Growth and Structure of Tanzania's Industrial Sector Investment and Employment.

Abstract

Tanzania like many other Sub-Saharan African countries is facing a formidable challenge of creating many employment opportunities so as to be able to absorb, each year, about 700,000 new entrants going into the job market or about 200,000 individuals who seek wage employment every year. Industrialization is one of the ways which can help in dealing with this problem. Indeed the experiences of South-East Asian countries show that industrial growth can contribute to the creation of employment opportunities in a sustainable manner. Tanzania's experience, however, show that the relatively high output growth achieved during reforms since the mid 1980s have not resulted into such increased employment creation. This situation is probably a reflection of the fact that the growth momentum achieved in Tanzania is either inadequate or does not come from investment directed into the labour intensive activities. This paper asserts that in order for the industrial sector to contribute substantially and in a sustainable manner to employment creation in Tanzania then, first the rate of industrial investment must be increased and secondly the pattern of industrial investment must be directed to labour intensive and agro-based industrial activities. Tanzania being basically an agricultural country such investment will have a multiplier effect in terms of employment generation partly due to the linkages effects which such industries might have to the rest of the economy.


African Journal of Finance and Management Vol.8(2) 2000: 46-54