Private Sector Development

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    For full story see link to the right Photo: Goodluch Mushi

The goal for Swedish development cooperation within Market Development in Tanzania is to contribute to "a strong private sector that creates employment opportunities for people living in poverty".

The Tanzanian economy has experienced high growth rates during the last decade. The private sector, formal and not at least the informal, is the main creator of employment opportunities in the Tanzanian economy. It is estimated that there are 3.1 million micro, small and medium sized enterprises (MSMEs) in Tanzania. However, too few productive jobs are being created in the economy to enable a larger share of people generating more income and escape income poverty. The reasons behind this are many.

Two of the binding constraints for private sector-led development in Tanzania are lack of access to financial services and weak trade-related infrastructure. Only 12 % of all adult population in Tanzania have access to formal financial services and 56 % are completely excluded from the formal as well as the informal financial market. Youth (16 - 34 years old) and especially women are overrepresented in the latter category. Transport costs in East Africa, including Tanzania, are the highest in the world, which inflates import costs, makes regional trade inefficient and lowers international competitiveness.

Swedish Support

Currently the portfolio contains five programmes (that in return have more than 50 individual projects) with the following objectives:

  • Increased access to financial services for people and businesses,
  • Improved trade facilitation for Tanzania as part of the EAC,
  • Increased incomes for the target groups through innovative agri-business ventures,
  • Increased use of renewable energy technologies through innovative models,
  • Improved business environment through advocacy of Tanzanian private sector organisations.

Increased access to financial services is supported through Financial Sector Deepening Trust (FSDT), a Tanzanian Trust established through a multi-donor initiative in close cooperation with the Government of Tanzania (mainly Bank of Tanzania - BoT). Improved trade facilitation is supported through the work of Trade Mark East Africa Tanzania Window (TMEA-TZ), a multi-donor initiative in close cooperation with the Government of Tanzania (mainly Ministry of East Africa Cooperation - MEAC). Increased incomes through agri-business ventures are supported through the Tanzania Agribusiness Window (TZAW) challenge fund established by the Africa Enterprise Challenge Facility (AECF). Increased use of renewable energy technologies is supported by another AECF challenge fund, the Renewable Energy and Adaptation to Climate Technologies (REACT-TZ). An improved business environment through advocacy is supported through the Business Environment Strengthening Tanzania - Advocacy Component (BEST-AC), that support private sector organisations in their advocacy efforts for an improved business environment, enhancing the quality and credability of their engagement in public-private dialouge.

Recent Results

  • In 2012 FSDT passed the one million mark of people and businesses in Tanzania gaining access to financial services from FSDT supported interventions since 2005.
  • In 2013 through TMEA-TZ funding, the construction of two one-stop border posts will be finanalized and operational, one between Tanzania and Kenya and the other one between Tanzania and Uganda. These integrated border posts are expected to reduce transit costs incurred in cross border movement by combining the activities of both countries' border organisations and agencies at either a single common location or at a single location in each direction.
  • In 2013 collaboration with more than 20 individual companies active in Tanzania with innovative  agri-business models will have been initiated, with the potential to increase incomes for thousands of people.
  • In 2012 BEST-AC supported more than 20 advocacy efforts of private sector organisations in Tanzania where some have led to improvement of the business environment in sub-sectors and others have been key to initiate and improve dialouge itself.

Contact: 
Sara Spånt (sara.spant@gov.se)
Jwani Jube (jwani.jube@gov.se)