remains a hurdle, with unreliable power and internet connectivity. The archipelago also faces a shortage of skilled tech workers and difficulties in accessing startup capital. These issues will need to be addressed for Zanzibar to realize its tech hub aspirations.
On the positive side, Zanzibar has higher mobile money usage than the mainland, with 78% of islanders using these services compared to 72% on the mainland. This could provide a foundation for fintech innovation.
The summit and broader Silicon Zanzibar initiative offer potential benefits beyond the tech sector. They could help diversify Zanzibar's economy, which has been heavily reliant on tourism. In 2019, before the COVID-19 pandemic, tourism accounted for 27% of the island's GDP and 80% of its foreign exchange earnings.
As Zanzibar pursues its tech ambitions, it will need to balance development with preserving its unique culture and environment. The success of this initiative could provide a model for other small island economies looking to diversify into the digital sector. However, it will require sustained investment, policy support, and collaboration between government, industry, and educational institutions to overcome the current challenges and realize the vision of Silicon Zanzibar.