Tanzania is poised to generate between 349,886 and 654,787 new jobs in the next 2024/25 financial year, based on the 49.35tri/- national budget tabled recently by Finance Minister Dr Mwigulu Nchemba.
The budget, which has increased by 11.2 percent from the previous financial year's 44tri/-, prioritises sectors with significant employ- ment implications.
By analysing key budget areas and their potential impact on job projections using metrics from the budget and a formula derived from a study published in the International Journal of Management and Economics, one can assess the employment effects of public investment in infrastructure sectors, particularly in low-income developing countries (LIDCs) like Tanzania.
The formula for estimating job creation involves multiplying the investment amount (in million US dol- lars) by sector specific job creation coefficients (jobs per million US dollars).
In LIDCs, public investment typically generates 16-30 jobs per million US dollars, reflecting the high labour intensity and lower capital per worker in these economies.
This analysis also takes into account potential biases, such as overestimation resulting from inefficiencies and corruption in public investment management, as well as the linear extrapolation of data from advanced and emerging markets to LIDCs.
Defense, Legal, and Security
The allocation for the defense, legal, and security sector is 5,493.5bn/-.
This allocation is broken down as follows: defense receives 3,323.5bn/-, the judiciary is allocated 465.9bn/- and public safety is granted 1,704.1bn/-.
The job creation estimates in this sector include formal jobs such as military personnel, police officers, judicial staff, and administrative roles.
Additionally, there are informal jobs for support staff and construction labor for infrastructure projects.
Economic Development Sector The economic development sector has been allocated a total of 10,290.7bn/-.
The detailed allocation is as follows: agriculture receives 1,938.1bn/-, energy is allo- cated 1,883.7bn/-, industries sector gets 110.8bn/-, youth development and skills enhancement receive 34bn/-, mining is allocated 231.9bn/- , natural resources, tourism, and environment receive 336.2bn/-, trade is allocated 272bn/-, and construction, transport, and communication receive the largest share of about 5,5tri/-.
The job creation estimates for these sectors are substantial.
Agriculture is expected to create between 13,312 to 24,960 jobs, energy will generate 12,960 to 24,300 jobs, industries are estimated to create 1,773 to 3,324 jobs, and youth development and skills enhancement will add 545 to 1,020 jobs.
The mining sector is projected to create 3,710 to 6,957 jobs, natural resources, tourism, and environment will generate 5,378 to 10,089 jobs, trade is expected to add 4,352 to 8,160 jobs, and construction, transport, and communication will create the highest number of jobs, ranging from 87,742 to 163,500.
Infrastructure Development
For infrastructure development, the budget allocates substantial funds; 5.5tri/- to transport infrastructure, about 1.94tri/- to agriculture and almost 1.88tri/- to energy.
Using the rule of thumb, these investments are projected to create between 37,600 to 70,500 jobs in transport infrastructure, 13,312 to 24,960 jobs in agriculture, and 12,960 to 24,300 jobs in the energy sector.
These jobs encompass both formal positions like engineers, project managers, and skilled construction workers, as well as informal roles such as unskilled labor and local suppliers.
Education
The education sector is allocated 6tri/-. The breakdown includes primary education with 4.4tri/-, administration services with 157.2bn/-, higher education with 1.35tri/-, science, technology, and innovation with 72.4bn/-, and technical education and vocational training with 196.5bn/-.
The job creation estimates are as follows: primary education is expected to create 58,576 to 109,832 jobs, higher edu- cation 17,872 to 33,672 jobs, and technical educa- tion and vocational train- ing 2,896 to 5,460 jobs.
Healthcare
The Healthcare sec- tor has an allocation of 2.54tri/-.
The breakdown includes medical services with 1.06tri/- /-, dispensaries with 61bn/-, district hospitals with 901bn/-, administration services with 95.7bn/-, health centres with 109.3bn/-, and preventive services with 310.7bn/-.
The job creation estimates are as follows; medical services is expected to create 16,998 to 31,872 jobs, district hospitals 14,416 to 26,820 jobs, and health centres 1,749 to 3,255 jobs.
Water, Housing, and Community Development
The allocation for water, housing, and community development is 1.42tri/-.
The breakdown is as follows; community development receives 320.3bn/-, informa- tion, sports, and culture 285.3bn/-, land, housing, and settlements 174.1bn/-, and water 641.9bn/-.
The job creation estimates are as follows: water sector is expected to create 10,270 to 19,257 jobs, community develop- ment 5,125 to 9,609 jobs, information, sports, cul- ture 4,565 to 8,562 jobs, and land, housing, settlements 2,786 to 5,226 jobs. Social
Security
The social security sector is allocated 2.65tri/- .
The breakdown includes elderly, children, and people with disabilities with 50.1bn/-, health insurance fund with 446.3bn/-, and social security funds with 2.16tri/-.
The job creation estimates are as follows; Social Security is expected to create 40,958 to 76,521 jobs, and the Health Insurance Fund 6,303 to 11,891 jobs.
Analytical Perspective
While the presented 2024/25 budget has the potential to create thousands of jobs across various sectors, it is crucial for the government to consider several key challenges to ensure these projections are realized effectively.
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Officials must address mismanagement and cor- ruption risks through stringent oversight and transparency measures.
Additionally, assessing the feasibility of job creation projections, particularly in historically challenging sectors, and setting realistic targets is crucial. Anticipating and planning for potential project delays by streamlining administrative processes and enhancing inter-departmental coordination will also help ensure timely project completion.
The government should thoroughly evalu- ate the adequacy of allocated funds to ensure they are realistic and sufficient to meet ambitious job cre- ation targets.
Additionally, accounting for external economic factors, such as global market fluctuations, and developing contingency plans will be essential to mitigate risks and ensure the budget's success.
The budget is a strategic plan with the potential to drive economic growth and boost employment.
By addressing risks such as mismanagement, setting realistic job tar- gets, streamlining bureaucracy, ensuring adequate funding, and considering external economic factors, the government can enhance its effectiveness and achieve its economic goals.
- Kelvin Msangi is an Operation Director at Tanzania Music Rights Society. He is reached through email; kelvinmsangi@ protonmail.com mobile; 0655963224.
