YOUTH UNEMPLOYMENT IN TANZANIA

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1 YOUTH UNEMPLOYMENT IN TANZANIA Tanzania Team Mwanjali,, S; Teye,, A; Shelukindo,, R WBI Labor Market Core Course MARCH 2005

2 OUTLINE Country profile Background information Employment by major sector Unemployment Definition Unemployment by age above 10 yrs Entrants in the labor market Strategies Other responses Labor laws under review Conclusion

3 COUNTRY PROFILE Total area: 945,000 sq.km Population: approx 34.4 millions Distribution by age: 0-10yrs: 10.5 millions > 10yrs: 22.6 millions Econ. Active: Employed: Unemployed: Econ. Inactive: 17.9 millions 15.6 millions 2.3 millions 4.6 millions

4 BACKGROUND INFORMATION Soon after Independence the government came up with a Policy Blue Print relying on the socialist path of production ie the policy of socialism and self reliance. The implementation of this policy led to the control of the major means of production leading to the Nationalization program of Banks and other foreign investments and created publicly owned parastatal organizations. The public sector became source of investment and employment creation in the formal sector.

5 BACKGROUND INFORMATION (cont) While gains were made on social front, particularly literacy, health services and poverty reduction, the economic situation deteriorated as shortages of foreign exchange resulted in lack of necessary inputs, because the economy could not grow faster as anticipated. Midways through the eighties, with the economic in shambles, the government moved away from centrally planned public sector led economy, towards a more market-oriented, oriented, one permitting private sector development. While these resulted in a turn- around in production and some employment gains, overall unemployment creation has not kept up with labor force growth.

6 EMPLOYMENT BY MAIN SECTOR Parastatal 0.5% Government 2.0% House work 3.2% Private 4.5% Informal 8.8% Agriculture 81.0% 2000/2001 ILFS

7 1990/91 ILSF SURVEY Parastatal 1.7% Government 3.0% Private 2.8% Informal Sector 8.5% Agriculture 84% Agriculture is the main provider of employment Informal sector ranks second Decline in the Public Sector employment from 5%(1990/91) to 2.5%(200/2001) Decline from Civil Service fro 3%(1990/91) to 2% (2000/1)

8 UNEMPLOYMENT Definition: A person is classified as unemployed if : One is without work (self or paid employment) seeking work, or One is temporary from work from the reference period due to economic reasons such as no suitable (adequate) land, off season and lack of capital or one did some work during the reference period but does not access s to that job every day such that one is mostly likely to spend more time unemployed than employed.

9 Economically Active Population 10 yrs and above, by age group, 2000/1 Age Group Employed Unemployed Total Inactive Unemployment % 10 t to to to to to to to to to to to TOTAL

10 UNEMPLOYMENT (cont) More persons were unemployed in 2000/1 than in 1990/1 Unemployment rate increased by 1.5% from 3.6% in 1990/1 to 5.1% in 2000/1 Unemployment is more severe among persons aged yrs than in other age groups In 1990/1 unemployment for males and females were 2.9% and 4.2% respectively compared to 4.4% and 5.8% in 2000/1

11 ENTRANTS INTO THE LABOR MARKET New entrants from primary, tertiary and colleges into the labor market is approx. 700,000 annually but only 30,000 or 3% secure employment in the formal sector. 97% of the entrants partly fall into the informal economy and some remain inactive.

12 STRATEGIES A fully fledged Department of Youth is in place to deal with youth issues including unemployment. A Youth Policy is in place focusing on youth mobilization, empowerment and counseling. Youth mapping is carried out in collaboration with Local Government Authorities to identify youth locations and their activities for empowerment enhancing. A Youth Revolving Fund has been established to support youth income generating activities in organized economic production brigades and small entrepreneurs. Local government authorities contribute 10% of their revenue collections to this fund.

13 STRATEGIES (cont) Vocation Education and Training programs have been developed. These programs are regulated by Vocational Education and Training Authority (VETA): Countrywide there are 40 government owned VET centres providing vocational training and complimented by authorized training providers Vocational Education and Training is supported by a training levy of 1% of payroll tax. Promotion of skills development programs and entrepreneurship as youth capacity building measure for active participation in the labor market.

14 OTHER RESPONSES Ratification of Core Conventions as a measure to guarantee workers fundamental rights and protection. Tanzania has ratified all 8 Core Conventions. Reform of labor policies and laws:

15 REFORM OF LABOR POLICIES AND LAWS Laws are antiquated, rigid, scattered and not user friendly and inhibit economic development. A National Tripartite plus Task Force was commissioned in October, 2001 to re-examine examine and reform the existing policies and laws and ultimately put in place laws and regulatory structures that promote economic efficiency, employment creation and at the same time protect labor.

16 REFORM OF LABOR POLICIES AND LAWS (cont) The execution of this assignment is carried out in two phases. Phase 1 focused on Employment law, Collective Labor Relation law, Dispute Prevention and Resolution, and Labor Market Institutions. Two pieces of Legislations have been enacted by Parliament namely, The Employment and Labor Relations Act No.6 and Labor Institutions Act No.7 both of 2004

17 REFORM OF LABOR POLICIES AND LAWS (cont) Phase 2 of the reform is presently on going focusing on the following: Employment Promotion Employment Services Labor Market Information Skills Development Workers Compensation Occupational, Safety and Health Social Security.

18 LABOR LAWS UNDER REVIEW The Employment Ordinance, cap 366 The Regulation of Wages and Terms of Employment Ordinance, Cap 300 The Security of Employment Act, Cap 574 The Industrial Court of Tanzania Act No. 41 of 1967 The Trade Unions Act No. 10 of 1998 The Wages and Salaries (General Provisions) Act No. 22 of 1974 The Severance Allowance Act, Cap 487 The Workmen s s Compensation Ordinance, Cap 263. The Occupational Diseases (notification) Ordinance, Cap 330. The Factories Ordinance, Cap 297. The Occupational, Health and Safety Act, No. 5 of The National Employment Promotion Services Act, No. 9 of 1998

19 Conclusion The reformed labor market policies and laws will promote economic efficiency and attract more investments both internally and externally hence creation of more job opportunities. However, youth unemployment pose a great challenge to the government, and more so on data collection. Tanzania will appreciate World Bank support in terms of conducting a study on this issue.