Potentials of Non-Traditional Sector on

Employment and Income Generation in

Tanzania

By Dr Joseph Shitundu

1
 1.0 Objectives
The main objective of this study:
 To facilitate the Ministry of Labour, Employment and Youth
Development to play a role in the development of Non
Traditional Sector, ensuring its contribution to employment
generation and the economic growth of the country.

The specific objectives:

 To assess the extent to which the current labour laws and
Policies, Occupational Safety and Health issues, Social
Security issues, National Youth Development and
Employment Policies and other socio-economic factors,
facilitates or hinders the growth of the non traditional sector:.

2
 The specific objectives:
-Cont

 Identification of Non Traditional Sector activities

 To identify the characteristics of groups involved in this
sector in terms of gender, age, source of capital, education
and skills.
 To identify and prioritize potential non traditional sector
activities according to projections on the number of
enterprises, jobs, income generation and level of
organization to be created over a period of time.
 To analyze sector activities in (iv) and their likely contribution
to pro poor growth
 To propose and develop strategic interventions for the
development of non traditional sector.

3
 2.0 Methodology and Scope
(i) Desk Review
 The information and data was gathered by reviewing
various documents (Policies, Strategies, Studies and
others), observations and conducting interviews,
administering questionnaires and using various
methodologies.
 This activity helps to understand the concept, nature
and scope of non-traditional sector in Tanzania, the
related policy environment, the objectives and
challenges of promoting non-traditional employment
activities in Tanzania.

4
 2.0 Methodology and Scope
Cont.

(ii) Field Work

 The fieldwork involving interviews was conducted using three
sets of checklist
 Involved gathering information from key Ministries; Association
of Tanzania Employers (ATE), Trade Union Confederation of
Tanzania (TUCTA), and District and Regional officials of the
selected regions.
 All these helped to establish the scope and issues of non-
traditional employment activities in Tanzania and establishing
the related problems, challenges and existing efforts towards
promoting non-traditional employment activities in the country.

5
 (ii) Field Work
Cont.

 Interview with Producers and Musicians, Sportsmen

and sports clubs, sports associations and fans.
 Interview with food processors eg fruits packaging
and selling
 Interview with small miners, brokers
 Interview with Herbs local sellers, their associations,
Districts Medical Officers and Pharmacists.
 Interview with handcrafts men, their associations,
Small Industries Development Organization (SIDO)
 Field visit to identified areas of non traditional sector.

6
 3.0 Definition and Growth of Non-
Traditional Activities in Tanzania

 Look at the various policies the way they incorporate and

address Non traditional employment.
 Definition: Non traditional sector includes all those economic
activities which are not part of the customary activities of the
local population and they are done primarily due to their high
cash value and export potentiality.
 Partly, emerged as a response to the fall of export prices of
traditional crops. It is a way to improve incomes, export
earnings and employment prospects.

Growth trends by sub-sectors

7
 4.0 Analysis of Field Work Results

4.1 Identified Numbers by Region by Sector

 Across the five regions, the most practiced non-
traditional sector activity is entertainment (fine
and performing arts) with 14.1 percent of the
respondents; Sports activities (11.7%); Food
processing (7.4%); and Handicraft (7.4%). Other
important non-traditional activities are
horticulture, flower growing, tie and dye, metal
works, timber and woodworks. (Based on Table
3.2a)

8
 4.1 Identified Numbers by Region by
Sector
Cont.

 Table 3.2a: Non-Traditional activities by

Region
 Table 3.2b: Reasons for Regional
Distribution of Non-Traditional Sector
Employment

9
 Job Employment
According to Table 3.3: Total Employment in Survey
entities by Gender:
 During the period 2007 to 2009, total employment increased by
26.2 percent. Entertainment and sports employs most, but the
proportion of males is higher compared to females.
Employment in Flower growing grew fast, fivefold between
2007 and 2009. Handicraft also employed close to three times
in 2009 the number employed in 2007.
 Total non-traditional sector employment increased from 1,913
(38% being females) in 2007 to 2,057 (39% females) in 2008
and 2,415 (43% females) workers in 2009. Most of the workers
were permanent employees while some were temporary and
casual workers.

10
 Job Employment
Cont.

 Female employment is highest in Tie and

dye, flower growing, horticulture, handicraft
and food processing (Table 3.4).
 Top ten sub-sectors in employment are
flower growing; Tourism; Mining; Catering;
Sports; Food processing; Timber works;
livestock/poultry; Handicraft; Entertainment
(Table 3.5)

11
 Income Levels
 Most operators are in the 0.5 mil to 5 mil income group.
Between 2006 and 2009, the lowest income group grew most,
more that 3 times followed by those within the 1 mil to 5 mil
income group that grew by 2.2 times. Very few operators are in
the 50 mil to 2002 mil and plus income group while the
surveyed entities total income almost doubled between 2006
and 2009 (Table 3.6).

 In 2006 entertainment was the lead activity, followed by sports,

and third is flower growing timber works and handicraft
activities were the fourth in income generation (3.6)
 In terms of proportional income earned the leading sectors are
flower growing; livestock/poultry; Handicraft; Hair dressing;
Food Processing; Entertainment (Table 3.7).

12
 Type of Organization
 Most of the respondent operators are organized as
cooperative groups (46%) and 22.7% are personal
business; 16.5% Family Business. Only 7.4% are
registered companies and another 7.4% are joint
ventures (Table 3.8)

 Cooperative organization is dominant in

entertainment and sports activities while
hairdressing, ICT, herbal, horticulture and catering
are mostly operated as personal businesses.

13
 Characteristics (Gender, Age, Sources of
Capital

Participation by Gender and Age

 Tables 3.3 and 3.4 and Figure 3.1 show active participation
of females. Overall Youth are 38.7% (Table 3.9a) and
leading sectors are Entertainment; Handicraft; Sports;
Timber Works; Tie and Die and Flower Growing (Table 3.9b)
Sources of Capital for Investment
 A total of 132 respondents indicated the sources of capital.
41% depend on own resources; 37.1% re-invest from profits.
Donor support (7.4%). Government initiatives and family
members are the least important sources of capital (2.2%
each). Financial institutions 6.1%. (Table 3.10)The sector
that benefited most from financial institutions is Handicraft.

14
 Characteristics (Gender, Age, Sources of
Capital
Cont.

4.5.3 Education and Skills

 This low level of education has implication in
terms of organizing and running the non-
traditional activities Table 3.11).
 Entertainment; Handicraft; Sports; Tie and
Die; Flower Growing and metal works,
absorbs most of the youth with primary up to
ordinary level education.
15
 Future Prospects

5.1 Projections of Prioritized Potential Non-

Traditional Employment Activities
 The survey identified several (more than 17
activities) non-traditional activities which are
emerging in Tanzania. However, looking at the
trends and their potentials in terms of the number of
enterprises; contribution to employment creation and
income generation as well as their organizations we
prioritized few activities for inclusion in MKUKUTA.

16
 5.1 Projections of Prioritized Potential
Non-Traditional Employment Activities

 Using information on number of enterprises, (Table

3.2a); employment (Tables 3.3 and 3.4); income
(Tables 3.6 & 3.7) and type of organizations (Table
3.8) we have prioritized 6 sub-sectors (Food
Processing; Flower Growing; Entertainment; Sports;
Handicraft and Horticulture) and three other
important sub-sectors. (Table 4.1)
 The sub-sectors also involve products which can
add-value and have export potentials. They are also
leading in terms of involving people of both sexes.

17
 5.2. Pro-Poor Growth Potential for Non-
Traditional Sector in Tanzania

 Pro-poor growth involves ensuring that the

four components of ‘Decent work”, namely,
employment, social protection, workers’
rights and social dialogue are covered.
 Despite the bad picture of decent work in the
surveyed enterprises it is possible to have it
promoted in the six prioritized non-traditional
sub-sectors:

18
 5.2. Pro-Poor Growth Potential for Non-
Traditional Sector in Tanzania

 They have big potential for higher earnings including

export earnings This may ensure ability to pay higher
wages regularly leading to both job and income
security.
 Workers can manage to join or make arrangement of
social security.
 Their types of organizations i.e. associations,
groups, cooperatives and joint ventures potentially
create room for some kind of social dialogue
including possibilities of establishing trade unions.

19
 6.0 What Needs to be Done
6.1 Challenges

6.1.1General Challenges
 Low level/Lack of ICT skills and knowledge, entrepreneurship
skills and business culture among youth;
 Challenges arising from impact of globalization on employment;
 Impact of HIV/AIDS pandemic particularly on youth
 Workers in the informal sector may be exposed to situations
which make them vulnerable to HIV & AIDS. The challenge is
to protect the workers and ensure the potential economic gains
from the informal sector.

20
 6.1 Challenges
Cont.
 Most informal sector workers are, in practice not protected by
labour laws;
 Lack of Labour Market Information System for continuous
collection, analysis, and reporting on employment creation
trends of non-traditional sector;
 Child labour persist despite different interventions done by
government and stakeholders; and
 Limited coverage of the social security schemes particularly
informal sector, small scale self employed entrepreneurs,
subsistence farmers
 Difficulties in accessing decent Working Premises partly
because of stringent Municipal authority rules and lack of funds
to pay for the rent as a result of low turnover of the business.

21
 6.1 Challenges
Cont.
 Lack of capital to Invest on a Better Business Premise: This is the
major reason for many to settle in unwanted areas. They can’t
establish business in areas allotted to small businesses because
the same areas are eyed by rich people who come to those areas,
construct businesses premises and they start charging rent.
 Law enforcement involving harassment by local government
militiamen impedes growth of economic activities or businesses.
 The provision and use of Business Development Services (BDS) is
too low.
 Collateral Requirements and loans with high interests are beyond
most business earnings.
Specific

22
 6.2 Strategic Interventions

6.2.1 Strategic Interventions (Actions to address the

challenges)
 The following are summarized key areas of focus, issues and
actors for promoting non-traditional sector in Tanzania:
 (a) Focus: Modernize Non-traditional sector Activities
 Issues:
 (i) Lack of Access to Credit
 (ii) Limited Value Addition and post-harvest losses
 (iii) Poor packaging
 (iv) Lack of quality standards
 (v) Lack of development Strategies eg Strategy for Handicraft
Sub-sector Development

23
 6.2.1 (5.2) Strategic Interventions
(Actions to address those

 Strategies:
 (i) Improve access to credit and ensure gender equality in
the access to credit.
 (ii) Promote processing, preservation and utilization of local
materials eg fruits and vegetables
 (iii) Develop and promote the use of standardized packaging
materials
 (iv) Develop and implement sub-sector specific development
strategies e.g for handicrafts development
 Actors: (i) Ministry of Trade and Industry, Ministry
of Finance, Ministry of Labour and Youth Development,
SIDO

24
 Focus Area: Marketing
 Issues
(i) Failure to capture the internal mkt and penetrate
international mkts
 Strategies
(i) Facilitate establishment of small scale food
processing industries for exports
(ii) Promote the establishment of storage facilities
(iii) Promote the development of sub-sectors export
agencies
 Actors: MLEYD; MIT; SIDO and PPP

25
 Focus Area: Employment Vulnerability
and Exclusion

 Issues
(i) Lack of Skills
(ii) Inadequate Social Protection
(iii) Lack of Income Security
 Strategies
(i) Implement new labour Act & Occupational Safety
and Health Issues
(ii) Promote extension of Social Protection and Social
Dialogue
Actors: MLEYD; VETA; SIDO; TUCTA; ATE

26
 Focus Area: Developing ICT for Urban
Areas & Improving Electrification and
Transportation in Rural Areas

 Issues
(i) Low accessibility to ICT
(ii) Limited use of ICT to enhance management and efficiency
(iii) Lack of electricity in rural areas
(iv) Poor Transportation systems in rural areas
 Strategies
(i) Increase coverage of telephone and internet
(ii) Create ICT awareness
(iii) Fast track the process of rural electrification
(iv) Build and improve rural transport system esp. roads
 Actors: MoST; MoEVT; MoTC; MoE; TANESCO; Local Govt

27
 Focus Area: The Music &
Entertainment Industry for Growth and
Job Creation

 Issues
(i) Little Benefits to Musicians, film operators and fine
and performance art operators from sales of their
products and services
(ii) The problem of pirates
 Strategies
(i) Promote the establishment of public and private
professional centres for identifying and training
talented people in these areas

28
 -continued-

 Strategies
(ii) Promote the marketing, protection and
licensing for creative works in the music and
film industry

 Actors: MoSC; MLYED; MIT

29
  END OF SLIDE SHOW

 Thank for your Attention

30