What Zanzibar Silicon Valley means for Zanzibar and other African governments?

On Tuesday, August 30, the Government of Zanzibar announced the launch of ‘Silicon Zanzibar’ in partnership with Wasoko, a B2B e-commerce Company formerly headquartered in Nairobi, Kenya. The Wasoko innovation hub is developed to create an abode for tech companies across Africa.

Previously known as Sokowatch, it was named Africa’s fastest growing company by Financial Times in May 2022. The company has successfully established markets in other East African countries such as Rwanda, Uganda, and Tanzania where it has now relocated and West African countries such as Cote d’ Ivoire and Senegal.

This development is a reaction to the recent policy by the Kenyan government – which signed into law the Finance Act, 2022 in July – making the economic atmosphere unfavorable for Wasoko. Daniel Yu, Wasoko’s CEO had then begun the search for an African government that had a flexible business environment policy which eventually led to ‘the first private-public partnership between an African tech start-up and Zanzibar’.

According to Yu, Zanzibar’s policy is more adaptive compared to Nairobi. “The tax rate is lower in Zanzibar, and there are better fiscal incentives. It is also easier to secure work and business visas compared to Nairobi,” Yu said.

“No longer will tech companies need to open offices and move their people to Dubai or London to manage their operations in Africa. We are providing an open and enabling environment for all tech companies and their team members to be based in Zanzibar,” said Mudrick Soraga, Zanzibar’s minister of investment and economic development.

Now located in Fumba town, Zanzibar, it is expected to obtain over $15m worth of investment providing Zanzibaris with career opportunities. The government will in turn provide strong incentives to participating companies under Zanzibar’s existing Free Economic Zone program, which includes offering work visas for relocating tech workers and exemption from corporate income tax for 10 years.

In other African countries like Nigeria, South Africa and Egypt where tech is growing exponentially, there may be an unexpected resignation of workers across other counties considering that Zanzibar would now be the buzz and boss. Home countries may suffer the loss of their best and able-bodied techies as well as incredible innovations being launched primarily in Zanzibar.

However, it is to be noted that the industry is fast growing on the continent and this serves as a major augmentation especially that the inclusiveness of regional governments in enhancing its technology sector would now be closely looked into else, it witnesses a massive brain drain.

Viewing this in light of African development, the partnership would not only enable the improvement of the continent’s economy but would also attract more investments in tech nationally and internationally. The Zanzibar Silicon valley is set to be an employer of tech talents in Africa as this adds to the revenue of home countries. To this end, the eradication of poverty and unemployment is addressed meanwhile, preserving the continent’s labor force in the tech industry.