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TOPIC 2:
ECONOMIC AND SOCIAL DEVELOPMENT
Economic development is the increase in economic growth and the distribution of the goods
and services among the people. It also refers to an increase in production and
quality.
Meaning of
Development
Development is a process to improve the lives of people in a country. This
involves not only raising living standards, for instance goods and services,
but a promotion of self-esteem, dignity, respect and people’s freedom to choose
and to take control of their own lives.
Levels of
Development
There are two levels of development, namely individual and national
development.
1. Individual or
personal level refers to the increase of
material well-being of a person like a good house, car and clothes. Also
greater freedom of expression, worship, increased human skills and the ability
to produce goods and services in a larger quantity.This aspect also includes
the educational level of a person.
2. National or
community level refers to the improvement in
social, economic, cultural and political affairs of a community or country. It
involves the provision of better health services and water accessibility.
Political development at the national level involves aspects of good
governance, rule of law and human rights.
Types of Development
There are two categories of development, namely economic development and social development. It is very important to
discuss the concept of economic development in modern times because there is no
country that can increase the welfare of her people without economic
development. Within a country, there is a gap in the living standards of the
people. There are people who live a luxurious life while others face hunger.
Similarly, mostcountries in the world today are poor; only one third of the countries
are rich. The poor countries have to raise the standards of living of their
people. These countries must be developed economically.
There is another concept in development, which is economic growth. Economic growth is an
increase in the productive potential in an economy. In other words, it is the
quantitative increase in goods and services produced in a country in a
specified period of time. Economic growth increases the Gross Domestic Product
(GDP). The GDP is the actual economic growth.
Meaning of
Economic Development
Economic growth is the
rate of expansion of national income or total volume of production of goods and
services of a country. Many developing countries have somehow achieved
reasonable economic growth but there is less economic development. In Tanzania
for instance, there is a rise in economic growth every year, yet the lives of
majority of the people are not improved. In this situation you will find an
increase in the GDP, but the living conditions of the people continue to deteriorate.
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| Bank of Tanzania |
INDICATORS OF ECONOMIC DEVELOPMENT
Indicators of economic development are also known as measurements or
criteria for testing the degree of economic development of a country. The most
frequently used indicators are per capita income of a country, birth rates,
population growth, life expectancy, literacy rates and energy consumption.
Others are rural-urban migration, unemployment and poverty.
Per Capita Income
Per capita income of a country is the average income of the people of a
given country in a particular year. It is calculated by dividing the total
annual income of the country by the population of that country. The total
annual income of a country is also referred to as the Gross National Product
(GNP) or the Gross Domestic Product (GDP). It is always given in monetary
terms.
1. Per capita Income= Gross National Product (Total
Annual Income of the Country)/Total Population of the country
2. Per capita Income = GNP/Total Population of the
country
3. per capita =28 212.6/ 40.7
4. per capita income =Tsh. 693 185
This indicator is considered to be the best single indicator of economic
well-being. The International Bank for Reconstruction and Development (IBRD),
more commonly known as the World Bank, classifies countries into three groups
according to their Gross Domestic Product (GDP) per capita.
Birth Rates
Birth rate is the ratio of total live births to a total live births to
total population in a specified community or area over a specified period of
time. The birth rate is often expressed as the number of live births per
thousand of the population per year. This is the easiest way of distinguishing
developing countries from developed countries. The birth rate in low-income
countries as a group is 30 per thousand, twice that of developed countries at
14 per thousand.
Population Growth
This is an increase of population. In developing countries, the population
growth is higher compared to the developed countries. Over the last 50 years,
world population has grown very rapidly compared to any previous time. World
population growth needs to be studied in order to understand its impact on the
process of development.
The reason of population growth in developing countries is the high birth
rate. Birth rates remain high even though death rates have fallen. This is
because a larger proportion of girls get married at a tender age. They have
children, and they have more years in which to have children.
Many governments in the world, including Tanzania's, have established
policies aimed at slowing the growth of population. For instance, in Tanzania
there is a birth control programme known as “Nyota ya Kijani”. The aim is to
ensure fewer children per family, so that poverty can be reduced. In this
regard, the government will be able to provide adequate social services to the
people.
Life Expectancy
This is the average number of years newborn babies can be expected to live
if health conditions stay the same. Life expectancy is lower in developing
countries compared to indeveloped countries. In developed countries, the deaths
of children under the age of five accounts for 1.3% of all deaths, while in
developing countries the figure is 10.5%.
The most commonly used indicators of life expectancy are:
1. Person/Populationper hospital bed. Medical care is very scarce in poor countries and that is why the
death rates arehigh in these countries. The governments have to improve the
quality of available health care and the number of people per doctor and
hospital beds. In Tanzania, there is a shortage of doctors and hospital beds.
There are cases where three patients share a single bed.
2. Calories deficiency is a cause of malnutrition. Our bodies do not have sufficient food to provide energy and to maintain
good health.
3. Protein per day. Types of food
and the quantity are important in the maintenance of good health. Lack of
protein will cause malnutrition. Malnutrition affects future productivity of a
population – the ability to work effectively.
4. Population per physician. In developing countries, physicians attend more patients than in
developed countries. This is because there are fewer physicians in developing
countries.
5. The infant mortality rate. This is the number of live-born babies who do not survive to their first
birthday out of each thousand babies born in total. The reasons for premature
death include poor quality of drinking water and sanitation. Also, inadequate
nutrition for pregnant women and infants. Another reason is poor health care
provision. Many people fall victim to polio, measles, diphtheria, tetanus,
tuberculosis, whooping cough, flu, diarrhea, pneumonia, typhoid, cholera and
malaria.
Literacy Rates
Literacy is the ability to read and write. Literacy has strong connections
with education, openness to change and labour productivity. Literacy is an
objective of development.
Energy Consumption
The consumption of energy in a country is highly correlated to the degree
of industrialization. The poorest countries use very little energy, while the
richest industrial countries use a lot of energy. The most common energy used
by poor nations like Tanzania is firewood. Industrialized countries use gas,
solar energy, and hydroelectric power and coal because they need more energy
for their industries. Energy consumption indicates the level of development of
a country.
Rural –Urban Migration
People in developing countries tend to migrate from rural to urban areas.
Cities in these countries grow rapidly. The purpose of migration is to get
employment. Most of these migrants remain unemployed and are subjected to
poverty.
Unemployment
This is a situation whereby able and mentally fit people in a country
arejobless and/or do not have formaljobs. There is a high rate of unemployment
in developing countriesand itis a serious matter in our societies, particularly
among the youth in urban areas. The high level of unemployment may result in
civil unrest, fall of standards of living, increased crime like drug abuse,
robbery, prostitution, theft and loitering. The other effects are child labour
to subsidize family income, separation of families and increased number of
street children.
Poverty
Poverty refers to the state of being poor. Poor people are those who fail to
enjoy better living conditions in the society they live in; they are unable to
meet the basic needs of life, which are food, clothes and shelter. Poverty is
the most distinguishing feature between developing countries and developed
ones. In this standard, two in five people living in developing countries are
absolutely poor. This type of poverty has been eradicated in developed
countries. Poverty is a hindrance to economic development.
Tanzania is gradually developing due to implementation of modern technology
in many production activities like industries and small scale businesses. We
are observing many businessmen and women in many places. The government has
established Export Processing Zones (EPZ). The act to establish EPZ was enacted
in April 2002 and became effective in March 2003. The main objectives of EPZ
are to attract and promote investment for export, increase foreign exchanging
earnings and increase employment opportunities. These aimed at attracting and
encouraging the transfer of technology and promoting the processing of local
raw materials for export.
Currently, eight companies have been licensed as EPZ developers (two in
industrial parks, six in single factory units), ten licensed as EPZ operators,
five in textiles/ garments, one in mineral processing/jewellery, one in fruit
processing, three in reconditioning mechanical, electrical and electronic
devices.
Main sectors for EPZ investment are textiles, agro-processing, leather
processing and manufacture of leather products. Others are fish processing,
lapidary (gold, diamond and gemstones, including the famous Tanzanite), wood
products, electrical appliances, and information and communication technology
(ICT). This will solve the problem of unemployment, raise the GDP of our
country and reduce the rate of poverty.
In Tanzania, agriculture is the backbone of our economy. With the
introduction of the policy “Kilimo Kwanza”, the number of people involved in
this sector will increase. New labour force involved in farming will be
utilized accordingly; this will solve the problems of malnutrition and increase
life expectancy.
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| Poverty |
FACTORS FOR ECONOMIC DEVELOPMENT
Economic development is the change or increase in the economic growth and
the distribution of the increased goods and services among the population. For
production to increase there must be land, labour, capital, infrastructure,
entrepreneurship, technology, education and good governance.
1. Land
Land is anatural resource which includes the surface of the earth, lakes, rivers and forests. It also includes mineral deposits below the earth. Land provides space where production can take place. Industries that depend on land include all extractive occupations such as farming, mining, quarrying and fishing. All these economic activities contribute a lot tothe national income. Land is a valuable factor. The value of land depends on location and fertility. The value of land may depend on what one is going to use it for. For instance, land in Tanzania is valuable to agriculturists and those who want to invest in estates, while in United Arabs Emirates land may have no value to an agriculturist but it is valuable to an industrialist who needs oil for industries.
2. Labour
Labour refers tohuman resource, the basic determinant of which is the nation's population. It is any mental (intellectual) or physical efforts of human beings made for any material benefit. Labour is the primary factor of production. It is labour that organizes the other factors of production. Labour is an important factor of production because it utilizes other natural resources that are available in production. Without labour, land and capital, nothing can be produced. It supervises the production of commodities. It applies technical know how in the production process.
3. Capital
Capital means all man-made productive assets. Capital is used to helot produce other materials. Examples of capital are tools, machines and buildings. Capital increases the productivity of land and labour. Money is used to purchase goods for further production.Capital may be classified into fixed and working capital. Fixed capitals include things like farms, machinery, tractors, and factories. Working capital is used in a single act of consumption, for instance raw materials, goods – in – process and fuel. Capital is important in production because it enables investment. Investments include the building of factories, power stations and the making of tools and implements. If more investments are established, production will increase. Thus, economic development will increase.
4. Infrastructure
Infrastructure is the whole web of facilities which need to be in place for productive industry to flourish. Infrastructure includes roads, railways, gas, schools, electricity, telephones, water, sewerage systems and others. Infrastructure is important foreconomic development. The goods produced have to be transported from the production place to the marketing area. If supply will be low then sales will not be good. Telephones are important to reduce movement of labour during the marketing process. Roads must be passable throughout the year. Poor infrastructure leads to poor development.
5. Entrepreneurship, Land
labour and capital need to be organized in order to produce. The person who organizes the business is known as an entrepreneur. An entrepreneur is a person who is responsible for the profit and loss of the business. He/she is the risk taker. An entrepreneur is important in economic development because he or she provides the funds necessary to bring together the other factors of production. The entrepreneur has to employ labour, buy or rent land and arrange capital. He or she bears the risk of the business. Entrepreneurs make some important decisions regarding the business like what to produce, where to locate the enterprise, and decide on the type of the business organization which may be a partnership or a corporation.
6. Technology
Technology is the way people use resources to meet their needs and wants. This includes tools, machines, materials, techniques and the process used to produce goods and services to satisfy their needs. Technology is composed of hardware, software and technical know –how. Hardware is the physical structure and logical layout of equipment or machinery that is used to carry out the required needs. Software is the knowledge of how to use the hardware in order to carry out the required needs. Technical know-how is the learned or acquired skills.The level of output of a firm depends on the quality and quantity of inputs in the existing state of technology.
When technology is high, production increases. The level of production in Tanzania is low due to poor technology. For instance in agriculture, despite having fertile and vast land, we cannot produce enough food to satisfy our needs and get surplus for export because of the poor technology we are using in production.In the mining sector, foreign investors have been invited to extract our wealth because we do not have appropriate technology.The availability of technology affects the rate of growth. It increases the productivity of capital and labour and the creation of new products. Lack of or technology causes poor production of goods and services and underdeveloped.
7. Education
Education is a vital aspect in production. The quality of labour is a major source of potential growth. Efficiency of labour depends very much on education and training.A worker must have basic skills of reading and writing. They are important to the functioning and productivity of an economy. Developing countries have made a huge effort to provide university Primary Education for all children.Education is very important in the production process, because it reduces the expenditure on the foreign labour. It improves the efficiency of human labour. In Tanzania, the education system trains job seekers rather than job creators. This has led to massive unemployment among the educated people in the country. One of the reasons is that there is low rate of industrial expansion and agricultural modernization.
8. Good governance
Governance refers to the exercise of power of the state in managing the country's social and economic resources. It also relates to accountability, rule of law, transparency and citizen participation. The government is responsible to see that there is peace in the country so that people perform their duties harmoniously. If there is no political stability in the country, the level of production will decrease.The government plays a vital role in economic development. It has to provide a conducive environment to the citizens to engage in production.
The government establishes policies that will favour people to invest. The government should encourage people to participate in economic activities by supporting them financially.The government must enact good policies which will favour the workers in terms of good salaries and a favourable working environment. It should also create favourable conditions for the functioning of markets, operation of private firms, employment of civil society and community-based organizations in the country.
Importance of Each Factor of Economic Development
1. Land; Land provides space where production can take place. Industries that
depend on land include all extractive occupations such as farming, mining,
quarrying and fishing. For instance, land in Tanzania is valuable to
agriculturists and those who want to invest in estates, while in United Arabs
Emirates land may have no value to an agriculturist but it is valuable to an
industrialist who needs oil for industries.
2. Labour; Labour is the primary
factor of production. It is labour that organizes the other factors of
production. Labour is an important factor of production because it utilizes
other natural resources that are available in production. Without labour, land
and capital, nothing can be produced. It supervises the production of
commodities. It applies technical know how in the production process.
3. Capital; Money is used to purchase
goods for further production.Capital may be classified into fixed and working
capital. Fixed capitals include things like farms, machinery, tractors, and
factories. Working capital is used in a single act of consumption, for instance
raw materials, goods – in – process and fuel.Capital is important in production
because it enables investments. Investments include the building of factories,
power stations and the making of tools and implements. If more investments are
established, production will increase. Thus, economic development will
increase.
4. Infrastructure; The goods
produced have to be transported from the production place to the marketing
area. If supply will be low then sales will not be good. Telephones are
important to reduce movement of labour during the marketing process. Roads must
be passable throughout the year. Poor infrastructure leads to poor development.
5. Entrepreneurship, Land, An entrepreneur is important in economic development because he or
she provides the funds necessary to bring together the other factors of
production. The entrepreneur has to employ labour, buy or rent land and arrange
capital. He or she bears the risk of the business. Entrepreneurs make some
important decisions regarding the business like what to produce, where to
locate the enterprise, and decide on the type of the business organization
which may be a partnership or a corporation.
6. Technology; When technology is high,
production increases. The level of production in Tanzania is low due to poor
technology. For instance in agriculture, despite having fertile and vast land,
we cannot produce enough food to satisfy our needs and get surplus for export
because of the poor technology we are using in production. In the mining
sector, foreign investors have been invited to extract our wealth because we do
not have appropriate technology.The availability of technology affects the rate
of growth. It increases the productivity of capital and labour and the creation
of new products. Lack of or technology causes poor production of goods and
services and underdeveloped.
7. Education; .A worker must have basic
skills of reading and writing. They are important to the functioning and
productivity of an economy. Developing countries have made a huge effort to
provide university Primary Education for all children. Education is very
important in the production process, because it reduces the expenditure on the
foreign labour. It improves the efficiency of human labour. In Tanzania, the
education system trains job seekers rather than job creators.
8. Good governance; If there is no political stability in the country, the level of production
will decrease. The government plays a vital role in economic development. It
has to provide a conducive environment to the citizens to engage in production.
The government establishes policies that will favour people to invest. The
government should encourage people to participate in economic activities by
supporting them financially.
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| Infrastructures |
THE ROLE OF FINANCIAL INSTITUTIONS IN ECONOMIC
DEVELOPMENT
Financial institutions are organizations which deal with financial
services, advice, assistance or support to individuals, companies and the
public at large. They are established by the public and registered by the
authorities. Financial institutions may be private or the publically owned. The
types of financial institutions found in Tanzania are banks, insurance companies,
and social security institutions. Others are loan-giving institutions and,
savings and credit cooperative societies (SACCOS).
Banks; A bank is an organization
that provides financial services like storingand lending money to people or
institutions. In Tanzania, there are two main types of banks, namely Central
Bank and Commercial Banks.
Central bank; The Central Bank of
Tanzania (BoT) was established following the decision to dissolve the East
African Currency Board (EACB) and the establishment of separate central banks
in Tanzania, Kenya, and Uganda. In December 1965, the National Assembly passed
the bill of the establishment of the Bank of Tanzania. The Bank was opened by
the first President of Tanzania, the Late Mwalimu Julius K. Nyerere, on 14th
June, 1966.
The central bank is a national financial heart. The
bank is independent from direct government influence when carrying out
desirable monetary policies aimed at stimulating economic activities in the
economy. The Central Bank of Tanzania carries out its responsibilities in close
cooperation with the government, and in particular the Treasury which is
primarily concerned with the financial policies of the government. The head is
BoT is the Governor, who is appointed by the Presidents of the United Republic
of Tanzania.
The
Role of Different Financial Institutions in Economic Development
The Bank of Tanzania has important subsidiary central banking functions.
The bank has the sole right to issue notes and coins in Tanzania for the
purpose of directly influencing the amount of currency in circulation outside
banks, thereby providing the economy with sufficient but if possible non-
inflationary liquidity.
The Functions of the Central Bank of Tanzania in
Economic Development
The central bank is a bankers’ bank. This function includes the acceptance
of deposits to act as prudential reserves for these banks (that is the minimum
reserves), the willingness to discount commercial and government paper, and the
commitment to act as lender of last resort to these banks. It also involves the
provision of central clearance facilities for inter-bank transactions.
The central bank is the banker and the fiscal agent ofthe government, and
may be the depository of the government. It makes temporary advances to the
government through its overdraft facility, subject to repayment within 180 days
and through purchases (direct or re-discounting) of treasury bills issued by
the government, which mature not later than 12 months from the date of issue.
The total amount outstanding at any time of advances made in this manner shall
not exceed one eighth the average budgeted revenues of government (average of
the actual collected revenues of the previous three fiscal years, excluding
loans, grants, other forms of economic aid, and all borrowing, whether short-or
long-term).
The central bank may advise the government on any matter relating to its
functions, powers, and duties. It may also be requested to advise the
government on any matter related to the credit conditions in Tanzania or any
proposal, measures, and transactions relating thereto.
The central bank is the depository of the official external assets of
Tanzania, including gold and foreign currency reserves. Guarding international
reserves may imply the determination of buying and selling rates of gold and
foreign exchange in foreign exchange markets and /or the buying and selling of
reserve assets for the purpose of sustaining the national currency’s external
value. It also includes reserve management, with a view to the prudential
investment of the funds, with due regard to safety, liquidity and profitability
and external debt management.
The central bank is the supervisor of banks and financial institutions. In
general, this activity involves ensuring that commercial banks and other
financial institutions conduct their business on and a sound prudential basis
and according to the various laws and regulations in force. It includes the
supervision of banking conduct and the licensing of financial institutions.
According to the banking and Financial Institutions Act of 1991, and the
new BoT Act, the main responsibilities of the Bank of Tanzania are:
1. Implementation of prudential controls concerning
capital adequacy, liquidity, concentration of credit and risk diversification,
asset classification and provisioning, and prohibited activities.
2. Licensing of banks and financial institutions.
3. Facilitation and monitoring of Deposit Insurance
Fund, the purpose of which is the protection of small depositors.
4. Modification and monitoring of the minimum
reserve requirements and foreign exchange exposure.
The central bank promotes financial development. This refers to the
establishment of an effective financial system, with the aid of which financial
transactions minimum amount of cost and time involved. In this connection, the
central bank has to be a facilitator of advanced clearing and transfer systems.
It also implies that the necessary banking services, as for example deposit
facilities and loan facilities, are made available. Included here is also the
availability of certain specialized institutions, which could be represented,
for example, by an industrial development bank and/or an agricultural
development bank and micro-finance institutions, and the facilitation of a money
market, a capital market, and a foreign exchange market.
Commercial Banks
Commercial banks are established for the purpose of earning profit through
accepting savings, and utilizing these savings of their customers to extend
loans and advance on which they charge interest. These banks attract the public
to deposit by giving interest rate on those deposits once made with them. All
the commercial banks are controlled by the Central Bank of Tanzania (BoT).
Some of the commercial banks operating in Tanzania are National Bank of
Commerce (NBC), National Microfinance Bank (NMB), Tanzania Investment Bank
(TIB), Akiba Commercial Bank (ACB), Standard Chartered Bank (SCB), Stanbic Bank
(SB), Habib African Bank (HAB), Diamond Trust Bank (DTB), Exim Bank (EB) and
Cooperative Rural Development Bank (CRDB).
The Functions of Commercial Banks in Economic Development
The following are some of the functions of commercial banks in economic
development:
1. Advise their customers on issues concerning
investment, trade and how to run them.
2. Act as trustees, and can also keep valuable
documents like wills, certificates and gold. Hence they ensure safe custody.
3. Provide foreign exchange to customers and help
their customers in carrying out foreign trade.
4. Offer the facility of standing order where they
make regular payment to a customer’s creditor on behalf of insurance premium
and electricity bills.
5. Facilitate withdrawal of money on current
accounts any time by the use of a cheque.
6. Offer bank draft facility to different persons
in the economy, especially the traders.
7. Extend loans to several individuals and
companies that are engaged in agriculture, ranching, mining, industry and
trade. In so doing, the economy of a country grows.
8. Facilitate deposits of money. The commercial
banks pay interest rates on the deposits.
Condition and
Procedures for Getting Services from Each Financial Institution
There are common conditions and procedures for getting services from the
commercial banks. Any person maybe a member of any bank he or she wants to
join. A person has to take an introductory letter from his or her employer or
from the local government officials where he or she lives. He or she will
present the letter to the authority concerned in the bank. A special form will
be given for filling in his or her particulars and the type of account he or
she prefers. The applicant must provide the name of a referee. When the bank
has approved the application it will open an account for its new customer. The
customer will be given an account number. There are various types of accounts
such as savings account, current account and fixed deposit account.
The customer may take a loan as per bank regulations. The purpose of a bank
loan is to provide the borrower with a lump sum of money to facilitate various
undertakings. To get a loan a person will make a formal application to the
bank. He or she might be interviewed by the manager. The manager has the
authority of deciding whom it is safe to lend to. When asking for the loan from
the bank, the bank may ask for collateral security. It is something given by
the customer to guarantee the payment of the loan, the customer would be
required to repay the loan by regular installments over an agreed period of
twelve, eighteen, twenty-four or thirty six months.
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| Bank |
The Strengths
and Weaknesses of Each of the Financial Institutions
Strengths of commercial banks
Commercial banks have the following strengths in their contributions over
the economic development of the country. They provide
1. Easy access of services from the automated
Teller Machines (ATM). This makes it easier for customers to access the bank
services all the time.
2. Security to their customers.
3. Investment advice, management of investments,
buying and selling of investments.
4. Safe custody of valuables (night safes).
5. Cash dispensers.
6. Loans to their customers who want to run
businesses, build houses, and buy cars, for improving their living standards.
Weaknesses of commercial banks
Apart from those mentioned strengths of commercial banks, there are some
weaknesses too, including:
1. Loans repayment
interest rate is high. Many people are discouraged fro
taking loans because of high interest rate. For instance, some banks chargeup
to 36% interst rate.
2. Bureaucracy in taking
loans from the banks. The filling in the application
form and the maturity of the loan takes a lot of time.
3. Referees and
collateral security is a hindrance to many customers. Due to this requirement, not everybody can get loans.
4. Low accountinterest
rates. Owners of the accounts in the banks are paid little interest
annually. This discourages people to deposit their money in commercial banks.
SAVINGS AND CREDIT COOPERATIVE SOCIETIES (SACCOS)
These are organized groups in which members contribute capital through
savings. The money collected from members is used to open various ventures and
profits obtained used to pay interest to the saver. Members can borrow money
and return it with an interest within the agreed time. This might be six,
twelve, eighteen or twenty-four months.
In Tanzania, SACCOS are developing and becoming very popular. Different
people including workers have established SACCOS for the purpose of raising
their living standards and eradicating poverty. Membership of the SACCOS is
voluntary. The members know each other and conduct meetings regularly. In fact,
it is family of its kind.
Principles of SACCOS
SACCOS members are bound with the following principles:
1. All members get fixed interest on their capital contributed.
2. They get dividends according to their
contribution annually.
3. Members have equal voice each has one share one
vote.
4. If one wants to withdraw his or her membership
from the society, his/her money is refunded after submitting his/her letter of
resignation.
5. Leaders are elected in a democratic way.
Importance of SACCOS in economic development.
Members can take loans for investment in various economic activities which
improve their living standards as well as the national income. They will be an
able to satisfy their daily needs such as paying school fees for their children
and constructing houses. Members can also borrow money for starting businesses.
Conditions and procedures for getting services from
SACCOS
SACCOS provide a number of services to their members, like banking
services. Any member who deposits his savings and assets can withdraw them in
time of need. SACCOS provide loans to their members. Money given as loans is
collected from the members of that SACCOS. SACCOS may take loans from other
banks or buy shares from different firms and companies. Through their shares
they get dividends, which are usually shared among the members according to
their contributions. To get any services from SACCOS one must be a member.
There are forms given to the applicants to fill in how much they want to
borrow and how they will refund. The applicant must be sponsored by other
members. He or she should list the property which will be confiscated in case
he or she fails to pay back the loan. There is a committee which goes through
each applicant’s request, examining the behaviour of the member carefully to
find out if he or she can reimburse the loan. The committee then concludes
whether to give or not to give the loan. Loans are utilized for various
purposes such as construction of houses, starting a business, emergencies,
paying school fees, livestock keeping and buying fishing implements.
Strengths of SACCOS
SACCOS have the following strengths in their contributions to the economic
development of the country.
1. They give loans to their members.
2. They provide education of entrepreneurship that
is how people can start business.
3. They create employment opportunities for the
members.
4. They establish various social and economic
ventures such as purchasing land or building a dispensary.
5. They provide financial assistance to members who
are widows.
Weaknesses of SACCOS
Apart from those mentioned strengths, SACCOS have the following weaknesses:
1. There is bureaucracy in processing the loans.
2. There is favoritism in the provision of loans;
other people are denied loans without genuine reasons.
3. There are not enough educated personnel to run
SACCOS.
4. There are various conflicts in many SACCOS
between the members and their leaders.
5. Funds are not properly managed by the members.
Many SACCOS are dormant. There are members who take loans and do not pay
them back hence causing suffering to those who deposited their money in the
society.
INSURANCE COMPANIES
Insurance companies are financial institutions that deal with managing risk
of a firm or business, people and their properties. There are mainly three
types of insurance, namely life insurance, health insurance and liability
insurance.
1. Life insurance is a kind of insurance that
guarantees a specific sum of money to a designated beneficially upon the death
of the insured, or to the insured if he or she lives beyond a certain age.
2. Health insurance is an insurance against
expenses incurred through illness of the insured.
3. Liability insurance insures property such as
automobiles and professional/ business mishaps.
In Tanzania there are many insurance companies. Some of them are national
Insurance Corporation (T) Ltd, Reliance Insurance Co.Ltd, Zanzibar Insurance
Corporation, Jubilee Insurance Co.Ltd, Tajack Insurance Co.Ltd and Prudential
Insurance.
Importance of Insurance in Economic Development
The following are some of the importance companies in economic development:
1. They restore loss because they take you back to
the condition you were in before the disaster.
2. They cover disasters that might affect the
individual (protection).
3. They reduce losses from auto accidents on the
roads and fire. In running a business or any production activity mishaps may
occur, thus it is advisable to insure against uncertainties that might occur.
Strengths of Insurance Services in Tanzania
Insurance services have the following strengths in their contributions to
the economic development of the country.
1. Many clients have been compensated in case of
loss of poverty.
2. In other types of insurance, for instance life
insurance, the insured is paid back his or her contributions with interest at
the end of the contract.
Weaknesses of Insurance Services in Tanzania
Apart from those mentioned strengths of insurance services, there are some
weaknesses too, including:
1. Insurance services are not accessible in rural
areas.
2. There is a need to educate Tanzanians on the
importance of insurance services.
3. Many insured people complain that insurance
companies delay to compensate them in case of a loss.
4. The procedure to get compensation takes a long
period of time.
5. There are unfair methods applied by some of the
insurance companies to avoid full and timely compensation for the insured asset.
SOCIAL SECURITY INSTITUTIONS
Tanzania, like many other countries in the developing world, has strong
informal social security and formal social security systems. Informal social
security systems are such as Village Community Banks (VICOBA) UPATU, UMASIDA
and VIBINDO. These are locally formed by people in their areas or community for
the aim of helping each other in socio-economic issues.
The formal social security systems found in Tanzania are the National
Social Security Fund (NSSF), Parastatal Pension Fund (PPF), National Health
Insurance Fund (NHIF), Local Authorities Provident Fund (LAPF) and Public
Service Pension Fund (PSPF).
NSSF offers social security coverage to employees of the private sector and
non-pensionable parastatal and government employees. PSPF provides social security protection
to employees of the central government under pensionable terms, while PPFoffers social security coverage to
employees of both private and parastatal organizations. LAPF offers social security coverage to employees
of local government and the NHIF offers
health insurance coverage to pensionable employees of the central government.
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| National Health Insurance Fund (NHIF) |
THE SOCIAL SECURITY REGULATORY AUTHORITY (SSRA)
Social Security Regulatory Authority (SSRA) is a regulatory and supervising
body of the functions of all social security schemes in the country. It
wascreated under the Social Security Regulatory Authority Act, 2008, which
President Jakaya Mrisho Kikwete assented to in June 2010 and which became
operational in September 2011. The authority has the role of ensuring the funds
are sustainable, project interests, increase coverage and reduce the burden to
the government.
Functions of Social Security Regulatory Authority
(SSRA)
The following are some of the functions of Social Security regulatory
Authority in economic development:
1. Register all managers, custodians and social
security schemes.
2. Regulate and supervise the performance of all
mangers, custodians and social security schemes.
3. Issue guidelines for the efficient and effective
operations of the social security sector.
4. Protect and safeguard the interests of members.
5. Create a good environment for the promotion and
development of the social security sector.
6. Advice the minister concerned on all policy and
operational matters relating to the social security sector.
7. Adopt the conventional broad guidelines
applicable to all managers, custodians and social security schemes.
8. Monitor and review regularly the performance of
the social security sector.
9. Initiate studies, recommend, coordinate and
implement reforms in the social security sector.
10. Appoint an interim administrator of schemes,
where necessary.
Strengths of Social Security Institutions
Social security institutions have the following strengths in their contributions
over the economic development of the country.
1. Provide security to their member’s
contributions.
2. Doing business by giving loans to firms,
associations, and individuals with interest.
3. Invest in the construction of houses for
accommodations in town and sell some of them to individuals.
4. They give benefits to the members when they
retire.
5. Assist members when in trouble such as sickness
or treatment to expectant mothers.
6. Refund expenses incurred during the funeral of
their member to the family concerned.
Weaknesses of Social Security institutions
Apart from those mentioned strengths of social security institutions, there
are some weaknesses too, including:
1. Poor record-keeping as some members sometimes
complain that their contributions are not shown on the respective records.
2. Delays when giving services to the members. It
takes about six months to get benefits when a member retires.
3. Education to the members is inadequate because
most of them are now well informed about their rights and contributions.
4. Some employers do not provide the correct
contributions to the concerned social security scheme.
5. Some social security institutions are not giving
loans to the members especially when a child wants to go to school and other
development activities.
6. Money value always fluctuates which causes a
negative impact to members since it affects their purchasing power.
LOAN – GIVING INSTITUTIONS
There are several financial institutions like banks, finance companies and
private money lenders, which provide loans to people. The loan taken will
depend on the purpose for which it is to be taken. There are various types of
loans which are available like commercial lending, house-building loans, home
financing and mortgage financing.
The financial resources of a person help him or her to ascertain whether it
is a rational decision to take a loan. The loan should be taken at reasonable
interest rates. The person needs to compare the interest rates from multiple
lenders. The repayment of loans is dependent on the prevalent interest rates of
the market.
The time of the actual repayment of the principal amount should be decided
in advance. A favourable adjustable rate protects a person from being in
trouble in future. Any lending agency will be interested to know your
creditability, if you will be able to pay monthly installments or not.
Strengths of Loan Institutions
Loan-giving institutions have the following strengths in their
contributions to the economic development of the country.
1. People who take loans from these institutions
establish petty businesses which raise income to their families.
2. Education provided is free of charge to all
members. They are trained on how to invest and spend money wisely.
3. When members sit together and train, they form
unity among themselves. They sit in groups of five, six, seven or ten.
Weaknesses of Loan-Giving institutions
1. Apart from those mentioned strengths of
loan-giving institutions, they loans and put their guarantors in trouble.
2. The interest imposed on the loan is very high.
3. The loans given are small in quantity and cannot
finance a large investment.
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| Bank |
THE ROLE OF GOVERNMENT IN ECONOMIC DEVELOPMENT
The government formulates policies which aim at attaining economic development.
The government creates good conditions for all sectors of the economy. For
instance, in agriculture, the government provides storage facilities for crops
produced in rural areas.
The Role of
Government in Economic Development
1. The farmers on modern methods of production and how to look after their
harvests. It also provides subsidized pesticides, fertilizers and equipment
such as sprayers, hoes and power tillers in rural areas. The government
encourages farmers to join cooperative societies and gives them loans.
2. The government encourages society to have a culture of saving and
investing. The culture and habit of saving and investing generates wealth for
individuals, households, communities and the nation, in the same vein, a
culture of wealth creation and accumulation for development must also be
reinforced by a culture of maintenance to prevent unnecessary loss of capital
stock.
3. The government promotes a broad human development strategy; it
encourages the society to upgrade itself and improve its productivity. The
government creates an incentive system that encourages and rewards individuals,
groups, and firms to embrace initiative, creativity, innovation and excellence.
This transformation is reflected in the education system, training
institutions, and recruitment and promotion process.
4. The government provides a good environment for actors to effectively
harness domestic resources in order to attain competitiveness in their diverse
economic activities. Competence and competitiveness, as driving forces, are
realized through sound macroeconomic policies, adequate and reliable
infrastructural development, quality education, effective utilization of
domestic resources, higher productivity and strengthening of the capacity to
effectively anticipate and respond to external changes. The government also has
a duty of providing security and favourable environment for investors in the
country.
Effectiveness of
the Government in Economic Development
The government plays an important role in economic development. For
instance in the 1980s the government adopted the policy of trade
liberalization, which led to the mushrooming of commercial activities in
Tanzania. Many local and foreign investors started investing in this sector.
Since then, the commercial sector has been expanding tremendously.
Areas where the government has been ineffective in
economic development
Apart from the mentioned effectiveness of the government in economic
development, there is some ineffectiveness too. Some of this ineffectiveness
is:
1. Signing weak contracts with investors which do
not consider the national interests, for instance mining contracts and
privatization of Tanzania railway Cooperation (TRC) to Tanzania Railway Limited
(TRL).
2. Poor tax collection where the government loses a
lot of money due to unnecessary tax exemptions and tax avoidance.
3. Failure to control inflation. The increase in
inflation is attributed to a combination of exogenous shocks. Some of the
exogenous shocks include the hike in global oil and flood prices, the decrease
in demand and price of primary exports in the world market. Other shocks
include extreme weather conditions, which adversely affect agricultural produce
and power supply, and consequently inhibit the growth of other sectors of the
economy.
4. The poor transport system affects the economic
development of Tanzania. For instance, traffic jams in cities is due to poor
infrastructure and city planning.
5. Inefficiency of power supply. The government has
failed to make proper use of the available waterfalls, natural gas, coal and
uranium to solve the power problems in the country hence affecting economic
production in various sectors like industries.
6. Lack of good governance and accountability shows
the inefficiency of the government in spearheading economic development. There
has been rampant corruption in Africa which hinders economic development.
7. Dependence on foreign aid to finance the budget
of the nation affects the economic development of the country especially where
the aid is not given on time. For instance, the government prefers the General
Budget Support (GBS) as one of the sources of external financing modalities.
The GBS contributed Tshs.4 billion in 2008/2009 budget.
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| Building Infrastructures |
THE ROLE OF THE PRIVATE SECTOR IN ECONOMIC DEVELOPMENT
The private sector in an economy is formulated under government policies
but owned individual or privately. Although the private sector provides
services to the public, it aims at maximizing profits. In a private sector
there are two components, namely the formal and the informal sectors.
Components of
the Private Sector
The private sector in an economy is formulated under government policies
but owned individual or privately. Although the private sector provides
services to the public, it aims at maximizing profits. In a private sector
there are two components, namely the formal and the informal sectors.
1. THE FORMAL SECTOR
The formal sector encompasses all jobs with normal hours and regular wages,
and is recognized as income sources on which income taxes must be paid. This
sector is composed of all those private firms established legally by the
registrar of companies. Their businesses are legally performed, opened at an
area known publicly. They pay tax and other duties to the government.
Examples
of businesses undertaken in the formal sector are industries, agriculture,
commerce and trade, transport and communication. The owners of these sectors of
the economy follow rules and communication. The owners of these sectors of the economy
follow rules and regulations established by the government.
Importance of the formal sector in economic
development
The formal sector plays a significant role in economic development.
1. Provides employment opportunities to skilled,
semi-skilled and unskilled labour. People are employed according to their
skills in a particular job. Thus, their living standard increases.
2. Helps to mobilize aid from foreign countries and
international organizations like the International Monetary Fund (IMF) and the
World Bank.
3. Increases income to the country as owners of the
firms pay tax to the government. The tax is utilized by the government in
various development projects in the country.
4. Brings in foreign exchange, skilled power and
capital.
5. Encourages competitions because of the existence
of the formal sector.
6. Creates availability of goods and services which
are of good quality due to competition.
7. Provides support to the people who have been
affected by disasters.
2. THE INFORMAL SECTOR
The formal sector has many names; some of them are invisible sector,
non-planned activities and unstructured sector. Others are informal economy,
people’s economy, one-person enterprise and urban subsistence sector.
The informal sector or economy as defined by governments, scholars or bank
is the part of an economy that is not taxed, monitored by any form of
government, or included in any Gross National Product (GNP). Examples of people
who engage in the informal sector are water sellers, street vendors, buckers
and shoe shiners.
In developing countries, around 70% of the potential working population
earns its living through the informal sector. They define the sector as that
type of sector where people earn a living self-employment and they are not on
anyone’s payroll. Most of them live and work in this sector not because it is
their wish or choice but because they have no chance of being hired by an
employer from the formal sector.
In describing this sector, one should bear in mind that the formal economy
is not a deviation of the formal economy. The sector shows the initiative of
people who have failed to get formal employment engaging in various economic
activities to earn a living.
Characteristics of the informal sector
The formal sector involves economic activities that are not regulated by
labour or taxation laws or monitored for inclusion in the Gross Domestic
Product (GDP) estimates.
There are two types of the informal sector activities, namely coping
strategies (survival activities) and unofficial earning strategies (illegality
in business). Coping strategies include causal jobs, temporary jobs, unpaid
jobs, and subsistence agriculture.
Importance of
the Informal Sector in Economic Development
Though most of the activities in this sector are performed illegally, they
contribute to the economic development of our country. The following is the
importance of the informal sector in economic development:
1. Provides jobs which reduce the unemployment
problem
2. Generates income for individuals linked to these
activities.
3. Helps to alleviate poverty.
4. Bolsters entrepreneurial activity.
5. Helps to bring commodities to the customer‟s
doors. This helps those customers who stay away from the city center.
6. Make easier the supply of goods and services
since the exchange takes place on the same day.
7. Contributes income to the local government.
Problems Facing
the Informal Sector
Apart from the mentioned importance of the informal sector in economic
development, there are some problems too. Some of those problems are:
1. Many jobs are low-paid and the job security is
poor.
2. There are no proper places set for them to
conduct their businesses.
3. Lack of transportation means. For instance,
“Machinga” guys walk long distances to sell their goods.
4. Some of the businesses do not address the issue
of hygiene.
5. Lack of enough capital which limits the
expansion of the businesses.
6. Lack of warehouse for traders to keep their
stock or commodities.
7. Lack of creativity among the members due to low levels
of education.
8. They are not recognized by the authorities and
therefore there is no freedom in doing their businesses.
9. No fringe benefits from institutional sources
because the activities are not recognized.
10. Absence of trade union organization.
Ways of
Improving the Informal Sector
The informal sector may be improved in several ways. Some of these include
the following:-
1. The government should recognize the sectors by
registering all the owners of these businesses.
2. Proper places should be located where people can
operate their activities comfortably
3. People should be educated on how to conduct
their activities properly and the importance of cooperation and unity. If they
are united it will be easier for them to get loans from financial institutions.
4. Health officers must visit these areas to
inspect and educate people on all issues relating to health.
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| Informal Sector |
SOCIAL DEVELOPMENT AND SOCIAL SERVICES
Social development is the improvement of the welfare of the people in the
community. It deals with the development in social, cultural and political
aspects of the society. Social development is the process of improving people’s
living standards, reducing poverty and unemployment, enabling people to invest
in profitable ventures, widening trading opportunities and reducing
inequalities among the people.
Meaning of
Social Development and Social Services
Social development is a
long-term process. There are a number of factors that must be considered to
achieve social development. People should get a balanced diet, good shelter and
health care. The government also has to provide important services which will
facilitate them in production. Such services are banking, insurance, loan
facilities and social security protection. These will support production of
goods and services which will stimulate high levels of living, high income,
more employment opportunities and better education.
Social services are those services which
are in a form of consumption. They include education, housing, insurance,
health, pension schemes, and cultural affairs. Sports, games and entertainment.
From these services, people get satisfaction. These services are provided by
the government through its agencies and the private sectors as well.
It is very difficult to draw a line between social development and social
services because they are closely relate. The third President of the United
Republic of Tanzania, Mr. Benjamin William Mkapa, named them as social hardware
infrastructure and software infrastructure. He meant that social hardware
infrastructure are those services which help directly to improve production in
the country and are usually in a form of investment. These include
transportation and communication, and water supplies for agricultural purposes.
The social-software infrastructures are those services which provide aids to
the services. These include banking and others.
Different Social Services Provided in
Tanzania
1. EDUCATION
SECTOR
The United Republic of Tanzania realizes that equality education is the
pillar of national development, for it is through education that the nation
obtains skilled manpower to serve in various sectors of the national economy.
It is through quality education that Tanzania will be able to create a strong
and competitive economy which can be effectively cope with the challenges of
development and which can also easily and confidently adapt to the changing
market and technological conditions in the region and the global economy.
As at 2011, the structure of the formal education and training system in
Tanzania constituted 2 years of pre-primary education, 7 years of primary
education, 4 years of junior Secondary (ordinary level), 2 years of Senior
Secondary (advanced level) and up to 3 or more years of Tertiary Education.
Specifically, the education system has three levels, namely basic, secondary
and tertiary levels. Basic level includes pre-primary, primary and non-formal
adult education. Secondary level includes ordinary and advanced education,
while tertiary level includes programs and courses offered by non-higher and
higher education institutions.
The Current Education System
The overriding goal of the United Republic of Tanzania is that of
eradicating poverty under the framework of Tanzania Development Vision 2025 and
the Poverty Reduction Strategy 2015. Both of these identify education as a
priority. The Ministry of Education and Vocational Training (MoEVT) therefore
recognized the need to develop the Primary Education Development Plan (PEDP),
2002 -2006, and Adult and Non-formal Education Strategy and implementation Plan
(ANEIP), 2003/04 – 2007/08.
Both the PEDP and ANEIP have been developed within the context of the
Education and Training Policy (1995) and the Education Sector Development
Programme (ESDP 2000). PEDP aimed at providing Universal Primary Education
(UPE). It was expected that all school-age children (7 to 13 years old) would
be enrolled in primary schools by the year 2006. This translates into a total
of 6.5 million children. The key components of PEDP are:
1. Enrollment expansion
2. Quality improvement
3. Capacity building
4. Institutional arrangements
5. Finance and resource allocation.
Those who missed basic education for various reasons are being absorbed
into non-formal education centres under the approved Adult Education/Non Formal
Education (AE/NFE) strategy and plan, developed after five years of experience
in piloting the Complementary Basic Education in Tanzania (COBET) and the
Integrated Community Based Adult Education (ICBAE).
The ANEIP is expected to contribute to the creation of lifelong learning
mechanisms, to improve people’s livelihood and to be used for the creation of
awareness of prevention of HIV and AIDS. ANEIP will also contribute to the
creation of a conducive environment to address gender issues, sustained
socio-economic development, good governance and poverty reduction. The plan targets
to enroll 3.5 million adults and almost a million out out-of school children
and youth.
Secondary education does not currently absorb all primary school-leavers.
In 2002 a total of 497 688 pupils completed Standard VII. Out of 497 688 pupils
only 107 282, which is about 21.7%, were admitted to secondary education in
both public and private schools. The age range in ordinary level secondary
schools is 14 to 17 years and in advanced level it is 18 to 19. In the real
situation, however, there is a wide range of age groups in both ordinary and
advanced levels depending on age at first enrollment in primary schools and
other factors.
Although initial enrollment in primary education is almost equal between
girls and boys, fewer girls than boys complete primary and secondary levels or
attain higher-level education. There are a number of reasons for this
disparity: gender relations, pregnancy at young age, and parental preference
for boys to continue with education.
The
accessibility, quality, efficiency and distribution of education services in
Tanzania.
The Education and Training Policy adopted in a policy for the education
sector reform. The importance of education for Tanzania’s development is also
echoed in the National Strategy for Growth and Reduction of Poverty (NSGRP)
which builds on three pillars: growth and reduction of income poverty ,
improvement of quality of life and social well-being, and governance
accountability.
The main role of the Ministry of Education and Vocational Training (MoEVT)
is so set policies based on accessibility, equality, distribution efficiency.
In addition, the ministry is responsible for improving the education standards
in the country, to systematize school; syllabi and oversee the implementation,
to arrange the format of examinations for primary and secondary schools and
distribution of school necessities and to promote national culture.
In the implementation of the education policy in Tanzania, the government
through the Ministry of Education and Vocational Training (MoEVT) introduced
various programs. Some of those programs are the Primary Education Development
Program (PEDP) and the Secondary Education Development Program (SEDP). The aim
is to improve the education system in the country and increase the enrollment
ratio in schools.
From 1995, communities have played a big role in the establishment of
primary and secondary schools. The community builds schools and the central
government supports it in many ways such as providing teaching materials, books
and teachers. Today about 90% of the schools are community-owned schools.
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| Provision of Education |
Achievement of the Government in the Provision of Education
Following the education sector reforms established by the Tanzanian
government, the following achievements have been observed:
1. Increased gross and net enrollment of boys and
girls, including children with disabilities, in primary schools from 90.5% in
2004 to 99% in 2010.
2. Increased enrollment of orphans and other
disadvantaged children in attending and completing, primary education from 2%
in 2000 to 30% in 2010.
3. At least 50% of boys and girls aged 14 to 17
years had been enrolled in ordinary level secondary schools by 2010.
4. At least 25% of boys and girls were enrolled in
advanced level secondary schools by 2010.
5. Pupils who have passed primary education are
given access to secondary education.
6. The introduction of Information and
Communication Technology studies (ICT) in primary and secondary schools gives
students skill to fit in the modern society.
Problems Facing the Government in the Provision of
Education Services
Despite the achievements registered by the government in the education
sector, the sector is still facing numerous problems, including:
1. Poor resource allocation to the sector. The
education sector has inadequate laboratories, libraries and their equipment,
textbooks and reference books for students and teachers.
2. Lack of qualified teachers.
3. The number of teachers is less compared to the
number of students enrolled into Tanzanian schools.
4. Low salaries to the teaching profession which
forces many people to leave the profession.
5. Unavailability of electricity in remote areas
which discourages teachers to go to the villages once employed. As a result,
they decide to find employment in private schools.
6. Lack of important school infrastructures like
classes, desks, offices, toilets and teacher’s houses.
7. Transport problems for both students and
teachers from their homes to schools, making them waste a lot of valuable time
while on transit.
8. Lack of in-service training for the teachers.
2. HEALTH SECTOR
For a period of almost fifty years, health services delivery has been
largely done by the government, with a limited number of private health
institutions especially in large towns or cities of the country. After
independence, health care facilities were redirected towards rural areas and
free medical health services were introduced except for Grades I and II. In
1977, private health services for profit were banned under the Private Hospitals
Regulation Act, 1977. This act had negative implications on health services in
the country. However, after a series of major economic and social changes, the
government adopted a different approach to the role of the private sector.
New were developed that favoured the private sector. The importance of the
private sector in health care delivery was further recognized with an amendment
to the Private Hospitals Regulation Act, 1977 which resulted into the
establishment of the Private Hospitals Regulation (Amendment) Act, 1991.
Following this act, individual qualified medical practitioners and dentists
could now manage private hospitals, with the approval of the Ministry of
Health.
The National Health Policy
The National Health Policy was introduced in the early 1970s in the wake of
the Arusha Declaration 1967. The broad objective of the National Health Policy
was to provide comprehensive basic health services equitably to the whole
population. Strong emphasis was put on promotion of health and prevention of
diseases rather than curative services. It also called for a shift from
building large hospitals to smaller to smaller health centres throughout the
country. In addition, emphasis was given to training mid-level health workers
to manage these health units.
The government of Tanzania has clear polices on the implementation of
health services to its people. These policies, currently the citizens are
required to share the costs of the services provided in those hospitals.
The specific
objectives of the health services in Tanzania are:
1. To reduce diseases and death so as to raise the
life expectancy of Tanzanians. The government gives more attention to special
groups like children under five years, cold people.
2. To make sure that primary health care services
are available and are offered efficiently to the people.
3. To prevent and control communicable and
non-communicable diseases such as HIV and AIDS, malaria, tuberculosis, diseases
caused by malnutrition, environmental health, and working places as well as
chemical control.
4. To enlighten the citizens about the preventable
diseases in order to know them and find techniques of controlling them.
5. To create cooperation among the public sector,
the private sector, religious organizations and non-governmental organizations
that provide health services.
6. To provide education and increase the number of
professional health workers.
7. To identify, rehabilitate the infrastructure
according to the needs of the disabled, and lay down rehabilitation systems.
8. To evaluate health policies, laws and standards
of giving health services.
Primary Health Care (PHC) Approach
Following the Alma Ata Declaration of 1978, the government adopted the PHC
approach as a means of achieving “Health for all by the year 2000”. The Alma
Ata Declaration defined Primary Health Care as the essential health care based
on practical, scientifically sound and socially acceptable methods and
technology. Under PHC, health services are made universally accessible to
individuals and families, through their full participation and at an affordable
cost.
- Provision of essential health care in all villages
through village workers.
- PHC committees at each level to promote community
involvement and intersect oral collaboration.
- Strengthening health services especially at
district level.
The purpose of primary health is to strengthen the health of the citizens
from the family to national level by involving the citizens themselves. This
includes education, prevention and treatment.
Public Health Education
Public health is mainly concerned with identifying prevailing health
problems and disseminating information about the public methods of preventing
and controlling them. This is an integral part of community involvement in
Primary Health Care (PHC). It is assumed that the health of an individual, the
family and the community at large is dependent upon factors such as
environment, socio-cultural traditions and lifestyles.
Hence, public health education focuses on strengthening and addressing g
issues related to agricultural development, child upbringing, environmental
sanitation and development in general. For instance, school children are a
special target group for health education through the school health program.
Public health education is provided by a variety of methods including mass
media, dissemination of health education materials and through dialogue with
communities.
Public health education is a very important method in offering health
services. It involves communication technology and sends messages to the
individuals, families, and the society in order to reduce diseases in the
society. The government uses a variety of technologies like the media,
signboards, fliers, journals, books and websites.
Environmental Health and Hygiene
Our health depends very much on how our environment is properly maintained.
Our land, plants, air, water bodies, buildings and sewage must be well taken
care of. The diseases which attack people are mostly caused by an unhygienic
environment. Our environment may be degraded by many economic activities, such
as the smoke produced form the industries which contaminates the air and
destroys the ozone layer. Waste water from industries which contains chemicals
is thrown into the rivers. Human beings are also affected by water pollution as
they use this water for different purposes.
The accessibility, quality, efficiency and
distribution of health services in Tanzania
The distribution of health facilities has a heavy rural emphasis because
more than 70% of the population lives in rural areas. Plans for the
establishment of health facilities have in the past taken into consideration
the population ratio. However with time this has in some areas been seriously
overtaken by the high population growth rate. The health system and specially
the government’s referral system assume a pyramidal patter of a referral system
recommended by health planners, which is from dispensary to consultant
hospital.
The structure of health services at various levels in the country starts
with the village health service. This is the lowest level of health care
delivery in the country.
They essentially provide preventive services which can be offered in homes.
Usually each village health post has two village health workers chosen by the
village government amongst the villagers and given a short training before they
start providing services.
Dispensary is the second stage of health services. The dispensary caters
for 6000 up to 10,000 people and supervises all the village health posts in a particular
ward. Health centres come after dispensaries. Health centres are expected to
cater for 50,000 people which is the approximate population of one
administrative division.
District hospitals are another important level in the provision of health
services in the country. Each district is supposed to have a district hospital.
District hospitals provide services to an average of 250 000 people. In
Tanzania, almost all districts have districts hospitals. In those few districts
without district hospitals, Faith Based Organization (FBO) hospitals are
designated as district hospitals.
Referral hospitals are the highest level of hospital services in the
country. currently there are four referral hospitals, namely Muhimbili National
Hospital (MNH) which caters for the eastern zone; Kilimanjaro Christian Medical
Centre (KCMC) which caters for the northern zone; Bugando Hospital which caters
for the western zone; and Mbeya Hospital which serves the southern highlands.
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| Muhimbili National Hospital |
THE ROLE OF GOVERNMENT IN THE PROVISION OF SOCIAL
SERVICES
It is the duty of the government to promote the welfare of its people. In
Tanzania particularly, the government is trying its level best to improve the
provision of social services. There are a number of economic and social sector
reforms and policies which the government has implemented. These are like
Primary Health Service Development Plan. The plan intends to minimize the
problem of human resource shortage through advocacy for increased funding and
reallocation of staff for optimum utilization.
Meaning of
Social Development and Social Services
The National Healthy Policy of 2007. The healthy policy vision is to have a
healthy community, which will contribute effectively to individual development
and the country as a whole. The mission is to facilitate provision of basic
health services, which are proportional, equitable, of high quality,
affordable, sustainable and gender sensitive.Government provision of health,
education and water services has consistently been rated as the key public
priority. The government plays a vital role in the provision of social
services. The following are the roles:
The Role of the
Government in the Provision of Social Services
Government provision of health, education and water services has
consistently been rated as the key public priority. The government plays a
vital role in the provision of social services. The following are the roles:
1. To make policies which support private and non-governmental institutions
in the provision of social services
2. To construct and maintain the transportation system.
3. To distribute teaching and learning materials to schools.
4. To distribute important facilities to hospitals and other areas where
health services are provided.
5. To educate Tanzanians on environmental preservation so that water sources
are not polluted.
6. To train the required personnel who will assist in the provision of
social services. Examples of such personnel are teachers; water experts;
railways; road and electrical engineers; doctors and nurses.
7. To train citizens on the best use of those social services and be
responsible. The citizens must realize that social services are for their own
use hence they should protect them
Appraising the role of the government in the provision
of social services in Tanzania.
The government plays a vital role in ensuring that social services provided
to the citizens. Effective access to functioning and well equipped social
services is a prerequisite ofimproving the quality of life and for promoting
the well-being of all Tanzanians. The following are some of the evidences on
the role of our government in the provision off social services to its
people:The government has extended the provision of water in many places in
rural and urban areas. For instance, Kahama, Shinyanga Water Supply Project
from Lake Victoria and the Chalinze Water Supply Project which was implemented
in the year 2001, targeted at supplying water to 105 000 people for the 18
villages by the year 2015.
The Tanzanian government has continued to focus on education provision since
independence. The aim is to address the shortage of skilled national manpower.
In the mid-1970s, a decision was made by the government to introduce Universal
Primary Education (UPE) by 1984. Funding was concentrated on primary education
and secondary school enrolment. The statics for primary enrolment and adult
literacy in the early 1980s were impressive. For instance, the Gross Enrolment
Ratio (GER) in 1980 was 98%.
In the 1980s the government allowed private and voluntary sectors to run
non-governmental schools. The education sector expanded rapidly. Higher
education in Tanzania during the late 19th century was predominantly provided
by the University Of Dares Salaam (UDSM).
The University of Dares Salaam was first established in 1961 as a College
of the University of London. In 1963 it became a Constituent College of the
University of East Africa. In August 1970, it became a national University.
In 1965, Sokoine University of Agriculture (SUA) was established as the
second university in the country. It started as an Agricultural college
offering Diploma training in the discipline of agriculture. The establishment
of this university showed the importance of agriculture in the country. With
the dissolution of the University of East Africa and the consequent
establishment of the University of Dares Salaam (UDSM) in 1970, the College was
transformed into a Faculty of Agriculture of UDSM and thereby started offering
Bachelor of Science in Agriculture.
In 1965, Sokoine University of Agriculture (SUA) was established as the
second university in the country. It started as an Agricultural college
offering Diploma training in the discipline of agriculture. The establishment
of this university showed the importance of agriculture in the country. With
the dissolution of the University of East Africa and the consequent
establishment of the University of Dares Salaam (UDSM) in 1970, the College was
transformed into a Faculty of Agriculture of UDSM and thereby started offering
Bachelor of Science in Agriculture.
1994, the Institutional Transformation Programme was initiated and since
then, there has been a considerable increase in students‟ numbers. Several
other tertiary training institutions have become universities. More recently, a
number of private universities have been opened, mainly run by religious
bodies. Vocational training as also provided in National VocationalTraining
Centres. In 1994, these came under the newly formed Vocational Education and
Training Authority (VETA). VETA colleges offer a wide range of courses.
Since 2001, there has been a dramatic expansion of primary education due to
the introduction of the Primary Education Development Programme (PEDP). In
2002, standard one enrolments increased by 43.1%. The enrolment in primary
school has increased by 5.8% between 2006 and 2010. Gross Enrolment Ratio (GER)
was 106.4% in 2010 and Net Enrolment Ratio was 95.4%, indicating adequate
absorption capacity at primary schools for all school ages (7 to 13).
In 2003, the government embarked on ambitious plans for the expansion of
the secondary education through the Secondary Education Development Programme
(SEDP). All those are the efforts which the government is doing to raise the
level of education in Tanzania, hence eradicating the problem of illiteracy and
unemployment.
The government, in collaboration with other stakeholders, has continued
with the implementation of the Child Health strategic Plan (2005 - 2010) and
the Road Map strategic Plan to accelerate reduction of maternal, newborn and
child deaths. Notable achievements have been recorded. The deaths of children
fewer than five years of age (the probability of dying between birth and fifth
birthday) have continued to decline significantly. The rate declined from 12
per 1000 live births in 2004/ 05 to 91 per 1000 live births in 2007/08 and
thereafter to 811 child deaths per 1000 live births in 2009/10.
The government provides free primary education to the pupils. For instance,
Primary Education Development Programme Phase 2 of 2007 -2011 aims at ensuring
that the objective of providing free pre-primary and primary education is
achieved. The enrolment in primary schools has increased by 5.8 percent between
2006 and 2010. The government also provides loans to students of higher
learning institutions through the Higher Education Students Loan Board (HESLB).
The government provides modern medical equipment and rehabilitation to most
off its hospitals. For instance , general rehabilitation of Muhimbili National
Hospital, Amana, Temeke, Mwananyamala and other regional hospitals in the
country.
The government also provides assistance to health researchers, for instance
Ifakara Health Research Centre. The Government recruits new personnel from
health colleges found inTanzania like Muhimbili College of Health Sciences and
others. It also provides medicine to its health centres through the government
agent, namely Medical Stores Department (MSD).
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| University of Dodoma (UDOM) |
THE ROLE OF THE PRIVATE SECTOR IN THE PROVISION OF
SOCIAL SERVICES
The government of Tanzania recognized effective partnership with the
private sector in the provision of social services in the country. Such
services are education, health, water, electric supply, communication and
transportation. The involvement of the private sectors in the provision of
social services has contributed to the improvement of the quality of life and
promotion of the well- being of Tanzanians.
Religious group, community-based organizations, individual-owned
institutions, non-governmental organizations and private companies are
stakeholders in the provision of social services. After a series of major
economic and social changes the government adopted different approaches to the
role of social services delivery. New policies were developed that looked
favourably in the role of the private sector. For instance, the Private
Hospitals Regulation Act, 1977 which allows the establishment of private
hospitals.
The Role of
Private Sector in the Provision of Social Services
The government of Tanzania recognized effective partnership with the
private sector in the provision of social services in the country. Such
services are education, health, water, electric supply, communication and
transportation. The involvement of the private sectors in the provision of
social services has contributed to the improvement of the quality of life and
promotion of the well- being of Tanzanians.
Religious group, community-based organizations, individual-owned
institutions, non-governmental organizations and private companies are
stakeholders in the provision of social services. After a series of major
economic and social changes the government adopted different approaches to the
role of social services delivery. New policies were developed that looked
favourably in the role of the private sector. For instance, the Private
Hospitals Regulation Act, 1977 which allows the establishment of private
hospitals
Challenges
Facing the Provision of Social Services in Tanzania
The major challenges facing the provision of social services in Tanzania
are:
1. Some of the government and private institutions
face financial constraints which complicate the provision of high quality
social services.
2. People living in rural areas have the worst
living conditions. As a result, they migrate on urban areas where they cause
intensive scramble over the available social services.
3. Delivery of household water continues to be a
problem for Mainland Tanzania; water supply is not sufficient in rural and
urban areas.
4. Transportation systems in the rural areas are
still a problem. People living in remotes areas do not have access to
transportation systems. Poor transport makes it difficult for people to go to
hospitals or farmers to transport their produce.
5. Bad behaviour among individuals of destroying
public and private infrastructure. Some destroy the railways and cause
accidents. Others steal transformer oil and telephone cables.
6. Services are too expensive and the citizens are
unable to pay for the costs of the services rendered. For instance, most of the
private schools set high school fees which are not affordable to a majority of
Tanzanians.
7. Corruption has become a big problem in the
provision of quality social services
Appraisal of the role of the private Sector in the provision of social
services in Tanzania.
8. The private sectors play a vital role in the
provision of social services in Tanzania. This is clearly observed in the
provision of education, health services, clean water, transportation and
communication.
9. The private sector has established many schools
and colleges for offering education in the country. Many people have benefited
from the education services offered by the private sector. Some of the
university colleges established by private institutions are St. Augustine
University of Tanzania (SAUT) Tumaini University owned by Lutheran Church, and
Muslim University of Morogoro (MUM). Others are the Hubert Kairuki Memorial
University (HKMU), the University of Arusha of Arusha, Zanzibar University and
Mount Meru University.
10. Many people have benefited from the health services
offered in hospitals established by the private sector in the country. examples
of the established hospitals include; Kilimanjaro Christian Medical Centre
(Moshi), Shia Ithnashery Hospital (Arusha and Dares Salaam)), Peramiho Hospital
(Ruvuma), Dr.Kairuki Hospital and Tanzania Heart Institute (Dares Salaam),
Ilembula Hospital (Iringa), Tayabali Mohammed Jaffer Hospital (TMJ) Dares
Salaam), Regency Hospital (Dares Salaam) and Bugando Hospital (Mwanza).
11. Various private companies have been established
to offer communication services in Tanzania. The companies include
telecommunication companies such as Vodacom, Airtel, Zantel and Tigo.
Broadcasting stations such as ITV and Radio One stations, Channel Ten TV and
Magic FM station, Clouds TV and Radio station, Tumaini TV and Radio stations,
Star TV and Radio Free Africa. Newspapers such as Mwananchi, the Citizen,
Tanzania Daima, Nipashe, Raia Mwema, Kiongozi, the Express, Rai, Mwanahalisi,
Annur and Alhuda.The private sector has contributed in the improvement of
transport services.
12. Many people are enjoying the social services
offered by the established transport companies in Tanzania. Examples of the
companies established by the private sector in Tanzania are Precision Air and
Community Airlines, Dar Express Bus Services, and other companies that include
sea ferries such as Azam marine and Sepideh Express.Considerable efforts have
been made by the private sector to promote access to clean and safe water.
Tanzanians are enjoying water services provided by the private sector. Examples
of water companies offering water services are Kili water in Kilimanjaro
region, AfricanMuslims Agency in various areas of the country, Aqua Drilling
Company in Dares Salaam and Maji Tech based in Arusha.
Success and Challenges Facing the Provision of Social Services
in Tanzania.
1. There is no doubt that both the government and
the private sector work hand in hand in offering good social services to the
people of Tanzania. The social reform policies enable Tanzania to succeed in
the following areas.
2. There has been considerable progress in primary
education following the implementation of the Primary Education Development
Plan (PEDP) in 2000. Enrolment rates have gone up. The number of classrooms and
desks in primary schools has increased, but more qualified teachers and more
books are needed to keep pace with increased enrolment. The data from the
Ministry of education and Vocational Training (MoEVT) indicates that the pupil
–to teacher ratio has increased from 1:64 in 2008 to 1:59 in 2009 and 1:51 in
2010 against the required ratio of 1:40.
3. The government has taken to measures to improve
the provision of water services to the public. The government has implemented
water projects since 2007. There was a change in the implementation modality,
whereby quick-win projects were implemented while procurement of consultants
was taking place. A two year working plan was developed which targeted to
construct 12 000 water points during the period. From July 2007 to June 2010 some
3 897 water sub-projects were constructed, resulting in 8 277 operational water
points.
4. The government has taken measures to improve the
provision of electricity both as hydro and thermal power. There are many
private companies in Tanzania today that avail generators to the public for the
public for use when there is power cut or no power installation
Solutions of the
Challenges Facing the Provision of Social Services
The following are some recommendation on the challenges facing the
provision of social services in Tanzania.
1. Enabling environment for increased private
sector involvement, including incentives and legal recognition to be created.
2. To educate communities on the importance of the
private sector participation in the provision of rural and urban water supply
and sanitation services.
3. To allocate enough budget in provision of social
services such as education, water, health and infrastructure in the country.
4. To give regular education to the public on how
to take care of the public social services in their localities. People should
be made aware that these services are for their own benefits.
5. To construct better infrastructures; this will
improve the living standards of the people.
6. To encourage community – based organizations to
fund and run their own social services. They can construct schools,
dispensaries, water supply systems and others.
7. To set a conducive environment for people to
invest in the provision of social services in the countryside.
8. Physical planning should be seriously carried
out to solve the problems of electricity and water supply.
9. The government should impose fines and take
drastic measures against people who destroy the environment.
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| St. Augustine University of Tanzania (SAUT) |
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