A Paper presented by Dr. Ladis C. Komba, the Permanent Secretary, Ministry of Labour, Employment and Youth Development in Tanzania, at an International Workshop on Promoting Decent Work in Africa held at the Cape Hotel, Monrovia in Liberia from
7 – 9 September 2008.
The ILO advocated Decent Work Agenda with its prescriptive nature, requires some policy shifts to improve the employment impact both in terms of the numbers of those who are employed and in terms of the quality of the jobs. Quality here refers to the extent to which the policies are geared towards achieving the four pillars of the Decent Work Agenda, that is provision of sufficient and rewarding employment opportunities for all, observance of the fundamental principles and rights at work, provision of protection including social security for the workers and allowing for opportunities for social dialogue as a means for good governance at the work place. In recognition of the diversity of countries and their needs, the ILO encouraged and provided the technical assistance in formulating Decent Work Country Programs that take cognizance of the situations and priorities of each country. The program in Tanzania therefore has put more emphasis on the first of the four pillars due to the magnitude of the unemployment problem in the country. The dominance of the informal economy and the significant role of self employment make the achievement of the other pillars to be more challenging.
In Tanzania, guided by the Millennium Development Goals (MDGs), the National Development Vision 2025, the National Strategy for Growth and Reduction of Poverty (NSGRP), famously known as MKUKUTA, the National Employment Policy was approved in April 2008. The National Development Vision 2025 inspires and raises national hopes of attaining high economic and employment growth to meet the needs and aspirations of all Tanzanians. MKUKUTA is a strategy aimed at implementing the Tanzania Development Vision. As a strategy, MKUKUTA has three cluster objectives, namely, growth and reduction of income poverty, enhancement of quality of life and social wellbeing and governance and accountability. Employment creation falls in the first cluster, whereby the operational target has been set to reduce unemployment from 12.9% in 2001 to 6.9% in 2010. The aim of the National Employment Policy is thus to stimulate an adequate employment growth in the economy in order to reduce unemployment and underemployment rates and eventually attain full productive and decent employment for all Tanzanians. Based on the fact that employment creation is a cross cutting phenomenon, requiring the participation of different players in the economy, mostly the private sector, the policy was formulated to give a general guidance so that a common goal is attained. The Ministry of Labour, Employment and Youth Development (MLEYD) has been given the coordination role, while recognizing that the employment opportunities are to be found in other Government Ministries, Departments and Agencies (MDAs), Regional and Local Authorities, The Private sector, Employers and Workers organizations, the Development partners, NGOs and civil societies.
2.0 Economic Background
The United Republic of Tanzania (Tanzania), situated in Eastern Africa had a population of 34.5 million people in 2002 when the last census was done. With a growth rate of 2.9%, the population is currently estimated to be above 37 million. The country faced serious economic crisis in the 1970s that led to the decline in the GDP growth rate from 5% during independence in 1961 to an average of 2.6% in the early 1980s and about 1% in the beginning of 1990s. Since 1980s, Tanzania embarked on implementing a series of economic reforms that gradually placed the economy in a sounder footing. The reforms have yielded substantial economic growth and impressive performance of the economy. For example, in the past ten years the economy has been growing consistently (except for 2003 due to drought) from 3.3% in 1997 to 6.8 % in 2005, constituting an annual growth rate of 5.1%. Considering the last five years up to 2007, the GDP has been growing at an average rate of 6.0%. As a result the per capita income has reached USD 360. The Achievements in GDP growth stemmed from improved performance in Agriculture, wholesale and retail trade, tourism and hospitality industry in general, mining and manufacturing.
Inflation rate decreased from over 30% in the 1980s to single digits, between 2000 and 2005, reaching 4% in 2005. Following the adverse impacts of drought on domestic food supplies coupled with consistent escalating petroleum prices inflation has recently increased reaching a peak of 9.7% in December 2006 and May 2008, though the annual average has been 7.3%.
Despite the positive achievements recorded through macroeconomic stabilization policies, crucial challenges still remain, and one of these is the high levels of unemployment and underemployment.
3.0 Employment and labour market situation
According to the Integrated Labour Force Survey (ILFS) done in the country in 2005/06, the economically active population in the country was 18.8 million compared to 15.5 million in 2000/01. The survey also indicates a labour force average growth of 800,000 people or 4.1% annually. Of the active population in 2006, 16.6 million were employed reflecting 88.3% employment rate or 11.7% unemployment rate as compared to the unemployment rate of 12.9% in 2001. A noticeable increase in the number of those employed is recorded in the private sector whereby the share has increased from 13% to 19.1% during this period. The employment in the Government and parastatal Organizations has remained to be low at around 2.5% during this period. The share of the traditional Agricultural sector (crop farming, livestock keeping, fishing and forestry) which is the main employer, has decreased from 81% to 75%, while the share of other sectors, especially the mining, construction, services have increased during the period.
Unemployment rates differ substantially between urban and rural areas, with rural areas having 7.5% and urban areas excluding Dar es Salaam having 16.5% (DSM has an unemployment rate of 31.5%). The unemployment problem affects more youth with 13.4% compared to the national level of 11.7%. Considering impact on gender, women are more affected with a rate of 12.5%, while men have 10.5%. Likewise, among youth, (15 t0 35 years) the unemployment rate for female youth is 13% while that of male youth is 10%.
The magnitude of the unemployment problem is well exemplified by comparing the rate at which the labour force is growing and the rate at which the economy is generating employment opportunities. As indicated above the people joining the labour force are close to 800,000 per year. The past experience shows that employment opportunities generated in the formal economy amounts to 40,000 per annum. This implies that the private sector including the informal economy has to absorb the remaining 760,000 job seekers each year. And if Tanzania has to reach the MKUKUTA target of unemployment rate of 6.9% by the year 2010, the current backlog of the unemployed must as well be employed during the same time, implying more efforts are needed.
4.0 The Government Efforts
Several efforts have been undertaken by the Government to address the problem of unemployment in the country. The underlying principle of the undertakings is the realization of the fact that employment creation is a useful tool in the fight for poverty eradication. Whereas various economic reform programs aim at increasing the wealth that a country has, in terms of GDP and other indicators, measures of poverty require that the wealth thus generated is fairly distributed among the citizens of the nation. Thus when unemployment rates are high, the wealth will concentrate in a few hands and thus poverty indicators would still show high poverty levels. Such indicators include the proportion of the population living below the absolute poverty line of 1$ a day, literacy rate, number of doctors per patients, the proportion of the population accessing safe water, etc. All these indicators increase with increases in employment rates, which through decent incomes, more people are enabled to share the cake that is created in a country. Having realized this, the Government has done the following:
a) Through the 2005 Manifesto of the ruling party (CCM) the Government has targeted to create a million jobs by 2010. As part of strategies aimed at achieving this goal the Economic empowerment fund was established in 2006/2007 to enable small entrepreneurs to access credit for investments and employment creation. The fund which was in the first year used as a cash guarantee, has enabled about 40,000 entrepreneurs to access credit from commercial banks, which would otherwise have not given them because of lack of collaterals.
b) Developed the National Employment Policy of 2008 as an improvement of the 1997 policy. The policy takes note of 24 key employment challenges and provides for Government policy statements to address them. The first of the challenges is to have a common understanding of the concept of employment and unemployment in the country. This is crucial so as all stakeholders deal with the problem of unemployment in a coherent manner.
c) Included employment creation in cluster one of the MKUKUTA and created a thematic working group on Employment that includes MDAs, social partners and Development Partners. Through the thematic working group all stakeholders are required to mainstream the employment creation agenda based on the Decent work program in their respective policies. The issues to be mainstreamed are as pointed out in the National Employment Strategy. A toolkit for mainstreaming Employment and Decent Work into the various policies has been developed with the assistance of ILO experts.
d) Developed a Youth Development policy 2007, to handle the issues of Youth. This was necessary because of the seriousness and the impact of the employment agenda among youth. In one of its chapters the policy focuses on the employment challenges youths are facing, including the lack of confidence, know how and experience, mismatch between the skills they have and what the labour market requires, opportunities for self employment, and others. The policy emphasizes the importance of youth groups as a vehicle for addressing the challenges.
e) The MLYED in collaboration with ILO and UNDP has developed a comprehensive National Employment Creation Strategy that takes cognizance of the inputs from local Authorities, the social partners, civil society and the private sector at large. The strategy is prescriptive in nature and leads various stakeholders to prepare their own plans for the execution of the national strategy.
f) The MLEYD in collaboration with ILO and the National Bureau of Statistics has designed a Labour Market Information (LMI) System for effective monitoring and evaluation of the achievements of employment created. This was inevitable since, so far there is a weakness in the way employment data are generated, analyzed and disseminated. It is even more important at this time when employment agenda is considered as cross cutting and is a matter to be done by all.
5.0 Entry Points for stakeholders
In order that all stakeholders take part effectively in generating employment and decent work in the country, the following entry points are emphasized, at the policy level institutional level , macro level (supply side) and micro level (demand side).
a) At policy level each player is foremost required to recognize the centrality of employment for poverty reduction in various development frameworks (MKUKUTA, JAST, UNDAF). Each player is then required to evaluate all policy and investment decisions in light of their job creation potential and focus on labour intensive programmes, create a conducive environment for private sector development and community based initiatives, improve infrastructure, promote principles of equality of opportunity and inclusion and put emphasis on promoting employment for youth and women.
b) At institutional level, each stakeholder is required to make efficient use of labour market institutions, such as the recently established Tanzania Employment Services Agency (TaESA), strengthen social dialogue through appropriate legislations, extend social protection, improve governance especially in the informal sector and enhance institutional capacity.
c) At the micro level (supply), the Government and other stakeholders are called upon to invest in people in terms of improving basic education, vocational training, apprenticeship systems and private-public partnership for professional training. Due to limited employment opportunities, emphasis should be in facilitating self employment through entrepreneurship training, microfinance schemes, counseling services and expanded market access.
d) At the micro level (demand) emphasis should be on investments in manufacturing and agro-processing as alternatives and complimenting activities to small scale agriculture, put preference to labour intensive technologies and value chains, develop non traditional sectors such as horticulture, design comprehensive local economic development programmes and community based initiatives and develop export markets for goods and services.
6. Conclusion
Tanzania has recognized that employment creation is a vital tool in the efforts aimed at eradicating poverty. This is because through employment people are enabled to participate in the growth of the economy and contribute towards eliminating income poverty at the individual level which then culminates into eliminating poverty at the family level and finally at the national level. Attaining higher levels of employment also provides an opportunity to the majority of citizens to share the wealth that is generated in the country and thus improve the status of most poverty indicators. It is for this reason that countries should strive at achieving employment that is in conformity with the Decent Work Agenda. The Tanzanian experience has shown, at initial stages the Decent Work Agenda needs to be adopted to match with the conditions and priorities of respective countries, while the philosophy should remain to be the ultimate goal. Recognizing that employment creation is a cross cutting phenomenon, Tanzania has through the National Employment Policy, MKUKUTA and the National Employment Creation Strategy provided the policy guidelines, strategic direction as well as entry points for all stakeholders to mainstream employment creation into their development agenda.