The European Union (EU) has taken significant steps to boost financial opportunities for Tanzanian businesses through a productive information session titled "Grow with the European Union Finance." This event, aimed at empowering Tanzanian enterprises, highlighted various financial opportunities provided by the EU and its Member States under the Global Gateway strategy.
Building on the successful dialogue initiated during the Tanzania-EU Business Forum in February 2023, the session focused on addressing one of the primary challenges identified: access to finance for expanding business, trade, and investment opportunities. Following the forum, European Development Banks signed several financing deals with local Tanzanian banks, including NMB, CRDB, and KCB, thereby expanding credit offerings for Tanzanian Micro, Small, and Medium Enterprises (MSMEs). The range of European financing options for the private sector has since increased.
The session's main objective was to offer concrete guidance on accessing these financing instruments. A key highlight was the signing of a new grant contract worth TZS 11.23 billion (EUR 4 million) between the EU and the Financial Sector Deepening Trust (FSDT). This grant aims to promote inclusive finance for small and medium-sized enterprises (SMEs) operated by women and youth.
With over 100 representatives from the banking sector, SMEs, MSMEs, and various corporate enterprises in attendance, the event underscored the crucial need for local businesses to connect with EU-backed financial institutions through the Global Gateway financing tools.
Cedric Merel, Head of Cooperation for the EU Delegation to Tanzania, emphasized the EU's comprehensive support for the Tanzanian business environment. "A conducive business environment is essential for businesses to thrive, and finance is their lifeblood," Merel remarked. "The European Union has provided a 360-degree approach to investments in Tanzania, from supporting regulatory reforms and enhancing domestic resources mobilization to strengthening capital markets and green and alternative finance."
Edward Claessen, Head of the Regional Hub for East Africa at the European Investment Bank (EIB), reinforced this message by highlighting the EIB's significant support for private sector initiatives in Tanzania. "Last year, Tanzania was the largest recipient of EIB support in Sub-Saharan Africa, with TZS 758 billion (EUR 270 million) in new investments to support businesses through partnerships with Tanzanian banks such as CRDB, NMB, and KCB-Tanzania," Claessen stated. He noted that EUR 166 million has already been disbursed, benefiting over 10,000 enterprises, including 3,000 women-led businesses and 900 blue economy enterprises in Zanzibar.
The session also provided insights into the EU's Global Gateway strategy, which addresses global challenges like climate change, health system improvements, and strengthening global supply chains. This strategy includes various financial products such as grants, loans, equity, and guarantees designed to benefit businesses of all sizes.
A significant component of this strategy is the European Fund for Sustainable Development Plus (EFSD+), which encourages sustainable investments in partner countries by offering risk-sharing tools through partner Financial Development Institutions. With a financial commitment of up to TZS 112.340 trillion (EUR 40 billion), EFSD+ aims to mobilize up to TZS 379.150 trillion (EUR 135 billion) in public and private financing worldwide to support the Sustainable Development Goals (SDGs).
In addition to EFSD+, the EU supports start-ups and early-stage SMEs through initiatives like the Funguo Innovation Programme, PesaTech Accelerator Program, and Serengeti Business Angels Network, which offer grants and investment opportunities. The EIB, the EU's lending arm, provides credit lines to local banks to support SME growth and innovation.
Gasper Mdee, a representative from the Tanzanian Private Sector Foundation, highlighted the importance of these financial opportunities. "In partnership with local private sector organizations, the EU ensures that diverse segments of the population, including underrepresented groups such as women and youth, have access to the resources they need to succeed. This support not only boosts individual businesses but also contributes to the overall economic development of the country," Mdee said.