IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/24824.html
   My bibliography  Save this paper

Tanzania: Pilot Rural Investment Climate Assessment. Stimulating Nonfarm Microenterprise Growth

Author

Listed:
  • Loening, Josef
  • Lane, William Leeds

Abstract

Tanzania’s Pilot Rural Investment Climate Assessment (RICA) measures the economic environment of non-farm entrepreneurs. The pilot assessment has three key objectives: it aims to better understand the rural non-farm economy in Tanzania, shed light on rural enterprise dynamics and business constraints, and reflect on areas where government policies are readily directed to help promote rural non-farm enterprise activity. The RICA is based on an analysis of a unique survey data set collected by the National Bureau of Statistics (NBS) during January and March 2005, covering enterprises, households, and communities in all seven geographical zones of the country. Selected findings are: (i) Non-farm activities are an important source of income for approximately 1.4 million rural households, (ii) Tanzanian rural non-farm enterprises differ from their urban counterparts, (iii) the predominant entrepreneurial activity is trading, (iv) labor productivity is typically low, (v) formal enterprises have higher levels of labor productivity than informal, (vi) the rate of new firm creation appears to be lower than in other African countries, and (vii) only a minority of enterprises propels employment growth. The pilot approach call for a careful evaluation of the following recommendations, which presented to stimulate dialogue and future analysis: (i) favorable policies and investments for agriculture play a big role for rural enterprises, (ii) maintaining favorable internal trade policies may therefore be of utmost importance in determining enterprise performance, (iii) microcredit and savings may offer a tool for promoting rural non-farm activity in buoyant rural markets, (iv) easing bottlenecks in rural infrastructure is important, (v) exploring options for better telecommunications via private sector cell phone nodes may be an attractive policy option to stimulate entrepreneurial activities, (vi) continuation of business registration reform and effective implementation at the local level remains a high priority, and (vii) future analysis should address knowledge gaps.

Suggested Citation

  • Loening, Josef & Lane, William Leeds, 2007. "Tanzania: Pilot Rural Investment Climate Assessment. Stimulating Nonfarm Microenterprise Growth," MPRA Paper 24824, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:24824
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/24824/1/MPRA_paper_24824.pdf
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    as
    1. Arne Bigsten & Mans Söderbom, 2006. "What Have We Learned from a Decade of Manufacturing Enterprise Surveys in Africa?," World Bank Research Observer, World Bank Group, vol. 21(2), pages 241-265.
    2. Sleuwaegen, Leo & Goedhuys, Micheline, 2002. "Growth of firms in developing countries, evidence from Cote d'Ivoire," Journal of Development Economics, Elsevier, vol. 68(1), pages 117-135, June.
    3. Evans, David S, 1987. "Tests of Alternative Theories of Firm Growth," Journal of Political Economy, University of Chicago Press, vol. 95(4), pages 657-674, August.
    4. Ellis, Frank & Mdoe, Ntengua, 2003. "Livelihoods and Rural Poverty Reduction in Tanzania," World Development, Elsevier, vol. 31(8), pages 1367-1384, August.
    5. Barrett, C. B. & Reardon, T. & Webb, P., 2001. "Nonfarm income diversification and household livelihood strategies in rural Africa: concepts, dynamics, and policy implications," Food Policy, Elsevier, vol. 26(4), pages 315-331, August.
    6. Arne Bigsten & Peter Kimuyu & Karl Lundvall, 2004. "What to Do with the Informal Sector?," Development Policy Review, Overseas Development Institute, vol. 22(6), pages 701-715, November.
    7. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-670, May.
    8. Lisa Daniels, 2003. "Factors that influence the expansion of the microenterprise sector: results from three national surveys in Zimbabwe," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(6), pages 675-692.
    9. Mead, Donald C. & Liedholm, Carl, 1998. "The dynamics of micro and small enterprises in developing countries," World Development, Elsevier, vol. 26(1), pages 61-74, January.
    10. Lanjouw, Peter & Quizon, Jaime & Sparrow, Robert, 2001. "Non-agricultural earnings in peri-urban areas of Tanzania: evidence from household survey data," Food Policy, Elsevier, vol. 26(4), pages 385-403, August.
    11. Richard Duncombe & Richard Heeks, 2002. "Enterprise across the digital divide: information systems and rural microenterprise in Botswana," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(1), pages 61-74.
    12. McPherson, Michael A., 1996. "Growth of micro and small enterprises in southern Africa," Journal of Development Economics, Elsevier, vol. 48(2), pages 253-277, March.
    13. Richard Tiffin & Xavier Irz, 2006. "Is agriculture the engine of growth?," Agricultural Economics, International Association of Agricultural Economists, vol. 35(1), pages 79-89, July.
    14. Dollar, David & Hallward-Driemeier, Mary & Mengistae, Taye, 2005. "Investment Climate and Firm Performance in Developing Economies," Economic Development and Cultural Change, University of Chicago Press, vol. 54(1), pages 1-31, October.
    15. Meghana Ayyagari & Asli Demirgüç-Kunt & Vojislav Maksimovic, 2008. "How Important Are Financing Constraints? The Role of Finance in the Business Environment," World Bank Economic Review, World Bank Group, vol. 22(3), pages 483-516, November.
    16. Rosegrant, Mark W. & Hazell, Peter B. R., 2001. "Transforming the rural Asian economy," 2020 vision briefs 69, International Food Policy Research Institute (IFPRI).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wang, Lili & Wen, Yi, 2018. "Escaping the Middle-Income Trap: A Cross-Country Analysis on the Patterns of Industrial Upgrading," Working Papers 2018-1, Federal Reserve Bank of St. Louis, revised 01 Jan 2018.

    More about this item

    Keywords

    Tanzania; rural labor markets; enterprise performance; informal sector;

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:24824. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter) or (Rebekah McClure). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.