Productive Jobs: Translating High Growth into Poverty Reduction

Since 2001, Tanzania has experienced a fairly high annual growth rate of around 7 per cent. However, this has not translated into major cuts in the poverty rate. According to the Household Budget Survey 2007, one third of Tanzanians live below the basic needs poverty line. Weak linkages between growth, jobs, and its distributional impact on social welfare in Tanzania underline that economic growth is essential but not in itself sufficient for poverty reduction.

Structural changes: A mismatch in jobs and growth?
While some structural changes in the Tanzanian economy are visible, these shifts have not benefited the labour-intensive sectors, such as agriculture, fishing, and services which have all experienced a decline in the growth rate from 2007 to 2008. The 2009 Guidelines for the Preparation of the Medium Term Plan and Budget Framework for 2009/10-2011/12 show that between 2007 and 2008 the agriculture growth rate declined from 4.0 per cent to 3.3 per cent, the fishing sector declined from 4.5 per cent to 4.3 per cent, and services from 8.9 per cent to 8.1 per cent.

Employment rates: Are we getting the whole picture?
The National Growth and Poverty Reduction (MKUKUTA) explicitly laid out as one of its objectives to reduce unemployment from around 13 per cent to 6.9 per cent by 2010 and to address underemployment, particularly in the rural areas. According to figures from the last Integrated Labor Survey (ILS, 2006) the unemployment rate in the country stood at 11.7 per cent. The employment to population ratio at 80 per cent remains relatively high. What is striking though is the per centage of people in informal employment which was as high as 93 per cent in 2006. Almost 55 per cent of employed work excessive hours (over 48 hours per week), which may indicate inadequate hourly pay. Furthermore, almost 37 per cent of people employed are living below the poverty line. The evidence clearly suggests that many of the jobs that are being created are not necessarily productive to help greater numbers of people to move out of poverty. With poverty and unemployment rates remaining less responsive to growth, one needs to reassess how growth is actually feeding into job creation and vice versa.

An agenda for productive jobs
In the national policy framework, job creation has often been seen more as a residual outcome of economic growth. Beyond recognizing the centrality of employment for poverty reduction in the MKUKUTA II (Growth and Poverty Reduction Strategy) and the national budgets, it is critical that productive job creation strategies are explicitly defined rather than simply viewed as a desirable outcome of all the development efforts. It is important to underscore here that it is not just any jobs that need to be generated, but more productive employment is needed to make a serious dent in the poverty rate. In this regard, more attention should be given to young people. The ILFS 2006 shows that the rate of unemployment was higher among young people (14.9 per cent). Productive job creation opportunities for young people especially women need to be targeted and clearly articulated in the next MKUKUTA.

Public and Private Investment
The role the private sector can play in creating jobs is now widely recognized. In order to fully tap into that potential, there is a need to clearly identify industries and business sub-sectors where investments can result in greater job creation and productivity. Business climate and removal of red tape can encourage greater private sector investment. Also, schemes such as Public-Private partnerships can be forged to boost investment in rural infrastructure, and agriculture which will result in greater job creation.

Skills Gap
With the changes in the economy catalyzed through strategic investments, it is important that skills gaps are identified in a proactive manner based on jobs that are likely to be generated in potential growth sectors. Accordingly, this should be followed by reviewing the existing formal and non-formal training systems i.e. vocational skills, mentorship, apprenticeships, and managerial skills for job seekers. Working in close collaboration with the private sector, these programmes need to be reoriented and scaled up.

Local Economic Development (LED): Macro- micro linkages
With greater devolution of public administration, it is critical that local governments play a greater part in stimulating local economies for job creation and poverty reduction. Local Government should be supported to craft LED strategies reflecting their comparative advantage. In many developing countries LED has been embraced by local governments who are increasingly playing a more proactive role in supporting poverty reduction in their respective regions.

Enabling environment for businesses
An environment that makes it easier for enterprises to access services will improve business opportunities and support jobs. Targeted schemes such as credit guarantees, soft loans and in some cases equity investments for small enterprises are some of these examples. Moreover, business training, market access, and institutional support for Savings and Credit Cooperatives (SACCOs) targeting young people can be prioritized.

Monitoring decent work in the country
At the moment, Tanzania does not have a robust mechanism to effectively track the number of jobs created or lost and the quality of jobs. Such a system will enable policy makers to better measure the pattern and sources of growth, as well as the manner in which its benefits are distributed. A Labour Market Information System (LMIS) using the new MDG Employment and Decent Work Indicators will allow greater convergence on cross-sectoral policies among various ministries.

Conclusions
Productive and adequately remunerative employment is indeed central and in fact the missing piece that can make the economic growth story in Tanzania more pro- poor. It is not simply the distributional impact of growth which is important for job creation, but an inclusive growth model that allows low income households to participate in the economy to derive benefits in an equitable manner. That in turn can lead to even higher growth rates as productive jobs and growth tend to feed each other.

The Kadhi courts debate in Tanzania and the ‘primacy’ of the secular state in East Africa

The state and religion in East Africa have never been completely separate. There is a Judeo-Christian heritage in common law and a strong faith-based education and socialization process of post-colonial elites, and development processes. However, religious leaders in Kenya and Tanzania are demanding more and more explicit acknowledgement of religious institutions in their national Constitutions.

In recent months various religious leaders have made a case for explicit creation of religious courts in Tanzania or the removal of constitutional guarantees on Kadhi courts, or the creation of a Christian equivalent of a Kadhi’s court in Kenya. Both demands have been made in a significant political context: constitution-making process for Kenya, and post-election politics in Tanzania.

During the 2005 election campaign Tanzania’s largest party, CCM, promised that should they be returned to government by the voters, they would get to work on establishing Islamic Courts in the country. CCM won the vote. Tanzania’s Muslims are still waiting for this pledge to be fulfilled.

In his ministerial budget presentation for 2009, the Minister for Constitutional Affairs and Justice, Mathias Chikawe, announced that while the government has been trying to incorporate ‘Islamic principles’ into existing laws, Kadhi courts did not feature in the government’s agenda.

This provoked an angry reaction from the Islamic community with some accusing the government of flip-flopping on its campaign promise. The Tanzania Muslim Council threatened CCM with a loss of votes in future elections. During a Parliament question and answer session, Prime Minister Mizengo Pinda told legislators that his government would not be pressured, especially since the issue may lead to divisive debates in the country. Nevertheless, Muslim organizations maintained their push for what they believe to be a just demand with plans to protest against the government’s decision.

While publicly demonstrating resolve, privately senior figures within CCM were concerned that the groundswell of anger amongst Muslims may cost the party in the local elections to be held in late 2009 this year. Such fears proved well founded after news broke that leaders within the Muslim community were mobilizing for nationwide protests.

The government engineered what appeared to be a truce by announcing the formation of a joint committee of Muslim leaders and civil servants to find ways to resolve the issue. This followed a meeting between the Prime Minister and the country’s most influential sheikhs in the country, after which Chief Mufti Issa bin Shaaban Simba urged his fellow Muslims to be patient and not to allow anger to govern their decisions.

However, parliament continued to be rocked by debate, with several MPs warning against the inclusion of religion in legal matters arguing that such a decision could lead to a Rwanda-style bloodshed. Speaking at a campaign rally in Mwanza, the Civic United Front (CUF) Chairman Prof. Ibrahim Lipumba attacked President Kikwete, saying that the government’s u-turn led to a rancorous and divisive tone in Tanzania on the Kadhi courts issue. Various senior figures within CCM added fuel to the fire by telling reporters that those who read into the 2005 election manifesto a promise to establish Kadhi courts were confused and in the process they revealed the divisions this issue has exposed within the party itself.

The European Union injected itself into the middle of the debate after the head of the EU Commission in the country, Ambassador Tim Clarke, implored the government to remember the secular foundations laid down by Mwalimu Nyerere when contemplating the Kadhi courts issue. Ambassador Clarke went on to hope that Tanzanians will retain the strict separation of Church and State as envisioned by Mwalimu Nyerere, for it has served the country well by making it the beacon of peace in East Africa. Kenya’s High Commissioner to Tanzania also advised against the establishment of Kadhi Courts.

Are East Africans tired of living under secular states? Do religious courts erode national unity in East Africa? What is the significance in the region of the Muslim demand for Kadhi’s courts and the Christian backlash against such demands? Are these demands by religious leaders an explicit call for a religious state?

Thoughts?

CDCF: When they want it, they get it.

The Constituency Development Catalyst Fund (CDCF) essentially provides additional resources for development at the local level by channeling money to constituencies under the management of Members of Parliament. The introduction of CDCF to Tanzania is thus supplementing the existing funding mechanisms for local government. Importantly, it may not represent an increase in funding, since funds may be taken away from other parts of the budget in order to finance the CDCF.

Your Member of Parliement just passed the bill last month, in case you didn't know. Article 63. (2) Of the Constitution of the United Republic of Tanzania states “The second part of Parliament shall …have the authority on behalf of the people to oversee and advise the Government of the United Republic and all of its organs in the discharge of their respective responsibilities in accordance with this Constitution”

The CDCF will seriously undermine the ability of Parliament to perform its oversight function independently and thus effectively, since a legislature that is involved in introducing and/or implementing spending proposals compromises its ability to question these initiatives and therefore to hold the executive to account.

The CDCF also creates a parallel structure alongside the existing local government structures and this increases the burden on the already overwhelmed local government officials. This parallel structure also increases the cost of administering local funds by using money which could have been used to increase the resources available for the projects themselves.

MPs claim that they act as ‘ATM machines’ in their constituencies because citizens assume that they have the resources to solve many of their problems. They claim that their income is not sufficient to cater for expectations from voters and that CDF will relieve them of this burden.

However, the role of MPs is to work with citizens to hold the government at central and local level accountable for resources allocated to solve development problems in their constituencies. MPs are not obliged to address these problems themselves unless they choose to do so willingly and have the necessary resources. This is the job of the executive. To take on the role of the executive will compromise their ability to perform their legitimate role.

MPs argue that they are expected by their constituents to deliver development projects despite the fact that they do not have control over where these projects are allocated.

Again, they get it wrong. MPs should work in collaboration with CSOs to educate citizens on the role of MPs. MPs should not make philanthropic promises to voters during elections unless they are sure of their ability to deliver these promises once elected. Normally campaign promises should either be in line with the candidate’s party manifesto or promises that the candidate intends to implement from his or her own sources of funding as philanthropic activities.

MPs claim that TASAF is not democratic hence CDCF will provide a more democratic means of empowering communities at the grassroots level to take an active role in their own development.

But MPs should seek to improve whatever challenges exist in the implementation of other local funding mechanisms, such as TASAF and the Local Government Capital Development Grant since they already seek to address the core purpose that CDCF seeks to address without the additional problems likely to result from the CDCF.

The challenges facing the very concept of CDCF and its implementation make it a highly risky venture for government to undertake. Further, evidence from different experiences at community level, and from previous studies like PEFAR, indicates that the poor quality of service delivery at the local level is not due to lack of funding, but more to systemic weaknesses, poor capacity, political interference, low civic competency etc. This establishment of a CDCF is likely to make this situation worse rather than better.

Additionally, given the existence of other development funds which serve the same purpose as a CDCF in Tanzania, it is recommended that the systemic and systematic challenges compromising the efficient and proper implementation of these devolved funds are contended with, rather than creating an additional fund which is likely to only exacerbate existing challenges.