World Bank Board Approves $80m to Accelerate Job Creation in Tanzania

September 3, 2015

The financing will contribute to the removal of barriers to doing business

WASHINGTON, September 4, 2015—The World Bank’s Board of Executive Directors approved today a development policy credit of US$80 million towards improving Tanzania’s private sector performance in order to enhance its role in employment creation in the country.

Over the past decade, private sector investment has been concentrated in a few fast growing sectors, such as the extractives, finance, communication, and transport while labor-intensive sectors such as agriculture and manufacturing expanded below the average rate of the economy (about 7 percent in 2014/15). As a result, job creation did not accelerate to keep pace with the growth of the working population.

“Thousands of young people enter the workforce every year and are filled with energy and high expectations,” said Bella Bird, the World Bank’s Country Director.Creating productive jobs is a priority for Tanzania and only the private sector can generate the number of jobs required. The policy reforms supported by this operation help to remove obstacles for doing business in the country, unleashing the private sector and employment growth.”

Each year, about 800,000 young people enter Tanzania’s labor force, which is expected to increase from 20 million as of today to 40 million in 2030. Opportunities for productive jobs for these youths remain limited, mostly in the informal sector.

The Business Environment for Jobs Development Policy Operation (DPO) is the first in a programmatic series of three budget support operations for Tanzania. The operation builds upon the government-led Big Results Now (BRN) initiative, and supports a set of horizontal policy interventions to improve the overall ‘ease of doing business’ and strengthen the factor markets (labor, land and capital). In addition, the operation supports reforms to improve the business environment in agribusiness and tourism, two labor-intensive industries critical for Tanzania.

We support concrete measures to simplify the life of businesses,” says Andrea Dall’Olio, the World Bank Task Team Leader. “For example, we identified more than 59 fees, levies and taxes imposed on the tourism sector by various government agencies. The complete list is now available in the Ministry of Natural Resources and Tourism website and we continue to work with the Government to drastically reduce their number and their impact on businesses.”

The DPO has been prepared jointly with the Japan International Cooperation Agency (JICA), who plans to provide parallel financing.

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