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Page 72 Participants’ Papers Learning for Life, Work and the Future
Training Fund oversees training for entrepreneurship
development.
The informal sector in Africa is now the area of the
fastest and most significant business growth, employing
the largest number of working people and creating
more new jobs per year than any other sector. By
reducing rural to urban migration, and therefore
reducing unemployment and social problems in urban
areas, it is the informal sector that holds the key to the
future development of Africa.
21 MWANUKUZI-KWAYU, Christine (United Republic of Tanzania):
Training in and for the Informal Sector − A Case Study of Opportunities
Industrialisation Centres of Tanzania Training Programmes
1. The Situation of the Informal Sector in Tanzania
Up to the early 1990s, formal wage employment was
the most important source of employment in Tanzania,
growing consistently at an average annual rate of 3%
between the 1960s and 1980s. At its peak in the 1990s
the formal sector had 800,000 employees, 80% of
whom were in the public sector. However, due to the
ongoing civil service reforms and parastatal sector
restructuring, public sector employment has declined to
about 50% of the total.
Since the mid-1980s, largely in response to the growing
economic crisis, the informal sector has become
increasingly important as a source of employment
opportunities. It is now estimated that about 22% of
the labour force is engaged in the informal sector as a
main or secondary activity.
In an attempt to provide opportunities for self-employment,
the government has initiated a number of
employment creation programmes in the informal
sector, with technical and financial support from donor
agencies. One of these is the National Income
Generation Programme (NIGP).
The NIGP is a multi-donor funded programme mainly
funded by the United Nations Development Programme
(UNDP). It focuses on income-generating
skills development and is implemented by the Opportunities
Industrialisation Centres of Tanzania (OICT),
with technical support from Opportunities Industrialisation
Centres International (OICI).
The preliminary needs assessed during the establishment
of OICT in 1993 were lack of entrepreneurial and
general management skills on the one hand and technical
skills on the other. Further studies and reports 1
conducted for the informal sector indicated that small
business operators experience the following four main
problems: lack of finance to start or expand business
activities, lack of basic business management and
technical skills, limited access to markets and a poor
enabling environment.
1 By the ILO, the Ministry of Labour, the World Bank, the UNDP and
other development agencies.
Due to this situation, the overall objective of the OICT
skills training project was to improve the lives of
unemployed Tanzanian youths and adults by providing
them with income-generating skills.
Many of the problems frequently observed in the
informal sector are compounded by lack of knowledge
of how to solve them, though not all informal sector
operators admit that training is a major part of the
solution to these problems. Nevertheless, the more
enlightened informal sector operators are ready to participate
in training programmes because they are aware
that the ability to solve problems leads to improved
productivity and higher income.
2. Potential Areas of Collaboration
Despite this awareness, and despite their willingness to
be trained, one of the difficulties experienced by
informal sector operators is finding time to attend
training sessions. The level of output and productivity
for many of them is so low that they are compelled to
work full-time, and lack of savings makes operators
unwilling to take time off to attend a training programme,
let alone pay for it. Under these conditions,
the opportunity cost of attending training is very high,
and operators would only be prepared to attend training
programmes if they perceived that the benefits exceed
the cost (often the opportunity cost).
Nevertheless, only about 15% of the operators 2 indicated
that they did not want to attend any training to
improve their skills and business management; the rest
showed an interest in attending skills upgrading as well
as some form of business management.
Enterprise development training might be an area for
subregional collaboration.
3. Strengths and Weaknesses of the Country’s
Response to Challenges
One of the issues that have often been discussed concerning
the training of informal sector operators is their
ability to contribute to the cost of training. For reasons
of programme sustainability, beneficiaries are expected
2 OICT Baseline Survey, 1996.