In spite of its natural comparative advantages and cheap labour, no industry will blossom as long as Tanzania cannot bring cheap commodities to urban centers where manufacturing plants are expected to be located.
In order to facilitate successful transformation of Tanzania’s rural economy, policy makers have been urged to support migrants secure jobs and access social welfare services.
The World Bank passed the recommendation in its report titled ‘Spreading wings : from economic growth to shared prosperity’ which the global financial entity released in Dar es Salaam last week .
The report asked the Government to ensure that infrastructure and services are in place to meet the needs of these newcomers, to guarantee their smooth social and economic integration into urban centers.
However, such motivating action is bound to encourage higher levels of rural-urban migration but the experts have argued that the cost of not taking action is likely even greater.
A simple example is that, large numbers of dissatisfied and unemployed youth could become a significant cause for concern with the potential to create or exacerbate social and political unrest in urban areas.
There is then an urgent need to improve the business environment for small and medium enterprises (SMEs) by reducing the costs of registration of such businesses, the report adviced. The SMEs are more likely to offer employment to the less educated migrants than larger companies that look for professional and seasoned staff.
The World Bank further adviced that, skills training programs coupled with programs to facilitate financial access ought to be implemented to encourage young entrepreneurs.
At the household level, rural migrants often generate significant benefits for their own households. At the macro level, rural migrants also generate broader economic benefits to the economy.
The report further explained that many migrants remit money not only to care for their rural family members but also to maintain a stake in the rural community and its resources as a back up incase of illness, lack or failure of an urban job, family circumstances or old age force them back to the village.
In China, such a shift has resulted in increased GDP growth and lifted millions of households out of poverty. Leveraging similar patterns of migration could enable Tanzania to come closer to achieving the same level of employment opportunity creation as many East Asian countries and other successful emerging markets have.
In Tanzania, the level of internal remittances from urban to rural areas was approximately 21,500/- per year in 2010. While this is still relatively low, in the Kilimanjaro region, for example, internal remittances make up almost half of the monetary income of rural households.
A portion of this income may be used to improve the productive capacity of these rural households. Urban households can also facilitate the transfer of technologies and create new market opportunities for farmers, the report explained.