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LABOUR MARKET PROFILE 2015 Tanzania and Zanzibar LO/FTF Council’s Analytical Unit Copenhagen, Denmark
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Labour Market Profile

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Page 1: Labour Market Profile

LABOUR MARKET PROFILE

2015 Tanzania and Zanzibar

LO/FTF Council’s Analytical Unit

Copenhagen, Denmark

Page 2: Labour Market Profile

Danish Trade Council for International Development and Cooperation

Labour Market Profile 2015

Tanzania & Zanzibar 2015 Page ii

PREFACE

The LO/FTF Council presents this Labour Market Profile

as a yearly updated report that provides an overview

of the labour market's situation.

This country profile presents the recent main

developments and is not an in-depth analysis.

Nevertheless, it shows a wide range of data in a

reader-friendly style. Certain key findings of this report

can be found on the Executive Summary.

The report is divided in 11 thematic sections, which

includes trade unions, employers’ organizations,

tripartite structures, national labour legislation,

violations of trade union rights, working conditions,

situation of the workforce (with subsections such as

unemployment, sectoral employment, migration,

informal economy, child labour, gender, and youth),

education (with subsection vocational training), social

protection, general economic performance, and trade.

Additionally, the reader may find, an appendix

including a list of the ratified ILO Conventions.

As indicated, the report is driven by statistical data

selection from international databanks, surveys and

reports (e.g. the International Labour Organization

(ILO), the International Trade Union Confederation

(ITUC), the World Bank, WageIndicator Foundation, the

Africa Labour Research & Educational Institute (ALREI),

etc.) as well as national statistical institutions and

ministries, and others. Moreover, narrative inputs are

collected from international news sources (e.g. The

Economist, the British Broadcasting Corporation (BBC),

LabourStart, The Guardian, etc.) together with local

sources such as trade unions centers, NGOs, local news,

the LO/FTF Council’s Sub-Regional Office, among

others.

This report also collects references from several

indexes, e.g. Global Rights Index, Doing Business Index,

the Governance Indicators, and the Human

Development Index. The indexes’ methodologies and

the data quality can be followed by the sources

websites.

All sources, indicators and/or narrative inputs that are

used are available by links through footnotes.

It is noteworthy to highlight that although most of the

statistical data is available, there were some problems

with availability and reliability of the data. In

particular, the data collection of trade union

membership, Collective Bargaining Agreements (CBAs),

women’s trade union membership and occupational

health and safety (OHS) committees are a challenge.

Therefore, used data from these abovementioned

indicators should be interpreted with some reservations.

ACKNOWLEDGMENT

This Labour Market Profile is prepared by the LO/FTF

Council’s Analytical Unit in Copenhagen with support

from our Sub-Region Office in Tanzania as well as our

local partners in terms of data collection of trade union

membership.

All other labour market profiles of the countries where

LO/FTF Council operates are available at our website:

http://www.ulandssekretariatet.dk/content/landeanaly

ser

Should you have questions about the profiles you can

contact Kasper Andersen ([email protected]), Manager of

the Analytical Unit.

Cover Photo: Carsten Snejbjerg

Editing, design and layout: Adriana Romero

Page 3: Labour Market Profile

Danish Trade Council for International Development and Cooperation

Labour Market Profile 2015

Tanzania and Zanzibar 2015 Page iii

Tanzania & Zanzibar Labour Market Profile

EXECUTIVE SUMMARY

Tanzania has experienced decades of political and

social stability, coupled with a significant reduction on

working poor and a fast growing middle-class. Such

improvements are a result of a somewhat economic

transformation with an increasing labour productivity.

There has also been an increase in the minimum wage

even though such wages have been affected in real

terms due to rising inflation in consumer prices over

recent years. Albeit the country is still a low-income

country, it is moving towards a middle-income status. It

continues to be overshadowed by deterioration of the

governance environment and with marginalized

improvements of the conditions of doing business.

Albeit the wage & salaried workers are on a rise, which

is related to the increasing industry sector, the formal

sector is still unable to create sufficient jobs to the

growing workforce. Estimations show that workers in the

formal sector are a minority group since close to 9 out

of 10 workers operate in the informal economy.

Unemployment rates are relatively low in comparison

with the Sub-Saharan Africa’s average. At the same

time the skilled youth population faces

underemployment when they have no choice then to

enter the informal economy.

The labour legislations have some flaws just as the

regulations are ineffective when applied in practice. It

is also noteworthy to mention that regular violation of

labour rights is present in Tanzania.

Another character of the labour market is that nearly

80 percent of workers in the private sector are

considered casual-labours and close to 90 percent of

enterprises are very small with between one to four

employees. As urbanization continues to experience a

rapid evolvement, urban zones are attracting many

micro-enterprises. These kinds of enterprises operate on

very little or basic specialization. However, in light of

these proceedings, the government has implemented

plans to curb a mismatch of the labour market needs.

Equally important it makes things difficult to achieve

when the education system, particularly vocational

training, is far behind targets due to a lack of resources

and insufficient school enrolment. Also the incidence of

skills mismatch remains high at 40 percent in terms of

undereducation.

The public sector's services are generally very under-

financed, which is related to its weak tax system. The

low social protection coverage suffers from financial

deficiencies, decreasing non financed by private

households out-of-pockets payments, and exclude

workers from the informal economy.

Tanzania, mainland

Both the Constitution and labour legislation has been

under reforms. They have been somewhat stalled by

technical voting systems. Reformed social security

regulations are under finalizations.

The trade union movement in Tanzania mainland has

experienced a significant growth of membership and

coverage of collective bargaining agreements. There

are some emeriging challenges such as financial

sustainability and competition from new and

fragmented unions.

There are no formal bipartite agreement developed

between the Trade Unions Congress of Tanzania

(TUCTA) and the Association of Tanzania Employers

(ATE) on thematic issues.

Zanzibar

Social dialogue has not been present on a regular basis

in Zanzibar. Many of the formal bi/tripartite institutions

rarely convey. However, some improvements of social

dialogue have been observed during recent years. The

Social Security Law revision is in the final process by the

Government.

There are far greater restrictions on trade union rights

in Zanzibar than in the rest of the Mainland. There is a

high minimum membership requirement, and the

Registrar has considerable powers to restrict

registration. The High Court can interfere in trade union

affairs by appointing the Registrar to act as a trade

union liquidator.

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Labour Market Profile 2015

Tanzania and Zanzibar 2015 Page iv

COUNTRY MAP

Source: The CIA World Factbook

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Danish Trade Council for International Development and Cooperation

Labour Market Profile 2015

Tanzania and Zanzibar 2015 Page v

TABLE OF CONTENTS

Preface ......................................................................................................................................................................... ii

Acknowledgment .......................................................................................................................................................... ii

Executive Summary ...................................................................................................................................................... iii

Country Map ................................................................................................................................................................ iv

Trade Unions ................................................................................................................................................................ 1

Tanzania, mainland ............................................................................................................................................................................................................. 1

Zanzibar ................................................................................................................................................................................................................................ 2

Employers’ Organisations .............................................................................................................................................. 3

Tanzania, mainland ............................................................................................................................................................................................................. 3

Zanzibar ................................................................................................................................................................................................................................ 3

Central Tripartite Structures ............................................................................................................................................. 3

Tanzania, mainland ............................................................................................................................................................................................................. 3

Zanzibar ................................................................................................................................................................................................................................ 5

National Labour Legislation ............................................................................................................................................ 5

Tanzania, mainland ............................................................................................................................................................................................................. 5

Zanzibar ................................................................................................................................................................................................................................ 6

TRADE UNION RIGHTS VIOLATIONS ............................................................................................................................... 6

Working Conditions ....................................................................................................................................................... 7

Workforce ..................................................................................................................................................................... 8

Unemployment .................................................................................................................................................................................................................... 10

Sectoral Employment ........................................................................................................................................................................................................ 11

Migration ............................................................................................................................................................................................................................. 12

Informal Economy ............................................................................................................................................................................................................... 12

Child Labour........................................................................................................................................................................................................................ 13

Gender ................................................................................................................................................................................................................................. 13

Youth ..................................................................................................................................................................................................................................... 14

Education ................................................................................................................................................................... 15

Vocational training ............................................................................................................................................................................................................ 15

Social Protection .......................................................................................................................................................... 16

Tanzania, mainland ........................................................................................................................................................................................................... 17

Zanzibar .............................................................................................................................................................................................................................. 17

Economic Performance ................................................................................................................................................. 18

Trade ......................................................................................................................................................................... 20

Trade Agreements ............................................................................................................................................................................................................. 21

Export Processing Zones (EPZ) ........................................................................................................................................................................................ 22

Appendix: Additional Data ........................................................................................................................................... 23

Ratified ILO Conventions .................................................................................................................................................................................................. 23

Trade unions in Tanzania 2013 ..................................................................................................................................................................................... 24

Trade Union Centre and affiliates in Zanzibar .......................................................................................................................................................... 25

References .................................................................................................................................................................. 26

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Labour Market Profile 2015

Tanzania and Zanzibar 2015 Page vi

Tables Table 1: Trade union status in Tanzania, mainland, 2014-2015..................................................................................................................... 1

Table 2: Trade Union Congress of Tanzania (TUCTA), 2014 ........................................................................................................................... 1

Table 3: Trade union status in Zanzibar, 2014 .................................................................................................................................................... 2

Table 4: Zanzibar Trade Union Congress (ZATUC), 2014 ................................................................................................................................ 2

Table 5: Membership of Association of Tanzania Employers (ATE), 2008 .................................................................................................... 3

Table 6: Tanzania: Global Rights Index (2015) .................................................................................................................................................. 6

Table 7: Wages and earnings Monthly average and legal minimum wages .............................................................................................. 7

Table 8: Working Conditions in Tanzania ............................................................................................................................................................. 8

Table 9: Employment rates in Tanzania, Age and Sex distribution, 2013 .................................................................................................... 8

Table 10: Employment Participation and Inactivity rates in Tanzania, ........................................................................................................... 9

Table 11: Inactivity rate in Tanzania ...................................................................................................................................................................... 9

Table 12: Skills mismatch between job requirements and qualifications in Tanzania, 2013 .................................................................... 9

Table 13: Comparative average growth of GDP per capita, Employment and WAP in Tanzania 2004-2013 ................................ 9

Table 14: Unemployment in Tanzania, 2013 .................................................................................................................................................... 10

Table 15 : Employment (2006) & GDP share (2012) Sector & Sex distribution ...................................................................................... 11

Table 16: Migration Facts ...................................................................................................................................................................................... 12

Table 17: Working children Proportion of all children ................................................................................................................................... 13

Table 18 : Highest level of schooling attained .................................................................................................................................................. 15

Table 19: Vocational Training, 2013 .................................................................................................................................................................. 16

Table 20: Public spending on social protection schemes, 2010 .................................................................................................................... 16

Table 21: Benefits, coverage and contributions to pension schemes, 2010 ............................................................................................... 17

Table 22: Key Facts in Tanzania (2014 est.) ..................................................................................................................................................... 18

Table 23: Ease of Doing Business in Tanzania ................................................................................................................................................... 20

Table 24: Tanzania's Governance Indicators, 2009-2014 ............................................................................................................................ 20

Table 25 : Trade and Foreign Direct Investment in Tanzania, (2014 est.) ................................................................................................. 21

Table 26: Ratified ILO Conventions ..................................................................................................................................................................... 23

Table 27: Trade unions in Tanzania 2013 ......................................................................................................................................................... 24

Table 28: Trade Union Centre and affiliates in Zanzibar (2014) ................................................................................................................ 25

Figures

Figure 1: TUCTA membership & union members covered by Collective Bargaining Agreements (CBA), 2008-2013........................ 1

Figure 2: Minimum wage trend in Tanzania .......................................................................................................................................................... 7

Figure 3: Labour productivity ................................................................................................................................................................................... 9

Figure 4: Unemployment trends in Tanzania and the Sub-Saharan Africa (SSA), 2000-2013, % ...................................................... 10

Figure 5 : Distribution of enterprises by size in Tanzania, 2011 .................................................................................................................. 11

Figure 6: Sector Share in Tanzania, 2002-2013, % of GDP ........................................................................................................................ 12

Figure 7: Status of employment in Tanzania, 1991-2013, % ....................................................................................................................... 12

Figure 8: Employment in the informal economy ................................................................................................................................................. 13

Figure 9: Women in Management and Ownership, 2013 ............................................................................................................................. 14

Figure 10: Youth unemployment, sex distribution, 2000-2013, % ............................................................................................................... 14

Figure 11: School Levels and Enrolment .............................................................................................................................................................. 15

Figure 12: Ratio of vocational student to all pupils in secondary education ............................................................................................. 16

Figure 13: Total health-care expenditure not financed by private household's out-of-pocket payments .......................................... 17

Figure 14: GDP real growth, Tanzania and Sub-Saharan Africa (SSA), 2000-2014, % ...................................................................... 18

Figure 15: GDP per capita (PPP), trend and forecast, Current US$............................................................................................................ 18

Figure 16: Working poor, Tanzania and the Sub Saharan Africa (SSA), % ............................................................................................. 19

Figure 17: Middle-class in Tanzania and the Sub-Saharan Africa .............................................................................................................. 19

Figure 18: Inflation trend and forecast ............................................................................................................................................................... 19

Figure 19: Gross Fixed Capital Formation (% of GDP) .................................................................................................................................. 19

Figure 20: Export, Import and Foreign Direct Investment trends ................................................................................................................... 21

Figure 21: Tanzania's main products share of exports, 2012 ....................................................................................................................... 21

Figure 22: Tanzania's main export markets, 2013 .......................................................................................................................................... 21

Figure 23: Number of Zone Developers and Operators since established of EPZA, 2006-2010 ........................................................ 22

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Tanzania and Zanzibar 2015 Page 1

TRADE UNIONS

Tanzania, mainland

By the end of 2014, there were registered 29 trade

unions registered; one was deregistered and another

three trade unions are in the process of being

deregistered. There are an estimated 506,000 trade

union members, increasing by 7 percent since 2011

(Table 1).

The sole national trade union federation in Tanzania is

the Trade Unions Congress of Tanzania (TUCTA). It was

established in 2001 under the Trade Unions Act of

1998. The organization is affiliated to the International

Trade Union Confederation (ITUC). There is a 28

percent representation of women in the Congress; and

regional meetings, making them slightly less than the

targeted 30 percent.

One third of TUCTA’s total membership is organised by

the Tanzania Teacher Union (TTU), which is one of the

strongest trade unions in Tanzania. TTU, together with

the trade unions for government workers (TUGHE) and

local government workers (TALGWU), represent more

than 50 percent of the total TUCTA membership (Table

27).

The trade union density was estimated at 2.5 percent of

the labour force and at 16 percent of labour salaried

workers. Women members of trade unions were

assessed at 42 percent.

Table 1: Trade union status in Tanzania, mainland, 2014-20151

Number of trade unions 29

Due (median) N/A

Members of trade unions (2014) 505,561

Women members of trade unions (TUCTA) 42 %

Trade union member share of labour force 2.5 %

Trade union member share of labour salaried workers

16 %

Members of affiliated trade unions from the informal economy

17,865

Number of CBAs 321

Workers covered by CBAs 420,000

Share of labour force covered by CBAs from the formal sector (estimation)

1.7 %

Labour force2 (2013) 24,219,000

TUCTA maintains strong ties with the Government and

has regular meetings with many other state institutions

for discussion on issues related to the labour market.

This congress union has twelve representatives on board

(see also Table 2 and Table 27).

Table 2: Trade Union Congress of Tanzania (TUCTA), 2014

Total Members 494,584

Women Members 208,446

No. of OHS Committees at workplaces 398

Note: Through TUCTA’s website, it was registered in December 2015 that the organization has 12 affiliated trade unions. More information about the affiliated and non-affiliated trade unions is

available in Table 27.

As of December 2013, there are a total of 310

collective bargaining agreements from the affiliated

unions to TUCTA. If we look back on time, this reflects a

considerable increase of CBA’s coverage since 2008

(Figure 1). There are estimations that the number of

CBAs reached 321 collective agreements since 2014

and covering 420,000 workers, i.e. 1.7 percent of the

labour force (Table 1).

Figure 1: TUCTA membership & union members covered by

Collective Bargaining Agreements (CBA)3, 2008-2013

The TUCTA strategic plan 2012-2016 continues to

promote attention to strengthen the financial situation of

the organization. The management of the real estate

owned by the organization has been improved and a

business plan has been developed for the revamping of

the Mbeya Labour College. Furthermore, a membership

database is under development. Also a draft policy has

been developed on how TUCTA and affiliated unions

can engage and organize in the informal sector. It is

equally important to note, that TUCTA faces challenges

and competition from new and fragmented unions.

During 2015 TUCTA conducted advocacy campaigns

through national media on topics like domestic workers,

gender labor rights and labour rights compliance,

workman’s compensation fund, Informal Economy

0

100000

200000

300000

400000

500000

600000

700000

2008 2009 2010 2011 2012 2013

Number of members in TUCTA affiliated unionsNumber of union members covered by CBA

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Labour Market Profile 2015

Tanzania and Zanzibar 2015 Page 2

contributions to social security schemes, among others.

TUCTA managed to pressurize government to allow

workers from the informal economy to pay contributions

to – and benefit from - social security schemes. On the

same token, TUCTA has supported regional trainers’

network through training of (master) trainers,

researchers and regional trade union representatives.

TUCTA is faced with serious financial constraints due to

lack of income from fees from affiliated unions, real

estates, decreasing formal sector, and losing external

donor support, among others. TUCTA is working on

financial recovery plans. Internal conflicts have also

arisen because affiliated unions oppose TUCTA’s

constitutional right to direct check-off from the source

(5% of member fees paid to unions). In addition, TUCTA

hardly pay salaries to the secretariat, and most

activities have been donor funded.

Zanzibar

Zanzibar’s labour concerns have historically been

neglected when it comes to constitutional matters. The

Zanzibar House of Representatives was compelled to

enact the Zanzibar Trade Union Act of 2001, which

allowed registration of trade unions in Zanzibar.

Subsequently, the national trade union centre -

Zanzibar Trade Union Congress (ZATUC) - was

established in 2003.

The labour law requires a union with 50 or more

members to be registered and sets literacy standards

for trade union officers. Not to mention the law

provides considerable powers of the registrar to restrict

registration by setting forth criteria for determining

whether an organization’s constitution contains suitable

provisions to protect its members’ interests.4

ZATUC continues its positive development and is

continuously consulted by the government. Among

others, trade union leaders are placed centrally in

standing committees in the House of Representatives to

lobby tabled Bills. For instance, ZATUC participated in

formulating the new regulation on public service to

establish committee of negotiating machinery for public

sector employees.

The trade union movement in Zanzibar is under reforms.

Internally ZATUC is merging resources together to make

fewer and stronger unions and has continued the

process of union merger. So far, it has managed to

reduce the number of affiliates from eleven to nine. The

new Zanzibar Public Sector Workers Union-ZAPSWU is

in place, while another merger process for private

sector unions has been initiated. It is without the teachers

union ZATU. ZATUC is currently working on merging two

private sector unions.

According to the available data, the trade union

movement covers nine trade unions with an estimated

18,000 workers and 40 percent are women. The trade

union density was assessed at 3 percent as a share of

the labour force (Table 3).

Unions affiliated to ZATUC have concluded 6 CBA’s,

which is up from four in 2012, and number of bipartite

negotiations has increased from four in 2012 to eleven

in 2013. In the private sector, affiliated unions have

negotiated at least 3 CBAs at workplaces in 2015;

others still on-going.

Table 3: Trade union status in Zanzibar, 20145

Number of trade unions 9

Due (median) N/A

Members of trade unions 18,285

Women members of trade unions 7,329

Trade union members share of labour force

3.0 %

Members of affiliated trade unions from the informal economy

832

Number of CBAs 6

Workers covered by CBAs 3,600

Share of workers covered by CBA 5.1%

Labour force (2012 )6 600,000

Note: The registered CBAs exclude the three new CBAs from the private sector due to lack of their worker coverage in 2015.

ZATUC continues to strengthening its working relations

with the Government of Zanzibar as well as employers’

organization. ZATUC presented a proposal for public

sector negotiation machinery to the Government and

succeeded having it established. ZATUC also played a

major role in the development of the Zanzibar Youth

Employment Action Plan and developed a strategic

plan and guidelines for combating HIV/AIDS in private

sector work places.

Table 4: Zanzibar Trade Union Congress (ZATUC), 2014

Total Members 18,265

Women Members 7,329

No. of OHS Committees at workplaces 1

Note: More information about the affiliated trade unions is

available at Table 28.

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Tanzania and Zanzibar 2015 Page 3

ZATUC Congress was held in December 2013. The

number of women leaders increased at national level

from 27 percent to 54 percent. ZATUC continued in

2015 of promoting young and female leaders in the

affiliated unions in line with its new policies on gender

and youth.

A new five year strategic plan and a work plan for

2014 were adopted, which is related on how to

engage with informal economy. So far 832 members

from the informal economy have been organized. In

2015, ZATUC set up a national union committee and

informal economy desk on informal economy to

organise its workers, and informal economy associations

have been trained on trade unionism and labour rights.

It is noteworthy to mention that the teachers union ZATU

has reached a membership rate of 52 percent of all

public teachers in Zanzibar and the largest affiliated

union in ZATUC. However, ZATU is facing a membership

saturation point, and has reached a deadlock in

collecting dues/payment arrears especially from

secondary teachers who are opposed to a flat rate of

2% direct check-off. In 2015, ZATU intensified its

membership service by disseminating newsletters,

training manuals and cluster visits to schools.

Regionally, ZATU is active in the federation for East

African Teachers’ Unions (FEATU) that recently gained

legal registration in Tanzania and is in the process to

finalize establishment of permanent office in Arusha

and receiving official observer status in the East Africa

Community (EAC) in line with the East African Trade

Union Confederation (EATUC) (only on issues pertaining

teachers’ rights and education matters).

EMPLOYERS’ ORGANISATIONS

Tanzania, mainland

Founded in 1960, Association of Tanzania Employers

(ATE) is the main employers’ organization in Tanzania.

The organization has representatives in most important

bi/tripartite organs. Their main objective is to enhance

sustainable socio-economic development in coordination

with the government and trade union movement. ATE’s

membership base currently stands at over 1,000

members, the majority of who are based in Dar es

Salaam (70%) and the remainder in other parts of

Tanzania mainland. The organization provides advisory

and representation services to its members with

industrial relations, legal, management etc. ATE is

governed by an annual general meeting and an

executive council.7

Table 5: Membership of Association of Tanzania Employers (ATE), 2008

Divisions No. of

enterprises per division

No. of employees per

division

Agriculture 30 25,956

Banking and finance 42 10,298

Commerce 288 25,210

Industry 259 41,263

Mining 20 6,238

Oil industry 17 1,694

Utilities and services 170 54,430

Total members 826 165,089

ATE is divided into eight divisions (Table 4). According

to the table above, which has some slightly outdate

data but remains indicative, the eight divisions in ATE

had a total 826 enterprise members, employing

165,089 workers, which is roughly equivalent of 14

percent of all formal workers.8 Furthermore, ATE and

ZANEMA are members of the East African Employers

Organization (EAEO).

Zanzibar

Zanzibar's employers’ organization is Employers

Association of Zanzibar (ZANEMA). Main activities are

to represent the private sector in policy advocacy and

to conduct training workshops for members. ZANEMA

maintains good working relations with ZATUC, but the

organization faces constraints in terms of manpower

resources. Recently ZANEMA expressed that despite

hefty work permit fees to protect domestic labour

forces from alien workers, it should also apply other

measures, such as upgrading skills of the workforce.9

CENTRAL TRIPARTITE STRUCTURES

Tanzania, mainland

Labour, Economic and Social Council (LESCO)

LESCO advises the government through the Ministry of

Labour on different matters such as measures to

promote economic growth and social equity, and any

significant changes to social and economic policy before

it is submitted to cabinet. LESCO consists of an

independent chairperson and sixteen members all

appointed by the Minister of Labour, which represent

the interest of the government, employers, workers; and

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four members appointed because of their expertise.

LESCO advises the Minister on e.g. national labour

market policy, any proposed labour law before it is

submitted to cabinet. It also collects and compiles

information and statistics relating to the administration

of the labour laws. Meeting in LESCO have been

seldom. In March 2013, new members of LESCO were

inaugurated for 3 years.

Labour Court

The Labour Court is a division of the high court, which

settles labour disputes referred to it. The Labour Court

is presided by a judge and two assessors from

Employers’ Organizations and Trade Unions. The

Labour Court lacks resources and processing slightly less

than half of the cases it receives.10

In May 2014 the government ordered striking Tanzania

Zambia Railway Authority (TAZARA) workers to go

back to work since the High Court’s Labour Division

ruled that their strike was illegal.11

Commission for Mediation and Arbitration (CMA)

Labour disputes are mainly regulated and resolved by

mediation through the CMA. It is an independent

department of government and has been operating

since 2007. The functions of the Commission are to

mediate or arbitrate in any dispute referred to the

Commission in terms of any labour laws, if the parties to

the dispute agree to arbitration or the Labour Court

refers a dispute. The CMA is well functioning and

therefore an important organ in the Tanzanian labour

market. Since its inception in 2007 to 2010, the CMA

had received around 19,000 cases and resolved 87%

of them.12

TUCTA petitioned in 2013 that the new chairman for

the CMA was appointed in disregard of the laws and

regulations. The Government eventually agreed to

appoint another chairman. In the meantime, the number

of pending cases before the CMA increased and

excessive delays (up to a year to hear the ruling) made

it difficult to go to appeal court. In the 2013/2014

budget a provision was given for an infusion of

manpower (mediators/arbitrators) in order to solve the

problem.

In addition, according to the U.S. Annual Country Report

on Human Rights Practices 2014,13 law prohibits

antiunion discrimination, it does not provide sufficient

protection against it. Disputes on the grounds of

antiunion discrimination must appear before the

Commission for Mediation and Arbitration, a

governmental department affiliated with the Ministry of

Labor. Reinstatement is not mandatory.

Sectoral Wage Boards

The members of the Wage Boards are appointed by

the Minister in consultation with LESCO. The functions of

the Wage Boards are to: i) conduct an investigation on

a minimum remuneration and other conditions of

employment; ii) promote collective bargaining between

registered trade unions, employers and registered

employer’s associations, and iii) make recommendations

to the Minister on minimum wages and conditions of

employment. Wage boards have been established in

sectors such as domestic service, private security,

agriculture, mining, and health.14

TUCTA and Ministry of labour agreed to increase

minimum wages by 11% in 2015/16, but in future,

minimum wage negotiations will be dealt with by

special wage regulatory committees and social

partners.

Essential Services Committee

The Essential Services Committee is composed of

employers, workers, and government representatives.

Workers in certain “essential” sectors, which may not

strike without a pre-existing agreement to maintain

“minimum services”, and workers in other sectors may

also be subject to strike limitation as determined by the

Essential Services Committee. This committee has the

authority to deem periodically which services are

essential.15

Other bi/tripartite organs16

Workman Compensation Body

Work Permit Board

Vocational Training Board

Tanzania Commission for AIDS

National Social Security Board (NSSF)

National Health Insurance Fund Board (NHIF)

Public Pension Fund

Regulatory Board for Social Security

Joint Assistance Strategy

Negotiation machinery at the Joint Staff Council

(central) and at the Master Joint Staff Council.

Teacher Education Quality Task Force, EFA

Committee

Education Sector Advisory Council

Education Sector Master Workers Council

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Board of the Vocational Education & Training

Authority (VETA), technical team member of the

adult literacy programme.

Zanzibar

Zanzibar Industrial Court

The Zanzibar Industrial Court is a division of the High

Court of Zanzibar, which settles formal labour disputes

conferred to it and like its mainland counterpart the

Zanzibar Industrial Court is presided by a judge and

two assessors from Employers’ Organisations and Trade

Unions.17 According to an ILO labour administration

audit,18 the industrial court is functioning, but is slow and

irregular due to lack of resources. The courts are the

only venue in which labor disputes can be heard.

Labour Advisory Board

The Labour Advisory Board consists of nine member,

with three members each from government, employers

and workers, all appointed by the Labour Minister. The

board provides advice on labour related issues, such as

proposed legislation, ILO conventions, industrial

relations, and working conditions. It is required to meet

four times a year.19 However, the board is reported not

to function effectively, and in the period 2005-2010

the board had only met twice.

Wages Advisory Board

The Wages Advisory Board consists of 13 members,

representing government, employers, workers, informal

sector, commerce and independent experts. It provides

recommendation for minimum wages and working

conditions. The board is required to meet twice a year.

According to an ILO labour administration audit, the

board is reported not to function effectively, and in the

period 2005-10 the board had only met twice.

Other important bi/tripartite organs

Conflict Resolution Committee

Zanzibar Social Security Board

Zanzibar Disabled Board

Zanzibar Business Council (bipartite)

MKUZA on Irrigation/Poverty Board

National Committee on HIV/AIDS

National OHS Committee

Committee on Education Policy

Aids Business Coalition Zanzibar (ABCZ)

Education Coordinating Board

NATIONAL LABOUR LEGISLATION

Constitution20

The Constitution applies to the United Republic of

Tanzania. The state is obliged to realize the right to

work and social welfare. The freedom of association is

guaranteed, though with several restrictions. Equal

opportunity and just remuneration is enshrined in the

constitution. A Constitution Review process was initiated

in 2013. The process has been very much debated and

is in its final stages. The draft new Constitution was

adopted and handed to the two presidents in Tanzania

and Zanzibar in October 2014. A referendum for

adoption of the new constitution was scheduled in April

2015, but has been postponed to 2016 due to delays

in registering voters.

The participating trade union representatives ensured

inclusion of labour rights clauses in a draft constitution

that awaits the coming referendum. Concerns remain

mainly related to the division of Tanzania mainland and

Zanzibar, ethnic relations, ownership of oil, and gas

reserves. The same awaits the proposed amendment of

employment and labour legislation that takes into

account ILO core conventions.

The mainland and Zanzibar governments have separate

labor laws:

Tanzania, mainland

Employment and Labour Relations Act21

The Employment and Labour Relations Act of 2004 sets

fundamental rights at work and regulates hours of

work, remuneration, leave, termination of employment,

trade unions and employers’ organizations,

organizational rights, collective bargaining, strikes and

lockouts and sets dispute resolution under the

Commission for Mediation and Arbitration. The labor

laws cover all workers, including foreign and migrant

workers.

The Labour Relations Act is contradicted by the Public

Service (Negotiation Machinery) of 200322 for civil

servants by having conflicting regulations concerning

strikes. Amendments of the Act are prepared and are

underway to parliament discussions.

Labour Institutions Act23

The Labour Institutions Act of 2004 applies to the

United Republic of Tanzania. It establishes the Labour,

Economic and Social Council, the Commission for

Mediation and Arbitration, the Essential Services

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Committee, the Sectoral Wage boards, the Labour

Administration and Inspection, and the Labour Court.

According to an assessment from 2013 by the Legal

and Human Rights Centre in Tanzania, 67% of workers

are completely unaware of the labour laws.24

Zanzibar

Labour Relations Act25

Of the laws specifically to Zanzibar, the Labour

Relations Act of 2005 regulates fundamental

employees’ rights, establishes the framework for

registration of trade unions and organizations,

organizational rights, collective bargaining and

agreements, labour disputes / right to strike, dispute

prevention and resolution and establishes the Zanzibar

Industrial Court.

The Employment Act

The Employment Act of 2005 regulates fundamental

rights and protection, employment procedures and

foreign employment, contracts of service and

employment standards and rights (hours at work,

wages, leave, vacation, penalties, termination of

employment, etc.). The law also establishes the Labour

Advisory Board, Wage fixing machinery and wages

protection as well as the Labour Commission and labour

inspection.

***

Several other legislations exist from Tanzania mainland

& Zanzibar which regulate and set standards and

restrictions for the labour market.26

Equally important the International Trade Union

Confederation (ITUC) has registered flaws on the

legislations. For example, the law prohibits anti-union

discrimination, but does not provide adequate means of

protection against it; just as Restrictions on the right to

elect representatives and self-administer in full

freedom.27

TRADE UNION RIGHTS VIOLATIONS

Tanzania was ranked as 3 out of 5 at ITUC’s Global

Rights Index in 2015, which was interpreted by ‘regular

violations of rights’. Stated differently, there are

deficiencies in laws and/or certain practices which

make frequent violations possible (Table 6).

Table 6: Tanzania: Global Rights Index28 (2015)

3 out of 5+

o Regular violation of rights o Workers in countries with the rating of 3

have reported government and/or companies are regularly interfering in collective labour rights or are failing to fully guarantee important aspects of these rights.

Note: Five clusters in total with ratings from 1 to 5. A country is assigned the rating 5+ by default, if the rule of law has completely broken down.

ITUC registered two cases on the regular violations of

rights in 2015.29 Both are related to the labour division

of Tanzania’s High Court ruled that a strike by workers

of Tanzania-Zambia Authority Railways Authority

(TAZARA) was illegal. It had been agreed workers

would resume work if the salary arrears were paid.

However, not all salary arrears were paid in time, and

other demands were not met. The government ordered

the workers to resume work, failing which they would

lose their jobs, and directed the TAZARA management

to keep a record of the number of days the workers

were on strike and deduct their salaries accordingly.

A similarly problem was repeated. TAZARA workers

went on strike but were ordered back to work by the

High Court. The strike was called to demand five

months’ salary arrears. The strikers returned to work

after receiving promises that their salaries would be

paid. The workers did start receiving their salary

arrears, after they returned to work, but the process

was slow.

According to the U.S. Annual Country Report on Human

Rights Practices 2014, 30 many private sector employers

adopt antiunion policies or tactics, although case law

discourages discriminatory activities by an employer

against union members. This is on both the mainland and

Zanzibar. Other antiunion activities were registered

such as international mining interests engaged in paying

officials from the Ministry of Labor Inspectorate to

ignore worker complaints or to write favorable reports

on working conditions. Also ILO reported during 2014

that some mining interests “barred” unions from

organizing and used security staff to block labour

inspectors from entering mines.

The above mentioned U.S. Annual Country Report on

Human Rights Practices also registered that TUCTA

officials stated that there were many instances of

discrimination against union workers. Again it was

related mining companies that appear to establish

employer-controlled unions under brands such as

‘welfare committees’ and ‘declared workers redundant’

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to prevent organizers from starting a union. According

to the report, the Tanzanian Mining and Construction

Workers Union reported 120 active cases of unfair

termination involving mining companies in different

stages of adjudication. TUCTA also reported cases of

hotels and construction firms dismissing employees for

attempting to unionize.

Both Tanzania mainland and Zanzibar have no cases with the ILO's Committee of Freedom of Association.31

WORKING CONDITIONS

In Tanzania mainland minimum wages are fixed by the

Government after tripartite consultation in the LESCO

based on recommendations from 12 sub-sectoral wage

boards.

The average earnings for employees in the public

sector are currently twice as much as compared to

monthly average earnings in the private sector.32 In July

2014, the minimum wages for public sector were raised

from 200,000 TZS (US$120) to 240,000 TZS

(US$144). The Government announced in July 2014 a

substantial increase in private sector minimum wages up

to 65%. The decision to raise statutory minimum wages

for private sector employees came after years of

debate. The announced increase would bring minimum

wages to TZS 40,000 (US$25) per month for domestic

workers, which is the lowest, while TZS 400,000

(US$248) for workers in the commercial and

communication services is the highest (Table 7). These

monthly wages were above the poverty line of TZS

13,998 (US$8.75) per month/person.

However, when the Wage Order was gazette it did by

far reflect what was announced and promised. TUCTA

has been advocating and lobbying for a minimum

wage policy and wage boards for public sector put in

place; and reduction of tax rates for low income

earners. Intensive TUCTA protests have eventually

caused the President to form a tripartite task force to

sort out the issue. As a result a new minimum salary

raise was reached in June 2015 at TZS 310,000

(US$167) per month. In addition, the Pay-As-You-Earn

(PAYE) – i.e. withholding tax on taxable incomes of

employees - was reduced from 12 percent in 2014 to

11 percent in 2015 (June) for income between TZS

170,000-360,000 per month. No income tax under TZS

170,000 per month.

According to the Income Tax Act (2004) the resident

individual income tax rates applicable in Zanzibar

differ from those which are applicable in Tanzania

Mainland.

Table 7: Wages and earnings Monthly average and legal minimum wages

Source

Current Shilling (TZS)

Current US$

Tanzania, nation wide

Mean nominal, average wage (2012)

Global Wage Database33

356,666 226

Minimum wage, average (2015)

The Citizen34 310,000 167

Minimum wage for a 19-year old worker or an apprentice (2014) Doing

Business35

77,697 48

Ratio minimum wage to value added per worker (2014)

0.53

Tanzania, mainland

Highest minimum wage (2013-16) WageIndicator

36

400,000 248

Lowest minimum wage (2013-16)

40,000 25

Median wage (2012)

WageIndicator37

114,400 72

Zanzibar

Minimum wage (2013)

LO/FTF Council

180,000 111

Median Wage (2010)

170,000 122

In reality the minimum wage experienced a growing

gap with the real minimum wage, which was related to

the rising inflation in consumer prices (Figure 2 & Figure

18).

Figure 2: Minimum wage trend in Tanzania38

The lowest wages are found in the trade sector, retail

manufacturing, and agriculture. Although earnings are

0%

-1%

61%

0% 0%

0% -3%

0%

66%

18%

-4% -10%

0%

10%

20%

30%

40%

50%

60%

70%

0

20000

40000

60000

80000

100000

120000

Real minimum wage trend (% change)Minimum wageReal minimum wage

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pegged on productivity indices, in practice wages are

also related to levels of education, i.e. those sectors

employing workers with low levels of education pays

lower wages.

Public civil servants have received increased travel

allowances (up to 50%) after years of lobbying by

trade unions to align salaries with the rising cost of

travelling fees and accommodations.

The public sector minimum wage in Zanzibar increased

in 2013 from TZS 145,000 (US$90) to TZS 180,000

(US$111). The Government announced that private

sector minimum wages be revised in 2014. In 2010,

before the minimum wage increase, the median wage

was around TZS 170,000 (US$122), notably higher

than on the mainland. In Zanzibar it has been observed

that officials responsible for checking minimum wages

are often corrupt, with the result that some rival

businesses can ignore the law without being penalized,

which includes kept in check enterprises in the informal

economy.39

General working conditions in Tanzania are available

at Table 8. Generally, the labour standards are not

effectively enforced, particularly in the informal

economy.

Table 8: Working Conditions in Tanzania40

Normal Weekly Hour

Limit 45 hours (mainland Tanzania)

Overtime Limit

12 hours (including overtime);

50 hours over a 4-week

period (mainland)

Max. Weekly Hours Limit 57 hours (mainland)

Min. Mandatory

Overtime premium/time

off in Lieu of Overtime

Wages

50% increase (mainland

Tanzania); no universal natinal

entitlement to compensatory

time off

Min. Annual Leave 20 days (mainland Tanzania)

Duration of Maternity

Leave Benefits 84 days

Amount of Maternity

Leave Benefits 100 %

Source of Maternity

Leave Benefits Social ensurance

Laws regulate safety in the workplace, but the

Occupational Safety and Health Authority (OSHA) is

ineffective. Also the inspection system operates with a

limited effectiveness and a small number of labor

officers are available to conduct inspections. As an

example, mining companies take advantage of these

limitations to avoid inspections.41

Moreover, a large majority of workers do not have

employment contracts and lacked legal protections.

Among others, TUCTA officials mention long-haul bus

drivers and seasonal agricultural workers as commonly

working for “one or two years” without a contract.42

A tripartite plan of action of promoting the ratification

of the Domestic Workers Convention No. 189 was

launched in February 2014.

WORKFORCE

The total population of Tanzania is 49.6 million (1.3

million in Zanzibar) and a labour force with 24 million

workers. Men are slightly more engaged active in the

labour market than women; in youth the gap is very

minimal (Table 9).

Table 9: Employment rates in Tanzania43, Age and Sex distribution, 2013

Sex Age Employment rate

Men & women

Total 15+ 86 %

Youth 15-24 75 %

Adult 25+ 92 %

Men

Total 15+ 88 %

Youth 15-24 76 %

Adult 25+ 95 %

Women

Total 15+ 84 %

Youth 15-24 75 %

Adult 25+ 89 %

Sources have reported that around 900,000 young

people enter the country’s job market annually, but only

50,000 to 60,000 formal sector jobs are created each

year. With more than 66 percent of the population

under 25, this job shortage will keep rising. 44 The latest

Employment and Earnings Survey from 2012 showed

that close to 1.6 million persons were employed in the

formal sector, which was an increase at 14 percent

since 2011.45

In Zanzibar, the labour market is estimated to hold

70,000 public and private workers, but the informal

economy is expanding because of high unemployment.

As a result of promoting the need for decent

employment, over 2,800 jobs have been created in

2015.

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The employment participation rate has basically stayed

flat the last two decades. Only the youth inactivity rate

has increased slightly (Table 10).

Table 10: Employment Participation and Inactivity rates in Tanzania46,

1991-2013, Total & Youth, %

One out of ten (11 percent) of the working age

population (WAP, 15+) and two out of ten (20 percent)

of the youth population (15-24 years old) are inactive

on the labour market in Tanzania; and with quite small

gaps between men and women (Table 11).

Table 11: Inactivity rate in Tanzania47 Total & Youth, 2013, %

Total Men Women

Inactivity Rate 11 % 10 % 12 %

Inactivity rate, youth 20 % 20 % 19 %

Skills mismatch between labour supply and demand by

educational attainment is present, with an estimated 28

percent in 2013 and a noteworthy gap between men

(21%) and women (32%). In terms of skills mismatch

between job requirements and qualifications has been

assessed at 40 percent in terms of incidence of under-

education and 14 percent of over-education (Table

12). This indicates that many youth have few

opportunities to learn skills to help them start and

sustain enterprises.

Table 12: Skills mismatch between job requirements and qualifications in Tanzania, 201348

Total Men Women

Incidence of over-education 14 % 13 % 15 %

Incidence of under-education 40 % 41 % 38 %

Labour productivity is a key measure of economic

performance. There has also been a stable increase in

the productivity in Tanzania, but remains with a wide

gap to the Sub-Saharan Africa’s average (Figure 3).

The improvements are related to an expansion in

agricultural production, services, construction as well as

an increased access to electricity.

Figure 3: Labour productivity49

2000-2012, Output per worker and GDP per hour worked as an index with base year 2000 (= 100)

Note: Tanzania’s labour productivity is defined as output per worker (GDP constant 2005 international US$ in Purchasing Power Parity (PPP)) while the Sub-Saharan Africa (SSA) and the World’s averages are estimated at output per worker in constant 2005 international US$. This could slightly underestimate Tanzania’s relative labour productivity in this Figure.

Based on estimations, the labour productivity (GDP per

worker) growth over the period 2004-2013 was

relatively low at 0.5 percent per year on average: it

decreased from 0.7 percent in 2004-2008 to 0.3

percent in 2009-2013. Employment grew on average

at the same rate as the working age population (WAP)

at 0 percent during 2004-2013. This suggests that the

GDP per capita is exclusively to changes in labour

productivity over the period. It is noteworthy to mention

that similar to labour productivity, the employment rate

increased slightly during 2004-2008, and fell again in

2009-2013 (Table 13).

Table 13: Comparative average growth of GDP per capita, Employment and WAP in Tanzania 2004-201350

% Change on Average

Years GDP/

employment

GDP/

WAP

Employment/

WAP

2004-08 0.7 % 0.9 % 0.2 %

2009-13 0.3 % 0.1 % -0.2 %

2004-13 0.5 % 0.0 % 0.0 %

0%

20%

40%

60%

80%

100%

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

Participation - 15+ Participation - 15-24Inactivity - 15+ Inactivity - 15-24

100 103 106 110 114 119 126 128

134 138 145

150 156

0

50

100

150

200

0

5.000

10.000

15.000

20.000

25.000

Tanzania SSA

World Tanzania - year 2000 (=100)

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Note: The columns above reflect: i) GDP per capita/employment

equals GDP per worker (i.e. labour productivity); ii) GDP/WAP

equals GDP per capita; and iii) employment/WAP equals the

employment rate (ratio of workers to working-age population

(15+)).

Unemployment

ILO's has estimated Tanzania's ‘strict’ unemployment

rate at 3.5 percent whereas youth unemployment is

double as high at 6.5 percent. Women have a double

as high unemployment rate than men (Table 14). The

unemployment rate has stayed stable in recent years

and significant below the Sub-Saharan Africa’s

averages (Figure 4).

Table 14: Unemployment in Tanzania51, 2013

Gender Rate

Unemployment

Total 3.5 %

Male 2.4 %

Female 4.5 %

Youth Unemployment

Total 6.5 %

Male 5.5 %

Female 7.4 %

Underemployment (2006)

Total 7.8 %

Youth 8.2 %

Adult 7.6 %

Figure 4: Unemployment trends in Tanzania and the Sub-Saharan Africa (SSA), 2000-2013, %52

Unemployment rates differ substantially depending on

the locality, though. According to other data signal that

the rural areas have the lowest unemployment rate at

7.5 percent followed by other urban areas (excluding

Dar es Salaam) at 17 percent and are highest in Dar es

Salaam at 32 percent.53 These estimations could

diverge somewhat in terms of the other above

mentioned estimations due to methodology differences.

Newly recruited workers are on increase: In 2011/12

was around 75,000 as compared to 48,000 workers

recruited in 2010/11. The majority of the newly

recruited workers were technicians and professionals.

However, employment services in Tanzania are

unpopular and ineffective. Not to mention, it is

insufficient to curb the rising youth unemployment and

underemployment. These themes are areas of policy

concern due to new entrants in the labour market are

estimated at around 800,000 from schools and colleges

each year.54

Tanzania's National Employment Policy (NEP) has

assessed that the informal economy has a capacity to

employ 63% of the yearly increasing labour force in

urban areas while the formal sector is 8.5%.55 Other

facts demonstrate that only 6% of annual graduates

from secondary and tertiary schools in the mainland

find formal waged employment.56

As many other countries in the Sub-Saharan Africa, the

population increases with many young Tanzanians

entering the labour force and moving from rural to

urban areas. The economy is not able to generate

enough jobs to absorb them. Youth in Dar es Salaam

are six times more likely to be unemployed than rural

youth. Many therefore end up in the informal economy.

Other data show Tanzania’s youth vulnerable

employment has been estimated at 57 percent.57 In all

of Tanzania unemployed youth have been assessed to

constitute 28 percent of the urban youth labour force

and 32 percent of the rural unemployed population.58

Young females are particularly vulnerable to

unemployment due to education and skills, cultural

attitudes and practices, discrimination and limited

opportunities to access productive resources. Education

does not necessarily provide a clear path to decent

employment.

An official unemployment rate in Zanzibar was 34

percent in 2012, with a much higher real rate

estimating youth unemployment at 20 percent and

joblessness as high as 85 percent.59 Unemployment in

Zanzibar has also been called a “ticking time bomb”.60

In Zanzibar the Ministry for Labour and the Ministry of

Public Services were drawn together as the Ministry of

State President Office Labour and Public Service, thus

merging labour and Public Service issues.

0

5

10

15

Unemployment - Tanzania

Youth unemployment - Tanzania

Unemployment - SSA

Youth unemployment - SSA

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Zanzibar's Employment Policy was adopted in 2005

and endorsed in 2009. Following a 2012 government

report on the employment situation, ZATUC asked the

Government to develop a plan of action, and ILO

agreed to support this. The exercise resulted in the

Zanzibar Youth Employment Policy, which holds issues

on youth employment and job creation.

ZATUC is also involved in discussions with employers’

organization and a number of ministries on how to work

together in private sector.

Sectoral Employment

The graph above shows considerable contrasts in the

amount of GDP generated in different industries

compared to the number of people employed per

sector. The sectors that are male dominated also have

higher contribution to GDP relative to the number of

workers in these sectors, e.g. manufacturing, transport,

and finance. Whether these sectors also have the

highest paid workers, depends on the sectors capital

intensity and the distribution of wages.

Table 15 : Employment (2006) 61 & GDP share (2012)62 Sector & Sex distribution

Sector Male

employment Female

employment GDP share per sector

Mining & quarrying 901 134 3.8 %

Manufacturing 272,872 161,335 9.7 %

Electricity, gas & water

13,507 3,498 2.4 %

Construction 171,995 6,686 8.9 %

Trade, restaurants & hotels

837,881 758,909 16 %

Transport & communication

231,116 13,111 8.3 %

Finance, real estate & business services

76,578 18,709 10 %

Public administration & services

528,725 734,651 8.6 %

Other services N/A N/A 4.0 %

Agriculture 5,880,789 6,832,446 29 %

The economy depends on the agricultural sector that

contributes with 29% of GDP and is by far the largest

employer, employing 76% of the workforce. This sector

is also the biggest employer for young people. Albeit it

small-scale agricultural producers are not characterized

as workers in the informal economy but termed as self-

employed, they do not have any access to decent work

benefits, rights, and protection. It is also noteworthy that

all land in Tanzania is owned by the state, which can

lease land for up to 99 years. Proposed reforms to

allow for land ownership, particularly foreign

land ownership, remain controversial.

A study shows that that there are about five million non-

farm businesses in Tanzania, which mostly consist of

household enterprises. This number is growing fast at

approximately 10 percent-15 percent per year, fueled

by the rapid urbanization and by lack of other

employment options for the majority of Tanzanian

workers. As a result about half of small non-farm

businesses are located in urban centers today. They are

very small with little specialization. They tend to

operate only a few hours per day or a few days a

week.63 As the table below shows that close to nine out

of ten (88%) enterprises are between one to four

employees. Around 70 percent to 90 percent of the

workforce in the private sector is casual labours and the

country has a low professional density, e.g. very low

numbers of accountants and lawyers.64

Figure 5 : Distribution of enterprises by size in Tanzania65,

2011

The government operates with the Vision 25 that is

based on three five year development plans that

linkage with skills development initiatives. It is

noteworthy that the sectors: services, engineering,

manufacturing, constructions, and health and welfare

have high skills targets. A study has showed, though,

that the planned enrolment targets, especially in the

health and welfare sectors, engineering as well as

technical and vocational levels are far behind the

targets. There is a mismatch of the labour market’s

needs relative to the government’s effort in terms of

funds and enrolments.

In the last decade, Tanzania has experienced some

sectoral shifts, with a diminishing share from agriculture

and a growing industry. It could also explain part of

Micro (1-2 employees);

60%

Small (3-4 employees);

28%

Medium (5-9

employees); 9%

Large (10 - <100

employees); 2%

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the increasing labour productivity that was previously

showed.

Figure 6: Sector Share in Tanzania, 2002-2013, % of GDP66

These structural changes have also been observed in the

status of employment. Especially own-account workers

have experienced a significant decrease from 90

percent in 1990 to 42 percent in 2013. As a contrast,

both waged workers and contributing family workers

increased (Figure 7).

Figure 7: Status of employment in Tanzania, 1991-2013,

%67

The own-account workers and contributing family

workers together make up a category of “vulnerable

employment”. This category fell by 23 percent in the

period 1991-2013, i.e. from 91 percent to 71 percent,

respectively.

Migration

In Tanzania almost double as many leave the country

than enter in comparison with the Sub-Saharan Africa's

average. Among others, this is due to native Tanzanians

migrating for labour opportunities. Due to Tanzania’s

stability it has hosted many refugees from conflict

riddled neighbouring countries, mainly Rwanda and

Burundi. Many of these have returned home, which is

reflected in the decline of -300,000 net migrants in the

period 2006-2010 to -150,000 in 2008-2012 (Table

16).

Table 16: Migration Facts68

Net migration (2008-2012)

Tanzania -150,000

Net migration to average population (2008-2012)

Tanzania - 1 : 1,501 inhabitants

Sub-Saharan Africa

- 1 : 2,838 inhabitants

Remittances received, % of GDP (2012)

Tanzania 0.2 %

Sub-Saharan Africa

2.0 %

In 2013 a total of 35,000 refugees from Rwanda,

Burundi and Uganda were expelled from Tanzania in

what was code named “The Kimbunga Operation”. It

was announced that the refugees forced to leave the

country were those failing to prove their citizenship or

otherwise legal status and thus living as illegal

immigrants in Tanzania. Tanzania Immigrations

authorities often carry out blueprint operations to catch

illegal immigrants. However, in 2014 almost 170,000

Burundians living in Eastern parts of Tanzania were

granted citizenship. Survey data from 2013 also

showed that only 0.13% of the total workforce is

regular non-citizen employees. It suggests that most

immigrants operate in the informal economy.69

In practice, Tanzania is attracting labour migrants.70

This is reflected in the very low share of remittances

sent to Tanzania, which indicates few Tanzanians

abroad sending money home to their families.

The East African Community (EAC) commits Tanzania to

adopt measures to the free movement of persons and

labour from the other five member states. So far,

Tanzania has been very reluctant to open its borders

and thus lack behind neighbouring countries in

implementing the provisions in the EAC Common Market

Protocol.

Informal Economy

The majority of Tanzanian mainland and Zanzibar

workers (85% and 88%, respectively) are employed in

the informal economy and this tends to be in subsistence

farming. There has been indications that the growing

informalization of the urban economy due to the lack of

alternatives.71

10

15

20

25

30

35

40

45

50

Agriculture Industry Services

90 88 84

76

69

48

42

0

20

40

60

80

100

0

10

20

30

40

1991 2001 2002 2006 2007 2011 2013

Wage & salaried workers Employers

Contributing family workers Own-account workers

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There are no formal policies and legislation developed

by the government in formalizing informal economy,

except social security reform has recently created funds

to roll over into the informal ‘sector’. Just as in many

other African countries, most new jobs are created in

the informal sector, crowding out jobs in the formal

sector. The informal 'sector' also absorbs many of the

young, since unemployment is not an option.

A Tanzania mainland Wage Indicator survey from

2012 showed that around 35% work without a

contract.72 The survey preselected workers, though, who

have better conditions as it sampled registered self-

employed and employees, and not unregistered self-

employed in the agricultural sector. The survey also

showed that the more young people tend to have no

contract, and that the median wage for workers with a

permanent contract is more than double that for

workers with no contract. In Zanzibar, 32% do not

operate with contracts.73

Figure 8: Employment in the informal economy

Share of persons employed in the informal economy

Tanzania (2014) 85%

Tanzania74 (2006) 93 %

Zanzibar75 (2010) 88 %

There is a big room to widen the tax base in the

informal 'sector' and improve government revenue

performance, but, in practice, it is the informality that

complicates it. Trade unions and cooperatives in

Tanzania have demonstrated as natural partners in

providing services and support to curb the informal and

unprotected situations of the workforce.76

Child Labour

Child labour is as high at 21 percent in Tanzania,

somewhat lower than the Sub-Saharan average (Table

17). Most children on the mainland work in agriculture,

with 32 percent of rural children being child labourers

compared to 11 percent of urban children. In Zanzibar

only 9 percent of 5-17 year olds are reported to be

engaged in child labour.

Table 17: Working children Proportion of all children

Region Year Type Proportion

Tanzania, mainland77 (age 5-17)

2006

Child labourers

21 %

Hazardous work

5 %

Zanzibar78 (age 5-17)

2006 Child labourers

9 %

Sub-Saharan Africa79 (age 5-17)

2008

Children in employment

28 %

Child labourers 25 %

Hazardous work 13 %

Children in employment include all children who conduct some kind of work, whereas child labourers are a narrower term without mild forms of work. Hazardous work is the worst from of child labour as defined in ILO C182.

The Government launched the National Costed Plan of

Action for Most Vulnerable Children II (2013-17), which

includes plans to provide social services to vulnerable

children, including child laborers. However, not much has

been achieved in recent years, except initiating a

National Child Labor Survey and with some support

programs on the elimination of child labor.80

Both on the mainland and Zanzibar, children tend to

work on a wide range of sectors, e.g. agriculture,

domestic helpers, street vendors, and mining. These

reasons force children to drop out of school and

become subjected to enforced labour, often times out of

necessity.

In Tanzania the number of HIV orphans exceeded 1.3

million representing the word’s third highest number of

HIV orphans. Tanzania's trade unions have started

activities aiming at helping children to stop work and

register for schooling, and at supporting vocational

training programs that equip youth with skills and

enhance their meaningful employability.81

Gender

Unequal division of labour responsibilities and decision

making within the family, limits women’s control over

household assets and income. For example, while

Self-employed

7%

Permanent labour contract

41%

Fixed-term contract

26%

No contract

26%

Employment status, mainland

Self-employed

25%

Permanent labour contract

22%

Fixed-term contract

45%

No contract 8%

Employment status, Zanzinar

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women have some decision making powers on the

utilization of their income, the amount of money earned

was insufficient to meet household needs adequately.

Thus, majority relies on their children’s earning to

supplement the family income.82

Women’s slightly lower levels of education are a

barrier to running their own farms. This is also a barrier

for women obtaining better-paid jobs on commercial

farms just as working on agricultural estates are

frequently the pickers and packers; and very rarely

attain management positions. In practice many women

are locked out of land ownership, access to credit and

productive farm inputs, support from extension services

and access to markets.

It is also noteworthy that young women earn lower

incomes where they are employed, and often face

hostile conditions in seeking employment and within the

workplace.

A 2013 Enterprise Survey reported that 24 percent of

firms had women participation in ownership in

Tanzania, which is lower than the Sub-Saharan Africa's

average at 34 percent. Tanzania has also a lower

score in terms of firms with women in top management

(Figure 9).

Figure 9: Women in Management and Ownership83, 2013

ILO’s Decent Work Country Programme for Tanzania58

identifies a need for increased gender equity in trade

union membership, but some improvements have been

registered. TUCTA and ZATUC are also collaborating

with the trade union confederation for the East African

Community EATUC to promote gender equality, both

within the labour movement and in Tanzania.84

Youth

Nearly 1 out of 2 (47%) of Tanzania’s population is

under 15 years of age. A youth boom is thus expected

to rise in the upcoming years. The private sector

employs slightly more young people than the public

sector.85

Since paid employment in rural areas is limited, it

pushes an increasing rural-urban migration of young

people. However, this is not met by supply of jobs. This

explains the fast increasing contributing family workers

among youth (see also Figure 7). Moreover, youth

population covers 59 percent of unemployed workers,

and is significantly higher within urban areas, and likely

to increase with their population growth.

When comparing youth female unemployment to youth

male unemployment, women outnumber men with

roughly 26 percent (Figure 10).

Figure 10: Youth unemployment, sex distribution, 2000-2013, %

The majority of Tanzanian youth had begun their

transition from studying to the labour market. As a

matter of fact, based on a survey from 2014, young

Tanzanians are either in a period of labour market

transition (47 percent) or has completed their transition

to a job designated as either stable and/or satisfactory

(32 percent). With attention to nearly one-third of

Tanzanian youth has completed their transition, most are

experienced into low-skill or unskilled manual jobs that

the respondent deemed satisfactory. This is likely to be

on recognition of the limited options available. After all,

young people are rarely found in professional jobs as

managers, professionals or technicians.86

The government in Zanzibar formulated a Youth Policy

in 2007, which is currently under review. The Youth

Employment Action Plan (2007) focusing on building

their capacity for their effective engagement in social,

political and economic development.87 ZATUC is

promoting training for youth unionists.88

0%

5%

10%

15%

20%

25%

30%

35%

40%

Firms with female top manager Firms with female participation inownership

Tanzania Sub-Saharan Africa Low income

0

2

4

6

8

10

12

Men Women

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EDUCATION

Based on a Basic Education Master Plan, the Tanzanian

government aims to achieve universal access to basic

education for children over the age of 7 years and

ensures that at least 80 percent of children complete

primary education.

In practice, in terms of schooling, Tanzania’s population

receives on average 5 years of education. It can be

argued that most of the population has completed

primary school. When it comes to secondary school,

there are only a few Tanzanians who have attained this

level of education. Not to mention very few have

completed university.

Table 18 : Highest level of schooling attained89

Population 25+, Total and Female, 2010

Highest Level Attained Total Female

No Schooling 26.1 % 34.1 %

Primary Begun 17.4 % 17.2 %

Completed 49.0 % 43.1 %

Secondary Begun 5.5 % 4.0 %

Completed 1.2 % 0.8 %

Tertiary Begun 0.2 % 0.3 %

Completed 0.5 % 0.5 %

Average year of total schooling

5.11 years 4.46 years

Table 18above shows the educational attainment of all

Tanzanians above 25 years, and therefore gives a

glance of the human capital of the labour force.

Women in general have less education than men, but

slightly more have completed university.

Data for enrolment in secondary school show a lower

rate than the Sub-Saharan Africa's average and has

entered a decline from 2012 to 2013 (Figure 11),

reaching 33 percent. Other data gives participation in

secondary education from 2005-10 at 26 percent for

boys and 24 percent for girls. Compare that to 31

percent for boys and 28 percent for girls for Sub-

Saharan Africa. Tertiary educations have also lower

enrolment rates than the rest of region and with low

rates.

Figure 11: School Levels and Enrolment90 Total and Female, Tanzania and Sub-Saharan Africa (SSA),

2000-2012, %

Net enrolment is the ratio of children of official school age, who are enrolled in school to the population of the corresponding official school age. Gross enrolment is the ratio of total enrolment, regardless of age, to the population of the corresponding official school age. Gross enrolment can therefore be higher than 100 %, but with tertiary or university education, the age of the pupils is more diverse.

The government has successfully implementing free and

compulsory primary education in 2001, considering the

high enrolment rates in Tanzania. The primary

enrolment rates are extremely high, with the prevalence

of child labour in Tanzania in mind. They do only record

enrolment, and primary school attendance is around

80%91, which is still very high for Sub-Saharan Africa.

The expansion in primary school has not been equalled

by expansion of teachers and schools facilities, which

constrains the educational system.

Vocational training

There has been a 39 percent increase of pupils in

vocational training in Tanzania in the period 2010 to

2013, reaching 248,239 pupils. Also the ratio of pupils

40

50

60

70

80

90

100

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Net Enrolment in Primary School

Tanzania,

Femaleenrolment

Tanzania,

Totalenrolment

SSA, Female

enrolment

0

5

10

15

20

25

30

35

40

45

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Gross Secondary school enrolment

School enrollment,secondary (%

gross)

School enrollment,secondary,

female (% gross)

School enrollment,secondary (%

gross)

School enrollment,secondary,

female (% gross)

0

2

4

6

8

10

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Gross Enrolment in Tertiary School

Tanzania,

Femaleenrolment

Tanzania,

Totalenrolment

SSA,

Femaleenrolment

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in vocational training in terms of all pupils in secondary

education is 11 percent, which is higher than the

average in Sub-Saharan Africa. It should be mentioned,

though, that the rate of secondary pupils is lower in

Tanzania in comparison with Sub-Saharan Africa which

inflates the vocational pupils’ ratio.

Table 19: Vocational Training92, 2013

Pupils in vocational training Tanzania 248,239

Pupils in vocational training (% females)

Tanzania 46 %

Sub-Saharan Africa (2012)

40 %

Ratio of pupils in vocational student to all pupils in secondary education

Tanzania 11 %

Sub-Saharan Africa

7.6 %

Ratio of pupils in vocational training out of 15-24 year olds

Tanzania 2.5 %

Sub-Saharan Africa

2.0 %

Note: Ratios are calculated based on average of the period 2010-2012.

Formal vocational training is administered by the

Vocational Education and Training Authority (VETA) of

Tanzania, which runs training centres. Vocational

training is also done by technical colleges, religious

training centres; private training centres and through

informal apprenticeships.

Figure 12: Ratio of vocational student to all pupils in

secondary education93 Tanzania and the Sub-Sahara Africa, 2004-2013

It is estimated that 37 percent of formal firms in

Tanzania are offering formal training.94 Due to the

Skills and Development Levy employers in Tanzania are

required by law to pay a Skills and Development Levy

of 6 percent of their wage bill. Two per cent of the

wage bill goes to the Vocational Training Fund, which is

administered by the VETA and 4 percent is remitted

directly to the Treasury. Recently the government has

allocated the 4 percent to the Higher Education Student

Loans Board (HESLB). Employers have argued that the

levy is unacceptably high, and that there is

misallocation of the 4 percent remitted to the

Treasury.95 On the other hand, the trade unions seem to

have played a modest role in developing the

vocational education and training system. The unions

have not been very active in developing policies or

putting forward initiatives in this field.

Apprenticeships average 21 months. The training fee is

an average around TZS 4,000 per month (US$3.2), and

a skilled worker will earn an average of TZS 81,228

(US$65).96

Informal training represents the most common since 58

percent of skilled workers coming from informal

apprenticeships, compared to 15% from formal

vocational training and 15% in NGO non-formal

training.

The labour market’s demand-side is mainly guided by

the previously mentioned NEP. This promotes

employment creation initiatives and employment

growth. The policy has deficiencies in terms of the post-

employment education and training system that lacks

guiding such skills development initiatives.

Opportunities for vocational training in Zanzibar are

limited. While enrolment in general education has

expanded rapidly within the last decade, technical and

vocational education has only experienced a limited

growth. There are few recognized institutions which

offer this type of education/training in Zanzibar.97

Regarding statistics there are only outdated data from

1998.98

SOCIAL PROTECTION

Table 20: Public spending on social protection schemes99, 2010

Public social protection expenditure, excl. health

Tanzania Shilling 752 billion

US$ 534 million

% of GDP 2.3 %

per capita 11.9 US$

% of government expenditure

15 %

Public health care % of GDP 4,5 %

Health social protection coverage

% of population 13 %

Trends in government expenditure in health

% changes per year (2007-2011)

-2.6 %

0%

2%

4%

6%

8%

10%

12%

14%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Tanzania Sub-Saharan Africa

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Table 21: Benefits, coverage and contributions to pension schemes100, 2010

Social benefits for the active age % of GDP 0.03 %

Total (public and private) health-care expenditure not financed by private household's (2011)

Out-of-pocket payments (%)

68 %

Old age effective coverage as proportion of programs

Contributory 3.2 %

Active contributors to an old age pension scheme

15-64 years 3.1 %

Tanzania, mainland101

Social security coverage in terms of numbers, scope and

adequacy is low for both contributory and non-

contributory provision: An estimated 2.7 percent covers

the entire population and about 6.5 percent of the

formal working population. Basically the entire informal

‘sector’ is not covered by any coordinated form of

social security scheme which makes it difficult to access

the available protection. There is no unemployment

benefit scheme.

There are seven social security funds supervised by the

Social Security Regulatory Authority. The two largest

social insurance funds offering health and medical

coverage are: i) the National Health Insurance Fund

(NHIF) providing the main access to health services,

after the state tax-financed health programs; and ii)

the National Social Security Fund (NSSF). In 2011, NSSF

had registered 521,629 members originating from

18,779 registered employers.102 The NHIF has

expanded its active registered members from 164,708

in 2001 to 536,829 in 2013, and, including

dependents, a total of more than 1 million people were

covered.103

The health system operates through a range of

programs. The Government is the largest provider of

health social services, but the health coverage is only

13 percent of the population. The expenditure on

health declined on 2.6% in the period 2007-2011 and

the not out-of-pocket payment fell from 85 percent in

2009 to 68 percent in 2011 (Table 20 & Figure 13).

Figure 13: Total health-care expenditure not financed by private household's out-of-pocket payments

East African countries,104 1995-2011, %

Reformed social security regulations have been in

progress. Many people are concerned about their rights

and pension benefits, especially the probability of

social rights between the social security schemes and the

right to withdraw pension funds before retirement age.

The Government of Tanzania has reached huge arrears

in payments to the social security funds, which threatens

the whole social security system.

The Government is expanding the Tanzania Social

Action Fund conditional cash transfer program, which

demonstrated an increase in school enrollment and a

decrease in child labor.

The Government of Tanzania adopted the Arusha

Declaration on Social Protection in December 2014

which provides a foundation for advancing the agenda

of social protection in Tanzania.

Zanzibar105

The Zanzibar Social Security Fund (ZSSF) is the only

public insurance scheme in Zanzibar. It provides old age

pension, life insurance, invalidity and maternity benefits.

In 2011, ZSSF had registered 61,396 employee

members originating from 927 registered employers.106

It is a contributory scheme with 10 percent of salary

paid by the employer and 5 percent by the employee.

Pension in Zanzibar is generally much lower than in

mainland Tanzania, at an average 3.5 times lower.

Pay-out to old age pensions has tended to be delayed,

often for several years.107 By intervention from ZATUC

this problem has been reduced.

The National Health Insurance Fund (NHIF) is operating

in Zanzibar Island providing the access to health

services. There are also several non-contributory safety

net programmes for vulnerable children, elderly and

40%

50%

60%

70%

80%

90%

1995 2000 2005 2006 2007 2008 2009 2010 2011

Burundi Kenya Rwanda

Tanzania Uganda

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disabled. Zanzibar also has several funds for Zakat the

Islamic founded social welfare, for an amount

equivalent to 2.5 percent of annual personal wealth.

In 2013 the ZSSF opened the issue of extending social

security coverage to informal economy, which was

discussed for the first time in the islands’ history. A

Social Security Law revision has been in the final

process. This also includes that the Government of

Zanzibar decided to introduce a universal social

pension to be provided to all older people aged 70

years and above, starting from April 2016.

In 2015, ZATUC negotiations with government resulted

in some improved benefits from the social security

scheme in Zanzibar (ZSSF), but ZATUC is concerned

about compulsory transfers from social security to health

schemes.

ECONOMIC PERFORMANCE

In the past few decades, Tanzania has experienced a

liberalized market economy transition as well as

political and social stability. The government occupies a

strong presence in sectors such as telecommunications,

banking, energy, and mining. The recent constitution

review process and the up-coming general elections in

2015 cause some tensions.

Table 22: Key Facts in Tanzania108 (2014 est.)

GDP GDP real

growth

Doing Business

2016

Human Development

Index

Gini Index (2007)

48.1 billion US$

7.0 % 139 of 189

countries

0.521 37.8

151 of 188 countries

76 of 144 countries

A high Doing Business ranking means the regulatory environment is more conducive to the start-up and operation of a local firm. The Human Development Index (HDI) measures the average of a long and healthy life, access to knowledge, and a decent standard of living. The Gini Index ranking the first country as the highest inequality, while the number 144 has the highest equality.

Discovery of huge oil and gas reserves holds promises

for the development of the extractive industry and for

substantial contributions to the Tanzanian economy. The

GDP growth in 2000-2014 was at 6.6 percent on

average per year due to high gold production prices

and tourism (Figure 14). The country is close to

achieving middle income status.

Figure 14: GDP real growth, Tanzania and Sub-Saharan Africa (SSA), 2000-2014, %

However, the GDP per capita in Purchasing Power

Parity (PPP) remains low and below the Sub Saharan

Africa's average; and ranked as 193 out of 230

countries (Figure 15).

Figure 15: GDP per capita (PPP), trend and forecast, Current US$109

Based on the distribution of income (Gini index) the

country has experienced a trend towards more

equality. But taking the low GDP per capita (PPP) in

account the population is still relatively poor. Tanzania

has also stepped up two steps in the Human

Development Index (HDI) in the period 2009-2014. The

progress toward the Millennium Development Goals

(MDGs) has been uneven, though.

Other data show that Tanzania has experienced a

noteworthy reduction of the working poor during the

2000s. In the share of working poor at US$1.25 a day

in total employment, it fell fast from 81 percent in 2000

to 36 percent in 2012. It even superseded the Sub-

Saharan Africa’s (SSA) average. Equally important the

working poor at US$2 a day decreased, but at a lower

rate from 91 percent in 2000 to 74 percent in 2012.

This latter trend remains higher than the SSA average

(Figure 16).

0

1

2

3

4

5

6

7

8

9

10

Tanzania SSA

0

1000

2000

3000

4000

5000

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

Tanzania Sub-Saharan Africa

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Figure 16: Working poor, Tanzania and the Sub Saharan Africa (SSA), %110

It has been reflected in the increasing middle-class.

Especially the low middle-class has fast increased: In

2000, 3 percent of Tanzanians lived for US$2-4 a day

and 1 percent for US$4-20 a day, while in 2011 it

reached 21 percent and 6 percent, respectively. The

former also superseded the Sub-Saharan Africa’s

average while the higher middle-class remains below

the region’s average. The low middle-class remains

economically vulnerable and could rapid drop below

the working poor rate (Figure 17).

Figure 17: Middle-class in Tanzania and the Sub-Saharan

Africa111

Tanzania's tax system revenues have rapidly grown, but

remains with insufficient finance to cover the public

sector demand. Roughly 450 big firms cover 70 percent

of the country's income tax. A challenge authority’s face

is the non-existent system to identify tax contributors of

their citizens. An additional burden is that the informal

economy retains most workers, making it harder for to

collect tax payments from small-medium enterprises

(SMEs)

In the late 2014, a major corruption scandal was

disclosed and as consequence, international donors

froze budget support. In light of these events, it is

expected to witness numerous sectors be affected, thus,

causing a burden in Tanzania’s economy.

Inflation of consumer prices used to be low, but in the

latter part of the 2000s in became volatile; peaking at

16 percent in 2012 due to rising oil prices, monetary

expansion and mounting food prices. This also affected

real wages. The inflation returned to one-digit since

2013 and has remained steady at around 6 percent,

largely due to the stability of food and energy prices

on international markets.

Figure 18: Inflation trend and forecast

There is a significant upward trend for capital

formation with the exception of 2009-10 and 2012

declines. It remains significant higher than the SSA’s

average (Figure 19). The trend is related to growing

capital inflows from the private sector that goes

towards the industrialization process, and a lower

proportion from development aid.

Figure 19: Gross Fixed Capital Formation (% of GDP) 112

30%

40%

50%

60%

70%

80%

90%

100%

1992 2000 2007 2012

Tanzania - US$1.25 Tanzania - US$2

SSA - US$1.25 SSA - US$2

0%

5%

10%

15%

20%

25%

1990/91 1999/2000 2007/08 2011

Middle class US$2-4 (Tanzania) Middle class US$4-20 (Tanzania)

Middle class US$2-4 (SSA) Middle class US$4-20 (SSA)

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

Tanzania Sub-Saharan Africa

10

15

20

25

30

35

Tanzania Sub-Saharan Africa (all income levels)

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The doing business environment in Tanzania has not

experienced many improvements since last year. The

country was indexed at 139 out of 189 countries in

2016. The ranking was 140 out of 189 countries in

2015. The country’s ranking remains slightly higher than

the SSA’s average ranking that was set at 143. This

modest increase in Tanzania is related to improvements

of dealing with construction permits. Endorsing contracts

as well as getting electricity have the highest rankings,

64 and 83, respectively. Trading across borders (180),

getting credit (152), and paying taxes (150) are the

most underperforming indicators. Eight of the ten

indicators have not demonstrated improvements (Table

23).

Table 23: Ease of Doing Business in Tanzania113

Topics 2016 2015 Change

Starting a Business 129 122 -7

Dealing with Construction Permits 126 147 21

Getting Electricity 82 83 No change

Registering Property 133 132 -1

Getting Credit 152 150 -2

Protecting Minority Investors 122 121 -1

Paying Taxes 150 147 -3

Trading Across Borders 180 181 1

Enforcing Contracts 64 64 No change

Resolving Insolvency 99 98 -1

Doing Business 2014 indicators are ranking from 1(top) to 189 (bottom) among other countries. The rankings do not measure all aspects of the business surroundings that matter to firms and investors or that affects the competitiveness of the economy. A high ranking does mean that the government has created a regulatory environment conducive to operating a business. Note: This Index has been controversial due to flawed data, especially in terms of labour market flexibility and undervalued paying taxes. However, the table can still be used as indicative measurement with reservations.114

Overall, Tanzania continues to enjoy a stable and

democratic government. In the light of the governance

milieu, the country has experienced declining trends on

five out of six of the Governance Indicators. Especially

has the political stability and control of corruption

declined, but also government effectiveness has

underachieved. Only has there been registered that

some improvements on regulatory quality has improved

(Table 24).

Table 24: Tanzania's Governance Indicators115, 2009-2014

Year Voice and

Accountability Political Stability

Government Effectiveness

2009 -0.16 / 44%

0.07 / 48%

-0.59 / 34%

2014

-0.17 / 42%

-0.54 / 27%

-0.64 / 27%

Year Regulatory

Quality Rule of Law

Control of Corruption

2009 -0.42 / 36%

-0.48 / 39%

-0.44 / 39%

2014

-0.34 / 41%

-0.41 / 39%

-0.80 / 23%

Note: The Governance Indicators score from ‐2.5 to 2.5 while the percentiles rank from 0 (lowest) to 100 (highest).116

TRADE

The National Vision 2025, trade policy and industrial

policy are closely linked and complementary. The

country is one of the best performing countries in Africa

in terms of global value chains’ (GVCs) participation

and its growth rate since 1995 was estimated at 67

percent of total exports, only superseded by Zimbabwe

(71 percent).117 Stated differently, Tanzania’s economy

has significantly globalized in the last decade.

The largest contributor to the export basket continues to

be primary commodities, particularly gold, metal ore,

tobacco, and coffee. The volume of manufactured

exports is also up surging.118 The development of the

extraction sector will likely continue through gas

exportation.

Generally, Tanzania exports an estimated 19 percent

of GDP and remains strong, driven by gold and tourism.

In contrast, the Sub-Saharan Africa’s (SSA) export

average was assessed at 29 percent.

Also the import has growing fast and reached 30

percent in 2014. This is mainly due to imports of capital

and a rapid increase in consumption imports,

particularly of vehicles and fuel, which has not been

matched by the development of productive sectors. It is

basically mining that is able to keep up with the growth

in imports. SSA’s average import was expected at 32

percent of GDP in 2014 (Table 25 & Figure 20). A

significant trade deficit is present in the country, and

keeping the current account deficit wide at around 11

percent of GDP.

The growth of foreign direct investment (FDI) has been

slightly higher than the SSA’s average in recent years.

Oil and gas exploration activities will continue to attract

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private capital in the country, and net inflow of FDI is

expected to remain strong.119

Table 25 : Trade and Foreign Direct Investment in Tanzania120, (2014 est.)

Exports Imports FDI flow FDI Stock121

9.4 billion US$

14 billion US$

2.0 billion US$

13 billion US$

19 % of GDP

30 % of GDP

4.3 % of GDP

27 % of GDP

Figure 20: Export, Import and Foreign Direct Investment trends

Tanzania and the Sub-Saharan Africa (SSA), 2000-2014122

In 2013 restrictions will be instituted on the size of land

that single investors can acquire. Disputes over land

have become a major issue in Tanzania, often with small

scale farmers pitted against powerful investors, who

seek to use the land for production of cash crops

exports, such as sugar.123

The European Union (EU), China and India are the main

importers of Tanzania’s goods. And the country’s main

export goods are gold, precious metal ore, tobacco,

and coffee (see Figure 21 & Figure 22).

Figure 21: Tanzania's main products share of

exports, 2012124

Figure 22: Tanzania's main export markets, 2013125

Trade Agreements

Tanzania is part of the East African Community (EAC).

The EAC free trade agreement from 1999 contains a

labour provision with cooperation on employment and

working conditions with an emphasis on gender equality

and discriminatory law and practices. Likewise, the

labour provision of the Common Market for Eastern and

Southern Africa (COMESA) agreement extends to

cooperation on employment conditions and labour

law.126 Tanzania is also part of the 2000 Cotonou

Agreement between the European Union (EU) and

African, Caribbean and Pacific (ACP) countries, which

reaffirms commitment to ILO’s Fundamental Conventions

and includes a labour provision on cooperation on

various labour and social issues.

In 2005 the EAC established a customs union and in

2010 the EAC agreed to establish full common market

with free movement for workers, goods, services and

capital.

Freedom of association and collective bargaining is

enshrined in the EAC common market in the sense that

an EAC migrant worker has equal rights as a

national.127 The free movement of labour within the EAC

opens up questions of how to achieve equal

opportunities and equal social and labour rights for

migrant workers, for example if workers can bring

pensions with them across borders. The free movement

of labour is also a source of concern in some of the EAC

countries, as the countries workforces have differences

in productivity and educational level. However, the

actual implementation of the economic integration have

slowed down the last few years especially with regards

to lifting barriers to trade and free movement of

labour. Although formal tariffs are increasing

0

10

20

30

40

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Export - Tanzania Import - Tanzania

FDI - Tanzania Export - SSA

Import - SSA FDI - SSA

Gold; 32%

Precious Metal

Ore; 9,5%

Raw Tobacco;

5,6% Coffee; 4,1%

Manganese Ore; 3,0%

Fish Fillets; 2,9%

Coconuts, Brazil

Nuts, and Cashews;

2,6%

Others; 40%

EU; 15%

China; 13%

India; 20%

Japan; 5%

U.A.Emirates; 4%

Kenya; 4%

Others; 38%

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abolished, trade is still challenged by non-tariff

barriers and corruption.

The objective of the East African trade union movement

is to safeguard workers’ interests in the EAC, ensure that

ILO standards are upheld and member states’ labour

policies are harmonized and the tripartite model is

institutionalized, while the free movement of labour is

promoted. The trade union movement has reached

observer status in the EAC in 2009, and along with

employers’ organizations they participate in ministerial

summits, sectoral summits, and other summits that involve

labour market issues. However, no meetings were

conducted in the Council of Ministers responsible of

Labour since 2009/2010 and implementation of the

EAC Common Market Protocol is moving very slow.

In terms of regional trade integration, Tanzania’s legal

services and accounting/auditing services tend to be

very regulated and restricted. Moreover, the country

does not allow foreign participation in initial public

offerings (IPOs). Sale or issue of shares by foreigners is

not restricted. Institutional investors, national pension

funds, fund management firms, and insurance companies

usually dominate participation in EAC stock and bond

markets, but the participation of Tanzanian investors in

other EAC markets is a maximum of 0.5 percent, which

is very low.128

Through the EAC, Tanzania is allowed to export duty

and quota free to EU since 2008, and will have to

gradually remove duties and quotas on EU exports to

Tanzania on most products, except the products

deemed to need protection from EU exports. These

include agricultural products, wines and spirits,

chemicals, plastics, wood based paper, textiles and

clothing. Negotiations on Economic Partnership

Agreement between the EAC and the EU were long last

concluded in late 2014, securing continued free access

to the European markets.

Since 2001 Tanzania has benefitted from the United

States’ African Growth and Opportunity Act (AGOA),

which is a Generalised System of Preferences. It allows

duty and quota free access for some products.

Tanzania can be removed from AGOA, if the United

States deems that Tanzania among other human rights

issues, do not seek to uphold the ILO Core Labour

Standards and have acceptable minimum wages, hours

of work and occupational safety and health.

Export Processing Zones (EPZ)

The EPZ and Special Economic Zone (SEZ) programs in

Tanzania were established in 2002 and have been

under significant expansion.129 There are 25 EPZ with

70 manufacturing industries whereby about 15

companies have applied for establishment of industries

in different areas in the country. These EPZ has created

around 26,400 direct employment, and 120,000

indirect ones;130 and contributing with 5 percent of

national exports. The industries operate in machinery,

processing of food and of minerals.

Figure 23: Number of Zone Developers and Operators since established of EPZA131, 2006-2010

There are two EPZs on Zanzibar, where there previously

have been unconfirmed reports of trade union rights

violations.

A study concluded that Tanzania’s EPZ program is

lagging behind, mainly due to the rigid and expensive

infrastructural issues. While EPZ firms have been

enjoying fiscal incentives, the government has not been

reaping benefits from the scheme as well as borne

fiscal losses in terms of huge tax exemptions extending

over up to 10 years.132 The EPZ program also face a

number of other challenges: High cost of operations and

production due to unreliable supply of electricity and

water made the EPZ operating enterprises

uncompetitive in the international markets.133

In October 2014 Obtala Resources Limited (AIM:OBT),

an emerging agri-processing, farming and timber

company, received an award by the London Stock

Exchange of an Export Processing Zone Certificate for

its farm project near Morogoro, Tanzania.134

4 5

10

18

24

3

15 18

28

35

0

10

20

30

40

2006 2007 2008 2009 2010Zone Developers Operators

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APPENDIX: ADDITIONAL DATA

Table 26: Ratified ILO Conventions135

Subject and/or right Convention Ratification

date

Fundamental Conventions

Freedom of association and collective bargaining

C087 - Freedom of Association and Protection of the Right to Organise, 1948 2000

C098 - Right to Organise and Collective Bargaining Convention, 1949 1962

Elimination of all forms of forced labour

C029 - Forced Labour Convention, 1930 1962

C105 - Abolition of Forced Labour Convention, 1957 1962

Effective abolition of child labour

C138 - Minimum Age Convention, 1973 1998

C182 - Worst Forms of Child Labour Convention, 1999 2001

Elimination of discri-mination in employment

C100 - Equal Remuneration Convention, 1951 2002

C111 - Discrimination (Employment and Occupation) Convention, 1958 2002

Governance Conventions

Labour inspection C081 - Labour Inspection Convention, 1947 Not ratified

C129 - Labour Inspection (Agriculture) Convention, 1969 Not ratified

Employment policy C122 - Employment Policy Convention, 1964 Not ratified

Tripartism C144 - Tripartite Consultation (International Labour Standards) Convention, 1976 1983

Up-to-date Conventions

Wages

C094 - Labour Clauses (Public Contracts) Convention, 1949 1962

C095 - Protection of Wages Convention, 1949 1962

C131 - Minimum Wage Fixing Convention, 1970 1983

Industrial relations C135 - Workers’ Representatives Convention, 1971 1983

C154 - Collective Bargaining Convention, 1981 1998

Vocational guidance and training

C140 - Paid Educational Leave Convention 1983

C142 - Human Resources Development Convention 1983

Occupational Safety and Health

C148 - Working Environment (Air Pollution, Noise and Vibration), 1977 1983

C170 - Chemicals Convention, 1990 1999

Specific categories of workers

C149 - Nursing Personnel Convention, 1977 1983

Dockworkers C152 - Occupational Safety and Health (Dock Work) Convention, 1979 1983

Fundamental Conventions are the eight most important ILO conventions that cover four fundamental principles and rights at work. Equivalent to basic human rights at work. Governance Conventions are four conventions that the ILO has designated as important to building national institutions and capacities that serve to promote employment. In other words, conventions that promotes a well-regulated and well-functioning labour market. In addition, there are 71 conventions, which ILO considers “up-to-date" and actively promotes.

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Table 27: Trade unions in Tanzania 2013

Trade Unions Total

Members Female

Members

Estimated potential members

No. of CBAs

Workers covered by

CBAs

No. of OHS Committees

at workplaces

Affiliated to TUCTA

CHODAWU Conservation, Hotel Domestic and Allied Workers Union

38,272 10,429 11,479 35 N/A 7

COTWU Communication Transport Workers Union of Tanzania

6,043 1,301 6,180 15 1,703 4

TTU Tanzania Teachers Union/ Chama cha Waalimu Tanzania

217,761 102,083 46,770 1 266,039 0

DOWUTA Dock Workers Union of Tanzania

3,410 - 325 2 3,810 1

RAAWU Researchers, Academician and Allied Workers Union

11,945 4,193 2,864 4 N/A 2

TALGWU Tanzania Local Government Workers Union

59,903 32,145 - 1 N/A 0

TAMICO Tanzania Mines, Energy and Construction Workers Union

12,071 1,421 17,820 10 18,765 10

TEWUTA Telecommunication Workers Union of Tanzania

1,593 631 6,439 3 1,627 2

TPAWU Tanzania Plantation and Agricultural Workers Union

43,113 14,592 20,580 198 N/A 25

TRAWU Tanzania Railways Workers Union

3,428 976 478 2 N/A 0

TUGHE Trade Union of Government and Health Workers

51,268 24,409 29,366 5 300 2

TUICO Tanzania Union of Industrial and Commercial Workers *

73,122 27,192 22,500 31 35,438 345

Not affiliated to TUCTA

TASU Tanzania Seafarers Union 771 40 640 3 741 0

TFCAWU Tanzania Fishing Crew and Allied Workers’ Union

2,400 - - - - -

TUJ Tanzania Union of Journalists 150 - - - - -

TAFIMU 200 - - - - -

IGWUTA 676 - - - - -

TASIWU 2,851 - - - - -

TUPSE 1,102 - - - - -

MPETU 303 - - - - -

FIBUCA 4,302 - - - - -

PRIPPAWUTA 361 - - - - -

NUMET 1,182 - - - - -

* Data of TUICO’s total and women union membership are from June 2015.

Note: An addition eight trade unions are not affiliated with TUCTA, but lack data of members. These following trade unions are: TMW, TPU, TAWU, THTU, TARWOTU, TMDPWU, DOSHITWA, and TAWUTA.136

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Table 28: Trade Union Centre and affiliates in Zanzibar (2014)

Trade unions Total

Members (2014)

Female Members (2014)

No. of CBAs (2014)

Workers covered by CBAs (2014)

No. of OSH committees

at workplaces

ZATUC The Zanzibar Trade Union Congress 18,265 7,329 6 3,600 1

COTWU –ZNZ Zanzibar Communication and Transport Workers’ Union

905 324 1 720 2

ZASU Zanzibar Seafarers Union 4,275 2 1

TUICO-Z Zanzibar Union of Industrial and commercial Workers

878 393 1 335 -

ZUPHE Zanzibar Union for Public and Health employees 1,990 1,207 4

CHODAWU-Z Zanzibar Conservation, Hotel, Domestic and Allied Workers’ Union

1,340

683 3 2,125 -

ZATU Zanzibar Teachers’ Union 5,527 3,344 - - -

ZAFICOWU Zanzibar Financial and Commercial Workers Union

565

252 - - -

TEWUTA-Z Zanzibar Telecommunication Workers Union 286 61 - - 1

ZAPSWU Zanzibar Public sector Workers Union 2,519 1,063 1 420 3

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