Keypoints:
- Zanzibar launches a $1bn cyber city to diversify its economy beyond tourism
- Dunia Cyber City offers low taxes, e-residency and a Digital Free Zone
- Project targets global tech firms, start-ups and digital nomads
ZANZIBAR has unveiled plans for a $1bn cyber city that backers say could transform the Indian Ocean archipelago into one of Africa’s most ambitious digital hubs, drawing comparisons with Singapore.
The project, known as Dunia Cyber City, is being positioned as a long-term economic pivot for Zanzibar, which has historically relied on tourism and spice exports. The development aims to attract global technology firms, start-ups and remote workers seeking a low-tax, digitally native base in Africa.
Building Dunia Cyber City
Dunia Cyber City is planned for the Fumba Peninsula on Unguja, Zanzibar’s main island. The development is a public-private partnership involving the Zanzibari government and private investors led by French entrepreneur Florian Fournier.
The concept blends physical infrastructure — including residential areas, office parks and community spaces — with a digital ecosystem designed to support online businesses and remote work. Developers describe it as a hybrid city, where physical residency and digital participation coexist, allowing individuals and firms to engage with Zanzibar even if they are not permanently based there.
Digital Free Zone incentives
At the heart of the plan is the designation of Dunia Cyber City as a Digital Free Zone, offering some of the most generous fiscal incentives currently proposed on the continent.
Under the framework outlined by project promoters, e-residents — individuals who register digitally but live elsewhere — would pay income tax at a rate of 5 percent. Physical residents would be taxed at 15 percent. Businesses operating within the zone would benefit from a corporate tax holiday of up to ten years, alongside exemptions from capital gains and wealth taxes.
These incentives are designed to mirror successful global models that have attracted technology capital to compact, well-regulated jurisdictions. Zanzibar’s authorities believe the package could make the territory competitive with established digital hubs while offering significantly lower operating costs.
Government backing and funding model
The Zanzibari government has granted a long-term land concession of about 30 years for the development, signalling strong political support for the project. Funding is expected to be raised through a combination of real estate sales within the city, local investment and joint ventures tied to the broader ecosystem.
Officials say part of the revenue generated will be reinvested into local start-ups and digital skills development, with the aim of ensuring the benefits extend beyond foreign firms and expatriate residents.
Economic diversification at stake
For Zanzibar, the stakes are high. Tourism remains vulnerable to global shocks, as demonstrated during the Covid-19 pandemic, and policymakers have increasingly spoken about the need to build resilience through diversification.
By anchoring itself in the digital economy, Zanzibar hopes to create new employment pathways for young people, attract foreign direct investment and position itself as a gateway between Africa, the Middle East and Asia.
Competition and challenges ahead
Despite the ambition, analysts caution that success is far from guaranteed. Building a globally competitive tech hub requires reliable electricity, high-speed connectivity, regulatory certainty and strong institutions. Zanzibar will also face stiff competition from more established African tech ecosystems in cities such as Nairobi, Lagos and Cape Town.
Whether Dunia Cyber City can move from blueprint to sustainable reality will depend on execution as much as vision. If it succeeds, however, Zanzibar’s $1bn bet could reshape perceptions of what Africa’s next generation of digital cities can look like.
