Experts who attended the African Innovation and Technology Forum on June 16, 2026, in Dar es Salaam have proposed several legal, regulatory, and practical reforms that could enhance Tanzania’s digital transformation and help position it as a key driver of the country’s vision of attaining a trillion-dollar economy.
Some of the key insights emerged from a report titled The Political Economy of Digital Governance in Tanzania, prepared by the Internet Governance Project (IGP), hosted by the Georgia Institute of Technology, in collaboration with Tech and Media Convergency (TMC). The report highlighted that while internet connectivity is increasing rapidly, the digital economy is not growing at the same pace.
“In terms of overall internet penetration, Tanzania is right up there with the rest of the region. But if you look at the amount of services in the economy, the general proportion of the service sector in the overall economy, you see a big gap between Tanzania and other countries, particularly Kenya, even Rwanda, and Zambia,” Dr. Milton Mueller of IGP said while presenting the report’s findings.
The report found that the contribution of the service sector to the economy has been declining since 2015, falling from 45 percent to 29 percent despite steady growth in internet penetration.
The report described this trend as an anomaly and argued that it is not primarily an infrastructure problem. Instead, it suggested that the challenge stems from legal and regulatory structures that shape Tanzania’s digital economy.
The report grouped the challenges into three key areas. The first is digital sovereignty. According to the report, mandates requiring data localization and local ownership create costly and redundant infrastructure requirements while discouraging foreign investment, without delivering the privacy and security benefits often used to justify them.
The second area concerns censorship, surveillance, and restrictions. The report highlighted a complex web of licenses, fees, and registration requirements that can hinder innovation, particularly for entrepreneurs who have ideas but lack financial resources. It also pointed to internet shutdowns and targeted surveillance as factors that can make the investment environment less attractive and discourage innovation.
The third issue is cronyism, where regulations are applied differently depending on an individual’s connections to ruling elites. It noted that under such circumstances, investments linked to politically connected individuals may receive preferential treatment and operate under different conditions than those without such connections. This double standard end up creating negative incentives for investment or innovation.
“You cannot build a modern trillion-dollar economy with an infrastructure that is designed to contain and control people in the digital economy,” Dr. Milton Mueller argued.
Response
Responding to the report, the guest of honor at the event, the Director General of the Information and Communication Technologies Commission (ICTC), Dr. Nkundwe Moses Mwasaga, argued that Tanzania is not seeking to isolate itself through digital sovereignty measures.
“We are not pursuing sovereignty to exclude ourselves; we are pursuing sovereignty to safeguard our values. And we do want to work with international partners, because the Vision 2050 has articulated an economy of 1 trillion dollars, of which 70 percent of it will be delivered by the private sector. We do need investors from abroad, but we want to keep our values up to the point,” Dr. Mwasaga argued.
Mwasaga went on to compare measures undertaken by the United Kingdom, the United States, and Europe in explaining the national security context. He argued that internet shutdowns occur in several countries and challenged estimates regarding the economic cost of Tanzania’s 2025 internet shutdown.
“The recent development of the U.S. government issuing a directive for export controls requiring Anthropic to suspend access to the Fable 5 and Mythos 5 AI models for all foreign nationals globally falls under an internet shutdown in line with U.S national security concerns,” Dr. Mwasaga argued.
“This event does happen, and they happen for a reason, and we do understand that every country has its way of defining national security,” he continued.
On the issue of the declining contribution of the service sector, Mwasaga argued that the discrepancy may lie in the methodology used to measure the digital economy, suggesting that its actual contribution could be significantly higher.
He explained that current measurements focus on core digital activities, defined as outputs produced by firms whose primary function is information processing and electronic communication, including the transmission and display of information.
He added that authorities are in the process of shifting toward narrower measures that include core digital activities as well as economic activities that rely on digital inputs, such as smart devices, e-commerce, business services, travel and accommodation services, financial and insurance services, and sectors undergoing digital transformation.
Unlocking the Potential
Experts participating in the discussion highlighted the need for Tanzania to fully embrace the private sector as a key catalyst for unlocking the digital economy’s potential. Several government representatives at the forum expressed support for this view.
In their report, IGP and TMC recommended that Tanzania revoke costly data localization requirements for tax and payment data. The issue has been widely discussed among banks and large corporations that depend on globally provided cloud services, which are often more affordable and benefit from economies of scale and innovation.
The report also recommended amending provisions that allow forced and warrantless data disclosures. Currently, Tanzanian law grants law enforcement agencies powers to preserve and collect digital data for criminal investigations without warrants or independent oversight. The report recommends adopting a model similar to Kenya’s, where judicial authorization is required.
To ensure Tanzanian startups can thrive and compete globally, the report also recommends fostering a market for strong encryption and supporting the use of Virtual Private Networks (VPNs).
“Secure, private communications are foundational to commerce and innovation. In a thriving economy, firms rely on secure data tunnels to secure their employees’ communications (and their company’s trade secrets) along a software-defined network infrastructure,” the report underscored.
It continued: “That secure network infrastructure can expand and contract per the business’s mobility and virtualization needs. Requiring registration and licensing of VPN providers and end-users introduces unnecessary compliance friction, deters investment, and undermines trust in the entire Tanzanian digital economy as state-approved options become the norm.”
The report also proposed reforms to takedown rules to prevent abuse. In addition, it recommended that TTCL operate on open-access, non-discriminatory terms under a published Reference Offer approved by TCRA, so as to reduce monopoly of the state firm and allow it to compete.
While explaining Tanzania’s digital transformation journey, the ICT Commission Director General emphasized that Vision 2050 identifies digital transformation as a key driver of economic growth and outlined that Tanzania has set rails from digital payment, to statrup enhancing regulation to unlock this potential.
The central position of Tanzania Vision 2050 was also echoed by the U.S. Chargé d’Affaires ad interim, Andrew Lentz, who called for the multi-stakeholder model of internet governance where governments, the private sector, civil society, academia, and the technical community all have a seat at the table in developing the future
“Right now, there are fundamentally different competing visions in the world that seek to influence the internet’s future role across Africa, in Tanzania, and around the world,” Lentz noted.
“One vision, the vision that the United States of America champions, holds that the internet should be open, free, global, interoperable, and secure. It holds that innovation flourishes when people can speak, create, and connect without fear of surveillance or censorship,” he continued.
“There is another vision, promoted predominantly by authoritarian states, that holds that the internet is a tool of state control. This vision promotes systems designed to monitor citizens, suppress dissent, and distort the information environment.”
“I believe the path to Vision 2050 runs through an open, rights-respecting digital ecosystem,” he emphasized.
The African Innovation and Technology Forum is expected to conclude today, June 17, 2026, when key resolutions from the forum will also be announced.
