The World Bank (WB) Board of Executive Directors has announced on September 4th, 2015 that it has approved a development policy credit of USD 80 million aiming at improving Tanzania’s private sector to raise job creation.
The credit will be issued by the International Development Association (IDA), an arm of the WB group focused on the poorest countries around the world, and will be paid off in a lapse of 38 years starting in 2021.
The total amount will be used to fund the First Business Environment for Jobs Development Policy Operation in Tanzania, whose objective is to increase the private sector’s job creation potential by reducing overall costs on establishing and running a business in the country.
The WB’s aim is to bolster private sector performance and to improve job creation in a wide range of sectors to prepare the country for the growth in workforce, which is currently accommodating 800,000 young people every year totaling 20 million to date, and that is expected to double by 2030.
According to the WB, the project will be mainly concentrated in the sectors as manufacturing, agriculture, trade, and other industries receiving 80% of the fund, since in the last ten years the private investments have been concentrated in fast growing sectors as those related to extractive operations, finance, telecommunication, and transport.
WB’s Country Director for Tanzania, Ms. Bella Bird, explained in the press release that the policy reforms within the project’s scope will help to remove current obstacles to undertake a business in Tanzania yielding to employment growth.
According to WB Task team Leader, Mr. Andrea Dall’Olio, the bank is planning to eliminate more than 59 fees identified so far in the tourism sector, which had been set by government agencies and are already published in the Ministry of Natural Resources and Tourism website to be followed during the project’s implementation.
The credit is the first of a series of three budget support operations to improve job creation in Tanzania, where the WB currently manages a portfolio of 25 operations with a commitment of USD 2.85 billion and USD 221 million received from regional projects in East Africa.
According to the WB, Tanzania enjoys one of the youngest and fastest growing workforces with a labor force participation for ages 15-24 representing 64.8% of the total population in 2014 up from 57.7% in 2009, against a flat average of 45.5% in the world in the same period.