OPINION: This is how Tanzania can raise its productivity

Friday November 8 2019

By Frank Christopher

The effectiveness of productive capabilities of an economy is what entails a capacity to transform the living standard of individuals in a certain economy.

It is in this contention the advanced economies have been characterized by higher levels of productivity as compared to low-income countries.

As efforts are being streamlined by low-income economies to improve the living standard of the majority out of poverty there is no option when it comes to addressing the productivity puzzle.

The importance of productivity to an economy cannot be overstated. Higher productivity leads to higher quality products, efficient use of inputs, lower costs of production as well as serving as a catalyst of a more inclusive growth and hence championing a poverty reduction agenda in both advanced and lower-income economies.

However, a slowdown in productivity growth may be a result of depressed aggregate demand, regulatory imbalances, weaknesses in markets and institutions, slower technological change, misallocation of resources as well as lower investors’ confidence.

In the case of Tanzania, a country under the low-income group there is no exception that confronting the productivity paradox is the key to meaningful structural transformation and shared prosperity to its people.


And in ascertaining the benefits of productivity to its people and the economy in particular, there are set of alternatives that Tanzania must reinforce as it seeks to mount up productivity index to new heights and raising its growth trajectories to the new levels as follows:

First of all there should be reskilling and up skilling of the workforce. Given a valid importance of the workforce in raising productivity levels there must be concerted efforts to equip its workforce new knowledge, skills and experiences that suits both current and future needs of the market.

It is through prudent skills mix they can be more productive and take control of an ever changing but competitive business environment.

Secondly, we need to improve the business environment as productivity growth goes hand in hand with a prudent business environment. With multiplicity of regulations and taxes it is much harder for many businesses to thrive which in turn lowers their competitiveness.

In this proclamation the role of the state should be a blend of a good policy maker and a business regulator that makes doing business easier. Easing of procedures on doing business will serve as a catalyst for a much formidable role of the private sector to drive an economy, creating jobs as well as contributing to new innovations.

On the other front, improving the business environment may unleash informal sector potentials as it can generate a leeway in which they can be integrated to the formal economy.

Reinforcing an interaction between the private and public sector is also another way to go.

In up thrusting productivity levels, Tanzania need models that can unleash cooperation and smart partnerships between the private and public sector.

This may inculcate in unleashing new opportunities in sectors such as mining, renewable energy, smart agricultural technologies, sophisticated marketing networks as well as enhancement of managerial capabilities to reflect the aspirations of an ever demanding business environment.

This may only come through smart regulations and policies that fosters innovation and entrepreneurship to generate healthy returns for all participants. Additionally, there is a need to address infrastructure bottlenecks.

Given the fact that Tanzania possesses a greater potential to become the regional gateway, more investments should be channeled to infrastructure as many businesses depends on it.

If we need to strike a high point economically, infrastructure must also be imminent to our development agenda as it can proliferate our country’s competitiveness and trade sophistication and consequently enhancing productivity.

And last but not least, we must encourage competition between the entities that drive our economy.

It is in this way we can enhance innovation that in turn can be a catalyst for augmenting productivity and industry transformation in a way that seeks to nurture a dynamic and vibrant economy that responds to both domestic and external frontiers.

In this synopsis firms may realize labour productivity gains ranging from small enterprises to the larger “superstar” exporters.

The author is a Dar based economist. Email: fchristopher92@yahoo.com