UNITED REPUBLIC OF TANZANIA

PRESIDENT’S OFFICE, PLANNING COMMISSION

THE TANZANIA LONG-TERM PERSPECTIVE PLAN (LTPP),

2011/12-2025/26
THE ROADMAP TO A MIDDLE INCOME COUNTRY

June-2012
 FOREWORD
It is indeed my great pleasure to present to you this national
Long Term Perspective Plan (LTPP, 2011/12-2025/26), the
core instrument to implement the Tanzania Development
Vision 2025 (TDV 2025). This Plan will be implemented in a
series of three Five Year Development Plans. The TDV 2025
aims to transform Tanzania into a middle-income country by
2025 and this shift will happen through a gradual
industrialisation of the currently agriculture-based economy.

Since Independence (1961), Tanzania has been through

three phases of long-term plans: (i) the first Long-Term
Perspective Plan (1964-1980) that was to be executed
through three consecutive Five Year Development Plans
(FYDPs), (ii) the second Long-Term Perspective Plan (1981-2000) that was to be executed in
four successive Five Year Development Plans and (iii) this Long-Term Perspective Plan
(2011/12-2025/26) to be implemented through three Five Year Development Plans. The two
previous pursuits of long-term planning were compromised when the country reverted to
shorter-term planning following the economic crises for most of the 1980s and 1990s. Economic
recovery, structural adjustment and poverty reduction strategies were implemented without
adequate focus on the underlying Vision. The Government’s choice to revert to long-term
planning is justified by the will to set up an efficient framework for implementing Vision 2025
with a clear roadmap outlining the country’s socio-economic development targets.

The Plan provides an overview of the economy in terms of the envisaged structural evolution,
challenges and opportunities thereof, both internal and external. It will be guided by six pillars:
broad-based growth, macroeconomic stability, competitiveness, national cohesion and cultural
heritage, good governance and accountability and sustainable development from economic,
environmental and social points of view. In order to realise the envisaged socio-economic
transformation the LTTP’s strategic direction delineates specific sector/sub-sector policies,
guiding principles and long-term objectives and targets. With greater emphasis on capital
(development) investment, particularly in the productive sectors and human resources (skills)
development, the Plan gives adequate attention to protecting and improving the social sector
gains, governance and key cross-cutting issues.

Meeting the TDV 2025 targets is conditional to the implementation of this Plan, through the
implementation of three FYDPs, namely the First FYDP (2011/12-2015/16), titled “Unleashing
the Growth Potential”; the Second FYDP (2016/17-2020/21), titled “Nurturing an Industrial
Economy”; and the Third FYDP (2021/22-2025/6), and titled “Realizing Competitiveness-Led
Export Growth”. The three plans are inherently interconnected in that successful
implementation of one is imperative for the implementation of the other.

I commend all stakeholders for the invaluable contributions leading to the finalisation of this
Long Term Perspective Plan. Specifically, I appreciate the part played by the Cabinet,
Parliament, the Ministries, Departments and Agencies, as well as the Regions and Local
Government Authorities, Development Partners, Public Enterprises, political parties, the civic

i
organisations and all individual citizens. May I specially thank the staff of the President’s Office
Planning Commission for organising and supervising the preparation of the plan.

The implementation of the LTTP and its component Five Year Development Plans and Annual
Development Plans will only be possible if all people of Tanzania diligently play their respective
roles in building a prospering country. Hence, I humbly urge my fellow citizens, together and
individually, to wholeheartedly support and commit to this transformational process for our
Nation, as carefully outlined in this LTPP. Tanzania should be able to achieve her ambition of
becoming a Middle-Income country by 2025.

GOD BLESS TANZANIA

Jakaya Mrisho Kikwete

President of the United Republic of Tanzania
June, 2012

ii
 INTRODUCTORY REMARKS
This Long-Term Perspective Plan (LTPP) (2011/12-2025/26) is the formal statement of the
roadmap for implementing the targets outlined in the Tanzania Development Vision 2025. The
LTPP, which is to be implemented in a series of three five year development plans and fifteen
annual plans, picks valuable lessons from the rich planning tradition of Tanzania. All efforts
were made to gather opinions, ideas and advice from a range of stakeholders, which included
sectoral experts in the MDAs, regions and Local Government and Development Partners. This
wide consultation process helped orient the Plan to meet the challenges and opportunities of
the next 15 years.

The Long-Term Perspective Plan outlines a development path that is cast in three five-year
periods (FYDPs), each with a specific development agenda. The first FYDP aims to remove the
economy’s growth constraints in order to unleash the growth potential of the country. In the
second FYDP the focus will be on nurturing an industrial-based economy whilst developing the
country’s agriculture and agro-processing sectors to enable Tanzania to become the regional
food basket. In the third FYDP focus will be to boost exports of manufactured goods with
sharpened competitiveness. The three phases are inherently interconnected, with the successful
implementation of one being an imperative for the implementation of the other.

The long-term planning horizon enables the country to systematically incorporate issues that
particularly require long-term planning such as climate change, environment protection into the
national development agenda. The Plan provides the minimum targets, strategic direction,
guiding principles and objectives for all main sectors and cross-cutting issues. It will be the
responsibility of each Ministry and associated entities to develop their own sector specific long-
term plans incorporating the principles and objectives outlined in LTPP. In this context, the
LTPP is in fact the initial step of the new long-term planning process in Tanzania. It outlines
methods envisaged for resource mobilization, which includes enhancing the existing traditional
financing methods and introducing innovative sources of financing. Also, an implementation
organizational structure has been proposed to ensure the timely implementation of the Plan.

The success of this plan will crucially depend on the active participation of the private sector
and the effectiveness of the public sector in providing the requisite enabling environment.
Certain fundamental principles such as accountability, transparency, timeliness, integrity and
judicious use of nation’s resources are paramount and must be ingrained at all levels of the
LTPP implementation. Such principles, when combined with dedicated leadership and
ownership of LTPP across the spectrum of stakeholders, will firmly guide our nation to its
rightful prosperous destiny.

Dr. Philip IsdorMpango

Executive Secretary

iii
 TABLE OF CONTENTS
FOREWORD..................................................................................................................................................................................................i
INTRODUCTORY REMARKS .............................................................................................................................................................. iii
TABLE OF CONTENTS .......................................................................................................................................................................... iv
LIST OF TABLES ..................................................................................................................................................................................... vii
LIST OF FIGURES ................................................................................................................................................................................... vii
LIST OF ABBREVIATIONS ................................................................................................................................................................ viii
EXECUTIVE SUMMARY ....................................................................................................................................................................... xii

CHAPTER I: CONTEXT ........................................................................................................................................................................... 1

1.1 Introduction ................................................................................................................................................................................ 1
1.2 Tanzania’s Development Agenda ...................................................................................................................................... 1
1.3 Review of the Implementation of Vision 2025 ............................................................................................................ 3
1.4 Rationale for Reverting to Long Term Planning ......................................................................................................... 5
1.5 Path to Achieving TDV 2025 Objectives ......................................................................................................................... 6
1.6 Linkages of the three FYDPs ................................................................................................................................................ 8
1.7 National Strategic (core) Investments ............................................................................................................................ 8
1.8 Institutional Implementation Framework .................................................................................................................... 8

CHAPTER II: OVERVIEW OF TANZANIA’S DEVELOPMENT ................................................................................................. 9

2.1 Introduction ................................................................................................................................................................................ 9
2.2 Growth and Economic Structure ....................................................................................................................................... 9
2.3 Macroeconomic Developments ....................................................................................................................................... 11
2.4 Development Dynamics: Growth and Poverty Reduction Nexus ..................................................................... 13
2.5 Productive Sectors ................................................................................................................................................................ 13
2.5.1 Agriculture ...................................................................................................................................................................... 13
2.5.1.1 Crops............................................................................................................................................................................. 14
2.5.1.2 Livestock ..................................................................................................................................................................... 14
2.5.1.3 Forest, Beekeeping, and Wildlife ..................................................................................................................... 16
2.5.1.4 Fishing ......................................................................................................................................................................... 19
2.5.2 Industry ............................................................................................................................................................................ 20
2.5.2.1 Manufacturing .......................................................................................................................................................... 20
2.5.2.2 Mining and Quarrying ........................................................................................................................................... 21
2.5.2.3 Construction .............................................................................................................................................................. 21
2.6 Infrastructure .......................................................................................................................................................................... 22
2.6.1 Transport......................................................................................................................................................................... 23
2.6.1.1 Road sub-sector ....................................................................................................................................................... 23
2.6.1.2 Railway sub-sector ................................................................................................................................................. 24
2.6.1.3 Air Transport sub-sector ..................................................................................................................................... 25
2.6.1.4 Maritime Transport sub-sector ........................................................................................................................ 25
2.6.1.5 Pipeline sub-sector................................................................................................................................................. 25
2.6.2 Energy ............................................................................................................................................................................... 26
2.6.2.1 Renewable sources ................................................................................................................................................ 27
2.6.2.2 Non-Renewable sources ...................................................................................................................................... 27
2.6.3 Meteorology sub-sector ............................................................................................................................................ 28
2.7 Lands ........................................................................................................................................................................................... 29
2.8 Housing and Human Settlement ..................................................................................................................................... 30
2.9 Services ...................................................................................................................................................................................... 31
2.9.1 Trade and Commerce ................................................................................................................................................. 31
2.9.2 Tourism ............................................................................................................................................................................ 32
2.9.3 Financial Services ........................................................................................................................................................ 33
2.9.4 Science, Technology and Innovation (STI) and Research & Development (R&D) .......................... 35
2.9.4.1 Science, Technology and Innovation (STI) .................................................................................................. 35
2.9.4.2 Research and Development (R&D) ................................................................................................................. 36
2.9.5 Communication Service ............................................................................................................................................ 36
2.9.6 Postal Services .............................................................................................................................................................. 37
2.10 Demographic Transition Related Issues ................................................................................................................ 38
2.10.1 Population Dynamics ................................................................................................................................................. 38

iv
 2.10.1.1 Demography ......................................................................................................................................................... 38
2.10.1.2 Youth ....................................................................................................................................................................... 38
2.10.1.3 Rural-Urban Migration .................................................................................................................................... 39
2.10.2 Urbanisation .................................................................................................................................................................. 39
2.10.3 Employment ................................................................................................................................................................... 40
2.10.3.1 National employment ....................................................................................................................................... 40
2.10.3.2 Youth employment ............................................................................................................................................ 41
2.11 Human Capital Development and Social Services .............................................................................................. 41
2.11.1 Education and Training ............................................................................................................................................. 41
2.11.2 Health ................................................................................................................................................................................ 42
2.11.3 Water Supply and Sanitation .................................................................................................................................. 43
2.11.4 Sports ................................................................................................................................................................................ 44
2.11.5 Entertainment ............................................................................................................................................................... 44
2.11.6 Media ................................................................................................................................................................................. 44
2.11.7 Culture .............................................................................................................................................................................. 45
2.12 Governance .......................................................................................................................................................................... 45
2.12.1 Improving Structures and Systems of Governance ...................................................................................... 46
2.12.2 Public Administration Effectiveness ................................................................................................................... 47
2.12.3 Gender-balanced inclusion in all socio-economic processes ................................................................... 47
2.12.4 Maintaining Peace and Security ............................................................................................................................ 47
2.13 Private Sector Development ........................................................................................................................................ 48
2.14 Cross-cutting issues ......................................................................................................................................................... 49
2.14.1 Gender .............................................................................................................................................................................. 49
2.14.2 HIV and AIDS ................................................................................................................................................................. 49
2.14.3 Environment and Climate Change ........................................................................................................................ 50
2.14.4 Social Protection .......................................................................................................................................................... 50

CHAPTER III: STRATEGIC DIRECTION ....................................................................................................................................... 52

3.1 Introduction ............................................................................................................................................................................. 52
3.2 Long Term Objectives and Targets ................................................................................................................................ 53
3.3 Pillars of the Long-Term Perspective Plan ................................................................................................................. 53
3.4 Envisaged Structural Transformation of the Economy ........................................................................................ 54
3.4.1 Structural Transformation ...................................................................................................................................... 54
3.4.2 Macroeconomic Stability .......................................................................................................................................... 56
3.4.3 Productivity and Growth .......................................................................................................................................... 57
3.4.4 Risks and Assumptions ............................................................................................................................................. 59
3.5 Productive Sectors ................................................................................................................................................................ 60
3.5.1 Agriculture ...................................................................................................................................................................... 61
3.5.1.1 Crops ........................................................................................................................................................................ 61
3.5.1.2 Livestock ................................................................................................................................................................ 61
3.5.1.3 Forest, Beekeeping, and Wildlife................................................................................................................. 61
3.5.1.4 Fishing..................................................................................................................................................................... 64
3.5.2 Industry ............................................................................................................................................................................ 65
3.5.1.5 Manufacturing ..................................................................................................................................................... 66
3.5.1.6 Mining and Quarrying ...................................................................................................................................... 67
3.5.1.7 Construction ......................................................................................................................................................... 68
3.6 Infrastructure .......................................................................................................................................................................... 68
3.6.1 Transport......................................................................................................................................................................... 68
3.6.1.1 Road sub-sector .................................................................................................................................................. 69
3.6.1.2 Railway sub-sector ............................................................................................................................................ 69
3.6.1.3 Air Transport sub-sector ................................................................................................................................ 69
3.6.1.4 Maritime Transport sub-sector ................................................................................................................... 69
3.6.1.5 Pipeline sub-sector ............................................................................................................................................ 69
3.6.1.6 Meteorology sub-sector .................................................................................................................................. 69
3.6.2 Energy ............................................................................................................................................................................... 70
3.7 Lands ........................................................................................................................................................................................... 72
3.8 Housing and Human Settlement ..................................................................................................................................... 73
3.9 Services ...................................................................................................................................................................................... 74
3.9.1 Trade and Commerce ................................................................................................................................................. 74

v
 3.9.2 Tourism ............................................................................................................................................................................ 76
3.9.3 Financial Services ........................................................................................................................................................ 77
3.9.4 Science, Technology and Innovation (STI) and Research & Development (R&D) .......................... 78
3.9.5 Communications sub-sector ................................................................................................................................... 80
3.9.6 Postal Services .............................................................................................................................................................. 81
3.10 Demographic Transition and Related Issues........................................................................................................ 82
3.10.1 Population Dynamics ................................................................................................................................................ 82
3.10.2 Urbanisation ................................................................................................................................................................. 83
3.10.3 Employment .................................................................................................................................................................. 84
3.11 Human Capital Development and Social Services .............................................................................................. 87
3.11.1 Education and Training ............................................................................................................................................. 87
3.11.2 Health ................................................................................................................................................................................ 88
3.11.3 Water Supply and Sanitation .................................................................................................................................. 89
3.11.4 Sports ................................................................................................................................................................................ 90
3.11.5 Entertainment .............................................................................................................................................................. 90
3.11.6 Media ................................................................................................................................................................................. 91
3.11.7 Culture .............................................................................................................................................................................. 91
3.12 Governance .......................................................................................................................................................................... 92
3.13 Private Sector Development ........................................................................................................................................ 93
3.14 Cross Cutting Issues ......................................................................................................................................................... 94
3.14.1 Gender .............................................................................................................................................................................. 94
3.14.2 HIV and AIDS ................................................................................................................................................................. 95
3.14.3 Environment and Climate Change ........................................................................................................................ 96
3.14.4 Social Protection .......................................................................................................................................................... 97

CHAPTER IV: FINANCING AND RESOURCE MOBILISATION ............................................................................................ 98

4.1 Resource Mobilisation ......................................................................................................................................................... 98
4.2 Traditional Sources of Financing .................................................................................................................................... 98
4.3 Innovative Sources of Financing ..................................................................................................................................... 99
4.4 Dynamic Resource Mobilization Committee ........................................................................................................... 100
CHAPTER V: IMPLEMENTATION ARRANGEMENTS .......................................................................................................... 101
5.1 Planning Framework ......................................................................................................................................................... 101
5.2 Institutional Framework .................................................................................................................................................. 101
5.2.1 Role of the State .......................................................................................................................................................... 102
5.2.2 Role of POPC................................................................................................................................................................. 102
5.2.3 Role of MDAs and LGAs ........................................................................................................................................... 103
5.2.4 Role of Non-State Actors......................................................................................................................................... 103
5.2.5 Role of Development Partners ............................................................................................................................. 103

5.3 Monitoring and Evaluation.............................................................................................................................................. 103

5.3.1 Overview........................................................................................................................................................................ 103
5.3.2 M&E Institutional Arrangement and Tools .................................................................................................... 104
5.3.3 Operationalizing the M&E ...................................................................................................................................... 104
5.3.4 The National Planners Conference .................................................................................................................... 105
5.3.5 Performance Indicators, Baselines and Targets .......................................................................................... 105
5.3.6 Reporting and Communication Arrangements ............................................................................................ 105
5.4 Plan Facilitating Factors ................................................................................................................................................... 105

ANNEXES................................................................................................................................................................................................ 107
Annex 1: M&E framework: Indicative Socio-Economic Targets.................................................................................... 107
Annex 2: Targets for Skill Development for Implementation of TDV 2025 ............................................................. 116

vi
 LIST OF TABLES
Table 1.1: TDV 2025 Envisaged Achievements .................................................................................................. 2
Table 2.1: Decomposition of Agricultural Sector (percent share), Nominal GDP .......................................... 13
Table 2.2: Growth Rates in the Agricultural Sector (at Constant 2001 Prices) .............................................. 14
Table 2.3: Forestry area information for Tanzania (selected years) in hectares. .......................................... 16
Table 2.4: Tanzania Export Statistics for Honey and Beeswax for 1995-2011 .............................................. 17
Table 2.5: Beekeeping potential areas (honey in tons) .................................................................................... 17
Table 2.6: Industrial GDP divided into sub-sectors (share of total industrial GDP) ...................................... 20
Table 2.7: State of Road Infrastructure in Tanzania, 2010 (km) ..................................................................... 23
Table 2.8: Road Density in Some East African Countries* ............................................................................... 24
Table 3.1: Mainland Tanzania: Evolution of Economic Structure, 2000, 2010 and Projections for 2025 (%
of GDP) ................................................................................................................................................................. 55
Table 3.2: Past and targeted average growth rates (% per annum) ............................................................... 56
Table 3.3: Targets in the Trade sector for 2025: .............................................................................................. 75

LIST OF FIGURES
Figure 1.1: Achieving the objectives of TDV 2025: ............................................................................................. 7
Figure 2.2: Sector Contribution to Nominal GDP in Percentage, 2000-2010 ................................................. 10
Figure 2.3: Total Government Expenditure Decomposition ............................................................................ 11
Figure 3.1: Tanzania’s Actual and Simulated Growth Paths to LMIC by 2025 ............................................... 54
Figure 3.2: Decomposition of Productivity Growth .......................................................................................... 58
Figure 5.1: Plan Implementation Framework ................................................................................................. 101

vii
 LIST OF ABBREVIATIONS
ADP Annual Development Plan
AfDB African Development Bank
AGOA African Growth and Opportunity Act
AIDS Acquired Immuno-Deficiency Syndrome
ASF African Swine Fever
AWS Automatic Weather Stations
BEST Business Environment Strengthening in Tanzania
BoT Bank of Tanzania
BRELA Business Registration and Licensing Authority
BRIC Brazil, Russia, India and China
CAG Controller and Auditor General
CBFM Community Based Forest Management
CBPP Contagious Bovine Pleuropneumonia
ccTLD country’s code Top Level Domain
CDG Composite Development Goal
CHF Community Health Funds
CHRAGG Commission for Human Rights and Good Governance
CIA Central Intelligence Agency
CLICOM Climate Computing Project (CLICOM)
CO Certificate of Occupancy
COMESA Common Market for Eastern and Southern Africa
COSTECH Tanzania Commission for Science and Technology
CPI Consumer Price Index
CRO Customary Rights of Occupancy
D-by-D Decentralisation-by-Devolution
DBMS Meteorological Database Management System
DfID Department for International Development (UK)
DRC Democratic Republic of Congo
DSM Demand Side Management
DTBi Dar Teknohama Business Incubator
DWT Deadweight Tonnes
EAC East African Community
EBA Everything But Arms
ECC Economic Committee of Cabinet
EIA Environmental Impact Assessment
EPA Economic Partnership Agreements
EPOCA Electronic and Postal Communications Act
EPZs Export Processing Zones
ERP Economic Recovery Programme
ES Economic Survey
ESRF Economic and Social Research Foundation
EU European Union
FAO Food and Agriculture Organization
FDI Foreign Direct Investment

viii
FMD Foot and Mouth Disease
FSSR Food Self Sufficiency Ratio
FYDP Five Year Development Plan
GDP Gross Domestic Product
GEF Global Environment Facility
GEPF Government Employees’ Provident Fund
GNI Gross National Income
GoT Government of Tanzania
GWh Giga watt hours
HBS Household Budget Survey
HIPC Heavily Indebted Poor Countries
HIV Human Immuno-deficiency Virus
ICT Information, Communication Technology
IFC International Finance Corporation
IFMS Integrated Financial Management System
IGC International Growth Centre
ILFS Integrated Labour Force Survey
ILMIS Integrated Land Management Information System
ILO International Labour Organization
IMF International Monetary Fund
IXP Internet Exchange Point
JNIA Julius Nyerere International Airport
kWh Kilowatt hour
LAPF Local Authorities Pensions Fund
LGAs Local Government Authorities
LGRP Local Government Reforms Programme
LITS Livestock Identification and Traceability System
LMIC Lower Middle Income Country
LTPP Long Term Perspective Plan
M&E Monitoring and Evaluation
MACEMP Marine and Coastal Environmental Management Project
MAFC Ministry of Agriculture, Food and Cooperatives
MCDGC Ministry of Community Development Gender and Children
MCT Media Council of Tanzania
MDAs Ministries, Departments and Agencies
MDGs Millennium Development Goals
MHSW Ministry of Health and Social Welfare
MIC Middle-Income Country
MKUKUTA Mkakati wa Kukuza Uchumi na Kupunguza Umaskini Tanzania (NSGRP)
MLDF Ministry of Livestock Development and Fisheries
MLEYD Ministry of Labour, Employment, Youth Development
MoF Ministry of Finance
MoVET Ministry of Education and Vocational Training
MSMEs Micro, Small and Medium Enterprises
MTEF Medium Term Expenditure Framework
MW Megawatt

ix
NAPA National Adaptation Programme of Action
NBS National Bureau of Statistics
ND Newcastle Disease
NEMC National Environment Management Council
NER Net Enrolment Rate
NESP National Economic Survival Programme
NFGG National Framework on Good Governance
NGOs Non-Governmental Organisations
NHBRA National Housing and Building Research Agency
NHC National Housing Corporation
NHIF National Health Insurance Fund
NICTBB National ICT Broadband Backbone
nos Not Otherwise Specified
NSC National Sports Council
NSGRP National Strategy for Growth and Reduction of Poverty
NSI National System of Innovation
NSPF National Social Protection Framework
NSSF National Social Security Fund
NWP Numerical Weather Prediction
ODA Official Development Assistance
Organization for Economic Cooperation and Development-Development Assistance
OECD-DAC
Committee
OVC Orphans and Vulnerable Children
PCCB Prevention and Combating of Corruption Bureau
PHDR Poverty and Human Development Report
PIMU Plan Implementation Monitoring Unit
POPC President’s Office Planning Commission
PO-PSM President’s Office – Public Service Management
PPF Parastatal Pension Fund
PPP Public Private Partnership
PPP$ Purchasing Power Parity (United States Dollar)
PRS Poverty Reduction Strategy
PSPF Public Service Pension Fund
R&D Research and Development
ROSCAs Rotating Savings and Credit Associations
RS Regional Secretariat
RUBADA Rufiji Basin Development Authority
SACCOS Savings and Credit Cooperative Societies
SADC Southern Africa Development Community
SAGCOT Southern Agricultural Growth Corridor of Tanzania
SAP Structural Adjustment Programme
SEZs Special Economic Zones
SIDO Small Industries Development Organization
SMEs Small and Medium Enterprises
SMMRP Sustainable Management of Mineral Resources Project
SSC South-South Cooperation

x
SSRA Social Security Regulatory Authority
STAMICO State Mining Corporation
STI Science, Technology and Innovation
TAA Tanzania Airport Authority
TANROADS Tanzania Roads Agency
TANESCO Tanzania Electric Supply Company Limited
TASAF Tanzania Social Action Fund
TAZAMA Tanzania Zambia Mafuta Pipeline
TAZARA Tanzania Zambia Railway Authority
TB Tuberculosis
TCRA Tanzania Communications Regulatory Authority
TDHS Tanzania Demographic and Health Survey
TDV Tanzania Development Vision (2025)
TEU Twenty-foot Equivalent Units
TFP Total Factor Productivity
TMA Tanzania Meteorological Agency
TRL Tanzania Railway Limited
TShs. Tanzanian Shillings
TVET Technical and Vocational Education and Training
tzNIC Tanzania Network Information Centre
UCAF Universal Communications Access Fund
UNCTADStat United Nations Conference on Trade and Development Statistics
UNESCO United Nations Educational, Scientific and Cultural Organization
UNIDO United Nations Industrial Development Organization
URT United Republic of Tanzania
USAID United States Agency for International Development
USD United States Dollar
WB World Bank
WDI World Development Indicators
WEF World Economic Forum
WGI Worldwide Governance Indicators
WHO World Health Organisation
WITS World Integrated Trade Solution
WSDP Water Sector Development Programme
WTO World Trade Organisation
YEG Youth Economic Group

xi
 EXECUTIVE SUMMARY
Context
Tanzania’s Long Term Perspective Plan (LTPP) is an important vehicle for implementing the
Tanzania Development Vision 2025 (TDV 2025) which emphasizes Tanzania’s cherished goal of
becoming a prosperous nation, through eradicating poverty, ignorance and disease in the drive
to becoming a Middle-Income Country (MIC).

LTPP sets the strategic direction and delineates the long-term objectives, targets, and pillars for
a more focused guidance, coordination and harmonization of the country’s growth process.
Besides, LTPP is a crucial link between the long-term Vision, and the country’s medium- and
short-term perspectives, namely the Five Year Development Plans (FYDPs) and Annual
Development Plans (ADPs).

Since its launching in 1999, TDV 2025 had no formal instrument for its operationalization.
Consequently, efforts to evaluate progress made in achieving the targets of Vision 2025 were
scattered. A renewed implementation framework for the remaining 15 years of TDV 2025,
through this LTPP, was thus imperative. This was further confirmed by recent commissioned
studies and the assessment that the country was not on track to reaching the TDV goals.

The path to realizing TDV 2025 targets will be facilitated by opportunity-based planning
implemented through a series of three five year development plans, building on each other and
making use of Tanzania’s opportunities and addressing the challenges.

The socio-economic transformation will be addressed in-depth through three strategic FYDPs:
the First FYDP (2011/12-2015/16): Unleashing the Growth Potential; the Second FYDP
(2016/17-2020/21): Nurturing an Industrial Economy; and the Third FYDP (2021/22-
2025/26): Realizing Competitiveness-Led Export Growth. The linkages between the three plans
are crucial, as the success of FYDPII will depend on the success of FYDPI, and the achievements
of FYDPIII will depend on the successes of FYDPI and FYDPII.
Overview of the Country’s Recent Development
Tanzania’s development since 2000, the year TDV 2025 was launched, has shown slow
structural transformation, varied sectoral growth rates, changes in the policy management
framework as well as a number of sector specific challenges. Though TDV 2025 targeted an
annual GDP growth rate of 8 percent or more, accompanied by an inflation rate below 5 percent,
the economy grew at an average rate of nearly 7 percent and recorded an inflation rate of 6
percent. The sustained average economic growth rate did not, however, have a significant
impact on poverty reduction.

The agricultural sector’s annual growth rate remained at around 4.3 percent. Manufacturing
recorded slow growth rates mainly due to a slow pace of rural industrialization and agro-
processing, rudimentary state of SMEs, as well as constraints related to the cost of doing
business, bureaucracy and infrastructural impediments.

The service sector, which has been leading in terms of contribution to GDP, overtook agriculture
which had historically been the leading sector, reversing their relative positions compared to 15
years earlier. Substantial progress was achieved in non-income dimensions, especially in
education and health services. The shares of the service and the manufacturing sectors to GDP
remained stable, while that of the industrial sector (excluding manufacturing) increased,
following the high growth rates in the ‘construction’ and ‘electricity and gas’ sub-sectors.

xii
The Government spending consistently exceeded its revenues, leading to widening fiscal deficits
and an increasing debt level. This can be explained by the relatively low capacity to raise
domestic revenue.

Governance improved significantly especially in areas of democracy, and political and social
tolerance. In terms of private sector development, the Government continued to improve the
business environment. A number of social protection schemes evolved, though their full
potential could not be exploited due to low coverage, inadequate coordination, high service
costs, inadequate funding, irregularity in investment, and low transparency and accountability.
Strategic Direction
All sectors of the economy present an opportunity for the country to significantly increase the
growth rate and achieve substantial poverty reduction. LTPP highlights the challenges that have
to be tackled and the opportunities that have to be taken advantage of in order to reach the MIC
status.

LTPP will be guided by the following six pillars: broad-based growth, macroeconomic stability,
competitiveness, national cohesion and cultural heritage, good governance and accountability,
and sustainable development from the economic, environmental and social points of view.

One of the goals of TDV 2025 is to transform Tanzania into a “diversified and semi-
industrialised economy with a substantial industrial sector comparable to typical middle-
income countries”. This sectoral transformation, coupled with the 8 percent GDP growth target,
implies a drastic change in the growth path, especially in the agricultural and manufacturing
sectors, in turn requiring raising capital to implement the necessary investments. In order to
facilitate this structural transformation, it is vital that macroeconomic stability is ensured.

This transformation also demands changing the pace and composition of the overall
productivity growth rate. This will be achieved through enhanced capital investment, skill-level
up-grading of the work force, in addition to strategic interventions (particularly in the
productive sectors).
Financing and Resource Mobilization
The successful implementation of the LTPP will critically depend on the country’s capacity to
secure resources for financing the envisaged programmes and projects. The thrust of LTPP is
thus to pursue a more reliable development financing framework and to reduce donor
dependency.

The target is to bring the ratio of Official Development Assistance (ODA) to Gross National
Income (GNI) closer to current levels in lower middle-income countries (reducing it by more
than half to about 6 percent). The accompanying increase in the need for financing means is to
be achieved through a mix of resource mobilization strategies, using both traditional and
innovative sources of financing.
Implementation arrangement
LTPP will be operationalized through three FYDPs, which in turn will be operationalized
through Annual Development Plans (ADPs), implemented in the sequence of Budget Guidelines;
Medium-Term Expenditure Frameworks (MTEFs); Cabinet Approval; Parliamentary
Authorisation; Execution; and Monitoring and Evaluation.

The implementation of LTPP involves transiting from one economic structure to another. This
means all stakeholders involved will have a proactive role to play, but also that the close
monitoring of areas critical to development will be enhanced.

xiii
The State will continue playing its traditional roles with greater focus on its developmental one.
The Planning Commission will take the lead role in articulating and influencing the direction of
economic management in the country and guiding national planning (in close collaboration with
the Ministry of Finance). The responsibility of implementing the projects identified through
FYDPs will fall on MDAs/RSs/LGAs. The annual work plans of MDAs/RSs/LGAs will have to be
aligned with respect to FYDPs and the LTPP. LTTP also recognizes the strengths and capabilities
of all development actors, including the private sector and civil society in achieving the
country’s economic development goals. Development partners are expected to bring their
influence in implementing projects and programmes consistent with the nation’s long-term
development agenda.

The monitoring and evaluation procedure will focus on tracking progress. For consistency, the
M&E of LTPP will be done in the context of the FYDP’s implementation milestones. The
LTPP/FYDP M&E function will be carried out at three different levels: Programme/Project
Level, Institutional Level and LTPP/FYDP Level. The M&E functions at the programme level and
institutional level will be conducted through MDAs/RSs/LGAs. Performance indicators will be
selected for monitoring and assessing the progress, trends and developments, to see whether
they are consistent with the objectives of LTPP. A Plan Implementation Monitoring Unit, PIMU,
within POPC will act as the overall coordinator of FYDP/LTPP implementation monitoring.

The successful implementation of LTPP will depend on several factors, namely; strong
leadership, technical and institutional capacities, well prioritized projects and programmes,
reliable and predictable quantum of resources throughout the implementation process,
institutional framework for development planning, change of mind-set, and an effective
communication strategy.

xiv
 CHAPTER I: CONTEXT
1.1 Introduction

Since the attainment of independence from colonial rule in 1961, successive Tanzanian
Governments have been committed to eradicating poverty, ignorance and disease, which are
viewed as the main obstacles to creating a prosperous and well informed society. Developments
in the international arena have also inspired planning towards attaining a competitive economy,
which would allow Tanzania to gain from regional and international trade. Achieving those
targets, along with radically transforming the country’s economy through enhanced
socioeconomic development, is a timely procedure. The country will have to tackle each of the
constraints in each of the sectors one at a time, in a prioritised manner, during the course of its
movement towards a middle-income country. Long-term planning is therefore imperative, given
the country’s objectives and targets for the medium and long term. The Tanzania Long Term
Perspective Plan (LTPP) is aimed at implementing the Tanzania Development Vision 2025, and
is therefore based on the foundations and orientations of the latter1.

This document provides the context of LTPP, and an overview of the economy in terms of the
envisaged structural evolution and the challenges thereof, both internal and external. It sets the
strategic direction delineating the long-term objectives, targets, and pillars related to (i) the
envisaged economic structure, and (ii) the developments in economic, social, political and cross-
cutting issues. Also, the ways of financing the Plan (and the related resource mobilization
propositions), and the institutional framework for the implementation and the monitoring and
evaluation (M&E) will be outlined. The Long Term Perspective Plan (LTPP) thus provides:
a) An interpretation of the country’s development direction intended in Vision 2025, by
providing a sharper and more focused guidance to the growth and development process
to transform Tanzania into a middle-income country;
b) A better coordination and harmonization of the growth process as well as the parsimony
structure to tap sector synergies, spinning sectoral players to provide a national
perspective;
c) A strategic anchor for other supporting strategies, such as macroeconomic stability,
good governance, industrial development, human resource development, technological
development, etc., which in the past had received inadequate attention;
d) Guidance for sustained long-term socioeconomic development and poverty reduction,
which is important for increased domestic resource mobilization and utilization, and
sustaining the reduction in external dependence;
e) A platform for a development dialogue beyond short- and medium-term perspectives, by
being the link between the country’s long-term Vision, the Five Year Development Plans
(FYDPs) and the Annual Development Plans (ADPs), the formulation of which will be
guided by the LTPP.

1.2 Tanzania’s Development Agenda

Tanzania’s development agenda is elucidated in the Tanzania Development Vision 2025 (TDV
2025 or Vision 2025). The preparation of TDV 2025 started in 1994; it was launched in 1999.
The gist of Vision 2025 is that by 2025 Tanzania should have gone through an unprecedented
socio-economic and political transformation with the objective of attaining a middle-income
country status, characterized by, among others, high levels of industrialization, competitiveness,

1 This LTPP focuses on Mainland Tanzania. However, it is suggested that in the future the Vision and the Plan guiding
the national development agenda should cover both sides of the United Republic of Tanzania, in view of the fact that it
is essentially one economy and one people.

1
quality livelihood, rule of law, and having in place a learning society. Vision 2025 outlines the
country’s social, economic and political aspirations for the first quarter of the 21 st century, with
an underlying drive to becoming a middle-income country (MIC), with a per capita income of
US$ 3,000 (in nominal terms), by 2025.

The Vision’s broad objectives and their related targets were elaborated in the Composite
Development Goals (CDGs). The CDGs for TDV 2025 listed five multi-dimensional goals:
a) social and economic progress;
b) political development,
c) institutional development,
d) technological development, and
e) environmental sustainability.
The centrepiece to the realisation of TDV 2025 is having a solid foundation for a competitive,
dynamic and highly productive economy, manifested in, and accompanied by, five main
attributes, namely: high quality livelihoods; peace, stability and national unity; good
governance; a well-educated and learning society; and a competitive economy capable of
producing sustainable and shared growth (Table 1.1).
Table 1.1: TDV 2025 Envisaged Achievements
B: Good Governance and C: A Strong and Competitive
A: High Quality Livelihood
the Rule of Law Economy
Goal 1: Food self-sufficiency and security, Goal 1: Desirable moral Goal 1: A diversified and semi-
Goal 2: Universal primary education, and cultural uprightness, industrialized economy, with a
eradication of illiteracy, developing Goal 2: Strong adherence substantial industrial sector
tertiary education and training in order and respect for the rule of comparable to typical middle-
to significantly raise human resources, law, income countries,
Goal 3: Gender equality and the Goal 3: Absence of Goal 2: Macroeconomic
empowerment of women in all socio- corruption and other stability manifested by low
economic and political relations and vices, inflation rates and basic
cultures, Goal 4: A learning society macroeconomic balances,
Goal 4: Access to quality primary health which is confident; learns Goal 3: A growth rate of 8% or
care for all from its own development more per annum,
Goal 5: Access to quality reproductive experience and that of Goal 4: An adequate level of
primary health services for all individuals others; and owns and physical infrastructure needed
of appropriate ages, determines its own to cope with the requirements
Goal 6: Reduction in infant and maternal development agenda. of the Vision in all sectors,
mortality rates by three quarters of year Goal 5: An active and
2000 levels, competitive player in the
Goal 7: Universal access to safe water, regional and global markets,
Goal 8: Life expectancy comparable to with the capacity to articulate
the level attained in typical middle- and promote national interests
income countries, and to adjust quickly to
Goal 9: Absence of abject poverty. regional and global market
shifts.
Note: B: Goal 2 –proposed reading “Strong and responsive legal and regulatory framework, adherence and respect for the rule of
law”
Source: URT, (1999), Tanzania Development Vision 2025, pp. 12-14.

Initially, Vision 2025 was designed to be operationalized through a series of five year
development plans. However, in the period following the adoption of Vision 2025, Tanzania
embarked on short- and medium-term structural adjustment and Poverty Reduction Strategies
before adopting the first five year National Strategy for Growth and Reduction of Poverty

2
(NSGRP I) in 2005,2 and NSGRP II in 2010. Even though initially these strategies focused on
social sectors, subsequently they increasingly turned to “growth” (mainly cluster 1) as a basis
for stimulating the capacity to finance social services (clusters 2 and 3 of the NSGRP) and with a
view to reducing aid dependence. The thrust of the LTTP and FYDPs is greater emphasis on
capital (development) investment, particularly in the productive sectors and human resources
(skills) development. However, the Plan gives adequate attention to protecting and improving
the social sector gains and governance.

1.3 Review of the Implementation of Vision 2025

Since its launching in 1999, TDV 2025 had no formal instrument for its operationalization,
despite the statement in the Vision that it was going to be assessed every five years. The
envisaged five year development plans which were to provide the monitoring and evaluation
(M&E) framework for TDV 2025 were not formulated. Consequently, efforts to evaluate
progress made in achieving the targets of Vision 2025 were scattered, making it difficult to see
the broad picture. In the absence of the five year development plans, MKUKUTA took
precedence as the medium-term plan to implement Vision 2025. However, MKUKUTA did not
prioritise specific development issues or lay out specific strategic interventions to realize the
objectives of Vision 2025. This is why it was necessary to come up with a renewed
implementation framework for the remaining 15 years of TDV 2025. The LTTP stresses the
long-term nature of the planning process, implemented through Five Year Development Plans
and Annual Development Plans, with distinctive emphasis on development programmes and
projects according to the set priorities.

In view of the missing monitoring framework for TDV 2025, the Government commissioned two
independent studies in 2009 and in 2010 to critically review the implementation of TDV 2025.
The broad objectives of the reviews were (i) to assess the progress made in achieving TDV 2025
goals; (ii) to identify new challenges to be considered in national planning for the remaining 15
years; and (iii) to recommend the best options to pursue. The review revealed the following:
a) Though relatively high economic growth has been recorded, it is still insufficient to
attain the Vision’s targets over the remaining period;
b) Sources of growth have been narrow and in most cases occurring in sectors where the
poor are less represented (mining, tourism, large scale construction). As a result, not
much headway has been made in poverty reduction;
c) The impact of vagaries of weather on agricultural and energy production, coupled with
persistent rises in global fuel prices, have led to a rise in inflation and hence cost of
production, thus adversely affecting the country’s competitiveness;
d) The country has promising opportunities, given its rich natural resources, strategic
geographical location and its active participation in regional and global economic
integration schemes, which need to be fully harnessed;
e) Efforts taken to unleash this potential are hampered by the existence of a weak
supportive infrastructure, notably power and transport;
f) The low level of infrastructure development (especially rural-rural and rural-urban
connections), coupled with the slow industrialisation (given electricity shortages and
the general business environment), had a negative impact on the country’s
competitiveness;
g) People’s developmental mind-set should be enhanced, in order to restore seriousness,
accountability, commitment, responsibility, and optimism.

2 In Kiswahili, Mkakati wa Kukuza Uchumi na Kupunguza Umaskini Tanzania (MKUKUTA).

3
Notwithstanding these shortcomings, a number of positive developments were observed in the
three main targeted achievements of TDV 2025, including the following3:

High Quality Livelihood:

 Concerning education: Increased enrolment at all levels of education: In pre-primary
education, from less than 0.1 million pupils in 2000 to over 0.9 million in 2010; with a Net
Enrolment Rate (NER) of 42.4 percent. In primary education, the enrolment increased from
4.3 million pupils in 2000 to 8.4 million in 2010 (with a NER of 95.4 percent). Enrolment in
secondary education (Forms I-VI), increased from around 0.3 million students in 2000 to
over 1.6 million in 2010. Tertiary education recorded more than three-fold increase in the
number of universities, to reach 31 in 2010 (11 Government-owned, 20 private), with
combined enrolment of 118,951 students (70.5 percent in public universities);
 Concerning health: Increased number of facilities in the health system from 173 hospitals
and 3,293 health centres and dispensaries in 2000 to 33,280 hospitals and 11,961 health
centres and dispensaries in 2010, life expectancy from 40 years to about 55 years in 2010
(females 56, males, 53) and reduced infant and child mortality (Economic Survey, 2010);
 Concerning gender: Implementing affirmative actions for women empowerment in all areas,
and increased enrolment of women at all levels of education: in 2010, they represented 50.1
percent of the pupils at primary school level, 44.5 percent at secondary level and 36.8
percent at university level (up from less than half of this level in 2000 for female enrolment
at university level). Other records include increased proportion of women representation in
Parliament (from 55 out of 275 legislators in 2000 (20 percent) to 125 out of 343 legislators
in 2010 (36.4 percent), well above the MDG target of 30 percent by 2015) and increased
number of women appointment to higher political and administrative responsibilities.

Governance and Rule of Law:

 New institutions and legislations were introduced, aimed at improving good governance and
a culture of rule of law, political tolerance and freedom of speech under the existing
multiparty system.

Strong and Competitive Economy:

 Increased per capita income from about USD 250 in 2000 to USD 547 in 2010 (in nominal
terms);
 The relatively high growth rate that was enjoyed during the last ten years (averaging
around 7 percent per annum between 2000 and 2010), which was mainly due to economic
and financial reforms and prudent monetary and fiscal policies;
 Increased domestic and foreign investment.

The achievements are nonetheless low on international scale and relative to the country’s level
of socio-economic development and the potential output, considering the level of the country’s
natural resources and geography and social stability. Therefore, the need to exert more effort
and set ambitions development targets cannot be over-emphasised.

3Unless otherwise specified, the data used in the three main sub-points come from (and from calculations based on):
United Republic of Tanzania (URT), (2011), Economic Survey 2010.

4
1.4 Rationale for Reverting to Long Term Planning

Tanzania has a rich experience with long-term planning. In 1964 a twenty year Long-Term
Perspective Plan was adopted (covering the 1964-1983 period), expected to be executed
through three successive Five Year Development Plans (FYDPs): the First FYDP (1964-1969);
the Second FYDP (1969-1974) and the Third FYDP (1975-1980), though its implementation was
shelved in 1976. In 1981, the Government prepared the second Long-Term Perspective Plan
(1981-2000), to be executed through four medium-term development plans, each lasting five
years. Though the Five Year Development Plans were prepared, they were not operationalized.

The shelving for one year of the 1975-80 Plan and the non-operationalization of the three Five
Year Plans were explained by the economic crisis of unprecedented depth and intensity
experienced in the mid-1970s and early 1980s. The crisis was caused, among other factors, by
recurring droughts and oil price shocks, the poor weather conditions and by the war with
Uganda under Idd Amin in the late 1970s. The planning process was further impaired as
economic shocks continued and the crisis intensified. The planning process gradually became ad
hoc, leading to a loss of focus on investments and growth in the medium- and long-term.

Given the gravity of the socio-economic crises and the need to enhance the predictability of
budgetary resources, the Government resorted to focusing on a short-term planning horizon of
three years, starting with the formulation of the National Economic Survival Programme (NESP)
(1981-1982), the Structural Adjustment Programme (SAP) (1983-1985) and the Economic
Recovery Programmes (ERPs) (1986–1995), before the entry of a generation of Poverty
Reduction Strategies (PRSs) during the early 2000s.

This regained importance of short-term plans in the 1980s and 1990s did not produce the
expected outcome in growth and poverty reduction. Furthermore, the lack of a strong
implementation framework for TDV 2025 (section 1.3) underscored the need for a new long-
term planning framework in order to effectively fast-track the socioeconomic development and
to emphasize the developmental role of the State. The Government, therefore, decided to come
up with a new Long-Term Perspective Plan. The Long-Term Perspective Plan (LTPP) links TDV
2025 to the Five Year Development Plans (FYDPs) and Annual Development Plans (ADPs). It
guides the formulation of the three successive FYDPs and ADPs between 2011 and 2025.

Other factors impelled the country to revert to long-term planning. These factors include:
a) Development is a process that requires persistence and coherence: experiences from
successful countries show that a number of issues need a longer time perspective to
register significant achievements. It takes various lengths of time and effort to create a
favourable business environment, sustain high levels of investment and create a critical
mass of skilled human resources to drive growth and development. It also takes time to
register behavioural changes and build institutional frameworks to propel positive
changes and build a positive image for sustained foreign inflows;
b) The socio-economic performance between 2000 and 2010 is below the TDV 2025
targets. Economic growth, though high, still falls short of meeting the envisaged target.
Sources of growth have been narrow and mostly escaping the poorest. Income
disparities are rising, thereby threatening social tranquillity;
c) Emerging new challenges in growth and social development, especially the critical
shortage of power and transport infrastructure hinder sustained economic growth and
international trade competitiveness and the immense growth in recurrent expenditure;
d) Adverse impacts on environmental assets such as water resources, agricultural and
grazing lands, brought about by, among others, global warming, extractive industries,
and hence the emphasis on “green growth”;

5
 e) The need to maximize opportunities from growing regional integration and
globalization;
f) Useful lessons from growth research which shows the need for the Government to help
fast-track the country’s structural transformation in order to sustain long-term growth
and competitiveness. The structural or sectoral shifts from agriculture and other low
productivity primary activities to “modern” sectors (such as manufacturing) require a
longer time horizon, hence the need to include it in long-term planning.
The main difference between this LTPP and the former long-term plans is the fact that the
country re-focuses on its Vision. Implementation of the LTPP through three FYDPs is crucial for
Tanzania to become a middle-income country (MIC) by 2025, with all its characteristics
regarding high education levels and human resource development, low poverty rates, higher
per capita income, and good governance and rule of law.

1.5 Path to Achieving TDV 2025 Objectives

The path to realizing the TDV 2025 targets requires a strategic socio-economic transformation.
This will be facilitated by opportunity based planning implemented through a series of three
five year development Plans. These Plans will build upon each other and chart out a
development path, making use of Tanzania’s opportunities and addressing the challenges. The
socio-economic transformation will be addressed in depth through the three strategic Five Year
Development Plans (FYDPs), as presented below (see also Figure 1.1):

I First FYDP (2011/12-2015/16): Unleashing the Growth Potential4

The first FYDP will address the main constraints to Tanzania’s growth. The infrastructure
bottlenecks, particularly in energy (with a special emphasis on diversifying the means of
production, including renewable energies), ports (with a special emphasis on the Dar es Salaam
port, Tanga and Mtwara), rural/feeder, regional and trunk roads, railways, and constraints
related to skilled labour, science, technology and innovation (STI), information and
communication technology (ICT), the general business environment and the productivity in
agriculture will be addressed. These bottlenecks will be monitored during the entire LTPP
period, meaning that the investments in each of the above will match the future needs,
especially for infrastructure and human capital. Specific skills and entrepreneurial skills for
each stage of development will be sharpened. These investments will prepare the economy to
efficiently tap into its rich natural resources (natural gas, iron, coal and minerals), starting with
the country’s primary industry. Jobs will be generated through the first-round effects of the
decrease in the country’s bottlenecks (decrease in transportation cost, decrease of general
production costs, increased availability of medium-skilled workers, etc.), especially in the
manufacturing and agriculture-related sectors.

II. Second FYDP (2016/17-2020/21): Nurturing an Industrial Economy

Once the country has tackled its growth constraints, it will be able to further develop its
industrial sector, mainly based on the value-addition of the increased primary products
following the implementation of FYDP I. Therefore, the second FYDP will focus on transforming
the country’s resources through the development of the industrial sector. The focus will be on
natural gas based/fuelled industries (following the investments made during FYDP I), agro-
processing industries (given the increase of the sector’s productivity and the improved

4 The framework of the LTPP was set in the course of reviewing the implementation of Vision 2025 and before the
publishing of FYDPI in June 2011, but, for technical reasons, the finalisation of LTPP was delayed. Therefore, the LTPP
remains the basis of all three FYDPs.

6
infrastructure) and medium-technology industries (given the increased human capital). Jobs
will be created through the focus of the country on the industrial sub-sectors which will
generate the highest employment: the decrease of the bottlenecks and the improvement of the
human capital will facilitate the fast development of the manufacturing sector, which could be
fast-tracked further by foreign investments.

III. Third FYDP (2021/22-2025/26): Realizing Competitiveness -Led Export Growth

The rapid development of the country’s industrial sector will lead to a significant increase in
production, which will have to translate into a larger focus on new markets in order to further
ensure the country’s socio-economic development. Therefore, the third FYDP will focus on
improving the competitiveness in all sectors, especially the manufacturing and services ones.
The improvement in competitiveness will facilitate export-oriented growth and significantly
increase Tanzania’s share of regional and international trade. The target will be to transform
Tanzania into the manufacturing hub of East Africa, whilst making sure all the gains made in
social services, business environment, infrastructure and productivity are promoted further.

Figure 1.1: Achieving the objectives of TDV 2025:

Source: POPC.

7
1.6 Linkages of the three FYDPs

The linkages of the three plans are crucial, as the success of each of these plans depends upon
the level of successful implementation of previous plans. For example, the removal of growth
bottlenecks such as power shortage, lack of high-quality rural roads and limited skills during the
first FYDP is necessary for the manufacturing-oriented growth during the second FYDP. Quality
infrastructure and a highly trained and innovative workforce are basic foundations for a
dynamic and competitive industrial base.

Along with reducing growth bottlenecks, successful inclusive (broad-based growth) during the
first FYDP will help reduce poverty and inequality, raising incomes and effective demand for
domestic goods. Strong effective demand will serve as domestic market for the domestic
manufacturing sector, thus allowing for expansion and economies of scale for the industrial
sector during the second FYDP. Striving for competitiveness will have to start already during the
first FYDP, assisted by measures against unfair dumping. Domestic producers will gradually
acquire the competitive capacity during the second FYDP and ability to export steadily.

Further, during the implementation of these three Plans, efforts will be oriented towards
ensuring sustainability in terms of economic, environmental and social perspectives. This
course of development, if treaded, will ultimately lead to the realization of the development
targets enshrined in TDV 2025.

1.7 National Strategic (core) Investments

In each of the three FYDPs, amongst all proposed projects, the Government will choose and give
special attention and allocate greater amounts of development resources to a sub-set of mega-
projects (or core investments) that are strategic to the country’s development, that is, those that
have higher multiplier effects and employment-generation and so have proven potential to
create greater and faster growth momentum than has so far been the case. Because of this, the
national strategic investments will be fast-tracked and prioritised during the five year periods
and their implementation will be tightly supervised.

1.8 Institutional Implementation Framework

The implementation of the LTPP through the three FYDPs will be made possible through a
broad-based institutional implementation framework (which is further documented in Chapter
5). The broad sectoral participation will involve specific actions taken by the Government, the
private sector, the MDAs, the LGAs, the Non-State actors and the Development Partners, which
will all be coordinated by the POPC.

8
 CHAPTER II: OVERVIEW OF TANZANIA’S DEVELOPMENT
2.1 Introduction

This chapter analyses Tanzania’s development between 2000, the year the TDV 2025 was
launched, and 2010, used in this Plan as the benchmark year. For each of the main sectors their
performance during the last ten years and the challenges they are facing are highlighted. This
provides the basis on which national policies, guiding principles and objectives that will have to
be put in place for each of these sectors until 2025 are defined in Chapter 3.

Section 2.2 analyses the country’s GDP and sectoral growth rates and the current economic
structure. Section 2.3 analyses the macroeconomic developments during the last 10 years in
three major indicators, i.e. inflation, the fiscal balance (and public debt) and the balance of
payments. Section 2.4 analyses the evolution of poverty and its linkage with the country’s
growth rates. Section 2.5 to Section 2.15 analyse the evolution of the main socio-economic
sectors and the challenges for each of them.

2.2 Growth and Economic Structure5

Growth: TDV 2025 targeted an annual economic growth rate of 8 percent or more and to keep
inflation below 5 percent between 2000 and 2025. However, the economy managed to grow at
an average rate of nearly 7 percent over the 2000-2010 decade6. Besides, inflation was
contained below 6 percent for most of the period. Figure 2.1 displays the sectoral and GDP
growth rates between 1999 and 2010.
Figure 2.1: Growth Rates of Total GDP, Agriculture,
For the past 10 years, the Industry and Services
agricultural sector’s annual
growth rate remained stunted at
around 4.3 percent. Crop
production dominated as source
of rural income, accounting for
about 70 percent of agricultural
GDP. Non-traditional crops have
recently taken a more prominent
role in driving growth.

The main constraints from the

supply-side, which have
negatively affected the sector’s
growth, are related to poor rural
Source: Economic Survey (2010)
infrastructure for
transportation; insufficient
water for irrigation and energy generation; inadequate storage infrastructure; and market
imperfections. Demand side constraints include low disposable income of consumers, stunted
growth of the local manufacturing sector, uncompetitive market prices (both locally and
internationally), and poor linkage with potential markets.

5 Unless otherwise specified, in this chapter, the “share of GDP” actually refers to the “share of Gross Value added
before adjustments”. By using this simplification, the sum of the shares of Agriculture, Industry an Services gives
100%. Also, unless otherwise specified, the data is taken from (or calculated using) United Republic of Tanzania
(URT), (2011), Economic Survey 2010.
6 See United Republic of Tanzania (URT), (2011), Economic Survey 2010., Dar es Salaam, Ministry of Finance.

9
Most of the output in the industrial sector for the 2000-2010 period came from increased
investments in manufacturing and construction, which accounted for 46.7 percent and 29.4
percent of total industrial gross capital formation, respectively (2009 Statistical Abstract of
Tanzania). Other sub-sectors were mining and quarrying (12.3 percent), electricity and gas
(10.2 percent) and water (4 percent).

The contribution of manufacturing to GDP increased from 9.3 percent in 2000 to 9.8 percent in
2010, an increase of 0.5 percentage points over a 10 year period (Economic Survey, (2010)).
The slow growth of this sector is explained by a slow pace of rural industrialization and agro-
processing as well as constraints related to the cost of doing business, bureaucracy and
infrastructural impediments.

The service sector, which has been leading in terms of its contribution to GDP in 2010 mainly
comprised ‘trade and repairs’ (27.6 percent), ‘real estate and business services’ (20.1 percent)
and ‘public administration’ (18.2 percent) (Economic Survey, (2010)).

Among the intermediating institutions in economic growth are small and medium-scale
enterprises (SMEs). On average, SMEs contribute over one third of Tanzania’s GDP and account
for more than half of informal employment7. Some of the problems faced by SMEs in Tanzania
include an unfavourable environment for doing business (high cost of production, delays in
movement of goods due to poor infrastructure), a bureaucratic tax system, poor governance and
limited economies of scale. As the East African Community (EAC) moves towards more
economic integration beyond the Common Market, Tanzania will have to step up its share of
regional trade and trade surplus with regional trading partners. This will mean encouraging
exports of value-added agricultural products instead of exporting unprocessed products.

Economic Structure: the services sector, with 47.8 percent contribution to GDP in 2010,
overtook agriculture which has historically been the leading sector. The latter’s share of GDP
shrank to 27.8 percent in 2010, reversing its relative positions compared to 15 years earlier.
Figure 2.2 displays the sectoral transformation that has happened between 2000 and 2010.
Figure 2.2: Sector Contribution to Nominal GDP in Percentage, 2000-2010

Source: Economic Survey (2010)

The shares of the service and the manufacturing sector remained stable. On the other hand, the
share of the agricultural sector dropped from around 33 percent to 28 percent (given the higher
growth in the other sectors and the remaining infrastructural and productivity issues in the
7See ESRF, (2009), “Study the Identification of Potential Growth Drivers for Tanzania based on an Analysis of
Tanzanians Competitive and Comparative Advantages; Growth Sectors and Growth Drivers: A Situational Analysis
Report”, Study submitted to POPC.

10
sector), whilst the share of the industrial sector (excluding manufacturing) increased from
around 10 percent to 15 percent (given the high growth rates in the ‘construction’ and
‘electricity and gas’ sub-sectors).

2.3 Macroeconomic Developments

After having analysed the country’s annual growth rate and the related sectoral growth rates
and shares, this section highlights the past trend and the importance of economic policy in the
three main other macroeconomic indicators, namely inflation, the Fiscal Balance and the
Balance of Payments.

Inflation: During the majority of the 2000 to 2010 period, the inflation was maintained below 6
percent, which is only slightly above the TDV target of keeping inflation below 5 percent per
annum. This was due to the prudent monetary and fiscal policies, coupled with an
accommodating international market situation. But from 2008 onwards, inflation was
consistently above 10 percent (apart from in year 2010), which can be explained by (i) a sharp
rise in food and fuel inflation (both of them having a significant impact on the CPI calculation
and trend), (ii) a nominal depreciation which led to an inflation in imported goods, and (iii) the
long-lasting effects of important bottlenecks and infrastructure shortages (leading to increased
transportation costs). The Bank of Tanzania (BoT) has continued implementing sound monetary
policies, managing the country’s liquidity and interest rates with the view of generating a
growth-prone environment without positively affecting the inflation, which, until the
international factors started playing a larger role on the country’s CPI, has proven successful.

Fiscal Balance and Public Debt: between 2000 and 2010 Tanzania has consistently spent
significantly more than its revenues, leading to widening fiscal deficits and an increasing debt
level. This can be explained by the country’s relatively low capacity to raise local revenues (the
average domestic revenue-to-GDP ratio between 2001/02 and 2009/10 was 12.2 percent) and
the increasing expenditures to cater for infrastructure developments. On average between 2000
and 2010, Government revenues increased by 20 percent per year, whilst expenditure increased
by more than 21 per cent per year. On average during the same period, recurrent expenditure
(composed of ‘wages and salaries’, ‘interest payments’ and ‘other goods, services and transfers’)
represented around 71 percent of Government expenditure, whilst development expenditure
(and net lending) only represented about 29 percent. The trends of the above mentioned sub-
categories are displayed in Figure 2.3.
Figure 2.3: Total Government Expenditure Decomposition

Source: Ministry of Finance (2012)

11
‘Other goods, services and transfers’ have remained the most important spending category
during the entire period (reaching over 50 percent in 2002/03). As can be seen, development
expenditure as a share of total has been declining ever since 2007/08, and in 2010/11
represented a lower expenditure share than wages and salaries (which have been increasing
ever since 2005/06). This trend in development expenditure should be reverted in order to
ensure sustained future growth.

Overall, the annual budget deficit increased from 4.6 percent of GDP in 2000 to over 15 of GDP
in 2010 (Economic Survey, (2010)), and, on average during that period, over 95 percent of the
annual deficit was financed by external sources. Even if the increase in public spending might
have positively affected the country’s past economic growth (World Bank, Tanzania Economic
Update (2012)), the trend might be crowding-out private investment (IMF, 2011) which could
jeopardize future growth rates.

During the 2000/01-2008/09 period, the majority of the public debt indicators decreased:
public debt as a share of GDP declined from 65.2 percent to 33.6 percent, the external debt as a
share of GDP decreased from 55.6 percent to 20.9 percent, and the public debt service as a share
of Government revenue decreased from 18.2 percent to 1.7 percent. Only the domestic debt as a
share of GDP increased from 9.6 percent to 12.7 percent. Nevertheless, the trend since then has
been increasing for all the above-mentioned indicators. For instance, Bank of Tanzania’s
Quarterly Economic Reviews, 2008-2011 show that the external debt and domestic debt
increased by 65 percent and 36 percent, respectively (in nominal US dollar terms), between
June 2008 and June 2011. According to World Bank estimates, given the current growth trend in
the country’s total debt, Tanzania might return to pre-HIPC debt levels by 20168.

Therefore, the objectives of the Government in the fiscal sphere include (i) enhancing domestic
resource mobilisation, that is, to expanding the tax base by including the informal sector,
reducing tax exemptions and maximising the rents collected from the exploitation of natural
resources),and (ii) containing and improving the quality, monitorability and efficiency of
Government spending (by enhancing expenditure control and accountability, value for money,
and consolidating the fringe benefits into salaries and wages). Both measures will ensure that
macro-economic stability is maintained, along with close debt monitoring.

Balance of Payment: The country’s trade balance has been in deficit during the entire 2000-2010
period, with the deficit increasing from around 8 percent of GDP in 2000 to around 17 percent
of GDP in 2010, given the larger annual growth rates of imports compared to exports. This, in
turn, partially explains the nominal depreciation of the Tanzanian Shilling during the period (76
percent depreciation between the annual averages of 2000 and 2010). On average, the import
cover remained at around 6.4 months for the 2002-2010 period.

During the same period, the capital and financial account remained positive, fuelled by large
capital transfers and large FDI inflows. In nominal US dollar terms, FDI inflows more than
doubled (from below USD 300 million in 2000 to around USD 700 million in 2010), representing
around 3.3 percent of GDP on average during the same period (UNCTADStat, (2012)). The
overall Balance of Payments remained in surplus in the main part of the period.

According to OECD-DAC (2012) figures between 2000 and 2010, Tanzania has been the second
largest receiver of ODA in Africa, receiving on average around 6.2 percent of total African ODA
per year. Furthermore, ODA represented around 11.5 percent of annual GDP on average during
the same period. These large inflows have immensely contributed to the country’s
socioeconomic growth, but given the Government’s will to decrease donor dependence, the ODA
inflows are likely to decrease during the next 15 years.

8 World Bank, (2012), Tanzania Economic Update: Stairways to Heaven.

12
The LTPP growth and competitiveness-related policies will aim at improving the business
environment and developing the value-addition chain, which will eventually increase the
country’s exports value (and reduce the trade deficit) and increase the level of FDI inflows.

2.4 Development Dynamics: Growth and Poverty Reduction Nexus

The sustained average economic growth rate of around 7 percent that was enjoyed over the
2000-2010 period was mainly due to economic and financial reforms and prudent monetary
and fiscal policies, all of which promoted domestic and foreign investments. This growth did
not, however, have a significant impact on poverty reduction.

For example, between 2000/01 and 2007, the proportion of Tanzanian households that were
below the basic needs poverty line only fell from 35.7 percent to 33.6 percent (PHDR, (2009))9.
This shows that growth has not been broad-based and pro-poor, the main reasons for this being
the fact (i) that the main income source remains agriculture, where the growth rate has been
relatively low, and (ii) that the growth happened mainly in sectors generating less employment.
However, existing evidence suggests that the poor have increased their access to publicly
provided social services such as education and health, indicating that some benefits of growth
have been re-distributed in favour of the poor (issues of quality notwithstanding). The challenge
ahead is to ensure that the economy continues to register sustained high growth and that such
growth is pro-poor, either inherently or through growth and re-distribution.

2.5 Productive Sectors

2.5.1 Agriculture

Despite the sector’s low growth rates over the past decade and its declining share in total GDP,
agriculture remains one of the dominant sectors in employment generation and export
earnings. As shown in Table 2.1, the share of agriculture in total GDP gradually declined from
around 29.5 percent in 2000 to 24.1 percent in 2010. The sector has grown at an average annual
rate of 4.3 percent between 2001 and 2010. Furthermore, the sector contributed an average of
29 percent of GDP (Economic Survey, (2010)) over the 2005-2010 period and over 24 percent
of the country’s export earnings in 2010 (WITS, (2012)) .

While it is still strong, there are indications that the sector’s dominance as a source of
employment is decreasing. Employment in agricultural activities represented 77 percent of
national employment in 2006, compared to 84 percent in 2000/0110. This 8 percentage points
decline in the sector’s share of employment during the last five years can be explained by the
structural transformation that tends to accompany economic development11.
Table 2.1: Decomposition of Agricultural Sector (percent share), Nominal GDP
Sub Sectors 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Crops 69.5 69.8 70.7 72.0 72.2 70.6 69.8 70.0 70.5 70.6 69.9
Livestock 16.3 16.5 15.9 15.4 15.5 17.1 17.5 17.4 17.5 15.5 15.0
Forestry and
8.6 8.3 7.9 7.5 7.5 7.5 7.8 7.7 7.6 8.5 9.5
Hunting
Fishing 5.7 5.5 5.5 5.1 4.8 4.9 4.9 4.9 4.4 5.4 5.6
Agricultural
29.5 32.6 32.2 32.2 33.0 31.5 30.1 29.6 29.4 28.4 24.1
GDP (% of total)
Source: URT, (2010), Economic Survey, POPC’s computation

9 The national basic needs poverty line is set at TShs. 13,998 per adult for 28 days, for Tanzania mainland as a whole.
This data is displayed in: United Republic of Tanzania, (2007), Household Budget Survey, or HBS (2007).
10 URT (2008), Economic Survey 2007
11 URT and USAID, (2011), Tanzania Growth Diagnostics.

13
There are also positive indications that labour productivity is increasing. Tanzania’s labour
productivity growth, measured in value added per agricultural worker, is reported to have
increased from around USD 210 in 1990 to USD 290 in 2009 (URT-USAID, (2011).
Table 2.2: Growth Rates in the Agricultural Sector (at Constant 2001 Prices)
Economic Period
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Activity Average
Agriculture 4.4 4.9 5.0 3.2 5.9 4.4 3.9 4.0 4.6 3.2 4.1 4.3
Crops 4.7 5.3 5.6 3.2 6.6 4.4 4 4.5 5.1 3.4 4.4 4.7
Livestock 3.9 4 2.8 2.2 4.1 4.4 2.4 2.4 2.6 2.3 3.4 3.1
Hunting and
4.8 3.6 3.3 3 2.7 3.6 4.6 2.9 3.4 3.5 4.1 3.6
Forestry
Fishing 2.9 4.8 6.8 6 6.7 6 5 4.5 5 2.7 1.5 4.7

Source: URT Economic Survey 2010, POPC Computation.

A brief overview of the growth rates in each of the agricultural sub-sectors is given below.

2.5.1.1 Crops

Crops are the most important undertaking in agriculture. Besides accounting for a significant
amount of the agricultural sector’s output (as indicated above), the sub-sectors’ contribution to
food availability and household food security cannot be overemphasized. Crop production, and
in particular the production of grains, is positively linked to the reduction of food-related
poverty and the cost of living for wage earners in general.

Food self-sufficiency, measured by the Food Self-Sufficiency Ratio (FSSR), has been fluctuating
over the 2000-2010 period, as shown in Figure 2.4. Overall, there has been successful assurance
of food security for Tanzania,
which has been accompanied by Figure 2.4: Trends of Food Self Sufficiency Ratio and
a declining trend in the Poverty Indicators (%)
proportion of food poverty.
However, there were some
districts which experienced
food insecurity. The sub-sector
has grown at an average rate of
4.3 per year (between 2000 and
2010), but this growth has been
erratic, with high growth
periods following comparatively
low growth rates. As such, there
is a need to further improve
productivity (through increased Source: MAFC (2010)
irrigation, mechanisation and
use of fertilizers, amongst others). Removing the pockets of food insecure population will
require deliberate policy actions and more directed resources, including improving
transportation networks from food producing zones to markets and needy districts.

2.5.1.2 Livestock

Representing around 16 percent of agricultural activities, livestock ranks second within the
agricultural sector in terms of its contribution to GDP. The estimated 2010 official statistics
reveal that there are 19.2 million cattle (out of which 680,000 were for milk), 13.7 million goats
and 3.6 million sheep (for 2011 21.3 million cattle). Other livestock kept in the country include
1.9 million pigs, and 58 million chickens, out of which 23 million are ‘improved’ chickens and 35

14
million are indigenous poultry. Out of the 23 million ‘improved’ chickens, 7 million are layers
and 16 million are broilers.

Despite being the third largest producer of livestock in Sub-Saharan Africa (with an average of
4.3 percent of GDP), the sector’s contribution to the economy is very limited. It also contributed
less than its potential as an important source of nutrition. The nation’s average annual per
capita consumption, estimated at 12 kg of beef, 43 litres of milk and 75 eggs is below the World
Food Organization’s standard of 50 kg of beef, 200 litres of milk and 300 eggs per annum. On the
export side, the presence of diseases, such as the Foot and Mouth Disease (FMD), the Contagious
Bovine Pleuropneumonia (CBPP), the African Swine Fever (ASF), the Newcastle Disease (ND)
and other transmittable animal diseases, acts as a barrier to the export of animals and other
related products. The sector is also facing a problem of non-compliance to new market demands
like the Livestock Identification and Traceability System (LITS) and Animal Welfare.

Common sources of meat include indigenous cattle, sheep and goats, poultry, pigs, game and
non-conventional animals. Cattle produce 53 percent of the meat, whereas sheep and goats
contribute about 22 percent and the remainder from pigs, poultry and non-conventional
animals. Total meat production rose from 323,000 tonnes in 2000/01 to 499,673 tones in
2010/11, an increase of 56 percent.

Production of eggs, mainly from indigenous chicken, contributes almost 100 percent and 20
percent of eggs consumed in rural and urban areas respectively. Whereas commercial layers
contribute more than 80 percent of all eggs consumed in urban and peri-urban areas about 46
percent of commercial layers are kept in about 8 percent of smallholder households up-country,
keeping less than 50 chickens. 36 percent of commercial layers are kept by medium and large
farms keeping an average of 500 chickens. Total egg production has increased from 600 million
in 2000/01 to 3.3 billion in 2010/11. Mortalities have fallen from 90 percent to 4 percent as a
result of the use of I-2 vaccine against Newcastle Disease (NCD) and improved housing and
feeding.

As for milk, production is mainly from cattle. Dairy goats are also gaining popularity as a source
of milk, particularly for the poor, and their milk is normally consumed at household level. Total
milk production has increased from 814 million litres in 2000/01 to 1.74 billion litres in
2010/11. Currently, only about 10 percent of the marketable surplus of milk produced annually
is filtering through into the urban markets and processing plants, on account of remoteness and
poor infrastructure for the collection and marketing of milk.

Hides and skins are the main export products in the livestock sub-sector. Data on collection and
export of hides from the varied sources (cattle, goat and lamb) show that the values of collected
and exported hides and skins were steadily increasing from 2002 onwards, peaking in 2008 but
subsequently declining (on account of the global financial crises). In 2010/11, 1.7 million pieces
of cattle hides, 2.1 million goat skins and 83,000 pieces of sheep skins worth TShs. 17.4 billion
were exported, compared to 739,315 pieces of cattle hides, 1.9 million of goat skins and 176,000
pieces of sheep skins worth TShs. 8.2 billion exported in 2009/2010. In 2008/09, a total of
982,668 million pieces of cattle hides, 2.7 million pieces of goat skins and 769,936 pieces of
sheep skins worth TShs. 12.8 billion were exported.

Export and value adding activities in this sector are constrained by a prohibitive business
environment, characterised by: (i) inadequate transportation and communication infrastructure
for collection of the raw material (hides and skins), (ii) high costs of processing (on account of
the need to import raw materials) and the high cost of utility, (iii) limited awareness of the value
of the raw material among herdsmen and farmers, (iv) flaying practices (and equipment)
inconsistent with high levels of quality and recovery, (v) rudimentary technology at butcher

15
slabs and abattoirs resulting into most of the raw hides/ skins collected being of low grade, and
(vi) stiff competition from imported leather products.

2.5.1.3 Forest, Beekeeping, and Wildlife

The Forest and Beekeeping sub-sectors

Forest and beekeeping accounted for 3 percent of GDP (both figures on average for the 2000
2010 period). Tanzania has 33.4 million hectares (ha) of forests and woodlands representing 38
percent of total land area (FAO 201012). The plantation forests cover about 240,000 ha of total
land area (FAO 2010). Forests supply a variety of wood and non-wood forest products, offer
employment, revenue from the sale of wood and non-wood forest products and services, and
contribute to poverty reduction. The sub-sector provides 3 million person-years of employment
(MNRT 200813). The noticeable contribution of the sub-sector to the national economy is due to
increasing demand for forest goods and services, macroeconomic changes and globalization.
There is also a great potential for forest sub-sector to benefit from Payments for Environmental
Services (PES) initiatives. Environmental services include watershed protection, forest
conservation, biodiversity conservation, carbon sequestration and landscape beauty in support
of eco-tourism. PES provides direct incentive to encourage sustainable forest management.

Tanzania has about 240 000 ha of plantation forests (owned by government, private industrial
and small scale woodlots, and medium sized plantations owned by small holders. This area is
Tanzania has about 240 000 ha of plantation forests (owned by government, private industrial
and small scale woodlots, and medium sized plantations owned by small holders. This area is
small compared to the demand for forest products in the domestic and export markets. Annual
consumption of wood fuel is around 50 million m3 while sustainable supply is around 18 million
m3. Industrial wood demand by year 2025 is forecasted to be 3.7 million m3 (Table 2.3).
Table 2.3: Forestry area information for Tanzania (selected years) in hectares.
1990 1995 2000 2005 2O10
Forest 41 494 929 39 478 286 37461 644 35 445 001 33 428 359
Other wooded land 18 183 389 16 542 376 14 901 364 13 260 351 11 619 339
Other land 28 901 682 32 559 338 36 216 993 39 874 648 43 532 303
Inland water bodies 6 150 000 6 150 000 6 150 000 6 150 000 6 150 000
Total country area 94 730 000 94 730 000 94 730 000 94 730 000 94 730 000
Source: MNRT, 2010

Tanzania is capable of supporting up to 9.2 million productive bee colonies in her forests,
woodlands and farm areas. The potential production from these honeybee colonies is estimated
to reach 138,000 and 9,200 tons of honey and beeswax respectively per annum.

At the present, Tanzania produces about 4,860 tons of honey worth 4.9 billion shillings and
about 324 tons of beeswax worth 648 million every year. This amount accounts for only 3.5% of
the existing potential of the beekeeping industry. The beekeeping sub-sector has not been
utilized at its full potential. Table 2.4 shows the beeswax and honey exports from 1995 to 2011.

12 FAO 2010. Global Forests Assessment Report, Rome. 340 pp

13 MNRT 2008. Tanzania Forest Sector Outlook Study: 2008-2018. Forestry and Beekeeping Division. 142pp

16
Table 2.4: Tanzania Export Statistics for Honey and Beeswax for 1995-2011
Beeswax Honey
Year Metric Tons Value in TZS Value in US$ Metric Tons Value in TZS Value in US$
1995/96 226 477,424,113 782,662 56 45,420,532 74,459
1996/97 326 836,303,796 1,359,844 311 227,607,933 370,094
1997/98 449 996,153,837 1,532,544 190 154,163,826 237,175
1998/99 403 1,014,211,97 1,440,678 39 24,184,518 35,533
1999/00 643 5
1,897,251,76 2,405,550 156 132,581,766 167,698
2000/01 370 845,432,0006 1,056,790 12 11,800,000 14,760
2001/02 235 555,856,200 617,618 -- -
2002/ 03 592 1,776,000,00 1,776,000 823 905,443,000 905,443
2003/04 332 0
1,165,490,00 1,165,490 821 1,091,861,639 1,087,657
2004/05 288 0
1,166,384,69 1,241,100 465 544,513,855 779,718
2005/06 302 8
1,645,246,56 1,403,794 148 187,616,236 159,809
2006/07 413 8
2,360,210,62 1,836,413 370 521,265,423 422,589
2007/08 428 0
2,213,368,56 1,891,768 94 88,357,833 80,892
2008/09 297 0
1,956,533,46 1,379,832 621 1,222,852,355 915,556
2009/10 330 1
2,141,519,74 1,427,680 291 686,457,890 457,639
2010/11 534 9
3,898,239,82 2,598,826 343 2,181,319,119 1,454,212
Source: MNRT, 2010 6

Table 2.5 shows the potential areas for beekeeping in Tanzania. Investors are invited and
encouraged to invest in beekeeping sub-sector for the following reasons:
i) Tanzanian honey is appreciated in the world market because of its flavour and the fact
that it is "organic" (free from chemical pollution).
ii) There are strong local and export markets for bee products (honey, beeswax, and
propolis).
iii) Beekeeping industry is sustainable because honey bees area natural part of the
ecosystem.
iv) Beekeeping is a profitable venture because the initial capital outlay is relatively low
compared to other business ventures.
Table 2.5: Beekeeping potential areas (honey in tons)

High producing area Medium producing area Un-exploited areas

District Potential Actual District Potential Actual District Potential Actual
Kahama 4,00 500 Kondoa 3,000 300 Lindi 8,000 50
0 8,00
Mpanda 1500 Kiteto 2,000 250 Songea 6,000 50
0 6,00
Sikonge 2000 Babati 1,200 150 Iringa 5,000 40
Urambo 0 6,00 1400 Kibondo 4,000 250 Biharam 4,000 15
Nzega 0 4,00 400 Handeni 3,000 150 ulo
Kasulu 4,000 5
0 5,00
Tabora 1200 Kigoma 3,000 100 Newala 4,000 15
0 6,00
Chunya 400 Arumeru 1,500 100 Tunduru 4,000 15
0
Manyoni 8,000 600 Rufiji 2,500 50 Singida 3,000 5
Bukombe 5,000 800 Nkasi 1,500 50 Hai 2,500 5
Total 52,000 7,800 21,700 1,400 40,000 180
Source: National Beekeeping Programme, 2001

17
The main challenge to the sub-sector is to bring about the improvement of the contribution of
forests and bee resources to the environmental conservation and production of forest and bee
products and services simultaneously in order to meet the changing demands of forest and
beekeeping product users and beneficiaries in a sustainable manner. The low contribution of
forest and beekeeping sector to the Gross Domestic Product is caused by unrecorded
consumption of wood fuels, bee products, catchment and environmental values and other forest
products and services. The difficulty of examining forestry in the context of economic growth
arises from the fact no markets exist for many of the sector’s contributions to the economy and
population. Hence, there is no objectively verifiable monetary value in which these services
could be measured. Water services, biodiversity, climate regulation, and cultural values are
examples of such forest services. Many transactions related to forest products and services, fall
within the informal sector or are undertaken illegally and are hence not recorded. Examples
include the sale of non-timber forest products or illegal logging for timber and charcoal.

The Tanzania's deforestation and degradation is estimated at 403,000 ha per annum between
1990 and 2010, equivalent to 1.16% of the country's total forest area (FAO 2010). The main
causes of deforestation are rapid population growth, poverty, clearing for agriculture, wildfires,
policy and market failures, persistent reliance on wood fuel for energy, over exploitation of
wood resources, lack of appropriate land use practices, and non adherence to existing ones.
Deforestation and degradation are taking place in both reserved and unreserved forests but
more so in the unreserved forests due to inadequate resources to implement active and
sustainable forest management.

Climate change may adversely affect forests. Most of the forests across Tanzania are projected
to shift towards drier regimes with doubling of CO2 in the atmosphere (URT 200714).

Other key challenges to the sector include:

a) Unsustainable forest management as a result of lack of mechanisms to guide joint
management arrangements.
b) Unsustainable harvesting and utilization of forest and bee resources.
c) Limited human and financial resources and lack of regular forest and bee resources
assessment and monitoring.
d) Lack of proper land use plans, slow pace of village titling hamper the devolution of
management responsibilities.
e) Fragmented forest resources administration (Central Government & Local Government).

Wildlife sub-sector
Tanzania has abundant and diverse wildlife resources and is considered having the most wild
and pristine wildlife protected areas (PAs) in Africa. The present network of PAs comprise 14
National Parks, Ngorongoro Conservation Area, 33 Game Reserves and 43 Game Controlled
Areas (GCAs) which cover approximately 233,300 kM2 (28%) of the total Tanzania's land
surface area (URT 1998). The network of protected areas and wetlands are important to the
economy in terms of game viewing; tourist and resident hunting; wildlife farming, breeding and
ranching; eco-tourism; and zoos, game sanctuary and ecological support critical for sustainable
development.

14URT 2007. National Adaptation Programme of Action (NAPA). Vice President's office, Division of Environment pp
52

18
Other wildlife economic activities include capture and trade of live animals, trade in bush meat,
skins and other products such as biltong, and farming of specific wildlife species. These
products could offer potential growth opportunities, but markets, production facilities and the
necessary policy framework do not adequately support expansion of these activities. Hunting is
not the only way in which Wildlife contributes to growth. The national parks, conservation area,
game reserves and now wildlife management areas attract high numbers of tourists for game
viewing and photo tourism, all of which are non-consumptive activities that contribute
significantly to the tourism sector.

Wildlife economic activities are also found in areas outside the PAs and therefore not confined
to PAs. Other areas include some forest reserves, village land and general land, which serve as
corridors, migratory routes and dispersal areas for the wildlife, and therefore important in its
conservation.

Wildlife Sub Sector faces a number of challenges. The main ones include:

a) Increasing poaching and sophistication of poaching techniques that pose danger to both
wildlife species as well as to the staff
b) Encroachment of wildlife areas due to planned and unplanned human developments
(agricultural activities, settlements, livestock),
c) Inadequate human and financial resources for effective wildlife management,
d) Inadequate staff motivation/remuneration
e) Inadequate equipments including vehicles, tents, arms and ammunitions, GPS, and
machines for effective management of wildlife areas
f) Poor infrastructure development such as roads, airstrips, and housing.

2.5.1.4 Fishing

The share of fishing in agricultural activities has remained fairly constant over the last decade
(see Table 2.1), ranging between 4.4 percent and 5.7 percent per annum, and a period average
of 4.6 percent. Its annual growth rate has been less stable. Starting from a low 2.9 percent
annual growth in 2000, the sector’s growth rate hovered around 6 percent between 2002 and
2005, and has since steadily dropped to 1.5 percent in 2010 (Table 2.2). The decrease in growth
between 2009 and 2010 has been attributed to poor fishing gears, destruction of hatcheries and
the decline of demand for fish in external markets.

Given the abundant fertile land and water for irrigation, Tanzania is poised to be a food surplus
country and exporter of many products to the region and the international market. The sector’s
successful development will entail surmounting the following challenges:
a) overdependence on and vulnerability to weather patterns and climate change;
b) poor and/or complete lack of physical, financial, human and institutional infrastructure
to support production and distribution;
c) inadequate and erratic use of science and technology in the area;
d) lack of and/or inappropriate agricultural financing and pricing mechanisms;
e) high cost and erratic supply of inputs;
f) limited investment in R&D leading to limited or no improvements in the sector;
g) minimal participation in the agricultural value addition chain;

19
 h) land tenure system that is not responsive to agricultural development investment
promotion needs which ultimately leads to competing use and costly conflicts, rapidly
depleting natural resources, due to unsustainable management, utilization and the
proliferation of illegal activities (e.g. trafficking of these resources) in the respective sub-
sectors; and
i) poor genetic potential of the local stocks for livestock.

2.5.2 Industry

Industry in its broad definition includes manufacturing, mining and quarrying, construction,
energy and water. Table 2.6 displays the share of each of the sub-sectors in the total industrial
GDP, and as can be seen, manufacturing has been the largest industrial activity throughout15.
Table 2.6: Industrial GDP divided into sub-sectors (share of total industrial GDP)
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Manufacturing 48.9% 46.5% 42.2% 39.5% 39.0% 38.3% 37.5% 36.7% 37.3% 39.3% 40.1%
Construction 28.7% 29.0% 34.5% 38.1% 38.1% 37.7% 37.6% 37.1% 36.7% 36.1% 35.6%
Mining and
8.2% 9.8% 10.7% 11.4% 12.3% 13.8% 15.5% 16.8% 16.2% 15.2% 14.9%
Quarrying
Electricity, gas 11.6% 12.0% 10.2% 9.0% 8.5% 8.2% 7.4% 7.6% 8.1% 7.8% 7.9%
Water supply 2.6% 2.7% 2.4% 2.1% 2.1% 2.1% 2.0% 1.9% 1.8% 1.7% 1.6%
Source: Economic Survey (2010)

2.5.2.1 Manufacturing

Manufacturing has a special role to play in the economy, in terms of championing innovation in
science and technology. The sector also has to lead the envisaged competitiveness drive and
economic transformation towards Vision 2025. After a lacklustre performance during much of
the 1980s and early 1990s, the sector picked up modestly thereafter though it has not been able
to record double digit growth rates. Over the 2000-2010 period, the sector has been grown at an
average of 8 percent per annum in real terms (with a peak of 9.6 percent in 2005), and
contributing an average of 8.9 percent to GDP in real terms. The sector accounted for an average
of 12.7 of total exports (with a peak of 26.1 percent in 2010) and 14.7 percent of non-traditional
exports (with a peak of 29.2 percent in 2008) (Economic Survey, (2010)).

The manufacturing sector is currently dominated by food processing. In 2010, for example, this
sub-sector ranked first in terms of gross output, employment and value added, accounting for
23.6 percent, 40.9 percent and 26.7 percent of total manufacturing, respectively. Large scale
enterprises dominate, with their location skewed to Dar es Salaam, Tanga, Arusha, Mwanza,
Morogoro and Iringa.

Manufacturing can enhance its role in the economy given (i) the resource abundance in primary
products, especially the agricultural products (in its broad sense) and the minerals and non-
metallic products (including oil and gas), (ii) the unsatisfied demand for manufactured products
in both the domestic and external markets, and (iii) the human resource base for employment
creation.

The sector has been constrained by both policy-related and sectoral factors. At the policy level,
the issues relate to the nature and implementation of industrial policies, the sector’s inward-
looking orientation and sustainability issues. At the industry level, the issues relate to structural
constraints, low capacity utilization, high production costs due to infrastructural impediments,

15The ‘electricity and gas’ and ‘water supply’ sub-sectors will be dealt with in the ‘energy’ and ‘water supply and
sanitation’ sections of this Plan.

20
eroding the sector’s competitiveness, competition from cheaper imports, weak forward and
backward linkages, low export drive and high costs of doing business.

2.5.2.2 Mining and Quarrying

Tanzania is endowed with rich mineral resources, though the full potential of the sector is yet to
be realized. Mining is an important employment generating activity, especially in small scale
mining. Since independence, mineral development was done by the State through its agency, the
State Mining Corporation (STAMICO). Liberalization of trade in minerals in the 1990s led to
increased local and foreign investments, attracting large global mining companies, especially in
the gold sub-sector.

Mainly as a result of the aforementioned policy change (especially in the economic and legal
spheres), the mining industry experienced a boom in both mineral exploration and mining
activities. Notable developments included the increased production from five large-scale gold
mines (Nzega, Geita, Bulyanhulu, North Mara and Tulawaka).

Nevertheless, gemstone and other precious metals have a low integration in the domestic
economy. On the other hand, minerals for industrial use/intermediate products such as coal,
iron ore, uranium, titanium, kaolin, phosphate, niobium gypsum, limestone, etc. have a relatively
high integration with the domestic industrial production. The sector’s growth in real terms was
relatively high in the early 2000s (with a peak of 17.1 percent in 2003), but slumped after 2007
to single digit rates, reaching 2.7 percent in 2010 and a GDP contribution of 2.4 percent, as the
initial upsurge in investments faded.

The performance of mineral exports has recently been improving, mainly due to the rising gold
price on international markets, itself caused by an increasing demand to hedge against
depreciating currencies and other financial assets. The future development of minerals will
most lead to large increases in Government revenues and might positively affect GDP levels.

The mining sub- sector has continued to face challenges, in particular:

a) low integration with other sectors of the economy;
b) low penetration of national/local suppliers and contractors in the sector;
c) slow development of small-scale mining;
d) low capacity of the Government to monitor the sector and leverage sufficient returns,
e) low levels of value-addition;
f) low levels of human capital and skills development (for high-end as well as low-end
jobs),;
g) high environmental degradation.
h) unsustainable development and health and safety hazards.
In view of these challenges, the Government formulated the new Mineral Policy of 2009 and
Mining Act 2010 with the objective of increasing the mineral sector’s contribution to GDP and
integrating mining industry with the rest of the economy in order to alleviate poverty.

2.5.2.3 Construction

The construction sub-sector represents a significant industrial activity, which has the potential
to create a large amount of employment opportunities. About 9 percent of Tanzania’s workforce
is employed in this sector (World Bank, Enterprise Survey (2006).

21
Construction activities are overseen by the Ministry of Works. Two other public institutions are
also important: (i) the Prime Minister’s Office, Regional Administration and Local Government,
responsible for urban, district and feeder roads, and (ii) the Ministry of Water and Irrigation,
responsible for the constructions related to water and irrigation development.

There are a number of agencies involved. The Tanzania Roads Agency (TANROADS) has been
the main executing organ for development, construction, maintenance and repair of trunk and
regional roads and bridges, facilitated mainly by the Roads Fund Board. The Roads Fund money
finances maintenance and development of both national roads (trunk and regional roads)
managed by TANROADS and local roads (district, feeder and urban roads) managed by the Local
Government Authorities (Councils). The Act that established the Roads Fund stipulates that at
least 90% of the funds should be allocated for roads maintenance and that at most 10% should
be allocated for roads development.

The Tanzania Building Agency mainly deals with the construction of public residential
properties (especially for Government officials). The National Housing Corporation (NHC)
facilitates the provision of serviced land, housing and other buildings. The private sector has
been active in the construction of both commercial and residential houses.

The sector’s annual real growth increased from 0.1 percent in 2000 to 10.2 percent in 2010,
peaking 15.6 percent in 2003. The sector recorded its highest share of GDP in 2010 (7.0
percent), attributed to increases in construction and rehabilitation of roads and bridges,
residential and non-residential buildings, airports and water infrastructures.

The sub-sector faces challenges related to:

i) low financing and inadequate funds for maintenance, rehabilitation and upgrading of
roads;
j) inadequate capacity of local experts (contractors, engineers, architects and quantity
surveyors) in terms of number, skills and equipment;
k) high cost of construction;
l) Attaining international competitiveness on the modes of supply i.e., World Trade
Organisations (WTO), East African Community EAC) and Southern African Development
Community (SADC);
m) Small share in work opportunities for local contractors and consultants;
n) Lack of adherence to environmentally friendly products and practices;
o) Lack of harmonisation of different laws and regulations (domestic and international)
governing the construction industry in relation to trade facilitation and regional
integration;
p) Need to improve professional conduct in the construction industry;
q) Need to improve institutional processes to speed procedures.

2.6 Infrastructure

Quality infrastructure plays a major role in economic development. In order to compete

regionally, particularly in the EAC and internationally, rural areas require adequate access to
transport, energy and telecommunications infrastructure. The main goal in infrastructure and
services provision is to minimise rural-urban differences in the supply and quality of facilities.
This will facilitate the extension of the benefits of socioeconomic development across and
within regions. Rural areas will therefore benefit from the investment in infrastructure included
in this Plan.

22
Tanzania serves 8 landlocked countries. It is therefore imperative to ensure that the potential
transit traffic is not diverted to alternative routes. Currently, the infrastructure and service
development in railways and ports is inadequate. Some traffic has been diverted from the Dar es
Salaam Port to ports in neighbouring countries. Tanzania therefore strives to invest in the
modernisation and expansion of road, railways, sea ports, airport, and lake ports to link up with
the regional network in order to ensure reliability and safety.

The development of infrastructure faces serious challenges, among which is inadequate

investment due to budget constraint. This limits efforts to rehabilitate and modernize
infrastructure for energy, railways, harbours and airports, roads and ICT.

2.6.1 Transport

The contribution of the transport sector to GDP has been fairly stable, ranging between 5.1
percent and 5.4 percent of GDP between 2000 and 201016. It accounted for about 5.6 percent of
GDP in 2010 despite the sector’s annual average growth rate of 6.1 percent over the period.
Performance has improved due to both Government and private sector investments in road
rehabilitation, modernization of port services and improvement of marine and air services.
Overall, the sector’s growth was 7 percent in 2010, slightly up from the 6 percent growth
recorded in 2009 (Economic Survey, 2010).

2.6.1.1 Road sub-sector

Road transport is the dominant mode of transport in Tanzania, accounting for over 90 percent
of passenger traffic and over 75 percent of freight traffic17. In the long term, the objective is to
improve other modes of transportation in order to have an efficient and integrated transport
system. Extending the road network to rural areas where the majority of Tanzania’s poor has
been a challenge. Only 24 percent of Tanzania’s rural population lives within two kilometres of
an all-weather road18. This makes the flow of goods and services to and from the rural areas
difficult and expensive. It has also inhibited the country’s ability to effectively utilize its
geographical location. Table 2.7 portrays the current state country’s road infrastructure.
Table 2.7: State of Road Infrastructure in Tanzania, 2010 (km)
Road Class Paved Unpaved Total
Trunk Roads 5,479 7,307 12,786
Regional Roads 841 20,264 21,105
District, Urban, Feeder, Roads 746 51,835 52,581
Total 7,066 79,406 86,472
Source: TANROADS and PMORALG, 2011.

Trunk roads link regions and neighbouring landlocked countries and the rest of the world. The
East African Community’s effort to develop the East Africa Road Network project under partner
states national plans encountered challenges. Tanzania has the lowest road density in the East
African region, with only 103m/km² (and only 7.4 m/km² for paved roads) (Table 2.8).

16URT, (2011), Economic Survey 2010.

17JICA Comprehensive Transport and Trade System Development Master Plan: Progress Report, December 2011).
18 Africa Infrastructure Country Diagnostic, (2010), “Tanzania’s Infrastructure: A Continental Perspective”, The

International Bank for Reconstruction and Development / The World Bank

23
Table 2.8: Road Density in Some East African Countries*
Country Particulars
Total Network (m per sq.km) 261.9
Kenya
Paved network (m per sq.km) 15.2
Total Network (m per sq.km) 330.8
Uganda
Paved network (m per sq.km) n.a.
Total Network (m per sq.km) 96.5
Tanzania (mainland)
Paved network (m per sq.km) 5.0
*Excluding Rwanda and Burundi
Source: Poverty and Human Development Report (PHDR, 2011)

The main challenges in the road sub-sector include:

a) inadequate funding for periodic maintenance and development projects: More than 92%
of the road network is unpaved and is therefore unstable during the rainy season;
b) overloaded vehicles, which cause damage to road pavements and reduce its lifespan;
c) inefficiencies of design and supervision, which adversely affects implementation of
projects;
d) low skills
e) lack of working facilities/capacity in local construction industries.

2.6.1.2 Railway sub-sector

Railways provide a relatively cheap and safe service for transportation of passengers and freight
within the country and for the neighbouring land-locked countries. However, the national
railway services have not been satisfactory.

There are currently two public organizations providing railway services. First, the Tanzania
Railway Limited (TRL) manages a network of 7 lines with a total length of 2,724 km of single
track Metre Gauge railway network, travelling across 12 out of the 21 regions of Mainland
Tanzania. This service is operating below capacity, with the volume of freight and passengers on
a declining trend owing to a lack of maintenance and the subsequent deterioration of the
infrastructure and facilities. The second one is the Tanzania Zambia Railway Authority
(TAZARA), which operates a 1,860 km line between Dar es Salaam and Kapiri Mposhi in Zambia
(975 km of it lies is in Tanzania). While freight tonnage on the line has been growing at an
average rate of 18.1 percent a year for the past 3 years, the shortage of locomotives and the
poor state of the passenger rolling stock has led to a substantial decrease in the number of
passengers originating from both countries. Improvements in the railway performance will,
apart from other benefits, relieve roads from persistent damage due to its excessive use, as
bulky traffic will be carried by a more efficient and durable railway infrastructure, hence
lowering roads maintenance and rehabilitation costs.

The railways infrastructure is a gateway within the EAC for domestic and transit cargo through
the ports. Hence, the East African Railway Master Plan are complementary to the Plan.

The challenges for the railway that have severely impacted the effective and efficient provision
of railway services include:
a) the dilapidated infrastructure (following inadequate investment in maintenance and
rehabilitation of railway lines);
b) outdated locomotives and wagons; and
c) outdated permanent way (leading to high maintenance cost).

24
2.6.1.3 Air Transport sub-sector

The conditions of basic airport infrastructures (runways, aprons, taxiways, buildings and
equipment) for most of the airports in Mainland Tanzania are poor. As a result, safe, reliable,
and comfortable air transport services are assured only during the dry season. Despite these
constrains, the air transport sub-sector has registered steady growth, with the number of
passengers growing by 7 percent, aircraft movement by 13.8 percent and the amount of cargo
(in tonnes) by 17 percent in 2010/11. There are a total of 7 licensed air operators (as of March
2011)19 and 368 aerodromes, owned, managed and operated by different entities. Tanzania
Airport Authority (TAA) owns, manages and operates 62 airports. There are three international
airports: Mwalimu Julius Nyerere in Dar es Salaam, Kilimanjaro and Zanzibar. The main
characteristics of the aviation industry have been the high cost of air travel (for domestic and
regional/continental flights) as well as inadequate air connections.

The main challenges for aviation are:

a) to develop airports and airstrips to handle traffic to inland destinations, for tourism and
business purposes;
b) to insure the availability of air travel enables potential investors to complete their
transactions in time;
c) to attract more international airlines to fly into Tanzania, through liberalization based
on Yamoussoukro decision; and
d) to develop an aviation industry with the capacity and cost-structure that will facilitate
the transportation of fresh products (cut flowers, vegetables and fruits, meat, fish, etc.),
as there are many areas in Tanzania with the potential to produce these products.

2.6.1.4 Maritime Transport sub-sector

The cargo handled at ports over the past three years (2008/09-2010/11) has, on average, been
growing at 11 percent per annum. Dar es Salaam port continues to be the largest port, handling
about 89 percent of the total cargo traffic (Economic Survey, (2010)). As of 2010, the targeted
market for transit cargo services had not been fully tapped due to the poor performance of the
maritime and inland transport sub-sectors. The aim is to make an optimum use of large
available markets, given the country’s geographical location.

The main challenges for the marine transport sub-sector are:

a) limited capacity to serve container traffic (as demand has been growing fast);
b) infrastructure constraints (especially at berths) and inefficient working facilities;
c) ineffective inland transport system; and
d) inadequate funds to implement development projects.

2.6.1.5 Pipeline sub-sector

As of 2008, Tanzania had 253 km (157 mi) of gas pipeline, 888 km (552 mi) of oil pipeline, and 8
km (5.0 mi) pipeline for refined petroleum products in Dar es Salaam. The TAZAMA crude oil
pipeline accounts for a large portion of the country's crude oil transportation capability. It
currently handles 600,000 tonnes of crude oil per year, although it was designed to handle 1.1
million tons. With the on-going initiatives in natural gas exploration, there is a need to invest
more in pipeline for transportation of gas and crude oil.

19 Tanzania Civil Aviation Website: http://www.tcaa.go.tz/.

25
There are only two functional long distance pipelines in the country: (i) the TAZAMA pipeline,
which transports crude oil from Dar es Salaam to Ndola refinery terminal in Zambia (a distance
of 1,750 km), and (ii) the pipeline which transports gas from Songo-Songo Island to Dar es
Salaam, over a distance of 232 km.

The main challenge in pipeline transport is to expand the services to reach other areas (such as
the Great Lakes region). Hence, the implementation of the long standing pipeline project to
connect Dar es Salaam to Mwanza and Kigoma needs expediting. Similarly, if possible, TAZAMA
should also transport domestic petroleum to regions in Southern Tanzania.

Addressing the constraints inhibiting the growth and development of this sector is important
for the country to become a transportation hub for the region, given its geographical location.
The main challenge is to shore-up the requisite financial, human and institutional capacity to
develop the transport infrastructure and facilities to a level and standard that can enable it to
play this role. Furthermore, it is expected that maintenance remains a priority, accompanied by
a mechanism ensuring the continuous improvement of the sector’s infrastructure.

2.6.2 Energy

The lack of a reliable energy supply has been identified as the main binding constraint to
Tanzania’s growth by the recently concluded growth diagnostic study of Tanzania by a URT-
USAID team of experts. According to the ‘Energy Development Index’, developed by the
International Energy Agency, Tanzania is ranked 60th out of the 64 developing countries.

Looking at the electricity production, increased investment over time has enabled this sector to
increase (i) the installed capacity from 785 MW in 2000 to 1,051 MW in 2010, (ii) the
generation from 2,539 GWh to 3,824 GWh, and (iii) the proportion of population enjoying
electricity from 6 percent in 2000 to 14 percent in 2010.

To approximate the current gap in electricity generation, one could use the elasticity between
GDP growth and electricity demand, which seems to be close to unity in many developing
countries. Given Tanzania’s average annual GDP growth of around 7 percent, electricity
generation should have had to grow at around 7 percent per year during the same period in
order to match increasing demand. This would imply an increase in generation from 785MW to
around 1,550MW. Given the need for a buffer of about 15 percent of total capacity (as of best
country practice (URT-USAID, 2011), this would have meant an electricity generation of about
1,800MW in 2010. Nevertheless, the ‘reserve margin’ of the generation system for the national
grid has been virtually zero since 2006 (URT-USAID, 2011).

It is no wonder, therefore, that per capita electricity consumption is relatively low, estimated at
85 kWh per year compared to 432kWh and 2,176 kWh for Sub-Saharan Africa and World
averages, respectively (WDI, 2012). Besides, the recently added electricity generation capacities
have mostly been either of the intermediate or spike-loads. The base-load generation capacity
has in fact declined due to increased uncertainties in water flows (given the rain shortages).

Among comparator countries in sub-Saharan Africa, Tanzania ranks first in terms of the number
of power outages per month and Tanzanian firms receive the highest share of their electricity
from generators (WB, Enterprise Survey 2006). Access to modern sources of energy in rural and
urban areas has remained low. Only about 14 percent of households in mainland Tanzania are
connected to electricity (TDHS, 2010), with a large disparity in coverage between urban areas
(45.4 percent) and rural areas (3.4 percent) (PHDR, 2011). This low coverage has a negative
impact on forest depletion (due to over-deforestation in search of firewood and charcoal).

26
Improved access to modern energy services is one of the pre-conditions for transforming rural
Tanzania. The country has many potential sources for generation of affordable and reliable
modern energy for domestic and industrial use in rural areas. Despite the immense potentials,
the level of development of these sources is quite low. These sources include renewable energy
development (such as mini-hydropower generation, biomass cogeneration, and solar energy)
and non-renewable sources (natural gas, petroleum and coal). The recognition of division of
energy sources into renewable and non-renewable is pertinent, particularly due to
sustainability and environmental considerations.

2.6.2.1 Renewable sources

Forests contribute to the energy sector in two major ways. First, as a direct source for biomass
energy, namely fuel wood and charcoal. Second, more indirectly, via water catchment and
storage for the hydropower sector. Biomass- based fuels namely fuel wood, charcoal and bio-
residues dominate the energy balance in Tanzania. The most predominant use of wood fuel is in
household for cooking and heating. Other uses are in social centres like schools, hospitals, and
prisons, and SMEs (beer brewing, bread baking, fish smoking and frying, pottery, food vending,
brick making, lime production and processing of beeswax).

Despite this importance of biomass- based fuels to peoples' livelihoods, wood conversion and
utilisation technologies commonly used are inefficient and therefore wasteful. Open three stone
stoves with thermal efficiency of less than 10 percent are commonly used in households, social
centres, beer brewing and food vending. At the same time, charcoal, which is the dominant
urban household energy, is produced in rural areas by using traditional kilns with very low
efficiency (i.e. 15 percent recovery rate). Other simple technologies characterized by low energy
efficient are used in SMEs including fish smoking and brick burning. , All these low energy
efficiency technologies are exerting a huge pressure on forests and therefore causing
deforestation and land degradation.

Considering the increasing demand for energy, it is pertinent to depend as much as possible on
renewable sources of energy. 20 Though hydro-power constitutes about 56 percent of the total
installed capacity, only 12 percent of the country’s proven hydro-power potential has been
developed. Around 90 percent of the total energy consumption in Tanzania comes from bio-
mass fuel. More than 80 percent of the energy derived from biomass (mainly charcoal and
firewood) is consumed in rural areas. There have been few private sector projects aimed at bio
fuel production. Solar energy has been exploited at a very limited scale, due to the lack of
awareness and availability of solar energy equipment. Other renewable sources (like the wind
and geo-thermal) have not yet been utilized on any significant scale due to limited know-how of
technology and lack of finance. Solar and wind energy account for less than 1 percent of total
energy production in Tanzania.

2.6.2.2 Non-Renewable sources

Of the proven total potential of 13,200 million tonnes of coal, only 0.04 percent is developed per
annum21. The substantial natural gas deposits discovered in the southern coastal areas at
Songo-Songo and Mnazi Bay have not yet been utilized due to delays in development of efficient
thermal generating capacity. Tanzania has about 5 trillion cubic feet of proven natural gas
reserves, which represent 24 years of reserves at current levels of production and more than
100 years of reserve if probable reserves are taken into account22. The increase in future gas

20 Data source for this paragraph: URT-USAID, (2011)

21 TANESCO(2010) Demand Side Management Programme in Tanzania, Presentation to a Workshop on Global Energy
Efficiency, Washington, DC.
22 As of end of February 2012, according to Reuters, the proven reserves have been raised to over 10 trillion cubic

feet (given the new Statoil discoveries along Tanzanian coastline).

27
production will lead to significant increases in Government revenue, and will positively affect
the country’s GDP levels. The electricity generation depends a lot on petroleum products, due to
the unreliable nature of national grid supply. Subsequently, about 46 percent of firms in
Tanzania own a generator (WB, Enterprise Survey 2006).

The main challenges faced by the electricity sub-sector include:

a) the lack of large scale investment since 2000, which has led to numerous small-scale
projects, hence translating into a lack of economies of scale in power production;
b) the limited participation of the private players in the energy sector due to the fact that
electricity tariffs are not cost reflective;
c) dependence on expensive foreign oil; and
d) the lack of dynamic demand projections which failed to take into account the huge surge
in demand (due to the development of the mining and industrial sectors).

2.6.3 Meteorology sub-sector

The Tanzania Meteorological Agency (TMA) provides weather and climate services, and thereby
contributes to the well-being of Tanzanians. TMA serves many areas, including air transport,
road transport, marine transport, railway transport, construction industry, agriculture services,
tourism and energy. Nevertheless, the sector’s development has been very limited, and does not
match the country’s needs.

The meteorological infrastructure in Tanzania consists of 28 synoptic stations (of which 16

operate 24 hours/day, 6 for 15 hours/day and the remaining 6 for 12 hours/day), 157
climatology stations, 2,056 registered rainfall stations, offshore marine-meteorological station,
15 agro-meteorological stations (operated by TMA in collaboration with Ministry of Agriculture,
Food Security and Cooperatives (MAFC)), 14 Automatic Weather Stations (AWS) located at
various stations in the country, one upper-air station located at Julius Nyerere International
Airport (JNIA) in Dar es Salaam, one weather radar station in Dar es Salaam, and 2 Numerical
Weather Prediction (NWP) models.

TMA faces several challenges in providing high quality, reliable and timely meteorological
services. The major challenges include:
a) the state of the current observational station network, which is not sufficient to capture
all climatic regimes and the local climate;
b) lack of sufficient data (due to a low density of station networks), which affects research
on climate change monitoring, attribution, and detection;
c) aging telecommunication systems;
d) lack of automatic linkages between the national observing network and the national
communication centre;
e) lack of automatic linkage between TMA and specific meteorological information users,
including media, disaster management institutions, farmers and the local communities
at large; and
f) Climate Computing Project (CLICOM) and the Meteorological Database Management
System (DBMS), both of which need to be upgraded to accommodate more information.

28
2.7 Lands

The issues of accessing and receiving the right to use land for development purposes are critical
for an effective implementation of any plan. As such, the successful implementation of LTPP will
hinge on generating the requisite land distribution and access management framework to
ensure timely availability of land for planned socioeconomic development programmes and
projects. Having many areas with unutilised land in Tanzania does not imply that the same is
easily accessible and could be availed for development activities.

Although all land is owned by the Government, in trust of the Head of State, the largest portion
is under customary law and controlled by villagers. Investors in Tanzania have complained
about the complications related to the acquisition of rights to use land.

According to the 2012 Doing Business report (World Bank, 2012), Tanzania’s overall ranking
declined compared to the previous year, for a large extent because of the issues related to land
acquisition (especially the number of days and procedures required) and property rights.
Globally, Tanzania ranks 158th out of the 183 economies on the ease of registering property,
which has a negative impact on its capacity to attract investors. Tanzania has a lower score than
any EAC country (which rank anywhere between Rwanda (61st) and Kenya (133rd)).

The problem of unplanned and untitled land is holding back sustainable land utilisation. In
2010, for example, the proportion of land which was surveyed and titled or designated for
particular uses was estimated to be about 10 percent of Tanzania’s total land surface. One of the
consequences of this situation is an increase in the number of land disputes among rural
communities, Government agencies, investors and individuals. Such disputes do not only
threaten peace and harmony, but also increase the cost of doing business, which has the
potential of deterring would-be investors. However, about 80 percent of land in Tanzania is in
rural areas, under customary laws, and controlled by villagers through the village assembly.
Based on the village land law (1999), it is difficult for foreigners to own village land unless
proper transfer of land from village land to general land was concluded.

The process of surveying, parcelling and titling land is lagging far behind the demand for
acquiring land, for both settlement and commercial purposes. It is difficult for stakeholders to
acquire land as a commercially viable asset that could be used as loan-collateral.

The ministry attempted piloting projects to prepare land use plans, survey land parcels and
issue Customary Rights of Occupancy (CROs) and Certificates of Occupancy (COs) in various
Districts. However, improving land records has already started by consolidating land records
ready for scanning and put in line with proper records.

The main challenges faced by the sector include:

a) the inadequacy of the comprehensive Integrated Land Management Information System;
b) inadequate capacity in terms of human resource to deliver quality services at LGAs
levels;
c) insecure international boundaries;
d) inadequate National mapping and surveying services;
e) inadequate capacity to establish and operationalize District Land and Housing
Tribunals;
f) increasing land disputes at Village and District levels;
g) absence of a land compensation fund;

29
 h) absence of land bank (due to the absence of village land use plans);
i) lack of awareness of land laws and regulations, and
j) high cost of land surveying due to the absence of basic maps which are currently
obtained by acquiring satellite imagery and aerial photo maps.

2.8 Housing and Human Settlement

Tanzania is facing a growing urban housing shortage, fuelled by the increasing rural-urban
migration trend. In 1995, it was estimated that about 70 percent of the urban population was
living in temporary shelters of squatter/slum areas23. There is no significant improvement to
date. The growing housing shortage is confirmed by overcrowding to around 4 persons per
room and high room rental costs. By 2001, it was estimated that in Tanzania’s urban centres,
about 1,200,000 additional housing units were required24. According to Seleki (2001), about 70
percent of the urban population is living in unplanned settlements, and about 60 percent of the
urban housing stock is to be found in these settlements.

Urban development in Tanzania has been generally heterogeneous, ranging from specially
planned to unplanned dwellings. Studies have indicated that about 32 percent of such dwellings
could be classified as being in bad condition, 51 percent in fair condition and 17 percent in good
condition25. The Housing and Enterprise Survey (2006) highlighted that the reason for the poor
condition are the large number of houses that are financed by own means, given the existing
lack of credit for private real estate projects.

One of the consequences of the rapid urbanisation is the cost of living. The rent rates differ
between the rural and urban sectors, but also within the cities, according to: (i) the distance
from the commercial districts, (ii) the availability of basic human services, (iii) the size, and (iv)
the nature (planned or unplanned) of the property. A 200m² property in most cities on the
mainland would cost around TShs.1.77 million (USD 1,358) per month or around TShs. 7,000 to
TShs 8,800 (USD5–USD7) per m². In Zanzibar, the same could cost as much as TShs. 2.36 million
(USD 1,811) per month.26

There is also a lack of city planning and urban land division according to activity. Homes are
increasingly being surrounded and/or co-existing with commercial establishments. Virtually no
separation has been made between residential and recreational areas. Residential houses are
increasingly turned into shades for commercial and industrial activities. Residential buildings in
many parts of urban Tanzania tend to be concentrated around sea, lake and river shorelines.
Over 90 percent of urban residential houses are within a 5 km radius from the commercial
districts, but also they are increasingly spreading out.

In rural areas, many dwellings are constructed from mud and poles or from mud bricks and
blocks. A smaller percentage of dwellings are made of concrete and stone, or of baked and
burned bricks. Most dwellings lack basic amenities (such as water, sanitation, electricity, etc.).
Piped indoor water is available to about one-fourth of households, and only about half of them
have private toilets.

23 Lugalla, J. L. P. (1997), “Economic Reforms and Health Conditions of the Urban Poor in Tanzania”, African Studies
Quarterly, University of New Hampshire
24 Seleki, B. A., (2001), “Urban Housing Problems in Tanzania: Some Possible Policy Interventions”, Ministry of Lands

and Human Settlements Development, Tanzania

25 See Seleki (2001).
26 See World Bank, Housing and Entreprise Survey (2006).

30
The challenges of the sector, therefore, include:
a) absence of general planning schemes and village land use plans;
b) increase of unplanned settlements in urban areas;
c) poor housing condition;
d) inadequate capacity to carry out research on low cost building materials and
technology;
e) increase in population in urban areas (and its impact on infrastructure facilities);
f) absence of housing cooperatives; and
g) poor mortgage facilities.

2.9 Services

2.9.1 Trade and Commerce

The adoption of economic reforms in 1986 saw, among other developments, a rise in both
exports and imports. However, imports have been increasing at a faster rate than exports,
leading to increasing trade deficits in the country’s trade with other nations. The volume of
trade recorded an increase in 2010 compared to 2009: exports increased by about 30 percent
from USD 3,295 million in 2009 to USD 4, 297 million in 2010, and imports by 22 percent, from
USD 5,834 million in 2009 to USD 7,125 in 2010 (Economic Survey, 2010).

The structure of exports has changed remarkably over time in favour of non-traditional exports.
Traditional exports in this context include coffee, cotton, sisal, tea, tobacco, cashew nuts and
cloves. In 2010, tobacco accounted for about 42 percent of the total value of traditional exports,
followed by coffee (which accounted for about 18 percent). Non-traditional exports include
petroleum products, minerals (especially gold), manufactured goods, fish and fish products,
vegetables and flowers. In the same period, minerals accounted for about 49 percent of the total
value of non-traditional exports, followed by manufactured goods/industrial goods which
accounted for 30.3 percent.

Wholesale and retail trade is one of the key sub-sectors in the economic development agenda of
Tanzania, which is expected to expand substantially as the economy moves towards its 8
percent growth target. Informal and formal trade in Tanzania accounts for approximately 12.1
percent of GDP. Most of the employment in trade is found in the informal sub-sector, which
refers to businesses that are not registered at the Registrar of companies. This sub-sector is
characterized by ease of entry and exit; reliance on indigenous resources; family ownership;
small-scale operations; labour intensive and adaptive technology; skills acquired from and
outside of the formal sector; and unregulated and competitive markets, among others. These
enterprises are found in every part of the country and have great potential for creating a variety
of jobs while generating widespread economic benefits.

According to World Bank data (2010), Tanzania rates favourably in comparison to Uganda and
Kenya with respect to the cost of exporting, while the national customs procedures are rated as
the least efficient in East Africa according to the Global Competitiveness Survey (WEF, 2010).
According to the Trade Freedom Index (Heritage Foundation, 2012), Tanzania ranks below its
East African counterparts with respect to trade freedom. Tanzania’s international trade in
services is also constrained by several legal and administrative factors. Hence, there is a need to
facilitate trade and commerce further in Tanzania by reducing customs procedural delay and
improve trade-related infrastructure.

31
Integration has also led to trade intensification among the SADC member States. Tanzania’s
trade performance in the bloc shows an encouraging trend through trade intensification. Export
to SADC countries increased almost tripled between 2004 and 2008 (from USD 151 million to
USD 443.4 million). The growth in exports to SADC can be partly attributed to the windfall gains
from increased cereal exports to the region, following the drought that hit the neighbouring
countries of Malawi, Zambia and the Congo (DRC). During the same period (2004-2008), the
value of imported goods from SADC countries increased from USD 221.6 million to USD 953.6
million. It is important to note that the trade deficit has widened, showing the importance of
increasing the county’s export competitiveness. As a share of total, Tanzania represented less
than 5 percent of SADC internal trade during that period. Like in the case of the EAC, the high
intensity of intra-SADC trade is also attributable to high regional trade introversion.

Tanzania has the potential to benefit from an enlarged regional market as the Common Market
for the Eastern and Southern Africa (COMESA), the East African Community (EAC) and the
Southern Africa Development Community (SADC) plan to implement a tripartite free trade area
by 2012. The country’s transport network links Tanzania’s landlocked neighbours to
international markets. Countries like Rwanda, Burundi, Malawi, Zambia, Uganda and Congo DRC
depend on Tanzania’s roads, railways and ports to get their goods overseas. Transit trade can
play a big role in Tanzania’s growth, but in order to realise this potential, the country must
expand and modernise the necessary infrastructure.

Access to affordable trade finance and credit facilities are crucial to the growth and
development of wholesale and retail trade.

Several factors inhibit the expansion of trade and commerce,

a) the limited access to affordable credit facilities, guarantees and credit rating agencies;
b) the levels of collateral requirements constrain demand;
c) limited access to venture capital;
d) limited financial services in rural areas,
e) required trade facilitation in terms of simplified customs administrative procedures
f) application of modern ICT.

2.9.2 Tourism

Tanzania is endowed with world-class tourism assets (natural, cultural, historic and
archaeological sites) that are in high demand in international tourism markets. Among the best
known, including its seven World Heritage sites, are: Ngorongoro Conservation Area, Serengeti
national park, Lake Manyara, Selous Game Reserve, Mt. Kilimanjaro and its national park, stone
town of Zanzibar, ruins of Kilwa Kisiwani and of Songo Mnara, and Kondoa Rock Sites.
Additional natural resources include the sandy development of coastal zones and the off-shore
islands.

Tourism plays a crucial role as one of the growth drivers of the economy in Tanzania. Blessed
with unique natural and cultural attractions; tourism is potentially a significant force for growth
and poverty reduction consistent with MKUKUTA 11's overall objectives. Between years 2000
and 2010 the number of tourist arrivals increased from 501,669 to 782,699 and revenue
increased from $ 739.06 million to $1.25 billion respectively. Tourism sector accounts for 25
percent of total export earnings. The growth is driven by economic reforms which created
conditions for promotion of private economic activities and aggressive promotion of Tanzania
as a sustainable and quality tourism destination - cult rally and socially acceptable, ecologically
friendly and economically viable.

32
Tanzania is endowed with many cultural heritage resources with international status. Some
have publicized the country and made it known beyond its borders. Examples are discoveries by
Dr. Mary and Louis Leakey of Zinjanthropus boisei from Oldupai Gorge in 1959 and dated 1.75
million years old the 3.6 years old hominine foot prints discovered at Laetoli. The Laetoli
footprints found only in Tanzania are unique in the World, Ruins of Kilwa and Songo Mnara, and
Kondoa Rock Arts.

Tourism is billed as a revenue generator, creating income that can be invested in other sectors,
implying it is a growth driver in its own right. The sector is among those with the highest
multiplier effect in the economy by virtue of its ability to link with other sectors and sub sectors
such as agriculture (catering food for tourists), transport (for people and goods), industry
(value addition of agricultural produce, product packaging, clothes), services (banking, securing,
entertainment) and utilities (telephone, water and electricity), all of which creating employment
and tax revenue for the government.

Challenges facing the tourism sector are numerous. Tanzania has yet to exploit this sector's fully
potential as a way of making Tanzania a favoured tourist destination. According to World Travel
and Tourism council (2010), Tanzania performed lower that the world average in terms of all
three indicators, namely; (i) tourism contribution to GDP (ii) investment (iii) employment. The
sector is still beset with problems related to:

a) poor infrastructure and infrastructural facilities (to ensure smooth operations and
comfortable travel and stay for tourists) ;
b) lack of geographical and product diversification (uneven development of tourism and
dependency of wildlife tourism) ;
c) inadequate regional and international tourist linkages (air access);
d) lack of planned land for tourism investment outside Protected Areas leading to
uncontrolled tourism development (e.g. difficulties in developing beach tourism);
e) shortage of appropriate and specialized core and skilled personnel in tourist industry;
f) limited budgetary allocations for tourism development and promotional activities;
g) poor institutional and technical capabilities and co-ordination among various
ministries, the private sector, and NGO's involved in tourism development.
h) The country has the potential to provide a rewarding and satisfying cultural experience
for a wide range of tourists but, at present, this potential is not being realised, largely
because of a failure in presentation. This situation can be rectified through a programme
of conservation of historical sites/areas; the development of interpretative centres; the
promotion of cultural activities.
i) lack of diversification of tourist activities, which explains the limited time spent inside
the country and the lack of recreational theme parks and other man-made tourist icons;
j) lack of reliable community tourist information centres.

2.9.3 Financial Services

Long-term sustainable economic growth requires the development of a sound and efficient
financial system that accommodates the coordinated development of three complementary
forms of finance, namely: bank finance, budgetary finance and other non-banking financial
services such as stocks and securities, micro-finance and insurance.

33
Bank finance operates through the intermediation of banks in compliance with relevant
regulations requiring asset security, capital and interest repayment. This type of finance is an
indirect form of financing, which translates into significant multiplier effects for the project’s
realization. Its effectiveness depends on the level of development in credit availability and
financial infrastructure. In order to fast-track the national economic development, bank finance
has to be used as a public policy tool as well as a commercial medium. Non-bank financial
institutions, such as insurance companies, mortgage providers, and pension funds, are critically
important for mobilizing savings and providing market-based safety nets.

In Tanzania, these three forms of finance are not balanced: the economy heavily depends on
government finance. The banking and securities markets are not developed enough to give the
required support to achieve sustained high levels of economic growth and development. The
financial sector is not very competitive, vibrant, and efficient and does not reach the majority of
the population. As a result, a lot of resources are not mobilized and pooled together, and hence
not efficiently allocated. This also limits room for expansion and diversification of investment
opportunities, risk sharing and easier exchange of goods through effective payment systems.
Furthermore, inadequate resource mobilization reduces lending activity and maintains external
financing barriers, and thus limits the expansion of firm and entrepreneurial activities.
Consequently, economic development as a whole is constrained.

Tanzania’s financial system lags behind many developing countries in terms of domestic credit
and credit to the private sector (as percentage of GDP). According to the World Bank data (WDI,
(2012)), Tanzania’s domestic credit to the private sector (as a share of GDP) stood at 16 percent
of GDP, whilst the average for lower middle-income countries at the same date was around 40
percent27. According to URT-USAID (2011), due to the high risk nature of agriculture, the share
of credit to the agricultural sector has remained low at an average of 9.9 percent of total lending
over 1990-2009. Increasing domestic credit to the private sector will boost GDP growth and
socioeconomic development.

But this also has to happen through an improved access to the financial services. According to
the 2009 FinScope survey, only 16.7 percent of the adult population was formally financially
included (i.e. using financial products that are supplied by institutions with a legal precedent),
the informally include represented 27.3 percent (i.e. using products from institutions that
operate without a recognised legal governance), and the excluded represented around 56
percent. For comparison, according to FinScope, the financially formally included represented
66 percent in South Africa (2008), 48.2 percent in Botswana (2004) and 47 percent in Namibia
(2007). In order to deepen the financial sector in Tanzania, it is crucial to increase the number
of financially included people.

The financial market in the country is also relatively small compared to the lower-middle
income countries. For instance, according to the WDI database, the market capitalization of
listed companies (as a share of GDP) in 2010 was about 5.5 percent in Tanzania compared to 66
percent in lower middle-income countries. Besides, the total value of stocks traded (as a share
of GDP) in 2010 was about 0.1 percent in Tanzania, compared to 34 percent on average in the
lower middle-income countries. This highlights that there is a lot of scope for Tanzania to
develop its exchange market.

The rural sector access to credit is facilitated primarily through savings and credit cooperatives
(SACCOS), village savings and loan associations and micro-finance institutions. Among private
sector businesses, micro and small enterprises reports the accessing of finance as a major
obstacle to their businesses (the World Bank Enterprise surveys). But the main reason for the

27The average domestic credit to the private sector (as a share of GDP) for the low income countries in 2010 was
around 28 percent, nearly twice as much as Tanzania.

34
limited access to formal financial services remains the dependence of large sections of
population on agriculture and informal sector for their livelihood.

2.9.4 Science, Technology and Innovation (STI) and Research & Development (R&D)

Science, technology and innovation (STI) constitute critical inputs to the development
processes, especially in an increasingly globalised, knowledge-driven economy. The
development of STI is a crucial component in the country’s socioeconomic development,
especially to increase the value and sophistication of the country’s production (namely through
an improved value-chain). Besides, research and development (R&D) is crucial in increasing the
sectoral productivity and general competitiveness of the country’s goods.

2.9.4.1 Science, Technology and Innovation (STI)

The STI policy and the needs of the economy should be closely linked, in order to be efficiently
supported by political leaders. According to the UNESCO (2011) report28, although policy
instruments exist, at the institutional level, there is little recognition of the importance of
research and a marked resistance to change.

Also, the report emphasises on the quality of higher education and training, and how both will
be crucial to develop the country’s value chain beyond simple production processes and
products. The existing weak relationship between research and postgraduate studies affects the
credibility of universities in the eyes of external academic bodies and development agents.
Furthermore, there is no institutional or national mechanism for assessing research
performance. The report also highlights the “limited efforts in attracting the private sector,
individuals, business people, trade unions and community organizations into contributing
significantly to the national STI effort by the way of funding or shared sponsorship of research
programmes”. As a consequence, research tends to be lacking in quality and relevance. This, in
turn, discourages policy-makers and the private sector from using local research outputs and
prompts them to seek for research findings abroad.

As explained in the URT-USAID (2011) report, a country’s lack of innovation can be seen in the
diversity, value addition and sophistication of its exports. Whilst Tanzania has successfully
diversified its export base between 2001 and 2010, it has only marginally been able to export
higher value-added products. The report further suggests the country has a relatively low level
of export sophistication, which is further highlighted in the WITS (2012) data, showing that
Tanzania’s share of high-technology and medium-high technology exports only represented 0.1
percent and 0.7 percent of total exports (on average between 2000 and 2005), and 0.5 percent
and 3.3 percent of total exports (on average between 2006 and 2009). For comparison,
Vietnam’s respective shares were 18 percent and 8 percent of total exports (on average
between 2006 and 2009). Furthermore, the URT-USAID (2011) report also highlights the low
number of trademarks and patents issued per year in Tanzania, which further shows the slow
development in this sector in Tanzania.

It is within this context that agencies such as UNIDO and FAO work with the private sector,
especially small and medium enterprises, to improve the performance of value-chains through
enhanced STI. However, skills and readiness to adopt technologies remain the main challenge
for businesses and spin-offs. With the support of funds from Finland managed by the World
Bank, the Tanzania Commission for Science and Technology (COSTECH) has recently started a
Business Incubator for SMEs to try to improve their competitiveness. Other pre-incubation
and/or incubator programmes are managed by the Small Industries Development Organization

28UNESCO (2011): “The Review and Evaluation of the Performance of Tanzania’s Higher Education Institutions”, June
2011

35
(SIDO) and the Dar Teknohama Business Incubator (DTBi). UNESCO’s expertise in science,
technology and innovation (STI) is required to enhance skills for the development of
technology-based SMEs.

2.9.4.2 Research and Development (R&D)

Tanzania lags behind in R&D. As a result the National Systems of Innovation (NSI) has remained
rather weak. In order to reverse this trend, the Government has committed itself to annually
apportioning at least 1 percent of GDP for R&D purposes. The weak linkages between the
education and research institutions and the private sector, coupled with the inability of the
agencies involved to commercialize their research and development (R&D) and innovative
products, means that Tanzania continues to spend funds for research that does not provide any
immediate valuable outcomes to its citizens.

Challenges Facing Science and Technology include:

a) inadequate funding of research works;

b) lack of adequate knowledge and skills on modern and new technologies; and
c) lack of coordination between the various research centres and the stakeholders.

2.9.5 Communication Service

The communications sector – IT services (Information Technology), i.e. communication sector

(telecommunications, broadcasting, internet, IT and postal services) in Tanzania has
experienced a tremendous growth in the last few years, in terms of deployment of
infrastructures, service providers, types of services and products as well as users. However, the
sector is still at a very nascent stage, despite the recently experienced growth. Tele-density has
increased from 15 percent in 2006 to 57 percent in 2011. Mobile phone subscribers have
increased from 5.5 million in 2006 to over 25.7 million in 2011. The number of tele-centres
increased from 6 in 2006 to 22 in 2011. The number of data and internet service providers rose
from 25 in 2006 to 68 in 2011. There have been 29 TV stations running since 2006, and this
number is expected to increase with the development of digital broadcasting. The number of
radio stations has increased from 47 in 2006 to 81 in 2011.

The number of internet users (per 100 people) in Tanzania is lower than the sub-Saharan
average, while the percentage of firms having their own website matches the sub-Saharan
average (World Bank, Enterprise Survey 2006). Tanzania is lagging behind countries such as
Botswana, Mauritius, South Africa, Malaysia, and even Kenya. On the other hand, Tanzania has
more radios per person (406) than most sub-Saharan countries (average 198).

Tanzania has the National ICT Broadband Backbone (NICTBB) infrastructure, with cross-border
connectivity to all neighbouring countries, and can thus serve as an ICT Regional Hub in the
future. The ICT backbone will enable high speed connectivity, which will facilitate data transfer
and increase efficiency in agriculture, transport, education, manufacturing, commerce, health,
tourism and indeed all other sectors, but also the Government management. Other significant
achievements alongside the internet exchange point (IXPs) include the establishment of the
Tanzania Network Information Centre (tzNIC) to manage the country’s code Top Level Domain
(ccTLD); establishment of the Tanzania Global Leaning Agency (TaGLA)m a capacity
development technology hub that links to over 120 similar facilities globally for knowledge
sharing and training through innovative approaches; establishment of eGovernment Agency
(eGA), a highly innovative institution to oversee, coordinate and promote the use of ICT for
improving Public Service delivery; and acquisition of ICT solutions in Government departments,
learning institutions, Non-Governmental Organisations as well as other entrepreneurs to

36
support service delivery. Some of the service delivery systems that are currently in place are the
Financial Management Systems, Integrated Human Resource and Payroll Management
Information Systems, Revenue and Tax Collection Information System, Service Delivery
Websites and Portals and sector-specific support information systems. The further development
ICTs will reduce transaction costs, time, and space barriers, translating into increased
competitiveness for national goods. The NICTBB is being complemented by the
operationalization of UCAF to enable communication services delivery to all Tanzanians.

The most important challenges facing ICT development in Tanzania is the human resources
capacity gap. This relates to:
a) Low capacity to harness technical skills required for development of relevant solutions
and applications to stimulate and expedite exploitation/utilization of the existing and
new ICT infrastructure being built.
b) Lack of local innovation in the communication sector.
c) Under-exploitation of ICTs in creating an information/knowledge-based society
d) Limited capacity to connect with the global markets for trade and information exchange
and to enhance value-addition in the productive sectors and management of social
services.

2.9.6 Postal Services

A developed postal sector creates a sustainable environment for economic development in any
country. A modern postal system can provide logistical solutions to integrate data and
information flows, facilitate the physical movement of mails and facilitate financial transactions
(through financial inclusion). The post can offer ordering and delivery functions for electronic
commerce (e-commerce) and become a reliable centre which provides payment services for
businesses and customers (thus bridging the gap for digital divide). The postal sector in
Tanzania should ideally play a vital role in the development of the country by providing, among
others, efficient inter-sectoral physical communications. It should therefore act as a catalyst to
the socio-economic development of the country.

The National Postal Policy and the Electronic and Postal Communications Act (EPOCA, 2010)
recognize the need to ensure the provision of basic postal services to the whole population,
whereas the Universal Communications Access Fund (UCAF) has been established under the
Ministry of Communications, Science and Technology to cater for underserved rural and
economically disadvantaged areas of the country.

The main challenges faced by the postal sub-sector include:

e) lack of operating capital, which has led to the inefficient performance of the sector;
f) limited participation of the private players in the postal sector;
g) limited use of modern technologies (i.e. electronic and postal communication) so as to
satisfy diversified customer needs.

37
2.10 Demographic Transition Related Issues

2.10.1 Population Dynamics

2.10.1.1 Demography

Tanzania faces a high demographic pressure which is posing a development challenge for the
country. Tanzania’s population almost tripled between 1967 and 2002 (the year of last
population census), when the estimated total population of Tanzania was around 34.4 million
people, almost equally divided between males (49 percent) and females (51 percent). According
to the Economic Survey (2010), Tanzania’s population grew at an average annual rate of around
2.8 percent between 2000 and 2010 (which can be explained by the high fertility rate among
Tanzanian women, at around 5.4 children in 2010). By 2010 total population was estimated at
41.9 million (mainland Tanzania). If the population growth rate remains around 2.8 percent for
the next 15 years, Tanzania’s population is projected to reach around 63 million people in 2025.

The present population profile and its dynamics have far reaching implications for the country’s
development and especially poverty reduction. Two major factors will determine Tanzania’s
future economic growth prospects: (i) the growth in the working-age share of the population,
and (ii) the institutional quality (including good governance, government stability, lack of
corruption and a stable business environment that encourages the participation of domestic and
foreign investors).

Positive national outcomes and a window of opportunity to save, known as the demographic
dividend (or bonus), can result from having a large and better educated workforce with fewer
dependent children to support – children who will in turn be more educated and employable.

This increase in population means that GDP must grow even faster in order for Tanzania to
reach middle-income status (given the ‘per capita’ nature of the threshold). Thus, even though
an increase in the population is a boon with regard to increased labour force and an increased
pressure for innovation, the challenges that such a growth poses with regard to economic
growth and improved social services are daunting. To start with, the dependency ratio tends to
be large, thus imposing a burden on the labour force. Further, public expenditure on such social
services as education and health must increase to cope with the increased population. The
increased labour force will only prove a boon if sufficient employment opportunities are created
to guarantee a productive engagement. The increased population shall also inflict pressures on
the environment in terms of extensive urbanization, encroachment of marginal land and the
general overexploitation of natural resources.

2.10.1.2 Youth

Tanzania, like many other developing countries, has a very young population. According to the
Economic Survey (2010), more than 64 percent of the total population was younger than 24
years old in 2010. This division presents challenges (related to skills development, education
and employment), but also represents a formidable opportunity to boost future growth.
Tanzania’s youth can be a driving force behind economic prosperity in the future if policies and
programmes are in place to enhance their opportunities.

In 2007 the Government reviewed the 1996 National Youth Development Policy to bridge the
gaps and challenges faced in its implementation. The reviewed policy aimed at providing
direction to youth, partners and other stakeholders on youth development issues. The
Government is also fostering youth development through a series of programmes, including: (i)
youth income-generating activities (through Youth Economic Groups (YEGs, currently
numbering 5,000 in farming, fishing, carpentry, tailoring and petty business), (ii) promoting

38
volunteerism and youth camps (based around community work and discussion forums), (iii) a
Youth Development Fund, with revolving funds for enterprise development, (iii) Municipalities
required to set aside 10 percent of their collections for youth and women development, (iv)
encouraging micro-credit institutions/regulations to cater for the youth enterprise
development financial support, (v) youth training centres that organise tailor-made training
programmes in disciplines such as entrepreneurship, agriculture, and ICT, (vi) youth skills
development organised by the Ministry with modules in Leadership, Project Planning and
Implementation, Records and Stores Management and Entrepreneurship, in which other non-
governmental actors such as private sector, Development Partners organisations take part (vii)
youth guidance, counselling, and general awareness programmes on drug abuse and HIV/AIDS,
and (viii) the National Youth Week and the Uhuru Torch Race.

There are a series of challenges that the youth are currently facing in Tanzania, and the most
important ones are:
a) a failing education system (where youth leave after primary school given the lack of
absorption in the secondary school system);
b) a lack of training and business skills (given the discrepancy between the taught skills
and the needs of the job market);
c) inadequate credit facilities reducing the potential for self-employment;
d) unattractive agricultural and rural areas (forcing the youth towards urban areas),
e) inadequate information (about the training and job possibilities).

As can be easily understood, one of the main consequences of these features is high youth
unemployment, and having a large unemployed youth group could potentially lead to social
unrest, as they would start engaging in illegal and/or potentially dangerous activities.

2.10.1.3 Rural-Urban Migration

Rural-urban migration in Tanzania is mainly driven by the probability of securing

employment/income in urban areas (given the scarcity of regular income jobs in the rural
areas), the existing real income differences between urban and rural areas, and the expectation
of a higher quality livelihood in urban areas (given the better access to health services,
transport, education and recreational facilities). The paradox is that this migration continues
despite the unemployment and underemployment in urban centres. The youth have a tendency
to migrate the most.

The main consequences of this migration are (i) reduced production in rural areas (especially in
the agricultural sector), and (ii) pressures on housing and settlements in urban areas (which
will be dealt with in the following section).

2.10.2 Urbanisation

Like many other developing countries in Africa, Tanzania is currently experiencing a rapid
urbanisation, usually positively related to a country’s growth and socioeconomic development.
According to the WDI (2012) and the NBS (2011) data, between 2000 and 2010, the share of the
population living in urban areas increased from around 22 percent to around 26 percent
(meaning a decrease of the share of rural population from around 78 percent to 74 percent). It
is likely that the major urban areas, namely Dar es Salaam, Mwanza, Tanga, Arusha and Mbeya,
will continue to experience rapid population growth between 2010 and 2025. According to the
UN-HABITAT report (2010) on the state of African cities, it is likely that much of the urban
growth will happen in Dar es Salaam, as it is one of the ten fastest growing cities in Africa. As

39
explained in the IGC-POPC (2011) paper, if this trend continues, around half of Tanzania’s
population will be living in urban areas by 2030.

The skewed population growth towards urban areas has put a strain on the Government’s
capacity to provide the necessary infrastructure and services to maintain a decent living
environment in urban areas. The main consequence is that in 2010, around 70 percent of the
urban dwellers were living in unplanned settlements, with inadequate road, transport, housing,
water, sewerage and sanitation, and electricity services.

Rapid urbanisation will also have an impact on economic growth and socioeconomic
development because of the other two main effects, that is:
a) the increase in cost of living and doing business in urban areas (given an excess demand
for majority of goods and services, and an increased transportation and congestion
problem, leading to a general loss of productivity and competitiveness); and
b) pressure on the labour market (and the current incapacity to provide decent
employment for the increased population, especially for youth, which will be dealt with
more in detail in the following section).
The challenge for the next 15 years is to efficiently address the growth of urban areas by making
sure the population continues to enjoy high quality public and private services, whilst enforcing
the business environment and overall productivity.

2.10.3 Employment

2.10.3.1 National employment

The labour administration in Tanzania, which role is based on the standards set by the
International Labour Organization (ILO) Conventions, is responsible for monitoring national
employment. Its purpose is to ensure efficient, effective and harmonized labour relations at
work places that will enhance socio-economic development and a decent working environment.
The economic reforms that Tanzania has undertaken since the mid-1980s have translated into
an increased size of informal employment. According to the 2006 Integrated Labour Force
Survey (ILFS), in 2006 Tanzania had a workforce of about 18.8 million people out of which 16.6
million (equivalent to 88.3 percent) were employed and about 2.2 million (equivalent to 11.7
percent) were unemployed. However, the percentage of the unemployed workforce has slightly
fallen from 11.7 percent in 2006 to 10.7 percent in 201129. The ILFS (2007) also highlighted a
number of important trends. First, the largest share of unemployed according to the age group
is the youth. Second, unemployment is the highest in urban areas (partly explained by the
increased rural-urban migration). Third, female unemployment remains higher than male
unemployment. Fourth, agriculture remains the largest employer (employing about 76.5
percent of the population in 2006). Even if the share has been declining since 2000/01 (when it
represented about 84.2 percent of total employment), its share remains far above any other
public or private employer. Finally, there is an increase in the number of informal workers:
according to the ILFS (2007), in 2006 around 40 percent of all households on mainland
Tanzania had informal sector activities, compared to 35 percent in 2000/01.

The one percentage point drop in the unemployment rate over the five years period does not
suffice to meet the goals set by the national programmes specifically designed for economic
development and poverty reduction. For example, earlier projections under the National
Strategy for Growth and Reduction of Poverty (NSGRP, or MKUKUTA) show that the
unemployment rate was targeted to have dropped to seven percent by 2010.

29 See: http://www.tradingeconomics.com/tanzania/unemployment-rate

40
2.10.3.2 Youth employment

According to the 2006 Integrated Labour Force Survey (ILFS), the 25-34 years age group
represented the largest age group in the labour force. The survey results also showed that the
unemployment rate of youth aged 15-24 years is the highest, at 14.9 percent, compared to 10
percent for the adult unemployment rate and 11.7 percent for the total unemployment rate.
Also, the ratio of the youth-to-adult unemployment rate was 1.4, indicating that youth are nearly
one-and-a-half times more likely to be unemployed than adults. According to the 2007 revision
of the National Youth Development Policy, around 700,000 youth (from primary, secondary and
tertiary education) enter the labour force each year, but only around 40,000 get employment
into formal sector.

An increasing number of school leavers who complete primary school, secondary school and
tertiary education each year, join this pool of unemployed. Therefore, creating adequate and
decent employment, especially for the youth, continues to be one of the main challenges in
Tanzania. This will have to happen through programmes (i) that will develop the youth human
and business skills (through education and training cycles which are in line with the job market
needs) (ii) that improve the business environment (including the access to credit) in the rural
and urban areas, (iii) that will prioritise initiatives which have a high employment creation
potential throughout the FYDPs and (iv) that will foster youth empowerment.

Main Challenges for Employment include

a) the mismatch between skills and demand on the labour market;

b) shortage of investment capital and unaffordable loan conditions;
c) low compliance to work environment standards, and
d) low coverage of social security.

2.11 Human Capital Development and Social Services

Human capital is a vital resource for achieving the outcomes spelt out in TDV 2025. The
development of this resource calls for specific interventions in education, training and health.
Other social services analysed below (i.e. water supply and sanitation, sports, entertainment,
media and culture) will further foster and facilitate this human capital development.

2.11.1 Education and Training

The drive for higher achievements in education in Tanzania reflects the need to fill the gaps in
skills and address the low levels of literacy and enrolment. From the immediate post-
independence period, the country expanded primary education and adult literacy in order to fill
basic skills gaps. The rapid political, social and economic changes which happened in the
country called for further investments in higher levels of education and training.

The State championed investments in education until the mid-1990s when provision of
education service was liberalized at all levels, leading to rapid expansion in both education
infrastructure and enrolment. This enabled Tanzania to record success in terms of enrolment,
putting her on the right trajectory to achieving the MDG targets before 2015.

Over the period 2000-2010, there has been a rapid growth in primary and secondary enrolment,
mainly driven by policy interventions. Enrolment in public secondary schools, for example,
increased from 149,762 in 2000 to 1,401,330 in 2010, a more than nine-fold increase. In 2010,
enrolment in both public and private schools stood at 925,465 pupils in pre-primary school
level; about 8,419,305 in primary schools; about 1,638,699 in secondary level; about 36,648 in

41
teacher education; and 118,951 students in universities and colleges. The capacity of technical
and vocational training is very small, only enrolling about 100,000 per year.

The main challenges facing the education sector include:

a) high teacher/student ratios at lower levels;
b) ensuring quality education;
c) low participation at higher levels of education (especially for females); and
d) education funding (especially at tertiary level).
e) In addition, the education system is unable to produce the required skills, in terms of
both number of people and required skill type.
In terms of skills, IGC-POPC (2011) showed that low skilled workers dominate the work force
(84 percent), followed by medium skilled (13 percent) and high skilled (3 percent) workers. The
composition of an average lower middle-income country (LMIC) is 55 percent of low skilled, 33
percent of medium skilled, and 12 percent high skilled workers. Thus Tanzania is challenged to
improve the skill mix in order to attain a middle-income country skills set by 202530.

2.11.2 Health

The need to address health sector issues has a long history. High prevalence of diseases and
near absence of local trained health personnel in the immediate post-independence period
explains much of the continuing efforts in this sector.

According to the Tanzania DHS 2010, 27 percent of married couples use modern family
planning methods compared to 20 percent in 2004/05. Ownership of mosquito nets has risen
sharply from less than 15 percent of households in 1999 to nearly 64 percent in 2010. Care
seeking at health facilities is high while TB coverage indicators have maintained high levels (88
percent of enrolled patients), surpassing the WHO target of 85 percent. Women receiving ARVs
for MTCT remains high, with coverage of 96 percent of all facilities.

Government budgeting, accounting and auditing processes are implemented in a transparent

way. Overall, financial audits are improving. Total coverage for CHF and NHIF has risen from 3
percent in 2005 to 17.1 percent of all Tanzanians by December 2011. Child immunisation
coverage remained high at 90 percent. The prevalence of malaria has declined, but for maternal
mortality much remains to be done. Progress in social welfare includes enactment of the Law of
Child Act 2009, People with Disability Act 2010 and implementation of Action for Most
Vulnerable Children (2007-2011).

The health system is managed along administrative levels of regions, districts, councils and
villages. There are also national and zonal levels for health delivery. In 2010 there were 21
administrative regions, 113 districts, 133 councils and about 10,342 villages. Primary services
form the basis of the pyramidal structure of health care services. Both the public sector and
private providers (including charity organizations) deliver health services. In 2010, the country
had 6,321 health facilities. Of the 230 hospitals in the country, the Government owned (97),
parastatals (5) and private and charity organizations (128). There were 684 health centres, 449
(65.6 percent) of which were owned by Government. Government also had the highest number
of dispensaries, 3,773 (73.5 percent) out of a total of 5,132.

The main causes of morbidity and mortality are malaria, tuberculosis (TB) and HIV/AIDS.
Malaria accounts for 30 percent of the national disease burden. In 2010, about 32 million people

30 The statistics related to the skills gap and number of skilled worker per sub-sector are shown in Annexes 1 and 2.

42
(76.4 percent of the population) lived in areas with stable malaria transmission. Incidence is
estimated to be between 14 and 18 million cases per year. In addition, malaria causes between
100,000 and 125,000 deaths per year, with between 70,000 and 80,000 of the deaths occurring
amongst children aged below 5 years. TB and active TB infection has rapidly increased, due
mainly to the HIV/AIDS pandemic. The incidence of TB is increasing at a rate of 5-10 percent
annually; most cases occur in the 15-49 year age-group.

The main challenge facing the health sector is low financing and inadequate human resources.
Improved financing for the health sector is critical, especially in capital investment to expand
health service network and ensuring preventive and care treatment standards. Concerning the
human resources in the sector, the ratio of professional medical staff per inhabitant in 2010 was
at 1:10,000 compared to an average ratio of 1:1,000 in low income countries.

Other challenges include:

a) low capacity at local Government level;
b) insufficient medicines, medical supplies, modern equipment and specialised medical
staff (especially dentists, cardiologists, orthopaedists and neurologists);
c) low health service coverage to the poor;
d) low promotion of healthy habits among the population; and
e) low coverage of health insurance.

2.11.3 Water Supply and Sanitation

Tanzania is well endowed with water resources that can be used for domestic consumption and
commercial ventures such as in industries and agriculture. A range of technologies is used for
harnessing the resource. The supply system is divided into rural and urban segments.
Implementation of the National Water Policy of 2002 changed the landscape of water provision
in terms of policy and practice.

The water sector is governed by the Water Sector Development Programme (WSDP) with four
main components:
a) Water Resource Management;
b) Rural Water Supply and Sanitation;
c) Urban Water Supply and Sewerage; and
d) Institutional Strengthening and Capacity Building.
In 2010, the water sector recorded a growth rate of 7.8 percent in real terms (the highest rate in
the last decade) and contributed 0.4 percent to GDP.

In terms of coverage, in 2010, about 86 percent of residents in regional towns had access to
water, compared to 53 percent in district townships and 55 percent for Dar es Salaam, Kibaha
and Bagamoyo. The situation in Dar es Salaam is explained by the dilapidated water supply
infrastructure and the increased demand for both industrial and domestic use of water.
Coverage of water supply in rural areas was 57.8 percent in 2010 (PHDR, (2011)).

With regard to sanitation, in 2008 the proportion of population with access to improved
sanitation facility stood at 21 percent in rural areas and 34 percent in urban areas (WDI,
(2012)), while only 17 percent of the urban population had access to a sewerage system (MDG
Progress Report, (2010)).

43
Water supply and sanitation coverage are challenged by dilapidated infrastructure,
infrastructure vandalism, rapid population increase, pollution of water sources and low
investment in development of water sector.

2.11.4 Sports

Sports involve all forms of physical activity which, through casual or organised participation,
maintains or improves physical fitness on the one hand but also provides potential source for
employment generation, poverty alleviation and export of talents commercially. Well-designed
sport-based programmes that are integrated with other community level interventions can
positively promote healthy lives of children and youth, as well as adults.

Sport also inculcates self-esteem, excellence and social cohesion. In its absence, negative
relationships, aggression and violence, racism, gender discrimination, psychological, sexual and
commercial exploitation and abuse have a higher probability to develop.

The National Sports Council (NSC) in the Ministry of Information, Culture and Sports is an
important institution in the development of sports in Tanzania. One of NSC’s core functions is
the coordination of the sports associations, which are arranged at national, regional and district
level. The department of sports development runs short and long training courses.

The sector is guided by the National Sports Development policy (1995) and the National Sports
Council Act (1967) revised in (1971). The Sports Development Policy is a framework that
encompasses both public and private sectors in sports development activities.

Promotion of sports in Tanzania is undertaken by both the Government and the private sector.
Sporadic successes characterize the achievements in this sector.

The main challenges of sports include the following:

a) increasing the number of sport centres to attract youth in sport activities;
b) create sport academies to provide high-quality training in a range of sports, and
c) include youth and children as a future investment.

2.11.5 Entertainment

The entertainment industry cuts across sports and culture, though has distinct activities such as
cinema and film industry, music, etc. There are various organs that oversee activities in this
area. In recent years, the industry has emerged as a source of employment and income
generation, both within and outside Tanzania.

The main challenges facing the industry include:

a) the lack of performance theatres and high-quality recording studios;
b) piracy of artistic works (and the related necessity to offer and incentivise the use of
efficient ways to secure intellectual property), and
c) non-observance of social norms and values.

2.11.6 Media

In Tanzania, media activities are guided by the Information and Broadcasting Policy (2003),
aimed at bringing Tanzanians in line with international standards and trends. The policy
recognizes the success and importance of the Media Council of Tanzania (MCT), a self-

44
regulatory mechanism. The MCT is an independent, voluntary, non-statutory self-regulatory
body established by the media fraternity on June 30th 1995. Media activities are also regulated
by the Tanzania Communications Regulatory Authority Act (2003).

The media is a key player in the development of the nation as it reduces transactions cost such
as in linking the Government with the citizens. The media plays a pivotal role in informing
citizens on multidisciplinary issues, using various ways, including broadcasting (television,
radio, video, etc.), print media (newspapers, books, magazines, etc.) and new media (internet,
blogs, etc.). Over the years there has been an increase in the number of media companies as well
as commercialization in Tanzania.

The media industry faces a number of challenges, including limited training of journalists, with
the result that unemployed youths enter the profession without formal training. This shortfall
has been attributed to insufficient allocated resources by both the public and private sector to
support professional and editorial training.

2.11.7 Culture

The policy on culture (1997) defines culture as all aspects of the lives of people that distinguish
them from other people. Culture is a complex fabric of “hard” and “soft” attributes related to the
way people live. The former includes works of art, heritage sites, etc., while the latter covers
issues such as attitude towards development and work, honesty, moral values, identity,
language, etc., for promoting social cohesion. The “hard” part of culture has not realized its full
potential, mainly due to problems of marketing. It is nevertheless important to note the
development of Kiswahili language through the East African Kiswahili Commission which is
hosted by the United Republic of Tanzania.

The “soft” part of culture, on the other hand, has been facing a different set of challenges related
to:
a) developmental mind-set;
b) work ethics and morals;
c) Patriotism;
d) meritocracy and professionalism; and
e) thrift.
The role of community and religious leaders, teachers, and parents is vital in fostering the
change of mind-set.

2.12 Governance

Governance is the manner in which a Government or State controls or rules over its territory
and the people which it judicially controls. It encompasses the State’s institutional and
structural arrangements, decision making processes, implementation capacity and the
relationship between Government officials and the public they serve31. Good governance calls
for transparent public management that is responsive to popular interests, responsible and
accountable, and where officials are capable, efficient, ethical, professional, and conduct their
duties in the interest of the served public. Good governance bestows legitimacy to political
power that can ensure the formulation and implementation of policies and programmes that are
equitable, non-discriminatory, socially sensitive, participatory, and above all accountable to the
people. Equitable wealth creation and distribution promote growth and prosperity.

31 Paraphrased from: URT, (2000), Composite Development Goal for the Tanzania Development Vision 2025.

45
Peace and security constitute an all-encompassing condition in which citizens live and work in
harmony and safety. This condition is achieved through, inter alia, protection of the country’s
territorial integrity against any security threats from within and outside Tanzania. The risk to
economic growth is not only from social inequalities if governance fails but also from potential
instability in Tanzania’s periphery. This is why continued upgrading of the defence capabilities,
that is, military, defence diplomacy, civil service and national cohesion are extremely important.

In Tanzania, efforts at improving governance and peace and security have aimed at ensuring
that (i) the rule of law prevails, (ii) leaders and public servants are accountable to the people,
(iii) democracy, political and social tolerance is deepened, (iv) that peace, political stability,
national unity and security (territorial integrity) are sustained and (v) Tanzania participates in
the maintenance of regional peace and stability through membership to the AU, EAC and SADC
and other UN and international peace support missions and operations.

2.12.1 Improving Structures and Systems of Governance

From the late nineties, in response to what was perceived to be difficulties in the management
of public sector, a significant number of new institutions and legislations aimed at improving
economic management were created. These include:
a) The establishment of Tanzania Revenue Authority to administer revenue collection;
b) The introduction of the Integrated Financial Management System (IFMS) and regional
sub-treasuries with the aim of increasing efficiency of budget management;
c) The establishment of Parastatal Sector Reform Programme to manage the privatization
process;
d) Reinforcing the powers of the Controller and Auditor General (CAG),
e) Strengthening public administration (appointment of a Minister of State responsible for
good governance);
f) Formation of a ministry responsible for regional administration and local government;
g) Formation of the Prevention of Crime and Corruption Bureau (PCCB) to lead the fight
against corruption;
h) Restructuring the government through a Civil Service Reform Commission which
culminated in the formation of the President’s Office – Public Service Management (PO-
PSM),
i) Instituting and strengthening rule of law (formation of Commission for Human Rights
and Good Governance (CHRAGG); establishing and implementing a Legal Sector Reform
Programme; formation of a commission to review the Union constitution),
j) Creating conditions for a vibrant private sector to thrive (establishment of the Tanzania
Business Council as an organized legitimate forum for public-private dialogue in an
effort to improvement government-business relations) and fostering political tolerance
and freedom of speech (enactment of a law establishing a free trade union movement;
k) Establishment of the Office of the Registrar of Political Parties;
l) Enhancing the participation of opposition Members of Parliament in key parliamentary
committees overseeing governance issues;
m) The enactment of new laws governing aspects such as the Election Expenses Act under a
multiparty system.

46
 n) Civilianisation of prosecutions the implementation of which is overseen by the Office of
the Attorney General that has widened access to justice for many citizens.
In 1999, following an attempt to take a holistic approach in improving its governance, Tanzania
adopted a National Framework on Good Governance (NFGG). The framework was to guide
deliberate interventions to improve governance by giving guidance on the priority areas and
timing at which targeted interventions would be undertaken the respective key players in the
country’s governance system.

2.12.2 Public Administration Effectiveness

A public administration system is effective if it is capable of ensuring the economic, social and
political demands of the day, and is adequately and timely responding with policies and
processes that are low in administrative cost, well targeted, fair, transparent, and meet the tests
of national interest32. Besides the reforms displayed above, Tanzania is implementing its Local
Government Reforms Programme (LGRP) which includes operationalizing a Decentralisation-
by-Devolution (or D-by-D) policy. These reforms were introduced, among other things, in order
to help the administration improve service provision through bringing the decision making
process related to the provision of services closer to the people. It is envisaged that this will
make the Government and its service delivery systems (e.g. systems for quality and efficient
delivery of services like issuance of certificates, property rights, land ownership, birth
registration, vital registration, etc.,) more responsive, efficient and effective.

2.12.3 Gender-balanced inclusion in all socio-economic processes

In realizing that women, who roughly constitute about 50 percent of Tanzania’s population,
when adequately empowered constitute a potent force for economic, social and political
development, the Government has made considerable efforts to integrate gender issues in
planning and budgeting processes. These efforts have started to bear fruit with gender patterns
in employment, with farm and non-farm activities changing considerably in Tanzania. An
increasing number of women have become active in market-oriented activities, and more
responsible for providing cash needs of the household. Women are in the forefront in expanding
micro and small enterprises in what is often referred to as the informal sector. More material on
this item is located in the section specifically dealing with the topic.

2.12.4 Maintaining Peace and Security

Political stability has characterized the country since its independence in 1961. The country
successfully transited to a multi-party political system in 1992, after more than thirty years of a
one-party system Government. Maintaining political and social cohesion and the resultant peace
and tranquillity despite the existing differences of opinions and diverse political and religious
orientations has been no easy feat. It has been built over a compact social fabric, which
recognises the equality of all men and women, and strives to broaden and increase equitable
access to primary means of production as a critical factor in strengthening and sustaining the
prevailing social tranquillity and political stability. Tanzania has also been actively engaged in a
number of conflict resolution, mediation and peace keeping efforts initiatives in the region in
order to help restore order in and for the benefit of the affected countries and to minimize the
risks of those conflicts spilling over to Tanzania.

These efforts at improving governance notwithstanding, corruption, outdated and contradicting

laws and regulations, delayed judgments in the courts of law, selfishness and unpatriotic leaders

32Speech by Pru Goward, (2005), “Efficiency, Effectiveness and Equity in Public Administration”, Institute of Public
Administration National Conference, Wrest Point Conference Centre, 410 Sandy Bay Road, Sandy Bay, Tasmania,
Friday 4 November 2005.

47
fail to make decisions in the national interests, erosion of the culture of honesty and decency
among the population, and undemocratic decisions are cited as main impediments to achieving
the level of good governance intended by these reforms33.

The Government is also committed to improve the safety and security of its people, taking into
account the new national and international threats (including terrorist attacks, major industrial
accidents, proliferation of technologies, components and weapons of mass destruction, critical
dependence of the functioning of society on infrastructure elements, and unrest in the country
and/or bordering countries). An increased level of safety and security would help foster the
country’s development, by increasing national and international confidence and therefore
reducing the cost of doing business.

According to the Worldwide Governance Indicators (WGI), the Government’s effectiveness in

2009 had declined compared to the rating in 2000 or 2005. It is noteworthy that within the EAC
region, however, the Transparency International’s ranking shows Tanzania is being surpassed
by Rwanda only as the least corrupt in the region. Therefore, the challenge ahead is to intensify
the depth and pace of interventions aimed at mobilizing public efforts and opinion towards zero
tolerance to corruption, improving and strengthening leadership and governance systems so
that the kind of mind-set and quality of leadership needed to oversee the intended social re-
engineering for improved governance and rule of law is put in place.

2.13 Private Sector Development

The Government has continued to improve the business environment for private sector
development. As a result, the country has witnessed an upsurge in private sector investments.
The business environment strengthening for Tanzania (BEST) programme (since 2003) was
designed to address the key constraints in the legal and regulatory environment and to promote
private sector development. After the first phase of the program, Tanzania was ranked 10th best
country in the world on improving conditions for doing business according to the Doing
Business Survey in 2007. In 2010, Tanzania was ranked 122nd in the world, better than Kenya
and Uganda in business start-up costs.

In 2010 the Government approved the creation of the Business Registration and Licensing
Authority (BRELA) in the spirit of implementing the “one stop centre” concept. During 2010,
about 509 projects worth TShs. 5.1 billion, with an employment creation of 43,640, were
registered. The manufacturing sector was the main channel of private investments, totalling 183
projects valued at TShs. 0.71 billion and creating 14,327 employment. In 2010, Foreign Direct
Investment (FDI) inflows amounted to USD 700 million, compared to USD 645 million in 2009,
representing an increase of 8.5 percent.

Tanzania has an enormous informal sector, indicating active private sector participation in the
economy. According to IFC, in 2010 about 55 percent of Tanzania’s GDP was generated within
the informal sector and about 95 percent of Tanzanian enterprises were informal. Transforming
this informal private sector into a formal sector is a huge challenge on hand.

The Tanzanian Government has taken a special interest to bring forth private sector
participation in large infrastructural and industrial investments. Public Private Partnerships
(PPPs) are increasingly been looked upon as an instrument to achieve this end. Government has
formulated a new PPP Act to facilitate this process further.

Along with the development of the private sector there is a need to ensure a strong culture of
corporate governance and corporate social responsibility among the private sector firms. There

33 ESRF, (2010), Review of the Tanzania Development Vision 2025.

48
should be accountability, transparency and fairness in all operations pertaining to private
businesses. Also, firms should be encouraged in their profit sharing activities through corporate
social responsibility initiatives.

2.14 Cross-cutting issues

2.14.1 Gender

The Government of Tanzania made considerable efforts to minimize gender imbalances and
inequalities that would prevent the society from realizing its full economic, social and political
development potential. Significant efforts have been made to promote women’s participation in
political and leadership positions. The proportion of women in leadership position has reached
30 percent34. Women’s participation in public service has also increased from 20 percent in
2004/05 to 22 percent 2008/09 and 25 percent in year 201135. Gender equity in both private
and public schools show a positive trend and there is a decrease in domestic violence. However,
there is a challenge in reducing gender differences in accessing primary and secondary school at
regional level. The World Bank rating which measures gender equality by the extent to which a
country has installed institutions and programmes to enforce laws and policies that promote
equal access for men and women in education, health, the economy, and their protection under
the law, Tanzania was given a rating of 4 (out of 6) in four consecutive years until 2009. The
assessment indicators range from 1 (= low equality) to 6 (= high equality)36.

The strides made in gender mainstreaming notwithstanding, challenges remain in addressing

imbalances in the rural areas where about 90 percent of women, engaging in agriculture and
livestock keeping, do not have equal rights to assets (including land) and have limited access to
finance and education. Hence they are vulnerable to poverty. Furthermore, there is unequal
representation of women in tertiary education, where only 33 percent of tertiary students are
women. Under-representation continues at the Technical and Vocational Education Training
(TVET) level. Girl’s representation in technical training varies widely by course: for example, 17
percent in engineering and other sciences, but up to 64 percent in health and allied science.
Overall women representation in TVET is 43.2 percent. Therefore further resolute actions and
concerted efforts are needed in order to improve the situation.

2.14.2 HIV and AIDS

The HIV/AIDS pandemic is a major threat to the workforce for production and creation of
wealth. The disease places a huge burden on the economy and households and reduces
productivity across sectors. HIV prevalence amongst adults (15-49 years) has declined for both
males and females, and across most age groups (PHDR, 2009). Nevertheless, the data should be
interpreted with cautious optimism, as in 2011 Tanzania was ranked 4th in the world in terms of
absolute numbers of AIDS-related deaths (CIA Factbook, 2011).

The prevalence rate at regional level varies with wide margins. For instance, Dar es Salaam
recorded 9 percent prevalence, while it was 15 percent in the Iringa region. HIV/AIDS-related
care and treatment has increased, and the number of sites offering voluntary counselling and
testing has risen three-fold during the last five years (PHDR, (2009)). Mother to child
transmission has been fairly low, indicating the good performance of MCT programmes. A major
problem in the battle against HIV/AIDS is lack of coordination as in most cases the actors do not
really understand their respective roles and mandates.

34 This is calculated as the number of women in parliament as a share of total.

35 Budget Speech, Minister of Community Development, Gender and Children, (2010/11).
36 ESRF, (2011), Review of the Tanzania Development Vision.

49
In the longer term, focus will continue to be on ensuring the minimization and eventual halting
of the virus’s transmission, while forging ways of reducing the impact of the disease on those
already living with HIV and AIDS.

2.14.3 Environment and Climate Change

Concerns about the state of the natural environment are high in Tanzania, given the
overdependence on primary resources, especially in agriculture. Policy actions towards
protection of environment include legislation, especially the National Environment Management
Act 2004, the creation of the National Environment Management Council (NEMC), compulsory
Environmental Impact Assessment (EIA) for all projects and the Marine and Coastal
Environmental Management Project (MACEMP) which targets conservation of marine
ecosystems. Tanzania has also implemented a number of programmes designed to enhance the
capacity to mitigate the adverse impacts of climate change and disasters, both natural and
human-made, and is actively engaged in global initiatives such Global Environment Facility
(GEF), the United Nations Environment Programme, the International Climate Fund and a
number of other related protocols.

Climate change is a major concern, as a large proportion of GDP is dependent on climate

sensitive sectors. The National Adaptation Programme of Action (NAPA) (2007) estimates that
projected temperature and rainfall changes could decrease the average annual maize yield by
33 percent. In the future, some areas of northern Tanzania will get more humid (between 5 and
45 percent), whilst others, especially in the south, will experience severe reductions in rainfall
(up to 10 percent). This change would make the central, western and southern part of the
country unsustainable for agricultural production.

Other adverse impacts of climate change include harm to biodiversity, affecting wildlife,
migratory patterns, pests and diseases. Already, 14 species of dry country birds have responded
to a drying climate and have expanded their range.

A recent study by DfID and GoT revealed various economic impacts of climate change. Current
climate change variability already costs Tanzania around 1 percent of GDP annually. This could
go up to 2 percent of GDP by 2030. An additional 0.3 to 1.6 million people will be vulnerable to
rising sea level by 2030. Coastal cities are extremely vulnerable. Eight (8) percent of Dar es
Salaam’s land area is potentially vulnerable to rising sea level. Further, about USD 500 million is
required annually to reduce current vulnerability to climate change, and a further USD 100-150
million per year will be required to build capacity and enhance resilience to future climate
change. The Global Climate Change funds will prove to be a good source to support the
Government initiatives in both adaptation and mitigation measures.

2.14.4 Social Protection

One of the formidable challenges of human development in Tanzania has been poverty,
manifested in the inability of a significant proportion of the population, namely the poor and
other disadvantaged groups, to maintain a stable consumption pattern (especially in times of
risks and uncertainties).

The social system in Tanzania is governed by the National Social security Policy (2003). The
main aim of this policy is to guide the efficient functioning of social security and eliminate the
structural, operational and policy-related weaknesses inherent to the social security system.
This policy led to the enactment of the Social Security (Regulatory Authority) Act No. 8 (2008),
which, amongst other things, led to the establishment of the Social Security Regulatory
Authority (SSRA) (2010).

50
A key intervention that has been able to address this situation is the Social Framework, defined
to include traditional family and community support structures as well as interventions by State
and non-state actors that support individuals, households and communities to prevent, manage,
and overcome shocks and risks threatening their security and well-being. The ultimate aim of
social protection is to enable the poor and vulnerable to take advantage of opportunities
available to fast-track their socio-economic development.

There are many forms of social protection schemes in Tanzania, covering a wide variety of
public and private measures meant to provide benefits in the event of an individuals’ earning
power permanently ceasing, being interrupted, never developing or being unable to avoid
poverty. The major domains of social security are: poverty prevention, poverty alleviation,
social compensation and income distribution.

The social security system in Tanzania has the following key elements:
a) Social assistance schemes which are non-contributory and income-tested, and provided
by the State to groups such as people with disabilities, elderly people and unsupported
parents and children who are unable to provide for their own minimum needs. The
Ministry of Health and Social Welfare (MHSW) in particular, provides services under its
Health Sector Strategic Plan III with particular focus on extending healthcare to the poor
and most vulnerable groups, as well as supporting and providing treatment for those
with HIV and AIDS;
b) Mandatory schemes, where people contribute through employers to pension or
provident funds. Employers also contribute to these funds;
c) Private savings, where people voluntarily save for retirement, working capital and
insure themselves against events such as disability and loss of income and meet other
social needs.

By 2010, there were six major contributory Government schemes in Tanzania, namely:
a) National Social Security Fund (NSSF) for employees of the private sector and
Government employees;
b) Public Service Pension Fund (PSPF) for Government employees who are eligible;
c) Parastatal Pension Fund (PPF) for employees of both private and parastatal
organizations;
d) Local Authorities Pensions Fund (LAPF) for local Government employees;
e) Government Employees’ Provident Fund (GEPF);
f) National Health Insurance Fund (NHIF).

Non-contributory services are provided by the Ministry of Health and Social Welfare (MoHSW)
in collaboration with the Ministry of Labour, Employment, Youth Development (MLEYD), the
Ministry of Education and Vocational Training (MoVET), and the Ministry of Community
Development Gender and Children (MCDGC).

A number of challenges face existing social protection schemes, including the inability to
provide stable services to members, low coverage, inadequate coordination, high service costs,
inadequate funding, irregularities in investment, and low transparency and accountability.

51
 CHAPTER III: STRATEGIC DIRECTION
3.1 Introduction

The previous chapter provided a comprehensive situational analysis of Tanzania across sectors.
It highlighted that the formidable task of economic transformation often triggers a number of
challenges, both internal and external. The most critical internal challenges, which haunted past
planning exercises and are likely to remain obstacles to the realisation of LTPP, include:
a) Resource mobilisation, to adequately and timely deploy for the implementation of LTPP;
b) Supportive infrastructure (transport, energy, water and communication), which will
require increased investment in these areas.
c) Implementation capability, which has historically proved to be a challenge;
d) Change of the developmental mind-set within the society at large so that everyone plays
the assigned part with commitment, along with an increased political will;
e) Ensure the country’s industrialisation will generate the maximum employment and will
not lead to increased inequality.

Among the external challenges the country has been facing, and will continue to face in the
foreseeable future, are:
a) Uncertainty in the global economy, where Tanzania has minimal or little control;
b) As the 2008/09 Global Financial Crisis clearly showed, the fate of developing nations
with high dependence on export earnings, aid, etc., remains that of vulnerability;
c) Climate change effects on the economy, with adverse effects on agricultural productivity.

Besides those challenges, the country also has the chance to capitalize on various opportunities,
such as:
a) Given the country’s strategic geographical location and the booming EAC market, the
country has the chance of becoming a trade and transport hub for the entire region;
b) Large natural resources (mainly hydrocarbons and minerals) which (i) the country can
exploit and use to finance development projects (that will eventually boost growth and
poverty reduction), (ii) will increase the country’s exports and improve the trade
balance, and (iii) help boost the growth in the industrial sector (by providing more raw
materials);
c) The quantity and quality of untapped land in Tanzania, coupled with the relatively low
current productivity in the sector, also gives the country an opportunity to significantly
increase the output in the sector, which will help develop the agro-processing, generate
increased income for the most vulnerable, and help limit the demographic shift towards
urban areas;
d) Tourism and financial services, if developed efficiently, will be able to generate
increased foreign reserves and develop the agricultural and industrial sector.
All sectors of the economy therefore represent an opportunity for the country to significantly
increase the growth rate and poverty reduction. The LTPP highlights the challenges that have to
be tackled and the opportunities that need to be developed in order to reach the MIC status.

Relevant cross-sector synergies will be exploited in the planning and sequencing of

projects/programmes, taking into account interdependencies, positive spill-overs and economy.

52
Government through respective sectors will also continue making use of on-going international
agreements including the MDGs, the High Level agreement on HIV and AIDS, environment and
climate change agreements, the among others.

This chapter gives the main strategic direction that will be followed in order to reach all the TDV
2025 targets. Section 3.2 outlines the main objectives of TDV 2025, whilst section 3.3 highlights
the six pillars of the LTPP. Section 3.4 gives further detail on the country’s envisaged structural
transformation, needed macroeconomic stability, productivity and growth targets and the
analysis of risks and possible responses. Sections 3.5 to 3.14 highlight the strategic direction for
each of the sectors and sub-sectors, highlighting, for each of them, indicative national policies,
guiding principles and objectives to be reached by 2025.

3.2 Long Term Objectives and Targets

The main thrust of LTPP is to achieve the objectives of Vision 2025, the main ones being:

Attaining a High Quality Livelihood: The aim is to ensure that the creation of wealth and its
distribution are is inclusive, in order to achieve equity and to reform all discriminative forms of
wealth-creation and sharing processes. The investments that have been made and continue to
be made in education and learning should have created a critical mass of highly qualified and
educated people.
Attaining Good Governance and the Rule of Law: The ultimate goal is to embrace a culture of
accountability, rewarding performance and doing away with all vices in the course of creating
and sharing wealth. The high level of human capital will have become an important source of
growth and will be able (i) to propel Tanzania to self-reliance, and (ii) to generate a positive
mind-set and a culture of hard work, entrepreneurship, creativity, innovativeness and ingenuity.
Finally, peace, stability and unity are the important ingredients in this endeavour.
Building a Strong and Competitive Economy: As technological and market conditions change,
the country must be able to adapt efficiently and effectively. By 2025, Tanzania should have
created a strong, diversified and resilient competitive economy.

3.3 Pillars of the Long-Term Perspective Plan

The Plan will be guided by the following six pillars:

Broad-based Growth: As the nation strives to attain higher rates of economic growth, it is
imperative that the benefits of such growth are shared broadly across different sections of the
population and across different geographical locations. LTPP recognizes that while
redistributive policies have a role to play, the effective and sustainable way for the country’s
growth to benefit the poor is to ensure that growth is inclusive, occurs in sectors where the poor
are most represented and enables to directly participate in the country’s development.

Competitiveness (efficiency and effectiveness): This principle targets production and

distribution. It calls for sound socioeconomic policies (and socioeconomic policy management)
that ensure adequate and reliable infrastructural development, quality education, effective
utilization of domestic resources, higher productivity and strengthening of capacity to
effectively anticipate and respond to new and emerging developments.

National Cohesion and Cultural Heritage: LTPP recognizes that a strong national unity,
cohesion, patriotism, peace and security are important ingredients for sustainable development
and need to be nurtured. This will ensure that the nation continues to enjoy peace, political
stability, national unity and social cohesion in an environment of democracy and political and

53
social tolerance. Efforts shall be made in order to preserve and maintain the country’s rich
cultural heritage.

Good governance and accountability: LTPP upholds the aspiration of ensuring that good
governance reinforces the national socioeconomic structure, thereby strengthening a culture of
accountability, transparency, rewarding good performance, penalizing/sanctioning
ineffectiveness and curbing corruption. In the same vein, the LTPP places emphasis on integrity
and ethical uprightness of public servants and institutions and upon the efficient, fair and
transparent administration of justice thus protecting the fundamental human rights as a basis of
social peace and stability of the country.

Macroeconomic Stability: The preservation of macroeconomic stability to underpin financial

confidence for enhanced investment and growth is an underlying prerequisite for the success of
the Plan. Such stability, along with the high growth that is necessary for reducing poverty, is
possible only under prudent and consistent monetary and fiscal policies.

Sustainable Development: There is a need to ensure that the growth path to be taken in the
future is sustainable from the economic, environmental and social (gender, health) perspectives.
Sustainability shall remain an important criterion in evaluating the projects and policies.

3.4 Envisaged Structural Transformation of the Economy

3.4.1 Structural Transformation

One of the goals of the TDV 2025 is to transform Tanzania into a “diversified and semi-
industrialised economy with a substantial industrial sector comparable to typical middle-
income countries”. The POPC conducted a study in 2011 (with the support of IGC), in order to
better understand what it would take for Tanzania to become a middle-income country by 2025.
The study generated the GNI per capita in Purchasing Power Parity (PPP) terms (in constant
2009 USD) that would have to be achieved by 2025 in order to reach the lower middle-income
country (LMIC) threshold (i.e. USD 2,700).

During the 2000-2010 period, the Gross National Income (GNI) per capita (pc) (constant 2009
USD), in Purchasing Power Parity (PPP$) terms, increased from around USD 960 to around USD
1,42037. This, however, fell short of the envisaged growth path if the country has to attain the
MIC status by 2025 (which, in GNI pc PPP$ terms, is set at USD 2,700 in 2009 USD)38. For the
same to be realized, an average annual GNI growth rate of 8 percent in the next 15 years will
have to be sustained (given a population growth of around 3 percent, this leads to a GNI PPP$
per capita growth of about 5 percent). Figure 3.1 reflects the under-performance in GNI per
capita growth in the ten years of implementing TDV 2025. It also shows that at an average
annual growth of 7 percent, GNI per capita (PPP$) will be below USD 2,700 in 2025.

Figure 3.1: Tanzania’s Actual and Simulated Growth Paths to LMIC by 2025

37Own computation using data from the World Bank, (2012), World Development Indicators (WDI) Database.
38See: President’s Office Planning Commission (POPC) and International Growth Centre (IGC), (2011), “Attaining
Middle Income Status: Tanzania: Growth and Structural Transformation Required to Reach Middle Income Status by
2025”. This paper will be referred in this Plan as IGC-POPC (2011).

54
Source: IGC-POPC Study 2011

The second step was to understand the sectoral share of GDP displayed by typical middle-
income countries, and to set this sectoral share as a target for 2025. Table 3.1 displays the
sectoral share and employment in agriculture for 2000 (when the TDV 2025 was launched), in
2010 (the latest status), the target for 2025 (the ‘middle-income’ type of GDP decomposition),
and the implied 2015 and 2020 targets.

Table 3.1: Mainland Tanzania: Evolution of Economic Structure, 2000, 2010 and
Projections for 2025 (% of GDP)
Sector/Year Current Targets Targets Targets for
Baseline
Status for 2015 for 2020 2025
(2000)
(2010)
Agriculture 33.1 27.8 25.4 23 20.7
Industry 19 24.4 26.5 28.7 30.7
of which Manufacture (% of GDP) 9.3 9.8 12.0 14.6 17.8
Services 47.9 47.8 48.1 48.3 48.6
82.1 74.6
Employment in agric. (% of total) 61.2 50.2 41.2
(2001) (2006)
Sources: National Bureau of Statistics (2010), TDV 2025, IGC-POPC (2011), Economic Survey (2010), WDI
database (2012).

Thus apart from sustaining growth rates above 8 percent on average (in order to reach the
lower middle-income status as of the World Bank classification), the country will also transform
from a mainly agricultural economy to a semi-industrialised one. This transformation, or
industrialisation, will happen along various lines: first, the increased productivity in agriculture
will increase production and generate an excess labour supply, both fuelling agro-processing,
leading to a sharp increase in the manufacturing sector. Second, an improvement of the value-
addition chain (from agricultural goods and commodities to a more value-chain approach in the
natural resources’ sector), will create employment and growth in the industrial sector.

This sectoral transformation, coupled with the 8 percent GDP growth target, implies the target
average annual growth rates displayed in the Table 3.2.

55
Table 3.2: Past and targeted average growth rates (% per annum)
Target
Past Averages
Target Indicator Averages
1995-2010 2000-2010 2010-2025
Agriculture growth rate (%) 4.0 4.4 6.0
Industry growth rate (%) 7.8 8.8 9.2
Manufacturing growth rate (%) 6.7 8.2 13.0
Service growth rate (%) 5.8 7.5 8.0
Source: Economic Survey (2000-2010), IGC-POPC (2011)

The past average growth rates for the last 10 years show that there will have to be a drastic
change in the growth paths, especially in the agricultural and manufacturing sector, in order to
reach the semi-industrialised economy target.

But the transformation from an agriculture-led to an industrial economy will also involve
changes in the country’s ability to raise (sources of) capital to implement the necessary
investments. Nationally, the IGC-POPC (2011) paper highlighted the fact that the country’s gross
fixed capital formation and gross savings will have to increase significantly (from 25 percent to
27 percent of GDP and from 18 percent to 22 percent respectively). This will happen through
the development of a more business-friendly financial intermediation system and increased
investment opportunities inside the country.

Concerning international capital flows, the country’s FDI inflows remain below the level reached
on average by middle-income countries (they represented 3.9 percent of GDP in 2007, about 1
percentage point below the level in the selected middle-income countries). Also, as the country
will develop, it will have to table on lower ODA levels, with an expected drop from 13 percent of
GDP to 5 percent of GDP between 2010 and 2025 (thus the need to boost national savings and
other international capital transfers).

According to the World Bank (Tanzania Economic Update, (2012), Tanzania is experiencing
some early signs of structural transformation on four different grounds. First, the informal non-
farm sector is growing rapidly, showing a regain (and diversification) of the economic activity in
rural areas, and the improvement of the infrastructure which happened around the cities.
Second, manufacturing exports have been growing faster in recent years, showing an
internationalisation of the sector. Third, the value of net credit to the private sector has close to
quadrupled between 2005 and 2010, showing the increased options for financing and further
boosting the sector’s growth. Finally, new pilot projects in the agricultural sector have proven
very successful, which is a first step to boosting the productivity in the sector (which remains
low in comparison to the regional averages. The country should take advantage of these
initiatives and trends to fast-track its transformation further.

3.4.2 Macroeconomic Stability

In order to facilitate this structural transformation, it is vital that the macroeconomic stability is
ensured. Below are the envisaged key macroeconomic indicators.

Inflation: Tanzania will strive at keeping inflation close to 5 percent annually, by following a
prudent monetary policy, whilst also solving the national supply constraints (associated with
food and essential raw materials) and minimizing the impact of internationally induced
inflation. The Bank of Tanzania will use its instruments in order to mop up the excess liquidity
in the economy (when and if such cases occur), and will closely monitor the evolution of the
value of the Tanzanian Shilling against its made trade partners. By doing so, the Bank will be
able to stabilise the country’s real exchange rate, and thus positively affect the country’s
competitiveness.

56
Fiscal Balance: As explained in the previous chapter, the main aim of the Government will be to
reinforce its current prudent fiscal policy management, in order to closely monitor the country’s
fiscal deficits. This will happen on two main fronts: on the one hand, the Government will
expand its tax base and find new ways to increase Government revenues in general (the
Government has targeted to be able to raise its revenues to around 21 percent of GDP by 2025),
whilst on the other hand closely monitoring public spending (mainly by enhancing expenditure
control and accountability). Besides, Government expenditure’s growth will have to be led by
development expenditure, which should become the most important component of
Government’s spending, in order to boost future growth.

Another major challenge will result from the projected windfall increase in Government
revenues related to the prospects of the developments in the mining sector and in the country’s
gas production. Countries that have not planned efficiently for natural-resource based revenue
windfalls have exposed themselves to what is widely known as the ‘natural resource curse’. The
main aspect of the curse happens when the large windfalls lead to excessive increases in public
and/or private spending (generating high inflation levels) accompanied by a nominal
appreciation of the currency (given that those resources are traded in foreign currencies),
translating into a loss of competitiveness (given the appreciation of the real exchange rate), and
eventually into a lower growth path than the one the country would have had, had it not
developed its natural resource sector(s). This is why Tanzania will come up with an effective
solution on how best to manage those resources (by creating a natural resource fund, for
instance), to avoid the negative effects of increased public spending and nominal appreciation
and ensure inter-generational equity (by enabling future generations to enjoy the revenues
from those resources).

In addition, the Government will continue monitoring the evolution of the country’s domestic
and foreign debt level (and the related debt services), in order to ensure long-lasting
macroeconomic stability and debt sustainability.

Balance of Payments: The focus of the Plan in the initial years will be on reducing the
‘structural deficit’ in the flow of goods and services (through various socioeconomic and
business environment related policies). This situation has unavoidably led to depreciation
pressures on the local currency, which has in turn pushed domestic inflation upward. Export
promotion and diversification, in part through increased domestic processing and
manufacturing, will therefore be emphasized. The target therefore is to sustain a high export
growth rate, over 10 percent as much as possible, and keeping the growth rate of imports at a
lower rate (in order to reduce the trade deficit). In the longer term, the Plan aims at much
improved trade balance, partly through continued export promotion and efficient import
substitution, to support the double-digit growth rates that are envisaged. Finally, the improved
business environment and the sustained economic growth will increase the capital and FDI
inflows, which in turn will improve the balance of the capital and financial accounts, and further
foster economic growth. Particularly, during the third FYDP (2020-25), the focus will be to
foster export oriented growth by improving competitiveness of manufacturing and service
sectors. This transformation into an export oriented competitive economy is expected to create
a significantly favourable trade balance.

3.4.3 Productivity and Growth

In addition to the sectoral transformation outlined in the previous section, it is noteworthy to

analyse the growth in productivity which is required to attain the middle-income country status.
The GDP growth rate can be divided into two main parts: the growth rate of the labour force and

57
the overall productivity growth, the sum of both amounting to the total GDP growth39. The
overall productivity growth rate of the economy is captured by the growth of the output-per-
worker, and is divided into three main sub-categories: the education per worker, the physical
capital per worker and the total factor productivity.

Between 2000 and 2008, Tanzania’s overall productivity grew by a rate of 4 percent. The
decomposition of Tanzania’s overall productivity during the same period is displayed in the
figure below. As can be seen, about 6 percent of the overall productivity growth could be
attributed to the education per worker, 8 percent to the growth of physical capital per worker,
while the governing factor of overall productivity growth was the improvement of total factor
productivity (TFP), which accounted for 86 percent.

Figure 3.2: Decomposition of Productivity Growth

Source: POPC’s calculations using Collins and Bosworth Data Base.

In order to give a strategic direction, these figures were compared to the overall productivity
growth performance of the set of middle-income countries (in the specific year of their
attainment of middle-income status) used in the IGC-POPC (2011) paper. The results show that
the current overall productivity growth rates, along with the growth rate of education per
worker, physical capital per worker and growth of total factor productivity in Tanzania are all
below the middle-income country level. For example, in 2008, Tanzania’s education per worker
grew by 0.27 percent while the middle-income average was 0.56 percent, and Tanzania’s
physical capital per worker grew by 0.62 percent, compared to 1.69 percent in middle-income
countries. This suggests that Tanzania needs to improve its productivity growth rates
considerably over the next 15 years.

In addition, the middle-income country average composition of the overall productivity growth
rate is quite different from the case described for Tanzania earlier. Around 11 percent of their
overall productivity growth rate was attributed to education per worker, while this figure stood
at 6 percent for Tanzania (for the 2000-2008 period), which indicates the need for improving
the skill level of the work force over the next 15 years. The share of physical capital per worker
in the overall productivity growth was also significantly higher in middle-income countries (at
30 percent, compared to 8 percent in Tanzania). This calls for large capital investments over the
next 15 years to improve the productivity across sectors.

39This is only one of the many growth accounting principles that could be used to decompose a country’s growth rate,
and has been chosen here as it displays productivity growth in a straightforward way.

58
Hence, there is a need to change the pace and composition of the overall productivity growth
rate during the next 15 years to create the globally competitive economy envisaged in the
country’s Vision document. This will be achieved through enhanced capital investment, skill-
level up-gradation of the work force, in addition to strategic interventions (particularly in the
productive sectors) as described in the sections that follow.

3.4.4 Risks and Assumptions

Full realization of the Plan objectives assumes a stable external environment as well as socio-
political stability. The growth targets are mostly ambitious but so is the determination for more
assertive effort from the individuals and government to change the mind-set towards more
assertive effort and drive to excel (compete). However, a number of risks must be recognised
ahead of implementation and thought be given to possible response measures for the country to
keep track of the projected growth path. Four sources of risks and possible responses relate to
exogenous global shocks, potential resource curse and income inequalities as well as changes in
climatic conditions.

First, exogenous shocks, like the recent global economic and financial crisis of 2008/09, are
likely to occur and exert significant impact on the country’s development. The current
instabilities in the Eurozone have negative implications on the earnings of Tanzania’s primary
exports, while political instability in the oil producing (exporting) nations of the Middle East is
tending to exert an upward pressure on global oil prices. A related source of risk emanates from
the volatility of primary commodity exports prices, a long-standing problem. All these
undermine export earnings and the capacity to import. The production structure is still highly
import-dependent, for oil and capital and intermediate inputs.

This implies that growth should be strong enough for the country to withstand the
macroeconomic effects of such shocks in order to remain close to the projected growth
trajectory; but it means also that the structural transformation being sought should enable the
country to produce an increasing amount of the basic capital and intermediate inputs (including
technological capacity) domestically. This should subconsciously be ingrained in the education
and training visions – “knowledge economy” with very long perspective – as basis for the
wealth, prosperity and security of the nation.

The second source of risk is a sudden commodity boom or slump, or on the “brighter side”, a
natural resource discovery:

(a) Commodity slump is not abnormal as commodity price instability has been a common
scourge of commodity-dependent economies such as Tanzania. Commodity price
stabilisation schemes have not been successful on sustainable basis. Countries like
Tanzania therefore need to take lessons from middle- income, resource-rich countries of
Brazil, Argentina, Malaysia and Thailand, and fast-growing Vietnam, that have exploited
increased world demand for high-value-added agricultural products and become such
“commodity developers” to reckon with. That has been possible through focused
attention on technological upgrading and diffusion to farm-level. 40 This is a certain way
of diversifying exports for a commodity-dependent economy like Tanzania.

40Nissanke M. (2010) “Commodity Markets and Excess Volatility – Sources and Strategies to Reduce Adverse
Development Impacts” Paper for Common Fund for Commodities Conference, School of Oriental and African Studies,
University of London

59
 (b) The reality regarding the discovery of gas calls for a cue from countries that have gone
through traumatic “resource curse” spells in Africa and elsewhere. Critical issues are
related to (i) preparedness of Tanzania in terms of human resource capabilities in the
technological, legal marketing and (ii) public finance management practices
(transparency, patriotism and zero tolerance of corruption and equity in the distribution
of proceeds).

At the start of the LTPP, the government should already map out and implement training
programmes for local experts at all levels in gas/oil and ancillary technical skills through
existing and possibly expanded vocational training and high education institutions
locally and abroad. Training in international legal (taxation and contracting details) and
marketing expertise cannot be overemphasised.

Out of the anticipated gas/oil proceeds, the Five Year Development Plans should be
flexible enough to devise and accommodate massive investments in infrastructural
services with particular attention to “connecting the country”, especially the hard-to-
reach, productive and populated areas, high impact-high investment programmes in
transport infrastructure and energy including sharpening the transit trade advantage
and in quality education and health. That is, much more and better should be done
ahead of the not-so-certain spin-offs expected of the normal corporate social
responsibly of “extracting” companies usually in the vicinity of the projects and
company taxation.

The third potential source of risk to long-term growth is income inequalities in society. This is
where the widening gap between the rich and the poor gets so bad that it leads to disruption of
peace and order. Purposeful attention to generating employment opportunities and to fair and
transparent budgetary allocations will over time redress tensions on feared inequalities.

The fourth distinct source of risk to the achievement of the LTPP is climate change. Changing
climatic conditions, particularly disaster-scale ones such drought and floods, earthquakes
and/or cyclones disrupt growth to the extent that they can adversely affect agricultural
production, manufacturing, food security; they can degrade environment, destroy
infrastructure, all of which negatively affect growth as well as public financial plans. Possible
responses to climate change have been discussed and it is expected that the proposed measures
will be implemented over time towards “green growth”. Nevertheless, preparedness also
requires that growth and consequently, the country’s financial position are strong enough to
“weather through” when disaster strikes, that is, over time, ability to finance or run climate
change adaptation and mitigation measures to avert large scale rescue measures.

3.5 Productive Sectors

Transforming the economy to reflect the envisaged economic structure requires deliberate
interventions to ensure that these sectors grow at the rate and in a manner that can facilitate
the required transformation. As explained in Chapter 1, the interventions will be sequenced
through three five year development plans with the themes of unleashing Tanzania’s growth
potential, nurturing an industrial based economy and promoting competitiveness-led export
growth, respectively. The following sections bring out major requirements that underpin the
requisite transformation for each sector, and provide guidelines and objectives for the projects
and programmes that the three five year plans will follow.

60
3.5.1 Agriculture

According to the CDG for TDV 2025, the main challenge in this sector is to increase the output
and the quality of all products for which the country enjoys a comparative and competitive
advantage and become food basket for the East Africa region and beyond. Agriculture in its
totality includes crops, animal husbandry, fisheries and forestry. By 2025, agriculture should be
accounting for 20.7 percent of GDP and will transform, through mechanization and
commercialization, into a modern sector capable of producing high quality output in sufficient
amounts to ensure nationwide food security and food self-sufficiency, and increasing incomes
through viable internal and international trade. Achieving these targets requires strategic,
targeted and well sequenced efforts to address the challenges that are impeding the realisation
of the sectors’ development potentials.

The guiding initiatives and frameworks for the realisation of the strategic interventions include
the Agriculture Sector Development Programme (ASDP), and on-going interventions that
complement the ASDP, including Kilimo Kwanza, the Southern Agriculture Growth Corridor
(SAGCOT, Feed the Future and Bread Basket. The Tanzania Agriculture and Food Security
Investment Plan (TAFSIP), a ten year investment plan, maps the investments needed to achieve
the Comprehensive Africa Agriculture Development Programme (CAADP) targeting 6 percent
annual growth in the agricultural GDP through allocation of 10 percent of the national budget to
the agricultural sector. All these initiatives are aimed at transforming the agricultural sector into
modern, commercial and competitive sector in order to ensure food security and poverty
reduction.

Below is a brief outline of what this transformation will entail in the agriculture sub-sectors.
3.5.1.1 Crops
The production of crops will be undertaken such that the various categories of products in this
sub-sector (e.g. food crops, cash crops, high value crops etc.) are well targeted in terms of
quantities and in terms of the geographical regions earmarked for growing them. The aim is to
ensure that by 2025, the sub-sector is capable of giving the country optimum mileage in
attaining food sufficiency, raise incomes and promote exports from the sub-sector. Efforts will
be made to promote specific crops in specific regions (a specialisation in each region) and to
facilitate enclave developments of agro-processing industries attached to each crop. A
‘developmental corridor’ approach, exemplified by the SAGCOT will be undertaken. Similarly,
efforts will be made to strengthen the institutional framework to enhance the capacity of
RUBADA in managing national stakes in agricultural business joint ventures with the private
sector.

3.5.1.2 Livestock

The sector will be transformed into a modern and highly productive one, capable of supporting
a thriving dairy meat and tanning industry in a sustainable manner.

3.5.1.3 Forest, Beekeeping, and Wildlife

Forest and Beekeeping Sub-Sectors

Efforts will be made to increase productivity, human and financial resources in the sub-sector,
by identifying and targeting outputs/ activities that can foster rapid and inclusive growth in the
sub-sector and the economy as a whole (e.g. wood and non-wood products, honey, beeswax, and
hunting). Ensure sustainable supply of biomass energy and raise the efficiency with which
biomass energy is utilised (including utilization of "green energy" opportunities and Payment
for Environmental Services, for their potential to catalyse a sustainable wood fuels industry).
Promote alternative energy sources. Forest degradation and deforestation will be reduced

61
through incorporation of emerging strategies and mechanisms of climate change mitigation and
adaptation. Promotion and engagement in modern forest and beekeeping practices will be
scaled-up to ensure that forest remain an abundant resource and, in turn create an ever-
changing habitat for living organisms.

National policies, Guiding principles and Objectives for the

Forest and Beekeeping Sub-Sectors

a) National Forest and Beekeeping policies

The National Forest and Beekeeping Policies are emphasising on sustainable forest and beekeeping
management that considers strategic sectoral planning and takes into account changes in the macro-
economic policies towards market economy and participation of the private sector and other relevant
stakeholders. The policies are focusing on:
 Forest land and bee resources management;
 Ecosystem conservation and management;
 Forest and beekeeping -based industries and products and services development;
 Beekeeping in cross-sectoral areas enhanced.
 Institutional capacity and human resources development; and
 Good governance and gender balance enhanced.
b) Guiding principles
The National Forest and Beekeeping Programmes promote the conservation and sustainable use of forest
and bee resources to meet local, national and international needs. The Programme is also meant to
increase the forest and beekeeping sectors' contribution to the national economy and poverty reduction
as outlined in NSGRP or MKUKUTA (2005-2010).

The Forest Act (No. 14 of 2002) and Beekeeping Act (No. 15 of 2002) provide legal framework for the
management of forests and bee resources. The established Tanzania Forest Service (TFS) under the
Executive Agencies Act (Cap. 245 Revised Edition 2009), as a semi autonomous government Executive
Agency will develop and manage forest and bee resources sustainably in collaboration with stakeholders
to deliver sufficient and quality goods and services to meet local and international socio-economic and
environmental needs. The reforms under the forest and beekeeping sector aims to enhance institutional
framework, address human and financial resources, and facilitate participation of all stakeholders.
c) Objectives
 The objective to be attained is:
 Ensured sustainable supply of forestry and beekeeping products and services and existence of
honeybees by maintaining sufficient forest areas and bee reserves under effective management;
 Ensured ecosystem stability through conservation of bee and forest resources biodiversity, water
catchment and soil;
 Increased employment and income generation through sustainable forest and beekeeping based
industrial development and trade; and
 Enhanced national capacity to manage and develop the forestry and beekeeping sub-sector in
collaboration with other Stakeholders.

National policies, Guiding principles and Objectives for the

Wildlife Sub-sector
a) The Wildlife Policy of Tanzania
The 2007 Wildlife Policy has adopted "wise use principles" for sustainable natural resources management
(NRM). The Policy empowers districts, villages, and private sector with responsibility to sustainably
manage resources under their jurisdiction. The civil society is empowered to support the government at
all levels to manage the resources. Protected areas will remain under "the central management". Wildlife
and wetlands on village land and general land will fall under "village or decentralized management",
while resources in Ramsar Sites, general land (open areas), Game Controlled Areas (GCAs) and hunting
blocks where there is human presence, will fall under "joint management" i.e. between central
government and districts or villages. Further, the policy takes cognizance of latest developments in the

62
sector by incorporating ranches and zoos as economic ventures in the resource use. The new policy also
recognises wetlands as important areas for conservation. All other major policies pertaining to the
wildlife sector aim at sustainable protection, management and utilization of wildlife.

Some of the strategies adopted by the policy include:

 To maintain the existing PAs, create new ones, secure GCAs and establish a new category of a
wildlife protected area to be known as Wetland Reserve for the purpose of conserving in-situ
biological diversity.
 To encourage villages to establish wildlife conservation areas on village lands in order to secure
critical wildlife habitats, such as corridors, migratory routes and dispersal areas; safeguard
biodiversity; and effect community-based conservation.
 To ensure that wetlands continue to provide goods and services to the people and the
environment for sustainable development.
 To conserve and administer core wildlife PAs, including Wetlands Reserves, through wildlife
authorities and ensure participation of other stakeholders in management.
 To retain ownership of wildlife and wetlands. The sub sector will put a mechanism which will
allow Tanzania citizens to access wildlife and wetlands resources, including issuance of
certificate of ownership of wildlife, to ensure that national priorities are addressed and abuses
are controlled
b) Guiding principles
The National Wildlife Policy (2007) addresses "wise use principles" for sustainable natural resources
management (NRM). The Policy empowers districts, villages, and private sector with responsibility to
sustainably manage resources under their jurisdiction. The civil society is empowered to support the
government at all levels to manage the resources. This means that protected areas, will remain under "the
central management". Wildlife and wetlands on village land and general land will fall under "village or
decentralized management", while resources in Ramsar Sites, general land (open areas), Game Controlled
Areas (GCAs) and hunting blocks where there is human presence, will fall under "joint management".
Further, the policy takes cognizance of latest developments in the sector by incorporating ranches and
zoos as economic ventures in the resource use. The new policy also recognises wetlands as important
areas for conservation. All other major policies pertaining to the wildlife sector aim at sustainable
protection, management and utilization of wildlife. The wildlife resources management are guided by
Wildlife Conservation Act No.5 of 2009, the National Parks Ordinance Cap. 283 of (amended in 2002), and
the Ngorongoro Conservation Area Authority Ordinance Cap. 284 (amended in 2002).

The guiding principles contain:

 Surveillance area coverage in and outside game reserves and wetlands.
 Promote measures to eliminate illegal activities in natural resources.
 Identify investments opportunities, develop and put in place user guidelines
 Stimulate entrepreneurship and facilitate development of small and medium wildlife based
enterprises on sustainable use principles.
 Establish semi-autonomous institutions (TAWA) for provision of improved services
c) Objectives
The wildlife protected area (PA) network has objectives that relate both to conservation and socio-
economies. The overall objectives of Tanzania's protected area network to be reached 2025 are to:
 preserve representative examples of Tanzania's terrestrial and aquatic habitats and their
physical environments;
 conserve viable populations of species making up Tanzania's fauna and flora, with emphasis on
endangered, threatened, endemic species and their habitats;
 protect areas of scenic beauty and special or cultural values;
 conserve water catchments and soil resources;
 provide opportunities for public enjoyment and the advancement of science;
 provide opportunities for sustainable utilisation of natural resources;
 provide for rehabilitation of particular habitats, local relocation, and re-introduction of particular
fauna species;
 Create opportunities for access to natural resources for enhancement of rural development.

63
3.5.1.4 Fishing

Developing and modernising the sector to take advantage of the country’s vast marine
and inland water fisheries potential, by ensuring that the sector optimally performs its
role as source of food, employment, livelihood to the people, recreation, tourism and
foreign exchange. This will be done bearing in mind that fisheries resources are
renewable resources, which are limited, and therefore have to be conserved, managed
and developed on a sustainable basis. Efforts will be made to ensure sustainable
exploitation, utilization and marketing of fish resources, to ensure that the intended
national socio-economic objectives are not met at the expense of damaging the aquatic
environment. Besides, investments will be made in order to further develop the
country’s aquaculture potential.

National policies, Guiding principles and Objectives for the

Agricultural sector
a. National Policies
The national policies should facilitate:
Modernization of the Sector through
 Comprehensive land-use planning and securitization of agriculture for various economic
activities through rationalizing land property rights;
 Intensifying measures to increase output and productivity through:
o Improved quality of inputs (e.g. use of improved seeds, increased use of fertilizer and
appropriate agrochemicals in crop production, improving the local livestock’s genetic
potential, improving livestock feeds);
o Mechanization;
o Raising labour productivity by increasing the area under household production. This in
turn can be done by reducing the number of households involved in farming through
promoting non-farming activities;
o Demand-driven crop production;
o Deploying adequate extension services (by providing adequate staff and funds for
research);
o Instituting strong and effective public veterinary health systems to control and eradicate
animal diseases affecting livestock productivity.
 Encouraging out-grower schemes and strengthen cooperatives;
 Incentivizing local and foreign direct investments in agriculture;
 Developing a framework to adequately finance the sector;
 Application of ICT.
Promotion of irrigation agriculture and water harvesting as well as conservation measures
 Enhancing irrigation schemes with capital injection and rapid expansion in areas that have arable
land suitable for irrigation with lessons from past irrigation schemes on institutional factors for
sustainability of the planned irrigation services.
 Making good use of the sizeable part of the country that receives good rains and the country’s
ample topographic opportunities for building dams to capture rain water in seasonal rivers to
use in crop production and livestock.
Improvement of rural infrastructure
 Continuing with construction and maintenance of rural infrastructure (roads, tracks, paths,
footbridges);
 Increasing access to water through an increased number of boreholes, spring sources, and piped
network systems;
 Ensuring access to rural energy by continually tilting the rural energy balance from traditional
fuels and hydrocarbons to electricity (generated mainly from solar and other readily
available/renewable sources);
 Setting up information and data management systems to provide access to information,
knowledge and enhanced communication.
Raising the value of agricultural products through measures for stabilizing agricultural prices and
enhancing competitiveness of the goods

64
 Institute simple and transparent pricing
 Introduction of crop insurance schemes;
 Investment in and promotion of technologies for agro-processing and other value adding
activities;
 Strengthening agricultural marketing information services.
 Put in place trade promoting policies that encourage farmers to expand the scale of production in
order to benefit from export markets in the Eastern Africa region and beyond, particularly for
grains, and agro-processing of the same locally (exporting flour rather than grain, for example).
b. Guiding Principles
Underpinning future projects/programmes that will be undertaken in this area are:
 Developing the strong forward and backward linkages between this sector and other sectors in
the economy;
 The creation of conditions for the private sector, organized in a variety of sizes to engage
profitably in activities in this sector;
 Development of effective training and research programmes in order to build the capacity of the
sector stakeholders;
 Sustainable production;
 Good governance (addressing land use conflicts ex ante, promoting inclusiveness; curbing illegal
activities)
 Ensure agricultural investment/business environment with regard to access to land/land use
plan, rural infrastructure, taxation, trade promotion policies including access and use of market
information on regional and global export markets.
c. Objectives
The objectives to be attained by 2025 are as follow:
 Increase the sectors annual average growth rate to 6 percent through to 2025;
 Efficiently managed transition which will have employment in the sector declined to only 43
percent of population by 2025;
 Ensure food security (by, amongst others, meeting the food self-sufficiency ratio targets in Annex
1);
 Increasing the value and marketability of outputs through improvement of infrastructure, raising
quality and standards of agricultural goods (with good grading, processing and packaging) and
reduction of input and output price distortions;
 Significant increase in profitable commercial activities undertaken by the local and foreign
private entities in the sector.

3.5.2 Industry

The model for transforming Tanzania’s economy into an industrial economy, which will
eventually be led by competitiveness-based export growth, is a critical issue for policy. While it
is acknowledged that Total Factor Productivity (TFP) is the main driver of long-run growth,
there are various ways to approach this issue. Experience from Asian countries has shown two
practical models: (i) the “migrating birds and pond”, for attracting FDIs, and (ii) the “flying-
geese” pattern, where a country exploits its late-comer advantage. Tanzania has recorded some
success with the former model, but needs to strategize on the latter in order to sustain the twin
goals of dynamic inclusive growth and structural transformation.

During the initial five years of LTPP (2011/12-2015/16), Tanzania will follow the ‘flying-geese
framework’ to develop its manufacturing sector bearing in mind the changing global market
challenges and opportunities. This will involve identifying those goods where Tanzania has a
comparative advantage, currently produced in dynamically growing economies elsewhere, but
can be promoted in Tanzania. The obstacles to starting industries will be identified, and policies
will be oriented towards the removal of the same (including providing incentives to pioneering
firms). At the same time, clustered development of these industries in special incubated zones
such as EPZs and SEZs with possible FDI will be encouraged. It is essential to build in the view
and concerted incremental effort to becoming a regional manufacturing hub in the region
already at this moment.

65
Following this phase, the industrialization will concentrate on large scale natural gas
based/fuelled industries, chemical industries, iron and steel processing, mineral processing and
medium-technology manufacturing, to realize the creation of an industrial based economy. In
the second FYDP (2016/17-2020/21) criteria for selecting industries should also include
regional aspect (capability to tap the advantage of regional market such as EAC and SADC). The
third FYDP (2021/22-2025/26) will focus on improving competitiveness of all these industries,
to enhance Tanzania’s export performance.

Industry in its broad definition covers manufacturing, mining, quarrying and construction.
These are presented separately in this document in order to highlight their uniqueness and
specific interventions required in LTPP. Nevertheless, the ultimate objective is to have grown to
represent over 30 percent of GDP by 2025, implying an annual growth rate over 9.2 percent for
the entire period, and employing over 20 percent of the country’s workforce.

3.5.1.5 Manufacturing

The main challenges for this sector in meeting the TDV 2025 objectives are: sustaining the high
growth momentum and development, promoting technological innovation and adaptation,
creating and developing international competitiveness, and developing a strategic domestic
industrial base.

A new generation of industries will be required to meet these objectives. This will be achieved
through fostering innovation, new capacity, diversification, promotion of higher value addition
and industrial clusters.

In order to reach MIC status, the manufacturing sector has to grow by 13 percent per year
during the next fifteen years and ultimately contribute 18 percent of GDP, generate USD 5.2
billion in export earnings and employ about 20 percent of the total labour force by 2025.

National policies, Guiding principles and Objectives for

Manufacturing sub-sector
a. National Policies
In order to achieve the long term goals, policy measures will address the weaknesses and constraints
facing the sector, with a special focus on:
 Increasing labour productivity through skills and technology development;
 Increasing competitiveness;
 Promoting exports with an emphasis on products based on comparative and competitive
advantages;
 Promoting industrial deepening with a view to creating and strengthening forward and
backward linkages (such as through clustering of manufacturing activities);
 Increasing value addition, especially in agricultural and mineral products.
b. Guiding Principles
Principles that will guide future projects/programmes include:
 Use of domestically available raw materials;
 Promotion of Micro, Small and Medium Enterprises (MSMEs);
 Research and Development (R&D) for raising productivity and competitiveness, taking advantage
of technological breakthroughs elsewhere;
 Rapid adjustment to regional and global markets;
 Development and use of clean technologies;
 Improving the business environment (through the promotion of SEZs) and infrastructure.
c. Objectives

66
The transformations in this sector aim at:
 Manufacture share of GDP to reach around 18 percent, implying an annual growth rate of over 13
percent per annum until 2025;
 Facilitating addition of value to national products;
 Modernizing production processes;
 Creating job opportunities, especially for the youth;
 Ensuring that the country is transformed to a semi-industrialised, middle-income country by
2025.

3.5.1.6 Mining and Quarrying

In order to attain the aspirations of TDV 2025, the mining sector is tasked to exploit more
efficiently the great potentials in terms of growth, employment creation, income generation,
increased foreign exchange earnings and contribution to GDP (CDG, 2000).

In 2025 the mineral sector should be a strong, vibrant, well-organized, private sector led, large
and small-scale mining industry, conducted in a safe and environmentally sound manner. It
should contribute significantly industrialisation and to exports, the former through the strategic
exploitation of its energy and industrial mineral resources and the latter mainly through
processed and/or semi-processed mineral outputs. It is also envisaged that the sector’s
considerable potential will contribute significantly to the Government’s revenues.

National policies, guiding principles and objectives for

Mining and Quarrying sub-sector
a. National Policies
The national policies should focus on
 Ensuring that the exploitation of the country’s mineral resources is undertaken in a manner that
is beneficial to the country’s development efforts and ultimately contributes to increasing the
general welfare of its citizens;
 Ensuring sustainable mining, including addressing land degradation after decommissioning of
mining activities, good governance such as through protecting the rights of villagers, small scale
miners, gender, etc.;
 Establishing a strong link between minerals for industrial use (coal, iron ore, uranium) and
domestic industrial production.
 Strengthening the institutional capacity for effective administration and monitoring of the
mineral sector as well as the legal and regulatory framework to enhance the capacity for
monitoring and enforcement.
b. Guiding Principles
The principles that will guide future projects/programmes are:
 Increasing local participation and ownership in the sector (for instance through demarcation
suitable areas for small scale mining, increasing local ownership in foreign companies,
empowering local suppliers and contractors to the mining companies, training local experts
(especially geologists), and the like);
 Enhancing mineral value addition;
 Instituting safety and environmental standards;
 Strengthening involvement and participation of local communities in mining projects;
 Promoting use of ICT in prospecting, processing and marketing of minerals.
c. Objectives
The objectives to be reached by 2025 are the following:
 Sustain annual growth rates in the sector above 5 percent for the entire period;
 Developing gemstone cutting and jewellery industry, making Tanzania successful enough to be
the gemstone centre of Africa;
 Providing dependable employment to Tanzanians;
 Contributing significantly to Government revenues.

67
3.5.1.7 Construction

The main thrust of the industry is to build a robust, reliable and competitive local
construction industry capable of delivering the aspirations of Vision 2025.

National policies, Guiding principles and Objectives for the

Construction sub- sector
a. National policies
The national policies that will have to be implemented by 2025 are based on the following:
 Financial policies alleviating the credit constraints for the real estate and construction projects;
 Control policies ensuring the construction works are of the highest possible quality, meeting
every security and longevity standards;
 Inclusion of climatic conditions observance rules for buildings and other infrastructure;
 Innovative use of engineered local materials
 Governance policies ensuring the required increased transparency in the sector.
b. Guiding principles
The programmes and projects in the sector will be guided by the following:
 Ensuring the highest quality services;
 Enhanced transparency; and
 Choices led by their value for money.
c. Objectives
The main objectives are to:
 Improve the capacity and competitiveness of the local construction enterprises;
 Develop an efficient and self-sustaining infrastructure base;
 Ensure efficient and cost effective performance;
 Promote application of cost-effective and innovative technologies and practices;
 Enhance participation in regional and international co-operation arrangements.
 Improve coordination, collaboration among institutions and stakeholders in the construction
industry;
 Empower tertiary institutions to deliver the required number of professionals (engineers,
architects, quantity surveys and others) in response to emerging demands in the economy;
 Strengthen the regulatory authorities/institutions to ensure professional quality and ethical
conduct.

3.6 Infrastructure

3.6.1 Transport

Development of transport will aim at ensuring that by 2025, an efficient, safe modern,
integrated transport infrastructure is in place, capable of providing transportation services that
adequately link production and marketing centres within the country and with a view to making
Tanzania a regional transportation hub and trade gateway. Transformations required in
developing various transportation modes are outlined in the subsections below.

A number of projects under the Public-Private Partnerships (PPP) will be conceived and
implemented during the LTTP period. In the transport sub-sector, for instance, the following
projects are proposed:
 Construction of Kigamboni Bridge
 Dar es Salaam-Chalinze Expressway (100 km)
 Arusha-Moshi Expressway (70 km)

68
  Maritime transport – ferry services between DSM Magogoni-Bagamoyo.

3.6.1.1 Road sub-sector

There will be a focus on constructing a wide network of modern, well maintained, and all-
weather roads through sustainable expansion and rehabilitation initiatives. Efforts will also be
made to introduce new technologies in road construction/upgrading, in order to improve safety
of road users. Access controlled bypasses (to prevent undesired traffic from entering urban
areas), expressways and roadside services facilities will be constructed. All types of roads –
trunk, regional, district, urban and rural and feeder roads as well as ferries are important.

3.6.1.2 Railway sub-sector

Focus will be on modernising and expanding the railway network to enable transport of bulky
natural resources and evacuation of products, especially where long distances are involved. This
will entail extending the current railway network (e.g. construction of railway links to Mtwara),
upgrading all railway lines, including implementing the EAC Railway Master Plan, and investing
in new signalling and communication systems, locomotives and rolling stock.

3.6.1.3 Air Transport sub-sector

Focus will be on improving and expanding the air transport infrastructure and services to foster
both domestic and international trade and tourism.

3.6.1.4 Maritime Transport sub-sector

Focus will be on upgrading and expanding maritime infrastructure and improving its services to
facilitate the economic use of waterways as a cheaper transportation alternative for areas which
border rivers, lakes and the ocean.

3.6.1.5 Pipeline sub-sector

Focus will be on developing gas and liquid fuels transportation infrastructure and ensure
effective utilization of gas and liquid fuels to contribute to the country’s socio-economic
development.

3.6.1.6 Meteorology sub-sector

Meteorological information is used by many sectors, including agriculture, energy, tourism, and
transport. The future demand for meteorological services will increase, and the improvements
to be made aim at providing safe, efficient, reliable, and easily available world class
meteorological services by 2025 (including enhanced skill-levels, infrastructure, research,
training and management).

National policies, Guiding principles and Objectives for the

Transport sector

a. National Policies
These will continue to focus on:
 Developing and improving all sub-sectoral policies and regulations;
 Investment in all strategic modes of transport an in meteorology;
 Investment by private sector in transport and meteorology infrastructure and services;
 Local government and community investment in development of feeder roads transport
infrastructure and services within their jurisdiction;

69
 Sustainable financing systems for development of transport and meteorology infrastructure and
its related services;
 Use of labour-based technologies to improve rural infrastructure
 Development and transfer appropriate technologies as roles of Government buildings agency and
regulatory professional bodies such as the Engineers Registration Board, Contractors
Registration Board, National Construction Council, Quantity Surveyors’ Registration Board,
Appropriate Technical Transfer Institute, Mbeya and Morogoro Works Institute.
 Creating the requisite human capacity to manage, operate and service the modern facilities and
processes that will be needed to expand and modernise the transport and meteorology sectors.
b. Guiding Principles
Development for the next 15 years will be guided by the following:
 Completing key missing links on transport corridors and ensuring that all sections of these
corridors are rehabilitated/upgraded or constructed to ensure a good flow of traffic and thereby
promoting national and regional integration;
 Facilitating the timely delivery of inputs and produce to firms and markets to increase yield and
get better prices;
 According high priority to projects which will support agriculture, manufacturing, mining, and
tourism;
 Responding adequately to the needs of the productive sectors;
 Promote safe and efficient transportation of natural gas and liquid fuels countrywide;
 Promoting regional projects (with SADC and EAC member States) in order to improve and
harmonize quality and access regional financing;
 Promoting good governance in transport infrastructure investments (protecting the natural
environment, and harmonizing the use of land with other demands) – an integrated approach for
protection and development of land-based infrastructure
 Promoting use of ICT in planning and management;
 Managing the growing urban mobility demand.
c. Objectives
The objectives to be met by 2025 are as follows:
 Meet all the specific sub-sectoral targets displayed in annex 1;
 Promote use of multi-modal transport;
 Ensure uninhibited movement of people and goods in the country, with emphasis on dynamic
strategic economic areas, in the region and globally;
 Creating a conducive environment for effective and profitable participation of the private sector
in managing and operating transport infrastructure and providing attendant services.
 Define the modality and financing facilities particularly for local contractors and consultants;
 Mobilise financing for public infrastructure construction and maintenance

3.6.2 Energy

Energy is the engine of development in any country, because it affects nearly all economic
activities. Therefore, the objective of the Long Term Perspective Plan (LTPP) is to ensure
availability of adequate power supply on sustainable basis, power which is reliable and of good
quality to all customers. As such, the main challenge of this sector in meeting the objectives of
TDV 2025 is to develop a reliable, economically accessible and appropriately priced energy
supply (CDG, 2000). Tanzania has huge untapped potential in both renewable and non-
renewable sources of energy. Immediate exploration and utilization of these sources in a
sustainable and efficient manner is required. There is a need of reducing reliance on biomass for
energy supplies due to its adverse environmental impacts.

Alternative renewable energy sources such as solar, wind and geothermal need to be relied
upon. Also, the extraction and processing of uranium shall be considered in the longer term.
Given that the energy supplies must be reliable, adequate, safe and produced in an
environmentally friendly and sound manner, there is a need to review the policies and produce
guiding principles to make sure the sector achieves these objectives.

70
 National policies, Guiding principles and Objectives for the
Energy sector
a. National Policies
The following policies, plans and strategies should be pursued in order to address the challenges in the
energy sector:
 Power Sector Strategy: A review of policies and strategies is necessary to encourage private
participation in all segments of the electricity sub-sector (i.e. generation, transmission and
distribution networks). This can be done through conventional and non-conventional (like Public
Private Partnership (PPP) arrangements) financing mechanisms. Tariff levels have to be
reviewed, focusing on a gradual move towards cost-reflective tariffs and phasing out subsidies;
 Master Plan for the development of the power generation sector: In order to meet the additional
demand for electricity and reduce the high level of expenditure on liquid fuels, the investments
will be directed towards projects which improve load base power and represent a minimal cost
and have a minimal impact on the environment. The Master Plan will focus on a suitable energy
mix which combines all the available energy sources such as coal, gas, hydro, geothermal, wind
and bio-fuels. Oil plants will only be for intermediate and spike loads in case of shortfalls. In
order to achieve the objectives of the Master Plan, the following strategies will be implemented:
(i) enhance the initiatives to develop coal-fired power generation plants, (ii) enhance the
initiatives to develop renewable sources of energy (the main focus being on wind, solar and
geothermal energy, putting emphasis on the utilization of local resources to ensure security and
continuity of supplies and to reduce dependence on biomass based fuels), and (iii) fast-track the
development of uranium as a sustainable source of load base power;
 Master plan for the development of electricity transmission sector: The Master Plan development of
transmission grid is proposed in a way to meet electricity demand, based on electricity minimal
cost, with quality and sufficient service. The main objective of this master plan is to reduce
electricity outages and to ensure a continuous electricity supply without outages post 2012;
 Refinery and marketing oil sector strategy: Emphasis will be directed towards bulk procurement
and improvement of the refinery sector, currently facing difficulties related to inefficient
technology use and a lack of modern operations, maintenance and control systems;
 National Gas Master Plan: The Master Plan will indicate gas production from gas wells,
transmission and distribution networks to the various customers around the country. Emphasis
will be directed to produce electricity, provide process heat in industries, fertilizer
manufacturing, domestic use and for powering vehicles;
 Promoting sub-regional and regional cooperation and collaboration in energy, and putting in
place mechanisms to integrate the national grid with the regional grid to create and maintain a
viable regional power pool.
b. Guiding Principles
For the next 15 years, the development of the energy sector in Tanzania will be guided by the following
principles:
 Electricity tariff system development: The plan requires that the future tariff system should cover
the generation, transmission, distribution cost and provide an acceptable rate of profit, while
ultimately removing direct Government subsidies by 2025. The development of the sector should
also ensure the affordability of electricity (given its impact on the country’s competitiveness and
the population’s livelihood);
 Demand Side Management (DSM) and Energy Conservation: Create awareness to the public and
other energy users about DSM and Energy Conservation. The strategy aims to reduce
unnecessary use of energy and reduce losses;
 Establishing a system of production, procurement, transportation, distribution and end-use that
is efficient, sustainable and environmentally friendly. This will be further implemented by
putting in place incentives and regulations which will ensure an appropriate balance in the
ecosystem, preserving the habitat and other life supporting systems including the natural water
cycle and the safety considerations;
 All policies and plans will work at ensuring reliability and the decrease and eventual cease of
power outages and shortages.
c. Objectives
The main objective is to enhance the energy sector based on market economy principles and develop a
modern energy infrastructure in order to ensure:

71
 Increased security and reliability of the energy supply in general and electricity in particular, at
the national and regional levels to ensure that energy does not remain a binding constraint to
development by 2015. Putting in place strategies to ensure a continued reduction in technical
and transmission system losses aiming at reaching annual losses of only 15 percent by 2025;
 Increased energy efficiency in generation/production and final use of energy sources aiming at
minimizing environmental pollution with planned installed capacity of 6,700 or more by 2025;
 Increased use of alternative and renewable energy sources such as wind, geothermal, solar and
biofuels;
 Establishment of an efficient energy sector from a financial and technical point of view;
 Establishment of an effective institutional and regulatory framework and restructure energy
companies;
 Optimization of the supply system based on the least cost principle with minimal environmental
pollution, with per capita consumption reaching 400-700 kWh;
 Increased investments in the energy sector through capital enhancement by International
Financial Institutions as well as private capital; and
 Establishment of a competitive electricity market according to the national energy policy.

3.7 Lands

Land is a capital asset, offering opportunities for both social and economic empowerment.
Securing rights to land are a basis for shelter, to access services and for civic and political
participation. Those rights can also provide a source of financial security by providing collateral
to raise credit, and by being a transferable asset which can be sold, rented out, mortgaged,
loaned or bequeathed.
Land management is therefore of great concern in Tanzania’s quest to promote socioeconomic
development. Ensuring effective property rights management and their enforceability are
crucial in both protecting investors and enhancing land value. The institutional framework for
land management needs to be realigned to facilitate socioeconomic policy management.

Land use planning needs to be hastened for prompt management of ever increasing social
conflicts over uses of land. Designating special land for human settlement and urban
development as well as other social and economic uses away from agricultural land needs to be
enhanced. The time cost to complete land transactions and its transferability needs to be
reduced drastically.

National policies, Guiding principles and Objectives for the

Lands sector
a. National Policies
Given the above mentioned challenges, the following policies will have to be deployed in land use and
ownership management to:
 Establish National direct receiving station to facilitate mapping, surveying and land use planning,
among others;
 Strengthen the institutional framework for land use and ownership management with the view of
reducing time and transaction costs;
 Establish and maintain geodetic control network to facilitate surveying and mapping;
 Prepare general planning schemes and village land use plans at all levels;
 Harmonize land Policies (Land Policy, Human Settlements Development Policy and others), land
laws (Land Act of 1999, Village Land Act 1999) and land related regulations;
 Reverse the effects of environment and climate change that are lessening the ability of land to
produce enough food to feed its population, create surplus for export and to produce requisite
mass of agricultural raw materials for industrial feedstock;
 Ensure readily available land banks for investment promotion;
 Improve human resource skills in tandem with the future requisite for land use and ownership
management.

72
 Strengthen and expand ICT infrastructure for land information system to facilitate provision of
efficient land services (including address and postcode system);
 Strengthen the capacity of National Land Use Planning Commission and LGAs levels.
b. Guiding Principles
The land management will be directed by the following guiding principles:
 Ensuring transparent land management processes and facilitated negotiations in land acquisition
(to ensure that access to land does not remain a binding constraint to growth by 2015), including
the need to keep local landholders and civil society informed and involved;
 To protect the rights of indigenous and marginalised groups who are particularly vulnerable;
 To respect existing land rights regardless of whether they are legally documented or customary;
 To avoid alienation of local communities by foreign investors for which contract farming and
leases are preferred over purchase as they provide an on-going revenue stream and leave
smallholders in control of their land; and
 To strengthen capacities to undertake thorough environmental impact assessments and
monitoring to ensure investments are undertaken in a sustainable manner.
c. Objectives
The objectives to be reached by 2025 are the following:
 Hastening land use planning;
 Setting up an Integrated Land Management Information System (ILMIS) at all levels;
 Identifying and acquiring parcels of land for national land bank to accelerate commercial
agricultural farming investments and industrial development promotion;
 Strengthening the institutional capability at the national and local levels to manage and enforce
property rights, and supervising the housing and human settlement development (both in rural
urban areas);
 Promoting the development of a pool of skilled and competent human resource skills on land and
human settlement development management;
 Strengthening land sector activities decentralization at zonal, regional and district levels;
 Implementing the land allocation to investors through the equity principal (land for equity);
 Having in place a land compensation fund at National, Regional and District levels;
 Establishing and strengthening the District Land and Housing Tribunals to all districts in the
country (about 150 districts);
 Strengthening both Tabora and Morogoro Ardhi Institutes;
 Establishing and maintaining valuation databank.

3.8 Housing and Human Settlement

Tanzania is facing a growing shortage of housing and a strong need to improve residential
housing and human settlements (both in rural and urban centres). These issues have to be dealt
with through a proactive land use planning and improved availability of housing development
financing. There is also a need to re-organise the rural construction and training units (common
in the 1960s) to spur availability of skilled manpower for housing construction. Given the
increasing urbanisation, housing plots need to be availed proactively and restrictions on
haphazard housing and human settlement developments in unplanned and risk prone areas
have to be checked to the minimum. Regulations have to be set to observe land use as
appropriately planned and separation of homes from development of commercial, recreational
and industrial activities.

National policies, Guiding principles and Objectives for

Housing and Human Settlement sector
a. National Policies
Consistently with the contemporary challenges, a number of national policies will have to be reviewed,
strengthened and/or developed with the following focus:
 To monitor the potential adverse effects of increased human settlement on the environment and
climate change, as well as the associated risks on human livelihood and economic growth;
 To advance preparation of land use planning and human settlement to facilitate harmonious
housing and human settlement development for the future;

73
 Facilitating the access to credit for real estate investments, in order to improve the quality and
decrease the cost of urban and rural housing;
 Facilitating the establishment of Housing Cooperatives;
 Facilitating the regularization of unplanned settlements at LGAs levels;
 Increasing availability of low-cost housing;
 Enhancing orderly urban and rural land use planning and management; and
 Redevelop the rural construction units in order to provide decent housing in rural areas.
b. Guiding Principles
The guiding principles for the housing and human settlement projects will include:
 To ease accessibility to priority serviced land for housing and human settlement development;
 To put in place various facilitative institutional frameworks to help develop the real estate credit
facility mechanisms;
 To strengthen human skills for the construction and management of human settlement
development.
c. Objectives
The following objectives are to be reached by 2025:
 Improved basic services in all human settlements;
 Halve the share of urban dwellings in bad condition;
 Over 80 percent of residential houses in urban centres developed in accordance with the planned
land use;
 To prepare general planning schemes and village land use plan at all levels;
 To decentralize land, housing and human settlements services at LGAs levels;
 Identified parcels of land for national land bank to accelerate real estate and housing
development promotion;
 Strengthened institutional capability at national and local levels to manage and enforce
adherence to housing and human settlement development both in rural and urban areas.
 To strengthen the capacity of National Housing Corporation (NHC) and National Housing and
Building Research Agency (NHBRA) to advance availability of housing and management of the
state’s interest in joint ventures with the private sectors;
 Established housing cooperatives at village and district levels;
 75,000 housing stocks built for different income groups, especially through public private
partnership;
 To strengthen research on low-cost housing at district level and establishing grassroots building
brigades;
 To create conducive environment for banks and other financial and non-financial institution to
provide loans for housing development; and
 Promoted development of a pool of skilled workers on housing construction and human
settlement development management.

3.9 Services

The services sector will continue to play a central role in the country’s development, with the general
objective of increasing the share of services to GDP to 49 percent, with a sustained annual growth rate of
around 8 percent during the entire period.

3.9.1 Trade and Commerce

The growth and development of trade depends on the existence of a vibrant market for products and
services. However, the market is hampered by low demand, unfair competition from counterfeit and
substandard goods. Moreover, linkages between the informal traders and the formal sector are either
weak or non-existent. The trade and commerce sector, which comprises of goods and services, is critical
for the national development. The significant importance comes, among others, through the development
of the domestic market and the integration to the regional and international markets, both of which
increase the country’s ability to face the challenges remaining in the sector. Table 3.3 displays the targets
to be achieved by 2025.

74
Table 3.3: Targets in the Trade sector for 202541:
S/N Item From 2010 To 2025
1 Share of Tanzania in Total World 0.04% 0.20%
Trade
2 Share of Tanzania in Total EAC Trade 32% 48%
3 Share of 'trade and repairs' to GDP 12% 14%
4 Share of Exports to GDP 28% 40%
Source: Economic Survey (2010), WITS (2012), EAC (2010), IGC-POPC (2011), POPC’s computation

The aim is to achieve these targets and improve the export capacity (by establishing trade and
marketing information systems and review and enforce related legal framework, amongst other
things), whilst at the same time reversing the declining trend in the import coverage rate.
Indicators of performance include trade to GDP ratio, efficient logistics, domestic competition
and ability to comply with international health, safety and quality standards and improved
standard of living as envisaged in the national development Vision.

National policies, Guiding principles and Objectives for

Trade and Commerce

a. National Policies
The policy measures necessary to transform Tanzania into an internationally competitive economy will
focus on:
 To enhance Tanzania’s capacity to manage Trade Policy, Trade Strategy, and Aid-for-Trade
formulation and implementation processes;
 To provide a mapping of current development needs and priorities within the Tanzanian trade
sector and the role of current or planned bilateral development assistances within the sector;
 Increasing market information and access;
 Investment in Industrial Parks, Export Processing Zones, and in export oriented areas in which
Tanzania has a comparative and competitive advantage;
 Promoting market integration and infrastructure development and connectivity with
neighbouring countries (including EAC and SADC), in order to transform Tanzania into a
logistical and transitional hub;
 Increase competitiveness, through industrial and mining development, increased productivity,
reduction of transport costs (following infrastructure investments) and through promoting value
addition and joining the global value addition chain;
 Establish one-stop border posts so as to facilitate trade;
 Addressing supply-side constraints;
 Trading with new emerging markets like China, India, Brazil and South Africa. Taking advantage
of international schemes given by various international groups like EU – EPA, EBA, and AGOA,
whilst increasing the country’s integration in the EAC and SADC regions;
 Participate effectively in the COMESA-EAC-SADC tripartite negotiations;
 Develop an export development strategy;
 Making full use of bilateral investment agreements.
b. Guiding Principles
The main guiding principle during LTPP will be:
 Participating effectively in international trade, at both regional and bilateral levels;
 Having an effective participation in the rules-based trading system (WTO);
 Having a consistent working arrangement for following up trade matters;
 Increasing the value of exports and joining the Global Value Addition chain;
 Increasing product diversification and enhancing effective marketing of exports.

41 All projections madse in this table are mae using past growth rates and the estimated future growth rates of trade
and exports. Therefore, these projections do not take into account the fact that the country could become a major
international gas exporters (as the current data do not allow us to make sound projections), and can thus be seen as a
lower bound of the situation might be in 2025.

75
c. Objectives
The overall objective of the LTPP in the trade sector is to make trade an important part of a vibrant
competitive economy, contributing significantly to the transformation of the country into a middle-
income one. Specifically, the country will:
 Increase the share of trade in the country’s GDP;
 Develop a strategy for trade in services;
 Improve market linkages by improving both soft and hard infrastructure;
 Enhance market knowledge and information, necessary to facilitate market diversification;
 Increase the country’s market share, globally and regionally, by reaching all targets displayed in
table 3.3;
 Improve Tanzania’s participation in regional trading blocs by aiming at sustainably operating
with a current account surplus;
 Enhance compliance on all multilateral, bilateral and regional trade agreements.

3.9.2 Tourism

The tourism sector plays a crucial role as a growth driver (given the steady growth in the sector
for the last decade) and as an income generator (for the Government, through taxes, and for the
country as a whole for the sector's role in generating foreign reserves). However, the extent to
which tourism is going to substantially contribute to economic growth will depend on efforts to
attract more tourists to the country. This will happen through policies that will lead to among
others enhancing and expanding the tourism product (geographical diversification e.g. western
and southern circuits and developing new tourism products e.g. convention and exhibition
centres, theme parks), improving air access, addressing land for investment, improving access
and infrastructures, creating greater market awareness, strengthening institutions and
economic linkages, improving knowledge and know-how, and attracting investment capital.
Efforts will continue to protect tourist resources, promote domestic tourism and nurture
community-based investments and improvements in social services in tourist areas to
encourage community participation in the protection of tourist resources.

National policies, Guiding principles and Objectives for

Tourism
a) National Policies
The following policies will have to be deployed to support tourism development towards 2025.
 Protection of tourist resources
 Enhancing and expanding tourism sector both product wise and geographically. This will entail
geographical diversification of tourism development to western and coastal Zones including
beach resort tourism, development of convention and exhibition centres, eco tourism
development, and promotion of cultural heritage activities.
 Modernizing tourism infrastructure in order to match the new demands (especially the up
market trend in the tourism sector). A viable tourism industry requires sound infrastructure
along with a developed superstructure of facilities and amenities. In fact tourism is a highly
diverse industry that requires many different components to be in place before there is a
complete product to offer in the marketplace. The implication of this is that a deficiency in any
one component will undermine the capacity of the destination to meet the expectations of
tourists;
 Strengthening private public sector partnership to enhance tourism investment, development
and promotion;
 Continuing enhancing marketing and promotional efforts through various marketing and
promotional techniques:
 Improving knowledge and 'know-how': One of the key characteristics of successful tourism
destinations is their emphasis on 'knowledge and know-how';
 Increasing the contribution of foreign exchange and revenues accrued from tourism while foreign
exchange sustainable growth of the sector through the promotion of sustainable and quality
tourism.

76
b) Guiding Principles
The tourism and antiquities sector is guided by a number of policies and regulations, including National
Tourism Policy (1999) and Cultural Heritage Policy that is geared towards contributing to economic
development and livelihood of the people; Antiquities Act, 1964 (amended in 1979) that provides for the
conservation and protection of sites and articles of palaentological, archaeological, value; the Tourism Act,
2007 that provides the institutional framework, administration regulation, registration and licensing of
tourism facilities and activities; and Tourism Master Plan (2002) that serve as a road map and strategic
framework for the sub-sector. The Tourism Master Plan (2002) is a useful document to guide the growth
of tourism in Tanzania. It focuses on the following aspects:
 Enhancement of the Northern Circuit and its extension to the Usambara Mountains to the East,
with Pangani River and the port of Tanga;
 Development of a strong, Southern Circuit;
 Development of Dar es Salaam and its water front; and
 Linking the Northern and Southern Circuits via a corridor.
The Master Plan also emphasises the importance of niche products, such as soft adventure, bird watching,
better facilities and cultural or historical products. The plan also proposes that in order to develop the
cultural component of the tourism product there is need for:
 Identification of conservation needs of historic and cultural sites in priority development zones
and the implementation of conservation measures for selected sites.
 The establishment of interpretative/exhibition centres for a number of themes - early man, rock
art, slave trade, village life, etc. In certain strategic locations, these centres could form the nucleus
of tourist service centres providing information, toilet and other facilities for visitors.
c) Objectives
 Doubling the number of international tourist arrivals from 0.8 million in 2010 to 1.6 million by
2025, while increasing contribution of the sector from US$ 1.3 billion in 2010 to over US$ 2.6 by
2025.
 Creating more job opportunities in the tourism sector
 Foster the diversification of the tourism development geographically and product wise.
 Ensure well trained personnel and increased accommodation.

3.9.3 Financial Services

Giving the population access to financial services will foster growth by enabling the financial
sector to use this capital to finance investments and to ultimately bring down the country’s
borrowing interest rates. This will ultimately increase the share of private credit and domestic
deposits to GDP inside the country.

National policies, Guiding principles and Objectives for

Financial Services
a. National Policies
The potential of the financial sector growth is far from being harnessed, so the LTPP emphasizes on:
 Faster implementation of the ‘second generation’ financial sector reforms in the earlier years,
and envisaged further measures to increase the sophistication and scope of the sector in the
outer years of the 2011-2025 period, in order to achieve the same best practices and attainments
as in the middle-income countries;
 Safeguard stability in the banking system while continuing to guide efforts in expanding the
sector. Also, corporate governance issues, including enhancing transparency and accountability,
will be a central concern;
 Increasing the outreach to people currently outside the financial system. This will happen mainly
through improving and developing the local and regional development banks, the quasi-banking
institutions (like the Savings and Credit Cooperative Societies (SACCOs)), the informal financial
services providers (like the Rotating Savings and Credit Associations (ROSCAs)), the
microfinance institutions, and the insurance companies, the capital market, and the pension
schemes;
 Reducing the cost of borrowing and raising capital to improve rates of investment;

77
 Enable and promote long term financing in the country, to enable the development of large-scale
and long-term projects.
b. Guiding Principles
The guiding principles for the next 15 years are as follows:
 Efficient financial intermediation systems;
 Policies, laws and regulations that will both increase financial services outreach and reduce cost
of raising capital (be it through borrowing or on the capital and stock markets);
 Effective participation in the financial services system of both people in need for finance and
those who have excess liquidity;
 Effective use of infrastructure for financial institutions like banks, insurance companies,
provident and pension funds, micro-finance and institutions including NGOs, SACCOS and
community banks, other non-bank lending institutions.
c. Objectives
The objectives until the completion of TDV 2025 are as follows:
 Doubling the share of the population formally or semi-formally included in the financial sector
from 17 percent to 34 percent;
 Decreasing the share of the people excluded from the financial sector by 10 percentage points
(from 56 percent to 46 percent);
 Share of people using informal financial instruments will continue to decline (from 27 percent to
20 percent, following the current trend);
 Increase the share of domestic credit to the private sector to GDP from 16 percent to around 50
percent;
 Increase the market capitalization of listed companies from 5.5 percent to 25 percent of GDP, and
the stock traded from 0.1 percent to 5 percent of GDP;
 To have a sound, stable, and market-based financial system that supports efficient mobilization
and allocation of resources, necessary to achieve economic diversification, sustainable growth,
poverty reduction and wealth creation;
 To improve the trust in the banking system, by spreading the information to improve the
knowledge and reduce the cost; and
 Carry on with the financial deepening process, by for example improving the access and servicing
of rural areas and more particularly developing new finance instrument.

3.9.4 Science, Technology and Innovation (STI) and Research & Development (R&D)

Tanzania needs to harness science, technology and innovation to enable the society to meet the
basic needs of its people and to develop international competitiveness in all areas of trade and
service delivery. The current state of science, technology and innovation in Tanzania, though
improving, remains low to enable the envisaged economic transformation. All improvements
will be based on the increased quality of general education, and science and technology
education in particular.

The improved value-chain and increased country’s competitiveness will happen through the
increased linkages between R&D institutes, the academia and the productive sectors, but also
through the strengthening of the institutional framework for patenting and management as well
as the mechanisms for technology transfer and adaptability. Fostering linkages with institutions
of science, technology and innovation from other relatively advanced countries would be
paramount in this regard.

In a world of rapid technological change which impacts on the supply and demand, if STI is not
mainstreamed, the risk of falling further behind is factual.

78
 National policies, Guiding principles and Objectives for
Science, technology and Innovation (STI) and Research and Development (R&D)

a. National Policies
The focus will be to strengthen the national capacity to go hand in hand with technological changes by
accelerating human resource development, investing in research and development, and ensuring linkages
between R&D and the productive sectors. The policies will be led by the need:
 To improve national STI systems by strengthening (i) Strategic national STI leadership and
foresight; (ii) Policy formulation and evaluation mechanisms (iii) Management and coordination
of STI (iv) Regulatory framework (v) Priority setting and performance assessment mechanisms;
 To enhance capacity of public STI institutions by: (i) Reforming the Public R&D System; (ii)
Streamlining and revitalizing R&D institutions; (iii) Capacity building of High Learning
Institutions for R&D; (iv) Promotion of centres of excellence; (v) Establishing technology
development and nurturing zones/centres
 To increase commercialization of STI outputs through: (i) Promoting the development of new
spin-off enterprises from R&D activities; (ii) Promotion of Graduate Entrepreneurs; (iii)
Strengthening management and protection of Intellectual property rights (iv) Setting and
managing STI products and services standards
 To foster foreign investment in STI by: (i) Promotion of strategic bilateral and multilateral
collaboration in STI (ii) Establishment of STI Diplomacy;
 To foster human resource planning, development and management for STI through: (i) Knowledge
and skills development; (ii) Lifelong learning; (iii) Enhancing societal STI knowledge base; (iv)
Human resource planning, development and management (iv) Attracting and strategically
utilizing foreign and diasporas talents; (v) Harnessing creativity and innovation in the workplace
 To enhance financial capital availability and risk mitigation through: (i) Expanding STI Funding
from ‘Traditional’ Financial Facilities; (ii) Financial incentives for STI initiatives; (iii) Public
procurement to leverage innovation; (iv) Development of venture capital ecosystem; (v)
Establishment of secondary stock exchange; and (vi) Risk Mitigation and Monitoring
mechanisms;
b. Guiding Principles
The investments for the next 15 years will focus on:
 Projects and programmes that are geared towards building-up technological capabilities in form
of education and skills enhancement; through establishing and strengthening STI colleges and
polytechnics
 Developing strategic skills by educating Tanzanians in the best colleges abroad
 Integrating science, technology and innovation in the socio-economic system of the nation
 Strengthening and expanding research infrastructure
 Increasing commercialization of research outputs by establishing spin-off companies
 Increasing the contribution of STI to national economic growth
 Increasing efficiency in the national STI system
 Intensification of innovation in priority sectors
 Evaluation and monitoring of impacts of strategic technical interventions
c. Objectives
The objectives to be reached in the next 15 years are as follows:
 To have freed resources and have come up with the requisite policy environment to the pursuit
of creativity and excellence in scientific and technological endeavour, and incorporate new
knowledge into socio-economic processes;
 A developed and efficient value chain, with increased sophistication of the country’s export, by
fostering the increased share of high technological intensity on the content of the country’s
tradable goods;
 Increased general education, awareness level and use of science, technology and innovation in
production, trade and provision of services;
 Increased linkages between R&D and academia and the productive sector.

79
3.9.5 Communications sub-sector

Taking into account the country’s long-term economic transformation, improving Tanzania’s
ICT broadband (high capacity networked) readiness, its information literacy and the
development of a competitive local human capital will require significant political leadership
commitment, aggressive investment ahead of demand, and deliberate policy efforts. To provide
a national framework that will enable ICT to contribute towards achieving the country’s
national development goals, and Transform Tanzania into a knowledge-based society through
the application of ICT, the following strategic directions will have to be followed.

National policies, Guiding principles and Objectives for

Communications
a. National Policies
The national policies include:
 Tanzania Communications Regulatory Authority (TCRA) should improve the legal and
competitive frameworks, including pressing private communication operators to reduce the cost
of services to reflect the market conditions, technological gains as well as the public resources
invested in the sector (including tax remissions);
 Building ICT capacity by expanding the training of ICT professionals and technicians, involving
various fields (such as computer engineering, information technology, electrical and electronic
engineering, telecommunications engineering and information science).
 Review the 2003 ICT policy to accommodate the latest technological advancement;
 Review the legal and regulatory framework which will enable more participation of the private
sector in ICT infrastructure investment;
 Establish ICT Coordination body (i.e. ICT Commission) to harness ICT initiatives including
investment in provision of ICT services/applications in order to ensure optimum impact to
national development.
 Review policies and legal framework to stimulate private sector participation in ICT innovation
and development of relevant solutions/application to an\application to Tanzanians
 review policies to promote uptake and usage of ICT services in rural communities
b. Guiding Principles
For the next 15 years, the development of the ICT sub-sector in Tanzania will be guided by the following
principles:
 Make use of the National ICT Broadband Backbone (NICTBB) infrastructure in order to increase
the efficiency in all sectors and fulfil the increasing demand for information services;
 ICT industry to encourage R&D, with the results being utilized to enhance modern business;
 Make use of Mkongo (marine cable) into inland networks so as to reap the benefit of the lower
costs, higher carrying capacity and higher speed which Mkongo provides.
 Harness NICTBB and UCAF resources in order to spearhead delivery of ICT service to all
Tanzanians.
c. Objectives
The objective to be attained by 2025 is as follows:
 To strengthen the competitive capacity and abilities of the service providers and business
enterprises as a whole within Tanzania, through an enhanced communication system;
 To enhance access to high quality, affordable and equitable IT, Telecommunication, broadcasting,
library and postal services country wide;
 Establish mechanisms that will result in reduced access costs to both abundant local and
international internet bandwidth for institutions and individuals in Tanzania;
 Contribute to efforts in making the country a competitive developer and producer of ICT
products and services.
 To establish and review communication policies and regulations in order to enhance conducive
environment for sector growth and sustainability and ensure its contribution to social economic
development Transform Tanzania into regional communication hub offering International
connectivity and viable solutions and applications
 To foster delivery of affordable universal communication Access to all Tanzanians

80
 To enhance public private partnership in development and adoption of Communication Service
and application.
 To strengthen stakeholders cooperation and collaboration at national, regional and International
level, in order to promote innovation and entrepreneurship in the communication sector.

3.9.6 Postal Services

To have an efficient and effective basic postal service (Universal Postal Services) that employs
state of the art ICT in order to reach all locations and people throughout the country at an
affordable price (so as to meet the growing socio-economic and cultural requirements), will
work towards poverty alleviation and development to a middle-income economy by the year
2025. In view of the above, the Government has established a special fund, the Universal
Communications Access Fund (UCAF), for the development of the postal and
telecommunications services in the rural and underserved areas.

National policies, Guiding principles and Objectives for

Postal Services

a. National Policies
The policies for the next 15 years include:
 The National Postal Policy, along with The Electronic and Postal Communications ACT (2010),
which both recognizes the need to ensure the provision of basic postal services and
communications access to the whole population (especially the underserved rural and
economically disadvantaged areas of the country).
b. Guiding principles
The investments for the next 15 years will focus on:
 Capitalization of the Public postal services operator;
 Develop a competitive environment for delivering efficient an high-quality postal services;
 Commercialize the services of the public postal operators;
 Involve the private sector participation in the provision of postal services;
 Stimulate growth of the market for quality postal services;
 Modernize the postal sector by utilizing appropriate state of the art technologies so as to satisfy
diversified customer needs; and
 Facilitate effective and efficient utilization of public and private resources in order to increase the
development and sustainability of the postal sector.
c. Objectives
The main objectives for the next 15 years are:
 To have an efficient and effective commercially oriented Public Postal Operator so as to
contribute to the national socio-economic development;
 To modernize and expand the postal network in order to meet the increasingly diversified needs
of the customers;
 To promote partnerships and joint ventures in creation of wealth to fixed assets for the public
postal operator to improve the capital base;
 To have a comprehensive address system that includes, among others, street names and
identification of buildings (thus facilitating physical delivery of mail); and
 To attain optimum security and safety in the provision of postal services in the country.

81
3.10 Demographic Transition and Related Issues

3.10.1 Population Dynamics

Population dynamics in this Plan are centred on three main topics: the country’s demography,
the importance of the youth and the rural-urban migration trends. Three major elements that
will be considered in the execution of the national Plan (based on population dynamics) will
include (i) the control/reduction of the fertility rate from 5.4 percent in 2010 to an expected 3.4
percent at the end of the Plan period, (ii) fostering youth development through employment
generating and skill development programmes, and (iii) contain the rural-urban migration by
creating productive and growth enhancing sectors in the rural areas.

National policies, Guiding principles and Objectives for

Population Dynamics
a. National Policies
Therefore, the national policies that will be set in place during the next 15 years will:
 Take necessary intervention measures to control fertility rates in order to contain the population
growth rates as close as possible to 2.5 percent per annum during the Plan period;
 Ensure an efficient information sharing framework for the youth (by establish youth information
centres starting at village level and by promoting youth programmes through the media), in
order to provide the youth with a better idea of their potential and possibilities;
 To strengthen and expand vocational training in public and private training centres with a dual
purpose of fostering youth industrial and self-employment jobs, by focusing on the special needs
of the labour market;
 To strengthen and develop youth-related programmes on credit schemes and service delivery to
provide them with capital and access to market;
 To strengthen youth-related training and skills development programmes in urban and rural
areas, and enhance youth empowerment for self-employment in areas of entrepreneurship,
leadership, project management, financial administration and book–keeping;
 Provide conducive environment for the creation of productive centres in the rural areas in order
to retain rural workforce and avoid unnecessary rural-urban migration;
 Provide conducive environment to encourage unemployed and retired urban dwellers to shift
into rural settlements and engage in productive sectors that will be created or designed in rural
settlement so as to reduce social instability;
 Establish rural productive and technical support centres that will transform rural areas into
industrial production centres, through a transfer of technology and innovation that is critical for
the prosperity of rural economy;
 Take all necessary measures to ensure the creation of planned small to medium urban areas, that
will be facilitated by basic social and economic amenities, like for example power, water and
infrastructure to support agro-processing industries;
 Design appropriate interventions that will address welfare issues for disadvantaged rural groups
in getting access to basic social and economic facilities, in line with the basic human rights
depicted in the Constitution;
 The ministry responsible for community development, home affairs and health should develop
affirmative action and programmes aiming at improving security, health and livelihood for the
disadvantaged groups;
 The ministry responsible for Local Government, industry and agriculture should determine
appropriate industrialization and agricultural production strategies for the local communities,
taking into consideration the natural endowment, skills and the need to increase value addition
in the produced crops;
 The ministry responsible for health, education, community development, should design
appropriate training programmes and curriculum that will be introduced to all reproductive age
groups with the aim of controlling fertility rates to manageable targets as targeted in the Plan;
 The ministry responsible for health, with support from key stakeholders, should champion and
execute programmes related to reproductive health and rights covering all reproductive age
groups, with specific emphasis to rural communities where facilities and knowledge are limited.
b. Guiding Principles

82
In the next 15 years, the guiding principles will be to ensure that:
 The ministry responsible for information, youth, culture and sports should foster information
about the existing job and training possibilities, develop new adapted training and skill
development facilities and programmes (with the help of the ministry responsible for education
and vocational training), and generally ensure that the needs of the youth are translated into the
main social and economic services;
 The ministry responsible for education and vocational training will work on increasing the
absorption of the secondary and tertiary level education;
 The ministry responsible for agriculture, livestock, community development, health and the
relevant local authorities should carry out campaigns that will address issues of malnutrition,
and production and storage of food crops so as to ensure availability of sufficient food for the
population;
 The ministry responsible for health, education and the relevant local authorities should carry out
nutrition campaigns including preventive health measures against common communicable and
non-communicable diseases;
 The Local Authorities should create an enabling environment that will facilitate access to health
facilities and personnel for all categories of people (specifically in the rural areas);
 The ministry responsible for community development should undertake reproductive health and
rights campaigns in all communities, with a target of addressing negative customs, norms and
beliefs on issues of fertility and reproductive health and rights among social and cultural groups;
 The ministry responsible for land, agriculture and industry should establish special incentive
packages that can be used to encourage unemployed urban youth to move to rural areas and
engage in productive agricultural economic ventures, including agro-processing of food crops;
 The ministry responsible for agriculture, industry, science and technology should take all
necessary measure to ensure that the results of research, development and innovation are
availed and utilized for the increased production of agricultural goods and the industrialization of
rural areas;
 The ministry responsible for water, energy, local authorities and infrastructure should take
measures to ensure budgeted resources are deployed for improvement of water facilities,
infrastructure development and generation/transmission of power for rural areas;
 Ensure the economic and social services provided in the economy take into account the needs of
the youth (especially related to health and education);
 Ensure that the youth development strategies foster good governance, equity, accessibility,
gender inclusiveness, youth empowerment and participation, and respect all cultural beliefs and
ethical values.
c. Objectives
On the issues of population dynamics, the LTTP intends:
 By 2025, through a number of sectoral interventions and initiatives, the population growth and
total fertility rate should be sustained at a target of 2.5 and 3.4 percent respectively;
 Preventive and curative measures will be sustained during the period, leading to lower mortality
at all ages;
 To have a better informed and more prepared youth group, which will play an even more central
role in the country’s socioeconomic development;
 To have an improved access to high-quality trainings and skills development programmes, as
well as to financial services, for the youth;
 Through social and economic interventions, the rural community environment and facilities will
be improved to attract young people and unemployed urban population;
 Affirmative actions will be developed and implemented for socially disadvantaged groups,
sustained and improved over the Plan period through adequate budget allocation.

3.10.2 Urbanisation

The overview highlighted the challenges that are related to the country’s rapid urbanisation,
and it is clear that many of the themes displayed will be dealt with in various sections of this
chapter. For instance, the emphasis was put on the challenge (i) of providing the increasingly
demanded social services (health, education, and water), (ii) of providing new infrastructure
(especially roads transport and electricity), and (iii) of improving housing and human

83
settlements will be dealt with in the respective sections. Therefore, this section will focus on the
national policies, guiding principles and objectives on the matters that pertain specifically to
urbanization.

National policies, Guiding principles and Objectives for

Urbanisation
a. National Policies
The national policies during the next 15 years will be along the following lines:
 To slow down the population growth in the cities, by setting up productivity enhancing and
economic centres in the rural areas (to reduce the rural-urban migration)
 To set up satellite cities around the current urban centres, in order to generate sub-cities in order
to reduce urban congestion and provide space for new investment opportunities;
 Create a special urban transport framework, using roads and railways, in order to curb the
bottlenecks and reduce the transportation time (of people and goods) to reduce costs and
increase competitiveness of the urban businesses. Besides, an incentive structure should be set in
place in order to increase the share of population using public transport (which will, at the same
time, curb pollution and reduce the size of the traffic jams);
 Closely monitor the needs of the urban population in terms of social service provision,
communication, and transport, in order to come up with timely and adequate solutions.
b. Guiding Principles
The guiding principles until 2025 will be as follows:
 The ministry responsible for land and human settlement will come up (and implement) a
complete urban settlement plan, in order to make sure the current (and future satellite) urban
areas develop in a safe, planned, responsible, and environmentally friendly manner;
 The ministry responsible for transport will come up (and implement) a complete urban transport
plan in order to tackle the current and future urban transportation bottlenecks, in the most
efficient and environmentally friendly way;
 The various ministries dealing with the main social services (especially health, education and
water and sanitation) and the ones dealing with the remaining main urban infrastructure
(namely electricity and ICT) will each come up with (and implement) specific urban development
plans, to ensure the quality of the urban livelihood (as well as the business environment) is
maintained and improved.
c. Objectives
The main objectives to be reached by 2025 are:
 Improving the living standards in the urban areas, by implementing cross-sector urban-related
policies and creating new satellite cities around the major Tanzanian cities;
 Creation and implementation of an urban-specific transport programme (including roads and rail
infrastructure investments) in order to efficiently tackle the current and future bottle-necks;
 Creation of satellite towns around each of the main urban areas, provided with all necessary
infrastructure and services to fast-track growth and alleviate the pressures on the current urban
areas;
 Maintaining and improving the productivity and competitiveness of the urban-related productive
activities (in the existing and future urban areas), in order to foster socioeconomic development
across all regions.

3.10.3 Employment

Human capital has been recognized as an important component for achieving economic growth
since the initial design of the country’s first development plans in the 1960s. The critical nature
of this component in the achievement of the national goals (including the realization of Vision
2025) cannot be underemphasized. Therefore, the policies underlining the Long Term
Perspective Plan and the attainment of Vision 2025 need to be articulated with an emphasis on
harnessing the human capital.

84
 National policies, Guiding principles and Objectives for
Employment

a. National Policies
During the implementation of LTPP, the following policies on human capital and its utilization will guide
the implementation framework:
 Human capital will have to be developed, nurtured and directed to propel growth in critical and
essential high impact sectors of the economy, based on the national priorities, the comparative
advantage over other key players and the need to sustain positive growth drivers (designed or
achieved in the past programmes). Those human capital skills will be developed and harnessed
through the adoption of relevant and appropriate financial and non-financial incentive regimes
directed to individuals with the appropriate capacity to develop and use such skills in
appropriate sectors of the economy. Finally, national institutions should set appropriate
standards in the training programmes so as to ensure Tanzanians are competitive in the East
African and global labour markets;
 Based on the comparative advantages that the country has over others, the institutional
framework for skills development that will support the high-growth/high-employment sectors
needs to be put in place, and where appropriate introduce some incentive regimes to encourage
private investments;
 Given Tanzania’s strategic geographical location, develop a workforce with the appropriate skills
to handle and harness information technology, transportation and logistics infrastructure, as well
as a financial support hub to facilitate growth and stability of such sectors;
 Develop human resource skills with the capability for enhancing research and development
(R&D), including the adoption of new technologies for advanced growth in the relevant sectors.
Also, the country should give incentives for the utilization of these improved technologies in the
production of goods and services, in order to improve efficiency and reduce costs of production;
 Support the sectors and sub-sectors in seeking the appropriate markets for their products,
including external markets in order to create incentives and employment in all sectors;
 For the purpose of absorbing young workforce in the economy, the Government will develop an
appropriate institutional framework that will: (i) create skills which are necessary in order to
significantly reduce youth unemployment, (ii) incentivise the hiring of young individuals, (iii)
prioritise the high-employment projects and programmes in the FYDPs, and (iv) ensure the shift
towards the development of the formal sector, from the existing informal sector, which has a
significant growth potential;
 In all sectors of the economy, institute a mechanism whereby salaries and rewards are based on
performance;
 Closely monitor and work on the development and improvement of the rural and urban business
environment, in order to foster the creation of new enterprises and thus increased employment
in both regions.
b. Guiding Principles
The guiding principles for the next 15 years in order to boost employment will involve actions in the
following areas:
 Sector ministries will have to link with all academic/training institutions as well as employers to
determine the long-term employment market profile, skill demand, competencies and other
attributes that are necessary to get young people employed in the relevant sectors. On the basis
of the skill demand and competencies and other attributes, training institutions should develop
relevant curricula geared towards developing the ones relevant to the labour market;
 Sector ministries should determine priority sectors where skills need to be developed and,
through annual budget allocation by the Government, commit enough funds to support
development of such skills in the manner that will support the job requirement in terms of
quantity and quality;
 The ministry responsible for science and technology should develop and sustain education and
skill development foundations to support talented young men and women needed to undertake
research in sectors with important growth potentials and a multiplier effect to the economy.
Funds for such foundations should come from donations, fund raising campaigns, sponsors and
Government budget;

85
 The ministries responsible for science and technology, infrastructure and communication should
design special incentives for private sector members who want to invest in the sectors for the
purpose of making Tanzania a communication, technology and financial hub for its land-locked
neighbours;
 The Government, through the ministry responsible for agriculture, should set aside funds to
support the insurance schemes for farmers involved in the Kilimo Kwanza strategic crops to
guard them against losses due to natural calamities and other unforeseen factors;
 Government needs to reinforce the budget funds for creating irrigation schemes for high value
crops that have a high potential of creating employment for young people in the rural area;
 Strengthen the ministry responsible for cooperatives to ensure there is a robust institutional
support for creating marketing cooperative societies that will facilitate information and trade on
behalf of their members. Besides, the regulations governing the management of Cooperatives
should be reviewed to support integrity and liability for those entrusted with managing
cooperative societies;
 The SMEs should receive special attention, as should the entire manufacturing sector (and
especially agro-processing), given their capacity to generate employment and economic growth;
 Mechanisms need to be established for all potential employers (both public and private) to avail
to all students throughout their training career, of the opportunities available in the job market
and skills required and competencies to enable them to determine areas of concentration during
their career development. Such roles should be managed by the ministry responsible for labour,
through labour exchange centres, and sector ministries which will have to be funded to support
and coordinate the information provision;
 Ensure effective enforcement of labour laws and international standards, to provide a decent
working environment and social protection (especially to vulnerable groups) in order to foster
competitiveness;
 Review rules and regulations governing employment in the public and private sector to allow the
introduction and execution of performance contracts beyond employment contracts.
c. Objectives
The main objectives in the employment sector are that by 2025:
 Keeping unemployment below 5 percent for the entire period;
 About 90 percent of all graduates coming from various training institutions will have been
equipped with relevant skills, competencies and other attributes relevant to the profession they
intend to join in the labour market;
 About 90 percent of all training institutions will have reviewed their curriculum to develop
relevant skills that are critical to sustain national growth;
 About 90 percent of scientific and technological innovation researchers will be supported by
grants set aside to develop skills in scientific research and innovation;
 About 50 percent of the industries will use appropriate modern technology in their production
processes and their products will be competitive in the East African market;
 A significantly reduced unemployment for the youth, coupled with their increased economic
empowerment;
 Around 80 percent of the Kilimo Kwanza initiative will be driven by technology and research and
development (R&D), managed by the formal sector, and will be supported by financial
institutions for national prosperity growth. Besides, all Kilimo Kwanza initiative production
processes will be based on predetermined quality standards and their products will be marketed
through well managed cooperative societies;
 Remuneration, wages or incentive packages for employees will be articulated in the legal
framework based on performance contracts and part on industrial relations and enhanced
productivity at the work places.

86
3.11 Human Capital Development and Social Services

3.11.1 Education and Training

Education is a crucial ingredient for national development. It continues to be instrumental in

creating the high quality human capital necessary for improving productivity and hence propel
economic growth. Increasing educational participation by all social groups as well as improving
quality of education at all levels is essential for Tanzania to become a competitive middle-
income country.

National policies, Guiding principles and Objectives for

Education and Training
a. National Policies
The broad policies of education and training are:
 Enhancement of partnership in the provision of education and training;
 Identification of critical priority areas to concentrate on;
 Broadening the financial base for education and training;
 Streamlining the management structure of education by placing more authority and
responsibility on schools, local communities, districts and regions;
 Emphasizing the provision of quality education;
 Strengthening the integration of formal and informal education;
 Increasing access to education by focusing on the equity issue with respect to women and
disadvantaged groups/areas;
 Fostering the culture of education-for-job creation and self–employment;
 Improving quality control and assurance measures, including curriculum review, examination
reforms, teacher management and inspection;
 Creating technical training institutes to cater for the demand (particularly from the industrial and
services sectors), along with developing sector/discipline-specific high-standard teacher training
colleges.
b. Guiding Principles
The guiding principles of education and training in the next 15 years shall be:
 Ensure quality teaching and learning at all levels;
 Ensure gender equity;
 Ensure universal primary and secondary education;
 Enhance technical training;
 Focus on science, engineering, education, health, ICT and agricultural profession;
 Continue expanding Open and Distance Learning
c. Objectives
The national policies and the guiding principles are guided by a series of objectives:
 To increase access and promote equity at all levels of education and training: the pupil-teacher
ratio at primary education should reach around 30-1, and 20-1 at secondary level. Literacy rate
of youths aged between 15 and 24 years should reach 94 percent. Completion rate of primary
education for age cohort should remain above 95 percent. Secondary education enrolment rate
for the age cohort should rise from the current 34 percent to 48 percent. Also, the enrolment into
tertiary education should rise from the current 1.5 percent to at least 10 percent;
 To bridge the skills gap to ensure that the lack of skilled labour does not remain a binding
constraint to economic growth (particularly for the industrial sector growth during the 2015-
2020 period) after 2015. The aim is to increase the proportion of the population with high
qualifications to 12 percent, and to 34 percent for the population with medium qualifications, by
2025;
 Creating a learning-friendly educational environment;
 Train and deploy the adequate number of teachers;
 To raise retention rates at all levels of education.

87
3.11.2 Health
The Tanzania Development Vision 2025 identified health as one of the priority sectors, aiming
at achieving high quality livelihood for all Tanzanians.

The main focus in the health sector for the next 15 years will be on increasing the access to
primary health care for all, universal access to safe water, and attaining the life expectancy of
typical middle-income countries.

National policies, Guiding principles and Objectives for

Health sector
a. National Policies
According to the national policy of 2003, the priority area for intervention revolves around human
resource development, improving district health services, curbing malaria, maternal, new-born and child
health, controlling the spread of HIV/AIDS, controlling tuberculosis and diprosy, as well as preventing
non-communicable diseases.

In order to attain the goals set in LTPP, the following will be areas of the policy focus:
 Access to quality primary health care for all;
 Access to quality reproductive health service for all individuals of appropriate ages;
 Reduction in infant and maternal mortality rates;
 Universal access to clean and safe water;
 Life expectancy comparable to the level attained by typical middle-income countries;
 Food self-sufficiency and food security;
 Gender equality and empowerment of women in all health parameters;
 Partnerships between industry, the private sector and communities in the provision of health
services;
 Access of the poor to basic health services;
 Improve preventive services/measures (improvement of water and sanitation, mosquito nets,
etc.) and primary health care;
 Awareness on the causes of health problems;
 Capacity of LGAs and other main stakeholders to deliver basic health services (by having the
appropriate level of infrastructure and the properly trained staff);
 Increased private sector investments and PPPs in health services;
 Family planning programmes;
 Health insurance coverage, with a target of universal coverage;
 Research and development (R&D) to promote inventions, patenting and industrial production of
medicines in the country.
 Implementation of the East African Health Research Commission Protocol.
b. Guiding Principles
The guiding principles for the health sector for the next 15 years include:
 Increase accessibility and quality of health services;
 Strengthen the management of health system;
 Develop policies and regulations on human resource for health and social welfare;
 Promotion of people’s health in an efficient and equitable way to attain the targets of Vision
2025;
 Put in place an efficient and equitable health financing schemes;
 Investment in the health of children in order to reduce child mortality and ensure that children
are healthy and therefore can focus on human capital development.
c. Objectives
Both the national policies and the guiding principles aim at achieving the following set of objectives:
 Reduce the burden of disease, maternal and infant mortality: both infant and under five mortality
should be reduced to 40 per 1,000 births, and maternal mortality be reduced to 220 per 100,000
live births;
 Ensure availability of drugs, reagents and medical supplies and infrastructures;
 Ensure that health services are available and accessible to all people in both rural and urban
areas;

88
 Increase the share of health sector in the national budget to about 15 percent;
 Reach national HIV prevalence rate of about 1.5 percent;
 The population should attain a life expectancy of about 70 years;
 Train and make available an adequate number of competent health staff, to manage health
services, with gender perspective at all levels;
 Sensitize communities on common preventable health problems;
 Promote and sustain PPPs in the delivery of health services.

3.11.3 Water Supply and Sanitation

The development of the water sector in Tanzania is guided by the National Water Policy of
2002. For the next 15 years, the development of the water sector for domestic and industrial use
in Tanzania shall be guided by the Water Sector Development Programme (2005-2025).

National policies, Guiding principles and Objectives for

Water Supply and Sanitation
a. National Policies
In order to enhance the country’s ability towards a more integrated management and development of the
country’s water resources, the policy focus will include the following areas:
 The development of water facilities will continue to be guided by the Water Sector Development
Programme (WSDP), which aims at improving the provision of water supply and sanitation
services nation-wide;
 Develop and implement water sector and sanitation projects at the village level in each district;
 Implement participatory water resource management plans at sub-basin levels;
 Ensure the installed water capacity functions well and is properly maintained;
 Encourage public-private partnership in provision of water services;
 Increase the information distribution and awareness campaigns on the importance of prudent
use of water, and use this long-term vision in order to write sustainable development policies;
 Promote an equitable access to water;
 Strengthen regional water boards;
 Secure adequate funding for water services;
 Increase utilisation of water resources for irrigation, whilst securing electricity generation
through the country’s multiple dams,
b. Guiding Principles
The guiding principles for the health sector for the next 15 years include:
 Supply of water (adequate, safe and clean) to everybody within 400m radius;
 Closely monitor water pollution and the general quality of water;
 Adequate supply of water for irrigation and livestock development;
 Adequate supply of water for hydropower generation and industrial production;
 Proper maintenance of water and sanitation systems;
 Sustainably manage the country’s sources of water.
c. Objectives
Both the national policies and the guiding principles aim at achieving the following set of objectives:
 By 2025, 90 percent of the national population should have access to safe water;
 Increase rural and urban access to improved sanitation services from 21 percent to 60 percent
and from 34 percent to 97 percent by 2025;
 Strengthening management of water resources at all levels;
 Improving the provision of water supply, sanitation and waste disposal services nation-wide;
 Providing full coverage in supplying water to urban centres;
 Ensure supply of reliable water for domestic use, both for human beings and livestock;
 Ensure supply of adequate water for irrigation purposes;
 Ensure supply of adequate water for industrial and production uses;
 Ensure supply of adequate water for hydro-power generation;
 Equity of access to water among all users.

89
3.11.4 Sports

Sports activities have proven to be a profitable venture in a number of countries. In addition, the
benefits of sports spread across many sectors of the economy. The development of sports calls
for appropriate investments in both sports infrastructure and youth development.

National policies, Guiding principles and Objectives for

Sports
a. National policies
Sports in Tanzania will be guided by the following policies:
 Policies aimed at increasing the participation level of all age groups in all disciplines;
 Significantly increasing the professionalism and training at the managerial level in all disciplines,
in order to foster excellence and have internationally competitive teams in as many sports as
possible;
 Large infrastructure projects that will provide the base for high-level development;
 Increased international training experiences (for athletes and trainers) to use international best-
practice.
b. Guiding principles
The guiding principles include:
 Partnerships between the public and private sectors;
 Maintaining high standards of sports infrastructure;
 Promote excellence in all disciplines.
c. Objectives
The main objectives to be reached by 2025 are:
 Development of sports infrastructure;
 To promote sports in educational institutions, workplaces and community level;
 To undertake research for the promotion of sports services;
 To train individuals so as to enhance their skills in sports, including coaching, administration and
management.

3.11.5 Entertainment

The Culture Policy of 1997 defines culture as activities performed voluntarily in order to
recover energy, mental state or zeal lost out of performing certain tasks. The activities include
non-competitive sports such as conversations, strolls, tours, reading newspapers and books,
participation in games, listening to TV and radio broadcasts, etc. Culture is an important link
between an individual and his/her surroundings.

Entertainment can also be used to educate people, strengthen solidarity and partnerships
nationally and internationally as well as promote culture of work and morale.

Both the national economy and global economy offer immense opportunities for the
entertainment industry. Tanzanians, especially youth, will be encouraged to be innovative in
order to maximize on these opportunities.

National policies, Guiding principles and Objectives for

Entertainment sub-sector
a. National policies
The main thrust of policies will be on ensuring that entertainment is compatible with national norms and
values and that it can be used to foster development. Specific policies include:
 Promoting entertainment for developmental objective such as employment creation and income
generation;
 Promotion of domestic production of entertainment paraphernalia;
 Promotion of designated areas for entertainment;
 Promotion of moral values.
b. Guiding principles

90
The guiding principles will be:
 Propelling Tanzanian’s identity;
 Ensuring moral uprightness in expression and language used;
 Adhering to ethical values.
c. Objectives
The main objectives are:
 To motivate talents;
 To promote the entertainment industry;
 To sensitize and empower entertainment artists to recognize their obligations, rights (such as
Intellectual Property Rights) and benefits.

3.11.6 Media

The national policies, guiding principles and objectives for the media industry will be aimed at
tackling the challenges faced by the sector, namely the limited training of journalists, whilst
safeguarding the steps that have been made towards ensuring the sectors independence and the
investments made to spread the information across the country.

National policies, Guiding principles and Objectives for

Media sub-sector

a. National policies
The national policies will be guided by:
 Set up training facilities for journalists;
 Enhance and facilitate international collaborations in order to raise the standards and quality of
the national media industry;
 Develop and incentivise new means of media and media supports.
b. Guiding principles
The main guiding principles will be:
 Ensuring impartiality and independence in the sector, and foster responsibility;
 Having high moral ethics;
 Promote evidence-based reporting.
c. Objectives
The objectives of the media policy include:
 Maintained pluralistic, free and independent media;
 Improved skills for all media professionals, through expanded existing training institutions
(and/or new institutions) and through the improvement of the training programme.

3.11.7 Culture

As explained in the preceding chapter, the Plan will focus on both hard and soft aspects of the
sector. The “hard” aspects of culture provide an opportunity for employment creation and
sources of income, both within and outside Tanzania. Promotional activities beyond national
borders will ensure achievement of these two goals. The “soft” aspects of culture need to be
moulded in a positive way for them to play the required role of contributing to the country’s
socio-economic development. Education, sensitization and sanctions have a great role to play in
reversing the current status.

National policies, Guiding principles and Objectives for

Culture sub-sector
a. National policies
The national policies that will be followed will aim at the following:
 Preserving and maintaining the country’s rich cultural heritage;
 Foster employment creation by increasing information on the sector’s opportunities, by
providing the related necessary training, and incentivising cultural projects around the country
(through Government investments and/or PPPs).
b. Guiding principles

91
The guiding principles will be divided into the hard and the soft aspects:
“Hard” aspects
 Maximizing on opportunities;
 Promoting the expression of culture.
“Soft” aspects
 Positivism;
 Savings;
 Developmental mind-set;
 Moral uprightness.
c. Objectives
The main objectives to be reached by 2025 are the following:
 Promoted national identity (through language, works of art, etc.);
 Protected national ethos and cultural heritage;
 Education and training mainstreamed, to inculcate in youth positive beliefs, ethics, morals, values
and attitudes;
 The values of a high developmental mind-set, hard work, responsibility and honesty
mainstreamed and fostered in the public and private sector.

3.12 Governance

Good governance is an important pre-requisite to ensure the socio-economic transformation

envisaged in TDV 2025. As explained in Chapter 2, it involves diverse components such as
ensuring peace and stability, observance of rule of law through a strong and responsive legal
and regulatory framework, improving structures and systems of Government, deepening
training and skills of legal professionals, and ensuring peace and territorial integrity. The
following section outlines the national policies, guiding principles and objectives for the next 15
years.

National policies, Guiding principles and Objectives for

Governance
a. National Policies
The following policies will be pursued:
 Deepening democracy, pluralism and broad-based participation;
 Speedy, efficient and fair dispensation of justice;
 Affordability, adequate and easy access to justice for all social groups;
 Improving the national legal and regulatory framework;
 Enhanced public trust, integrity and professionalism of legal officers;
 Promotion and protection of human rights and observance of the rule of law;
 Securing national borders from fall outs of instability in neighbouring countries;
 Strengthening defence and adaptation of defence policy to the evolving security environment as
well as strengthening diplomatic capabilities through dialogue
 Promote more transparency (information openness) in public sector activities, for example by
disclosing information and creating and maintaining updated institutional websites;
 Improve systems of accountability and transparency in procurement and resources management;
 Improve systems of investigation and legal redress mechanism, particularly in the use of public
funds;
 Adopt information and communication technology (ICT) in crime detection and prevention, and
foster general police force training in this (and other crime detection and prevention) field(s);
 Establish effective processes to ensure that national overarching policies and planning
mechanisms are designed and endorsed with the adequate participation of the relevant
stakeholders;
 Fast-track the finalization and implementation of the new constitution by 2015;
 Accelerate the reforms of the legal sectors, in order to ensure timely procedures, affordable,
adequate and easy access to justice, enhanced public trust, integrity and professionalism of legal
officers;
 Enhance the operational capacity of all Government institutions;

92
 Operationalize a national ID system by 2015
b. Guiding Principles
Governance issues will be guided by:
 The need to have lasting peace and security, free from cross-border threats or cross-border
military incursions;
 Having a lean, modern, well equipped, well structured, efficient, well qualified, professionally
trained, highly disciplined and adequately rewarded military and security forces;
 Knowledge and excellent competencies for legal professionals on negotiation of major
investment contracts especially in the areas of natural gas, uranium, iron and steal and
petroleum;
 Reduce the backlog of outstanding cases;
 Improve office accommodation;
 Clear separation of the prosecutions from the investigative functions;
 Modernise court operations and legal registries through development of electronic case
management systems and streamline the manual case flow system currently in place
 Improving efficiency and transparency of all Government institutions;
 Ensuring value-for-money in all government projects;
 Development of social justice, equality and rule of law through quality and accessible legal
services;
 Efficient provision of public goods and services.
c. Objectives
The main objectives during LTPP implementation will be:
 To ensure access to justice for the poor and the disadvantages;
 To ensure competence, motivation and integrity of personnel;
 To have automated registries;
 To speed up court decisions and raise the ratio of decided to filed cases;
 To secure national borders and promote good neighbourliness and warm inter-State relations;
 To ensure security and safety for all people living in Tanzania;
 To ensure maximum efficiency and transparency in public service in all aspects;
 To ensure wider participation in national decision making;
 To reduce levels of corruption across all sectors;
 To increase access to justice through improved skills and means to deliver legal and judicial
services.

3.13 Private Sector Development

The role of the private sector in national development has been emphasized in all policy
documents. Considerable progress has been made towards ensuring that the private sector
becomes the engine of growth. That notwithstanding, efforts need to be directed at improving
the investment climate for a pro-active private sector participation, including development of
new PPP in large scale infrastructure and industrial projects.

National policies, Guiding principles and Objectives for

Private Sector Development
a. National Policies
The Government has created an enabling business environment policy for the private sector to operate.
Creating the right conditions for business to grow is a key feature for job creation and enabling the poor
to earn a decent living. The national policies will include:
 An increased dialogue, information flow and partnership between the private and the public
sector (through, for instance, increased usage and implementation of the PPP agreements);
 Closely monitoring the country’s competitiveness and business climate, in order for the
Government to be able to generate the best possible environment for the private sector;
 Nurture a culture of strong corporate governance and corporate social responsibility across
private sector businesses;
 Attract more FDI in job generating industries.
b. Guiding Principles

93
The guiding principles for the private sector development for the next 15 years include:
 Creating an attractive investment climate that supports the growth of businesses. Specifically,
conduct reforms that allow markets to work with greater efficiency and fairness, and improve the
legal, institutional and regulatory frameworks;
 Leveraging maximum input from the private sector, by developing hard and soft infrastructure;
 Facilitating access to regional, national and international markets for the nationally produced
goods and services;
 Develop human capital resources, by investing in research and knowledge management that
support the private sector development, in order to have a highly educated and healthy working
population;
 The development of the PPP agreements, in order to improve the public-private business
environment.
c. Objectives
In order to attain the goals set in LTPP, the following will be areas of the policy focus:
 To empower entrepreneurs to produce, trade and become economically self-sufficient;
 To enable the private sector to become a vibrant engine of growth and hence create job and
income;
 To enhance the competition by helping the private sector to tackle constraints related to
regulation, non-tariff barriers, market availability and other policy related constraints;
 To expand markets access both domestically and globally;
 To foster PPPs in large scale infrastructural and industrial projects.

3.14 Cross Cutting Issues

The development strides that Tanzania wishes to take will not be those that are blind to the
varying needs and opportunities facing different gender groups in the country, the inherent
trade-off between consumption of natural resources for development and the need to preserve
the same for the future generations, and vulnerable groups that inevitably are impacted
differently by different events and undertakings in the society. In the following section we
outline the ideal scenario that needs to be realized and attendant efforts that need to be taken to
guarantee this realization for each of these items.

3.14.1 Gender

It is envisaged that in the next 15 years, gender imbalances will have been addressed and
women will have been empowered enough to access opportunities to participate in and benefit
from economic, social and political activities at a level that is at par with men in the society. The
following will be the national policies, objectives and targets in this sector.

National policies, Guiding principles and Objectives for

Gender
a. National Policies
The national policies will be as follows:
 Encourage women’s participation in leadership in the economic, social and political arena;
 Identify women as special vulnerable group in all economic policies;
 Improve the working environment for women in all economic sub-sectors;
 Special emphasize on women’s education at all levels;
 Efficient community level and national level initiatives to curb domestic violence;
 Promote access of women to economic assets and finance.
b. Guiding Principles
The following are the objectives of intervention in this sector:
 Empowerment of women is an effective method of bringing forth development in the society on
various fronts;

94
 Women are especially more vulnerable to many development challenges such as poverty, climate
change impacts, HIV/AIDS and other diseases.
c. Objectives
The following will be the targets for the next 15 years:
 To attain a 50/50 percent ratio (of women to men) in political and leadership positions by 2025;
 To improve performance of Tanzania with respect to the gender inequality index;
 To considerably improve women’s enrolment and retention rates across all levels of education;
 To increase women’s participation in public services from current level of 22 % (2010) to over
40% by 2025.

3.14.2 HIV and AIDS

The HIV/AIDS pandemic has become a major challenge in recent years because of its impact on
the population’s structure and resources. Combating HIV/AIDS asks for multi-sectoral
interventions, because it is covering cultural, social, economic, political and technological
processes. This requires the involvement and participation of all public and private
stakeholders in developing a strategic framework and in the implementation of the strategy.

National policies, Guiding principles and Objectives for

HIV and AIDS
a. National Policies
The national policies to be followed are as follows:
 Establish a framework to coordinate HIVAIDS activities in the country to ensure resources are
efficiently employed;
 Develop of a national research agenda to be followed with Government and non-State actors in
the country;
 Synchronize the frameworks for all the programmes by category to avoid uneven spatial
distribution in working sites. Examples of categories are awareness, HIV testing, most vulnerable
children, etc.;
 To develop a strategic planning framework of all HIV/AIDS control programmes and activities
within the overall national strategy;
 To foster national and international linkages among all stakeholders through proper co-
ordination of all HIV/AIDS control programmes and activities within the overall national
strategy.
b. Guiding Principles
The guiding principles are as follows:
 Create a framework for the working relations with international organizations and donors in
supporting HIV/AIDS activities in the country;
 Create a framework to guide interventions to fight HIV and AIDS;
 Handling of social, economic, cultural and legal issues related to the epidemic.
c. Objectives
The main objectives are as follows:
 Reach a national HIV prevalence rate of about 1.5 percent;
 To have a society in which our children can grow up free from the threat of HIV/AIDS and which
cares for and supports all those who are still infected and affected by HIV/AIDS;
 To provide the strategic leadership, coordination and implementation of a national multi-sectoral
response to HIV/AIDS, leading to the reduction of further infections associated diseases;
 To minimize the adverse socio-economic effects of the epidemic.

95
3.14.3 Environment and Climate Change

Environment and climate change issues deem attention of stakeholders across all sectors owing
to their widespread impacts. Mitigation and adaptation mechanisms need to be put in place to
minimize the negative impacts of climate change on the economy. Effective institutional
mechanisms to tap the global climate change funds need to be fostered to finance the huge
financial demand of adaptive and mitigation strategies. Policies should be put in place to
minimize the adverse environmental impacts of development.

Actions aimed at attaining the vision of green growth, sustainable land, agriculture, wildlife and
forest management along with progress made on REDD and especially tapping the benefits from
carbon trading will be pursued. It is pertinent too as the country seeks to industrialise to ensure
environment sustainability is not upset. Concrete plans to improve climate change resilience
and disaster preparedness should be devised. National policies, guiding principles and
objectives over the next fifteen years are as follows:

National policies, Guiding principles and Objectives for

Environment and Climate Change
a. National Policies
The following policies will guide the strategic intervention in this section:
 The National Environment Management Council (NEMC) will need to be further strengthened to
conduct comprehensive environment impact assessments of all major national projects and
programmes;
 Policy measures to realize proposed actions under Tanzania National Adaptation Programme of
Action (NAPA);
 A national climate change strategy will be drafted;
 Climate change and environmental impact assessment training will be offered to selected staff
across ministries;
 An institutional framework will be developed to efficiently access global climate change finance;
 National and regional integration policies such as the EAC Regional Policy on Environment and
Climate Change;
 Lessons from Best practices, such as from the EAC and Lake Victoria Basin Commission (LVBC)
on environment management.
b. Guiding Principles
The guiding principles for the next 15 years will be the following:
 Environment and ecology protection, promoting a sustainable development;
 The climate change threats need immediate steps for adaptation and mitigation;
 The global climate change fund will provide opportunities for climate change finance, which need
to be accessed;
 Environmental impacts of all national projects need to be evaluated.
c. Objectives
The objectives to be achieved by 2025 are the following:
 Ensure environmental sustainability while attaining economic development;
 To make the most vulnerable sections of the society and sectors resilient to climate change
impacts;
 Effectively access climate change finance to develop adaptive capability;
 Mainstream issues related to climate change and environment in all national programmes and
policies;
 Develop an inventory of Green House Emissions and build internal capacity for tracking and
measuring the emissions as part of mitigation strategy
 To minimize the economic costs of climate change.

96
3.14.4 Social Protection

The main thrust is to contain causes of generalized insecurity and strengthen systems and
institutions that deal with social protection in order to protect vulnerable groups (such as
orphans and vulnerable children (OVC), persons with disabilities (PWDs), the aged, and ex-
prisoners, widows and widowers, externally and internally displaced persons, marginalized
persons), whilst also expanding their choices and enhancing their participation in decent
productive activities. Finally, an integrated and comprehensive system of social protection,
formal and informal, and involving all stakeholders, is required.

National policies, Guiding principles and Objectives for

Social Protection

a. National Policies
Special policy focus will be on:
 Reinforcing and improving existing initiatives, both formal (such as the National Social Security
Policy (2003), Tanzania Social Action Fund (TASAF), Community Health Funds (CHFs), etc.) and
informal (such as family structures, traditional coping strategies);
b. Guiding Principles
The following principles will be adhered to:
 Ensuring sustainability, good governance, and universality;
 Ensuring cost effectiveness in delivery;
 Dealing with the matter with an integrated approach;
 Involvement of stakeholders;
 Protecting and safeguarding the interests of members;
 Improve quality and public awareness on the issues of social security;
 Closely monitoring inequality.
c. Objectives
The main objectives to be achieved by 2025 will be:
 To increase the proportion of Tanzanians accessing social security services;
 Harmonise the social security system;
 To reduce the proportion of Tanzanians facing various forms of insecurity;
 To enhance access to social protection interventions;
 To promote social protection as a productive strategy.

97
 CHAPTER IV: FINANCING AND RESOURCE MOBILISATION
4.1 Resource Mobilisation

The successful implementation of the LTPP will critically depend on the country’s capacity to
secure resources for financing the envisaged programmes and projects. Historically, public
investment, notably the Government’s development budget, has relied heavily on external
resources (grants and concessional loans), which have been unreliable and unpredictable.
Donor overdependence is inconsistent with national autonomy and sovereignty.

The LTPP thus seeks to pursue a more reliable development financing framework and to reduce
donor dependency. The country’s socioeconomic development will eventually lead to a decrease
of Official Development Assistance (ODA), and the Plan’s target is to bring the ratio of Official
Development Assistance (ODA) to Gross National Income (GNI) closer to current levels in lower
middle-income countries by the end of the period (reducing it by more than half to about 6
percent). The accompanying increase in the need for financing means is to be achieved through
a mix of resource mobilization strategies, which have been separated here into traditional and
innovative sources of financing.

4.2 Traditional Sources of Financing

All conventional means of development financing will be explored in a more efficient manner to
meet the huge demand for finance during the implementation of LTPP. The system of mobilizing
these conventional sources will be streamlined and made more efficient to increase their
contributions. The following conventional sources will be given special focus:

Tax Revenue: There will be concerted effort to improve tax collection. Tax exemptions will be
limited, the informal sector of the economy will be identified and will be encouraged and
incentivised to transform into formal sector, thereby increasing the taxation base. The tax
collection system will be made more efficient, transparent and corruption free. Tax collection
through LGAs will be expanded in both scale and depth, in order to substantially increase its
contribution to total tax revenue. The tax to GDP ratio will be brought at par with middle-
income countries by 2025.

Non-tax Revenue: Other state charges such as road license fees, tourism charges, natural
resource usage charges will all be constantly updated and the collection system of these charges
will be made more efficient and accountable. The Government will review the rates of - and
streamline the collection of - charges for all public services. Royalty payments from mineral
resources will be periodically reviewed to partially reflect the profit increase due to higher
commodity prices.

Privatisation of non-core public assets: Government will privatize all non-core public
establishments and encourage more privatization. The sale of public assets will be at a
competitive market price and if required part ownership of the firms will be retained with the
government.

Foreign grants and concessional loans: Government will seek more access to foreign grants
and concessional loans, from foreign governments and other international institutions such as
AfDB.

98
4.3 Innovative Sources of Financing

The country will also have to finance the implementation of the LTPP (through the respective
FYDPs and ADPs) by using innovative financing instruments. The most important ones are
developed below:

Annual Expenditure Quota: Over the last decade, total development expenditure has varied
between 28% and 69% of domestic revenue, averaging 48% for the whole period. The
Government shall henceforth allocate at least 35 percent of the projected annual domestic
revenue to development. While this does not generate new resources, it ensures a budgetary
recurrent saving to be reserved for development financing.

Domestic Borrowing: The country will start financing part of its projects and programmes
through two new domestic instruments, namely infrastructure bonds and sub-sovereign bonds.
Infrastructure bonds will help finance large infrastructure projects for which the potential
revenue could reimburse the interests and capital. On the other hand, sub-sovereign bonds
(issued by governmental bodies and/or local government institutions) can generate significant
means for financing projects and programmes managed by those entities (especially for
infrastructure). Government and/or international guarantees will be required.

Pension and Social Security Funds: Being one of the most important players on the country’s
capital market, and with large reserve funds, they represent a formidable potential to finance
large national projects. Therefore, the Government will come up with a framework in which
these institutions will play a larger role as a source of investment capital.

Minerals: Considering the increasing importance of the sector in the economy and its increased
capacity to generate large profits (given the upward price trend on international markets), the
country will further analyse how to tap some of those extra revenues, by setting up a super-
profit tax on the windfall earnings of the sector for instance. This proposal is subject to dialogue
and negotiation, but there is a need for the mining sector to be seen in practice to be benefiting
Tanzanians (not just mining companies).

In the same vein, but much more resolutely, the recent discovery of natural gas (and oil) in an
opportunity to plan acquisition and use of substantial revenue from the sub-sector as source of
development finance on the one hand, and plan local economic programmes/projects allied to
or in support of the sub-sector to generate employment. As indicated earlier, the second goal
can be attained if the country begins early to train Tanzanians massively in the skills and
technological (including legal) capacities ready to run many of the related job and so well
educated that they can fairly quickly adopt and adapt (internalise) new technologies.

National Climate Fund: This fund will be set up in order to access the global climate change
funds more efficiently, to then finance programmes and projects where these issues play a
major role (and/or represent a major challenge). Besides, the country will use the fund to deal
with its future international carbon trading operations.

Public Private Partnerships (PPPs): The Government will further enhance the role of the
private sector, by financing an ever larger share of its projects through those PPPs, as they
provide an efficient way of sharing the risks and benefits of given projects, whilst alleviating the
financial burden for the State.

Diaspora Bonds: These will be utilised in order to tap from the financial resources of the
Tanzanians living abroad and that wish to invest in the development of their country. The
Government will work on improving financial intermediation and creating a beneficial incentive
structure in order to render those products attractive.

99
Foreign Market Bonds: Further financing means will come from issuing medium and long term
sovereign bonds on the international markets (denominated in foreign currency). These bonds
will be used to finance the projects that have the highest capacity of generating foreign
exchange.

Regional Economic Arrangements and South-South Cooperation (SSC): Tanzania will use and
help develop the existing regional frameworks to jointly finance infrastructure projects (such as
the ones provided by the East African Community and the Southern African Development
Community (SADC)), as well as attract new strategic partners (especially the BRIC countries).

4.4 Dynamic Resource Mobilization Committee

The mobilisation and management of resources for LTPP will require a dynamic operational
mechanism to ensure availability and efficient utilisation. Through the existing institutional
framework of the Ministry of Finance, a Resource Mobilisation Committee will be established.
Key functions of the same will include:
(a) Setting realistic contribution benchmarks from each financing source;
(b) Making follow-ups to ensure actual resource inflows.

Accurate estimations of the contributions from both traditional and innovative instruments
mentioned above will be conducted by this committee. POPC will monitor and evaluate the
financing aspects of the LTPP implementation. Since the implementation of LTPP is spread over
15 years, it is imperative to make efficient use of long-term financing instruments. The role of a
resource mobilization committee, which will be mindful of these long term and short term
financing issues, is crucial in coordinating the financing aspects.

100
 CHAPTER V: IMPLEMENTATION ARRANGEMENTS
5.1 Planning Framework

The Long Term Perspective Plan (LTPP) 2011/12- 2025/26 has been prepared to implement
Tanzania’s development agenda as articulated in Vision 2025. While providing broad, long-
term directions, it has been broken down into three successive Five Year Development Plans (or
FYDPs): FYDP I (2011/12- 2015/16) has the theme of unleashing Tanzania’s latent growth
potential; FYDP II (2016/17- 2020/21), with the theme of nurturing an industrial economy; and
FYDP III (2021/22- 2025/26), anchored on the theme of attaining export growth and
competitiveness. In turn, FYDPs will be operationalized through Annual Development Plans
(ADPs), implemented in the sequence of Budget Guidelines; Medium-Term Expenditure
Frameworks, MTEFs; Cabinet Approval; Parliamentary Authorisation; Execution; and
Monitoring and Evaluation. Figure 5.1 displays the implementation framework for the LTPP.

Figure 5.1: Plan Implementation Framework

Source: POPC

5.2 Institutional Framework

The implementation of LTPP involves transiting from one economic structure to another. This
means a proactive role of all stakeholders involved. The Review of the TDV 2025 showed that
Tanzania is currently facing the following implementation bottlenecks: (i) misalignment, and in
most cases failure to articulate a manageable number of operational priorities, which led to a
thin spread of resources towards a wide range of activities, with little impact and a dampening
effectiveness in implementation, (ii) in the absence of guiding plans, long term priorities and

101
opportunities were sometimes sacrificed in favour of short-term operational needs, (iii) the
identification of projects was done in isolation rather than in a comprehensive and
complementary manner, thus losing a well-articulated implementation sequencing for
completeness and harnessing of synergies, (iv) the lack of a clear financing strategy, resulting
into high financial unpredictability, overdependence on donations, and under-funding, (v) a
weak institutional framework for the implementation of national plans, and (vi) a weak
monitoring and evaluation framework to check consistency and coherence. The Plan is prepared
in the manner that will address the above mentioned bottlenecks by assigning roles to each
actor responsible with the implementation of the LTPP and subsequent FYDPs. The Plan
recognizes that it is vital to closely monitor areas critical to development, like for example
infrastructure, where investments are large, and therefore prone to special interests and
corrupt practices. The Government is in the process of reviewing the POPC Act (1989) in order
to give it more mandates to coordinate and direct the implementation of the LTPP.

5.2.1 Role of the State

The role of the State will continue to be:

 Maintaining macroeconomic stability to provide the private sector with a reasonable
degree of predictability in the economy in order to make informed decisions on
investments;
 Defining the strategic direction for achieving Vision 2025 by providing policy and
strategic direction for the country through strengthening the Planning role;
 Formulating medium term strategies (FYDPs) to implement LTTP to achieve Vision
2025 objectives;
 Strengthening the institutional framework – Government institutions, PPPs, markets etc.
through creating an enabling environment for doing business, strengthening and
instilling a strong institutional oversight, establishing and enforcing property rights and
contracts, ensuring competition and consumer protection;
 Ensuring good governance (at the political, economic, and social level);
 Addressing infrastructural bottlenecks (facilitating infrastructure development through
direct financing, or indirectly through guaranteeing private sector investment);
 Addressing blockages to economic growth, which will be done through implementing
cautious and selective industrial and trade policies/proactive measures to develop and
nurture the formation of strong national players in the private sector, so that they may
compete effectively with international players;
 Developing human resources/skills and knowledge creation;
 Promoting social protection;
 Pursuing sustainable development in all its essential elements (economic system,
environmental system, social system and institutional system);
 Given the need to increase awareness about the country’s planning framework and the
importance of aligning strategies and policies with these plans at all levels, the
Government will make sure that the LTPP and all three FYDPs (along with the Vision)
are effectively distributed throughout the country; and
 Strengthening the institutional and regulatory framework and its enforcement to ensure
a level playing field for all private businesses, and encourage fair competition;
supporting the merger of small companies, including banks, to form larger entities
which can withstand regional and global competition.

5.2.2 Role of POPC

The Planning Commission, the national think tank on socio-economic management, will take the
lead role in articulating and influencing the direction of economic management in the country
and guiding national planning, working in close collaboration with the Ministry of Finance

102
which hosts key development cooperation operational and dialogue frameworks such as the
Joint Assistance Strategy (JAST) for coordinating development financial assistance and technical
cooperation,42 and related the Paris Declaration Survey reports, draft National Technical
Assistance Policy, the stock of experience in managing M&E frameworks (e.g. annual
implementation reports of MKUKUTA based on the Monitoring Master Plan) and performance
indicator-based monitoring, notably the Performance Assessment Framework (PAF) and
funding modalities including GBS, project and basket financing of the budget.

M&E for the LTPP will be spearheaded by POPC, through appropriate M&E plans. The
implementation capacity at the MDAs, RSs and LGAs level will be constantly monitored by POPC,
and methods to meet the capacity gaps will be identified. Finally, POPC will also prepare a
performance-based implementation and M&E framework for the implementation of core
strategic investments in priority areas.

5.2.3 Role of MDAs and LGAs

The responsibility of implementing the projects identified through FYDPs will fall on
MDAs/RSs/LGAs. The annual work plans of MDAs/RSs/LGAs will have to be aligned with
respect to FYDPs and the LTPP. The M&E functions at the programme level and institutional
level will be conducted through MDAs/RSs/LGAs. It will be the responsibility of local
governments and sectoral ministries to ensure that the priorities identified by communities and
sectors respectively are in line with national priorities.

5.2.4 Role of Non-State Actors

LTTP also recognizes the strengths and capabilities of all development actors, including the
private sector and civil society in achieving economic development goals. In this vein, the
Government will promote public-private partnerships, especially in activities that are
characterized by large and lumpy investments.

5.2.5 Role of Development Partners

Successful implementation of LTPP is contingent on securing the financing of FYDPs. While

strenuous efforts will be made to improve and diversify the resource base (to take emerging
opportunities into account), development partners are expected to bring their influence to bear
in implementing projects and programmes consistent with the nation’s long-term development
agenda.

5.3 Monitoring and Evaluation

5.3.1 Overview

To track implementation of the LTPP more systematically, an exclusive procedure, anchored

within the FYDP M&E system, will be adopted. The monitoring and evaluation procedure,
however, should focus on tracking progress. For consistency, it is important that the M&E of

42 JAST (Joint Assistance Strategy for Tanzania) began in 2002 as Tanzania Assistance Strategy (TAS) (2002-05). It
was later renamed JAST, for 5 years 2006-2011; and review is up for JAST II for 2012-17. JAST Implementation
Reports alongside the Paris Declaration Survey reports dwell on principal indicators of effectiveness of aid - notably
strengthened financial management and procurement systems and donor use of these country systems, alignment of
aid flows to national priorities, aid predictability, untying of aid, contribution of aid and technical assistance to
country capacity strengthening, focus on results and mutual accountability. In the near future, aid will be received
even though it is likely to shrink for many reasons; but the principles of aid effectiveness are still relevant for effective
use of both domestic and foreign resources.

103
LTPP is done in the context of the FYDP’s implementation milestones, taken as key steps
towards the achievement of the long term targets. As it is for the FYDPs, it will draw information
from the national statistical system, analysing and reporting information on specific indicators
to provide critical decision makers, development stakeholders, and the citizens with indications
of the extent of progress and the achievement of long term targets.

Result-based performance management will be adopted where five year planning and annual
plans are linked to systems of management of public servants, especially those who will be
implementing the selected strategic investments/projects. The national priorities will be made
known across all levels of implementation, and the institutional modalities will be put in place
to ensure effective implementation, monitoring and evaluation.

The critical question is how the existing frameworks and tools at the Ministry of Finance can
best inform or complement the M&E intended for the LTPP, the FYDPs and the ADPs. The
analytical reports of the MKUKUTA Monitoring Master Plan (e.g. Poverty and Human
Development Reports, MKUKUTA Annual Implementation Reports and various surveys
undertaken by the National Bureau of Statistics carry key variables, definitions and indicators
which cover major aspects of the development plans. Analyses and reporting of economic
trends and progress made over periods covering both MKUKUTA and LTTP period/ sub-periods
would have to recognise this fact.

5.3.2 M&E Institutional Arrangement and Tools

A strong monitoring framework will be needed to assess the implementation of LTPP,

consistent with agreed policies, goals, targets and milestones.

As the instrument geared towards implementing the national development agenda with
interests cutting across the spectrum of all stakeholders, their participation in monitoring the
implementation of LTPP to ensure its success is vital.

There is already a framework in place for administration, management and execution of the
LTPP, namely the POPC, the Economic Committee of Cabinet (ECC), the MDAs, LGAs and other
public and private sector actors. The fundamental role of POPC is to monitor LTPP’s
implementation. Nevertheless, monitoring of LTPP needs to be strengthened further.

Therefore, a Plan Implementation Monitoring Unit (PIMU) will be established within the POPC
structure as an overall coordinator of the FYDP/LTPP implementation monitoring. To access
necessary information, PIMU will use existing reporting systems at MDAs and LGAs levels as
well as specific information requests from the private sector. Key functions of PIMU will include
preparing annual, biannual and five year reports on the progress made in the implementation of
LTPP, and undertaking periodic studies/research to inform the implementation of LTPP.

5.3.3 Operationalizing the M&E

The LTPP/FYDP M&E function will be carried out at three different levels:
a) Programme/Project Level: The M&E of each project/programme outlined in the FYDPs
will be conducted by the respective implementing agency such as MDAs/RSs/LGAs. The
M&E reports of the same should be forwarded to the central M&E committee housed at
the POPC.

b) Institutional Level: The M&E of institutional performance of all implementing agencies

will be conducted on an annual basis. The challenges to implement FYDPs’ projects will be
analysed and the impediments and progress will be identified. The institutional M&E

104
 reports will be reviewed by POPC and this will help POPC in advising the Government on
improving the implementation capacity of the institutions.

c) LTPP/FYDP Level: The overall M&E of the FYDPs and LTPP implementation will be the
responsibility of POPC. The M&E reports at the project and institutional level will be used
effectively together with consistent monitoring of implementation progress of FYDP and
evaluation in terms of meeting the performance targets outlined in FYDP and LTPP.

5.3.4 The National Planners Conference

The National Planners Conference will be strengthened under the lead role of POPC, to
incorporate all major stakeholders participating in the LTPP/FYDPs implementation process.
The annual FYDP/LTPP M&E reports will be discussed at the Planners Conference, and ways to
ensure meeting of FYDPs’ targets will be explored. This will be a national forum for all
stakeholders to express their concerns and suggestions on any stages of FYDP implementation,
and will be held once a year. The discussions provide an informed assessment of whether or not
the country is on track to achieving the Vision 2025 goals.

5.3.5 Performance Indicators, Baselines and Targets

Performance indicators will be selected for monitoring and assessing the progress, trends and
developments, to see whether they are consistent with the objectives of LTPP. Two types of
indicators will be developed: (i) outcome indicators, to assess the achievements in line with the
aspirations and objectives of Vision 2025, and (ii) output indicators, to assess the outputs at
project level. Baselines set for FYDPs will apply for LTPP. However, targets will also be set for
the end of the period and for the end of each of the three FYDPs (2015/16, 2020/21 and
2025/26). A list of socio-economic indicators and targets are included in Appendix 1.

5.3.6 Reporting and Communication Arrangements

To the largest extent possible, the FYDP reporting arrangement (including annual
implementation report), will be utilized in reporting LTPP. Two types of reports will be
produced: five year performance reports, and the LTPP outcome report.

The five year performance reports will be gauged against the five year targets and interpreted
in light of the final targets. PIMU, with the support of the secretariat, will coordinate these
reports. A communications strategy will be developed to guide dissemination of information
emerging from these assessment reports.

In addition to the performance reporting, budgeting reporting of all MDAs/LGAs/RSs and all
relevant stakeholders will also be crucial. The budget reports of all FYDPs/LTPP-related
projects will be forwarded to the resource mobilization committee at POPC. The budget reports,
in addition to the regular revenue and expenditure, should specifically discuss all pertinent
issues associated with any problem related to flow of funds and challenges.

5.4 Plan Facilitating Factors

Successful implementation of LTPP will depend on several factors, namely:

a) Strengthened technical and institutional capacities to effectively follow-up and manage
the LTPP implementation process;
b) Strong political leadership during the planning and implementation stages;
c) Priority projects and programmes: these will be designed to maximize on the rich
resource potentials and investment opportunities obtainable in the country;

105
d) Development projects and programmes requiring critical mass financing: they will be
allocated as an adequate, reliable and predictable quantum of resources throughout the
implementation process;
e) Institutional framework for development planning: this will be sustained in order to
build capacity and programming; and strengthen institutional succession and
management;
f) A paradigm shift in the people’s mind-set is needed towards promoting a dedicated and
patriotic population, led by dedicated and committed leaders who ensure that plans are
implemented without fail. It will be critical to entrench the culture of dedication to work
and having key performance indicators;
g) Effective communication: all possible means of communication will be employed in
order to foster awareness, ownership and legitimacy.

106
 ANNEXES
Annex 1: M&E framework: Indicative Socio-Economic Targets

TZ Current Targets for Targets for Targets for

Section Target Target Indicator TZ Base line
Status FYDPI FYDPII FYDP III
2000 2010 2015 2020 2025
Economic growth GDP Per capita growth, percent 2.5 3.6 5.5 5.5 5.5
GDP growth rate, percent 5.1 6.5 8 8 8
GNI pc (Atlas Method) at constant 2009 USD 270 500 670 855 1100
GNI pc PPP at constant 2009 USD 770 1,350 1,809 2,308 2,950
GNP per capita (pc), nominal (USD) 300 500 640 814 1,040
Gross Domestic Saving as % of GDP 13.2 10.6 14 15 22
Net ODA (percent of GNI) 10.6 13.7 10 7 5
Revenue (percent of GDP) 10.2 17.5 19 20 21
Inflation rate, percent 5.9 6.8 4-5 <5 <5
Poverty head count % 43 19.3 (MDGs
35.7 (2000/01) 33.6 (2007 HBS)
target)
Income inequality (Gini coefficient) 0.35 0.34 (2006/07)
Productivity and
3.5
Growth
3.5.1 Agriculture Agriculture growth rate, percent 3.4 4.6 6 6 6
Agriculture (% of GDP) 33.1 27.8 25.4 23 21
Employment in agriculture (% of total) 74.6 74.6 61 50 41
Food self-sufficiency ratio (average) 92 100 120 130 140
Agricultural product (in constant 2001 TShs.) per 174,238 212,671 305,000 435,000 622,000

43Sources: 2000/01 and 2006/07 HBS reports. The “basic needs poverty line” poverty headcount figure for 2015 is derived as the MDG stated target of halving poverty by 2015 from
the base headcount of 38.6% from the 1991/92 HBS results - all figure for overall mainland Tanzania.

107
 TZ Current Targets for Targets for Targets for
Section Target Target Indicator TZ Base line
Status FYDPI FYDPII FYDP III
2000 2010 2015 2020 2025
worker (2006)
3.5.1.1 Crops Proportion of irrigated cropland (%) 3.3 3.5 10 15 18.3
Annual Growth rate (%) 4.67 4.40 6.2 6.2 6.2
3.5.1.2 Livestock Annual Growth rate (%) 3.91 3.40 5.5 5.5 5.5
3.5.1.3 Forestry Annual Growth rate (%) 4.83 4.10 5.5 5.5 5.5
Forestry Total revenue from sale of forest products in USD 237,979,633.5
Hunting Total revenue from sale of wildlife products in USD 17,020,094.24
3.5.1.4 Fishing Annual Growth rate (%) 2.94 1.50 6.5 6.5 6.5
3.5.2 Industry Industry growth rate, percent 9 7 9.2 9.2 9.2
Industry (percent of GDP) 19 24.4 26.5 28 31
Employment in industry (percent of total) 5 6 8 12.5 20
3.5.2.1 Manufacturing Manufacturing growth rate, percent 8 10 12 12 12
Manufacture (percent of GDP) 9.3 9.8 12 14.6 18
3.5.2.2 Mining and Quarrying Growth rate of mining, sector, percent 13 1.2 5 5 5
3.5.2.3 Construction Annual Growth Rate (%) 0.8 10.2 10.5 11 11
3.6 Infrastructure
3.6.1 Transport
3.6.1.1 Road sub-sector Road Density (km/1,000km²) 98.7 99.3 102 105
Proportion of paved roads (%) 4.2 7.7 13.8 20 30
86
Percentage coverage of total maintenance needs (%) 58 10044) 100 100
(2008)
3.6.1.2 Railway sub-sector Freight (tonnes) 1,350,625 256,190 1,456,000 2,456,000 4,556,000
Average Speed freight train (km/h) 15.6 10.4 (2006) 30 100-120 100-120
Wagon Availability (%) 71 48 60 75 90

44Revised from 64% to 100% by 2015. The Ministry emphasises that the costs of deferred maintenance are exorbitant. It observes that if maintenance costs are deferred for long (15
years), the country would have to pay dearly in reconstruction costs when such money would better be used for increasing the mileage of paved roads.

108
 TZ Current Targets for Targets for Targets for
Section Target Target Indicator TZ Base line
Status FYDPI FYDPII FYDP III
2000 2010 2015 2020 2025
Air Transport sub-
3.6.1.3 Passenger traffic (nos.) 1,200,000 988,637 (2009) 3,430,000 4,000,000 4,500,000
sector
Total Cargo (tonnes) 40,000 26,741 35,500 45,000 55,000
Aircraft Movement 112,820 160,820 (2006) 169,500 216,000 276,000
Maritime Transport
3.6.1.4 Transit freight (DWT) 4,684,929 5,540,000 6,395,071 7,250,142 8,105,213
sub-sector
Passengers (Nos) 565,704 682,134 (2006) 953,000 1,095,950 1,260,345
Containerized cargo (TEUs) 98,691 255,880 (2006) 795,000 1,200,450 1,812,675
Freight (tonnes) inland waterways 62,263* 87,889* (2006) 126,328 147,683 169,038
Passenger (Nos.) inland waterways 274,701* 515,925* (2009) 677,781 812,141 946,501
3.6.1.5 Pipeline sub-sector Volume of gas transported (in million cubic feet) N/A 25,550 40,000 60,000 80,300
3.6.1.6 Meteorology sub-sector Number of people using TMA services 10,897 16,000 19,134 21,402 23,670
Total expenditure on Meteorological equipments
NA 2,354 6,320 8,960 11,600
and instruments (Million TShs.)45
3.6.2 Energy Electric power (kWh per capita) 58.2 81.7 150 377 490
Electric generation from various sources –Thermal,
renewable sources…46
Electric Power Transmission losses (percent) 2347 24 19 18 15
Installed capacity (MW) 785 1,051 2,780 4,740 > 6,700
Access to electricity (% of population with access ) 10 14 30 49.7 55
Electricity Consumption (GWh) 2,134 3,430 8,000 28,887 54,951
Time taken by registrar of Titles to approve a
3.7 Land 21 10 4 3 3
transfer of certificate of right of occupancy (days)
Housing and Human Residential houses in urban centres developed in
3.8 NA 30 43 60 >80
Settlement accordance with the planned land use
3.9 Services Services growth rate, percent 3.6 7.2 8 8 8
Services (percent of GDP) 47.9 47.80 48.1 47.5 49

45 Computations based on average over years (2010 being the reference).

46 Proposed additional indicator(s); to be provided in the course of time by implementing agencies/stakeholders.
47 This data point is for year 2005, as no comparable data could be found for previous years.

109
 TZ Current Targets for Targets for Targets for
Section Target Target Indicator TZ Base line
Status FYDPI FYDPII FYDP III
2000 2010 2015 2020 2025
3.9.1 Trade and Commerce Export growth rate, percent -5 8.4 10 10 10
Share of Tanzania in Total World Trade 0.02% 0.04% 0.07% 0.12% 0.20%
Share of Tanzania in Total EAC Trade 25% 32% 37% 42% 48%
Share of 'trade and repairs' to GDP (current) 13% 12% 13% 13% 14%
Share of Exports to GDP (current) 16% 28% 32% 36% 40%
3.9.2 Tourism Growth of tourism sector, percent 4.3 4.2 6 6 6
Amount of visitors (Millions) 0.50 0.80 0.94 2.0 2.40
Average length of stay (days) 8 11 18 21 21
Revenues (Constant 2010 Billion US$) 0.74 1.30 2.69 3.34 >4
Share of adult population formally or semi-formally
3.9.3 Financial Services NA48 17% 21% 27% 34%
included in the financial sector
Share of adult population excluded from the financial
NA 56% 54% 51% 46%
sector
Share of people using informal financial instruments NA 27% 24% 22% 20%
Share of domestic credit to the private sector to GDP 4.1% 16% 23% 34% 50%
Market capitalization of listed companies (% of GDP) 2.3% 5.5% 9.1% 15.1% 25%
Total value of stock traded (% of GDP) 0.1% 0.1% 0.4% 1.4% 5%
Science, Technology
3.9.4 and Innovation and R&D expenditure (% of GDP) >0.2 (2003) N/A 0.23 0.5 1
R&D
Trademark application (no.) 500 556 780 1,099 1,399
High technology export (% of manufactured export) N/A 3 4.33 5.67 7
Information and
3.9.5 Communication Internet density-penetration (% of population) 0.12 11 21.33 31.67 42
Technology
Broadband Internet Subscription NA 0.01 1.2 2.5 3.7
Telephone penetration / Tele-density (% of
0.85 47.93 54.95 61.98 69
population)

48 There is no comparable data for 2000 from FinScope.

110
 TZ Current Targets for Targets for Targets for
Section Target Target Indicator TZ Base line
Status FYDPI FYDPII FYDP III
2000 2010 2015 2020 2025
Fixed telephone subscription (% of population) 0.52 0.40 2.6 4.8 7

Mobile phone subscription (% of population) 0.33 47.53 54.69 61.84 73

Population per post office (Number of people served
3.9.6 Postal Services 110,647 83,765 56,882 30,000 7,271
by one post office)
Average number of Inhabitants per post-office box 271 250 191 132 73
Demographic
3.10 Transition and
Related Issues
3.10.1 Population Dynamics Population growth rate 3.1 2.9 2.7 2.7 2.5
Rural population, percent of total49 74 73.7 70 66.3 62
Total population (Millions) 34.4 43.2 49.8 57 65
Fertility Rate 5.7 5.4 4.5 3.9 3.4
3.10.2 Urbanisation Urban Population (% of total) 26 26.3 30 33.7 38
3.10.3 Employment Unemployment, total (% of total labour force) 12.9 4.7 4 below 5% below 5%
Human Capital
3.11 Development and
Social Services
3.11.1 Education and Training Pupil-teacher ratio at primary 40:1 51:1 45:1 37:1 30:1
Gross completion rate primary 55% 95% 95% 95% >95%
Pupil-teacher ratio at Secondary 20:1 40:1 33:1 26:1 20:1
Secondary gross enrolment rate 6.3% 34% 38% 43% 48%
Tertiary enrolment rate 0.7% 1.5% 3.9% 6.9% 10%
Literacy rate (15-24) 78% 77% 82% 88% 94%
Pupil-teacher ratio rural50
Pupil-teacher ratio urban *51

49 This is based on the IGC-POPC (2011) calculations, and might thus differ from the NBS (2006) projections.
50 Proposed additional indicator(s); to be provided in the course of time by implementing agencies/stakeholders.
51 Proposed additional indicator(s); to be provided in the course of time by implementing agencies/stakeholders.

111
 TZ Current Targets for Targets for Targets for
Section Target Target Indicator TZ Base line
Status FYDPI FYDPII FYDP III
2000 2010 2015 2020 2025
Education expenditure as % of budget52
High53 Legislators, Senior Officials, Managers NA54 0.2% 0.5% 1.2% 2.7%
High Professionals NA 0.7% 1.4% 2.7% 4.7%
High Technicians and associate professionals NA 1.8% 2.6% 3.7% 4.7%
Medium Clerks NA 0.4% 1.0% 2.2% 4.6%
Medium Service workers and shop and market sale workers NA 9.1% 10.5% 11.6% 11.8%
Medium Craft and related trade workers NA 4.1% 7.0% 11.5% 17.4%
Medium Skilled agricultural and fishery workers NA NA 0.2% 0.3% 0.4%
Low Plant and machine operators and assemblers NA 1.3% 2.3% 3.7% 5.7%
Low Agriculture and elementary occupations NA 83.7% 74.5% 63.1% 48.8%
Health expenditure, public (% of government
3.11.2 Health 11.3 (2003) 10 15 15 15
expenditure)
National HIV Prevalence rate (Percentage) 7.1 5.7 (2007) 5 3 1.5
Access of safe water in rural and urban (% of total) 54 54 57 70 90
Access of safe water and sanitation in rural areas (% 53
75 75 80 90
of total) (2003)
Life expectancy (Years) 50 59 62 66 70
Infant Mortality rate percent of 1000 life birth 99 51 45 42 40
Maternal Mortality rate per 100,000 596 (1996) 454 300 250 220
Under five years mortality rates per 1,000 life births 153 81 50 45 40
Water Supply and Coverage/Access to safe and clean water in regional
3.11.3 68% 86.1% 90.1% 95% 100%
Sanitation Urban centres55
Coverage/Access to safe and clean water in Rural
48.5% 57.8% 67% 78.5% 90%
Areas

52 Proposed additional indicator(s); to be provided in the course of time by implementing agencies/stakeholders.

53 Data in percentage of working population.
54 Given the change in calculation between the 2001 and 2006 ILFSs, this data can not be gathered. The data for 2010 are actually for 2006, as no later data is available.
55 Both coverage data follow Economic Survey (2010) classification.

112
 TZ Current Targets for Targets for Targets for
Section Target Target Indicator TZ Base line
Status FYDPI FYDPII FYDP III
2000 2010 2015 2020 2025
Access to water supply services56 (Urban) 86% 84% 95% 96% 100%

Access to water supply services (Rural) 45% 58.7% 65% 75% 90%
Proportion of population with access to improved
22% 21% 35% 58% 97%
sanitation facility (Rural)
Proportion of population with access to improved
29% 34% 41% 49% 60%
sanitation facility (Urban)
3.11.4 Sports Sports infrastructure 10% 11% 25% 45% 85%
Sports academic institutions 5% 10% 25% 40% 75%
Research and Development 2% 4% 10% 25% 50%
Ratio of skilled administrator and coachers 5% 10% 20% 45% 75%
Percentage increase of entertainment industry for
3.11.5 Entertainment 15% 35% 50% 75% 90%
economic development
3.11.6 Media Transporting and evidence-based reporting improve 15% 20% 30% 55% 80%
3.11.7 Culture Mind-set and moral uprightness improve 10% 11% 20% 45% 89%
Mobilisation of youth
income-generating % of youth income-generating activities established 5% 5% activities 20% 25% 30%
activities
Volunteerism on youth
Number of youth camps organised per year 5 3 5 5 5
camp
Access to Youth Development Fund (% of youth
Youth training centres 5% 20% 25% 29% 35%
benefiting from the Fund)
Number of Youth SACCOs established 238
% of fund (reimbursement) to YDF from Youth
90% 90% 90% 92% 95%
Groups
Youth information centres established in accordance
to Youth Development Plan as % of youth graduated 20% 5% 20% 30% 50%
in various fields at centres
Number of training manuals/modules developed on
Youth skills Leadership, Project Planning and Implementation,
20% 5% 25% 35% 70%
development Record and Stores management, Life Skills and
Entrepreneurship

56 For both Rural and Urban access to water and use of sanitation facility, the 2015 target is set in the MKUKUTA II document.

113
 TZ Current Targets for Targets for Targets for
Section Target Target Indicator TZ Base line
Status FYDPI FYDPII FYDP III
2000 2010 2015 2020 2025
Youth guidance and Number of awareness creation programmes
15% 50% 65% 75% 95%
counselling conducted on Youth on HIV/AIDS, drug abuse
% of youth tested on HIV (Volunteer Counselling and
15% 25% 50% 75% 90%
Testing)
Uhuru Torch and Number of projects inaugurated during Uhuru Torch
70% 80% 85% 90% 95%
National Youth Week Race
Amount of money for community development
75% 8% 85% 90% 95%
during the Uhuru Torch Race
Number of youth participating in National Youth
15% 25% 30% 75% 80%
Week
Number of visitors attended the Youth Week 70% 75% 80% 85% 90%
Total expenditure on organising the Uhuru Torch
70% 75% 80% 85% 90%
Race
Quality of implementation in all MDAs of five
performance management and accountability tools
3.12 Governance 62% 65% 70% 75% 80%
(strategic plans, client service charters, OPRAs, M&E
and complaints handling systems (CHS))
Number of corruption cases investigated on the
100% 15% 25% 40% 66%
number of allegations received (%)
Number of corruption cases convicted on the total
14.3% 11% 16% 23% 33%
number of cases prosecuted (%)
Cases pending for two or more years (% of total) 45% 14% 12% 10% 5%
CPIA transparency, accountability, and corruption in 3.5 3
3.5 4 4.5
the public sector rating (1=low to 6=high) (2005) (2009)
Children registered with a birth certificate within 90
3-5% 8% 80% 90% 95%
days of birth (% of total)
Private Sector 60
3.13 Informal economy as a share of GDP (%) 55 45 37 30
Development (2005)
Doing Business: Ease of doing business international
NA 131st 116th 102nd 90th
ranking
3.14 Cross Cutting Issues
3.14.1 Gender Seats of Women in Parliament (% of total) 21.5% 30%/36%57 38% 44% 50%
Women’s participation in public services NA 22% 27% 34% 40%

57 Given 2010 was an election year, it is important to separate between the first and second part of the year.

114
 TZ Current Targets for Targets for Targets for
Section Target Target Indicator TZ Base line
Status FYDPI FYDPII FYDP III
2000 2010 2015 2020 2025
Ratio of girls to boys in primary school (%) 98.1% 99.7% 99.7% 99.7% 99.7%
Ratio of girls to boys in secondary school (%) 84.9% 80.0% 85% 91.3% 98.6%
Ratio of females to males in tertiary education (%) 33.5% 33.3% 35% 40% 48%
3.14.2 HIV and Aids National HIV Prevalence rate (Percentage) 7.1 5.7 (2007) 5 3 1.5
Environment and
3.14.3
Climate Change58

Mandatory Formal Social Security Coverage (share 5.4%

3.14.4 Social Protection 5.4% 8% 10% 20%
of total labour force) (2003)

58 To be provided in the course of time by implementing agencies/stakeholders.

115
Annex 2: Targets for Skill Development for Implementation of TDV 2025

High Skilled Labour Force Targets59

Occupation Categories 2025 TARGET 2025 Target

(% of working for Number
population) (’000)
Physical scientists and related technicians 0.32 87.7
Architects, engineers and related technicians* 1.07 290.8
Life scientists and related technicians 0.27 73.1
Medical, dental, veterinary and related workers 0.78 212.2
Health assistants/workers 0.97 263.8
Statisticians, mathematicians, systems analysts
0.05 13.4
and related technicians
Economists & Economics related professionals 0.37 100.0
Accountants & Financial sector professionals 0.77 208.9
Jurists & legal professionals 0.20 54.4
Teachers 3.90 1,061
Authors, journalists and related writers 0.06 17.5
Administrative and managerial workers 1.58 430.6
Government executive officials 1.02 278.0
*Targets for Skills Development in the construction industry is 1:5:25 (engineer:technicians:atisans) as
per Engineers Registration Board.

Source: IGC-POPC Study 2011

59 The baseline data for 2010 under this employment classification is unavailable for Tanzania.

116