INVESTING in vocational skills is an area where the government needs to place more emphasis to reduce the rate of unemployed youth, who constitute a large part of the country's population, the Prime Minister, Mr Mizengo Pinda, has suggested.
Mr Pinda made the suggestion in Dar es Salaam on Tuesday while launching the World Bank's Fifth Tanzania Economic Update with recent projections showing that more Tanzanians will live in cities than in the surrounding countryside by 2030.
"We have a vocational education authority almost in every region but in some areas, if you visit them, you will find out that their classes are not even full simply because of economic problems that cause some people not to send their children to those training centres," noted Mr Pinda.
The Premier further suggested that developing more vocational programmes in partnership with private sector is essential to industrial development. "Small business owners know what skills are needed in their respective undertakings, which must be imparted to the youth," he added.
Expounding further on thematter, Mr Pinda said that the private sector must be given an opportunity to drive the economy of the country in which the government should be the main facilitator.
"There is need to think creatively on how to leverage private sector knowledge and abilities to impart employable skills to growing labour force," he told his audience.
He stressed that the report was relevant to policy making, saying there is a need to see how best regulations can be simplified so that small business can be empowered to prosper.
Speaking about the informality of urban jobs, the prime minister said they cannot restrict people from migrating to urban areas, noting that the overall majority of youth moving to urban areas have no skills and end up working in the informal sector.
"This informal sector is characterised by low productivity and incomes, but the reality is the sector is driven by a sense of enterprise that could be tapped to ensure it contributes meaningfully to employment and economic growth.
But it is crucial to quit viewing it negatively leading to evictions and closure," he said. The biannual report, entitled "Who wants a job -- The magnetic power of cities", outlines policies and actions to help the country's growing number of businesses needed to compliment the youth labour force that continues to expand each year.
World Bank Country Director for Tanzania, Burundi and Uganda, Mr Philippe Dongier, said that there was no doubt that the country's economy has been doing very well over the past decade.
"The economy has failed to create enough productive jobs for a rapidly growing labour force as of late there are approximately 23 million Tanzanians in the job market and expected to reach 45 million by 2030 who have high hopes of a decent job and good life," said Mr Dongier.
The report explains that if well managed, urbanisation offers an opportunity to create new kinds of jobs in areas such as manufacturing and services.
It further added that agriculture contribution to GDP declined from approximately 45 per cent to 28 per cent between 1990 and 2012 and most new businesses remain fragile, informal, unspecialised and are often run by entrepreneurs who typically are unable to expand and become competitive.
"There is an urgent need to address the challenges faced by small business entrepreneurs in Tanzanian cities," said Mr Jacques Morisset, the main author of the report and lead economist for Tanzania, Burundi and Uganda.
Mr Morisset said that success for Tanzania will depend on its ability to boost the expansion of small businesses and create linkages with large conglomerates.
The economic update suggests measures to remove the restrictions that hinder small businesses growth in various city centres, including alternative methods of building skills for business owners, improving infrastructure investments in roads for better connectivity and increasing access to finance.