The Household Enterprise Sector in Tanzania : Why It Matters and Who Cares
The household enterprise sector has a significant role in the Tanzanian economy. It employs a larger share of the urban labor force than wage employment, and is increasingly seen as an alternative to agriculture as a source of additional income for...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111116083418 http://hdl.handle.net/10986/3650 |
| Summary: | The household enterprise sector has a
significant role in the Tanzanian economy. It employs a
larger share of the urban labor force than wage employment,
and is increasingly seen as an alternative to agriculture as
a source of additional income for rural and urban
households. The sector is uniquely placed within the
informal sector, where it represents both conditions of
informal employment and informal enterprise. This paper
presents a case study on Tanzania using a mixed approach by
combining both quantitative and qualitative analysis to
examine the important role of household enterprises in the
labor force of Tanzania, and to identify key factors that
influence their productivity. Household enterprise owners
are similar to typical labor force participants although
primary education appears to be the minimum qualification
for household enterprise operators to be successful. Access
to location matters -- good, secure location in a
marketplace or industrial cluster raises earnings - and
access to transport and electricity is found to have a
significant effect on earnings as well. In large urban
areas, the biggest constraint faced by household enterprises
is the lack of access to secure workspace to run the small
business. Although lack of credit is a problem across all
enterprises in Tanzania, household enterprises are more
vulnerable because they are largely left out of the
financial sector either as savers or borrowers. Although HEs
are part of the livelihood strategies of over half of
households in Tanzania, they are ignored in the current
development policy frameworks, which emphasize
formalization, not productivity. Tanzania has a large number
of programs and projects for informal enterprises, but there
is no set of policies and program interventions targeted at
the household enterprise sector. This gap exacerbates the
vulnerability of household enterprises, and reduces their productivity. |
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