Putting Tanzania's Hidden Economy to Work: Reform, Management, and Protection of its Natural Resource Sector

Putting Tanzania's Hidden Economy to Work: Reform, Management, and Protection of its Natural Resource Sector

by World Bank




Tanzania's annual real economic growth rate has in recent years been between 6 and 7 percent with Gross National Income equivalent to about US$340 per person. A “hidden” economy could potentially have contributed an additional US$100 per person. Forestry, fisheries, mining, and wildlife made traditional contributions to the economy. Hidden values and untapped potential remain uncounted. Some 582,000 tourists visited Tanzania in 2004, contribution US$750 million to export earnings. A recent single shipment of illegal ivory left Tanga, valued at US$200 million. Commercial fishing fleets operating offshore contribute in excess of US$300 million to foreign coffers; less than 2 percent finds it sway back to Tanzania. Most of the production from half a million artisanal miners leave the country unnoticed and untaxed. This book is about this hidden part of the economy–the uncounted, the illegal, the unnoticed, or the squandered.

This paper advocates a three-pillared approach to improve capture of this hidden value. The first pillar of good governance eliminates corruption, improves transparency, controls illegal activities, and improves accountability, monitoring, and compliance. The second pillar of good management eliminates price distortions, improves capture of resource rents, and reduces waste. A third pillar of safety nets reduces conflict and social vulnerability.

Product Details

ISBN-13: 9780821374627
Publisher: World Bank Publications
Publication date: 03/17/2008
Series: Country Studies
Pages: 96
Product dimensions: 6.70(w) x 9.80(h) x 0.40(d)

Table of Contents

Foreword     v
Acknowledgments     vii
Abbreviations     ix
Introduction     1
The Big Picture: Tanzania's Hidden Economy     5
The Natural Resource Sector: A First Look at the Obvious     5
Counting the Unaccounted: Some Methodological Background     12
The Hidden Economy Revealed     14
Characterizing the Weaknesses and Potential Responses     19
Reform: Striking Down Corruption and Illegal Activities     23
The Business Case for Reducing Corruption     23
The Need for Reform: Sectoral Overview     25
Reform Examples in Tanzania     28
Recommended Priority Reform Actions     30
Management: Correcting Policy Distortions and Improving Efficiency     33
The Business Case for Improved Management     33
The Need for Improved Management-Sectoral Overview     35
Improved Management Examples in Tanzania     42
Recommended Priority Management Actions     43
Precaution: Introducing Safety Nets and Accommodating Uncertainty     47
The Role of Precaution and Redundancy     47
The Need for Precaution: Sectoral Overview     51
Examples of Precautionary Management in Tanzania     54
Recommended Priority Protection Actions     56
Action Plan     57
Summary of Findings     57
Summary of Recommendations and Priority Actions     58
Sector-at-a-Glance: Priority Interventions     61
References     77
List of Tables
Tanzania MDG Baseline, Most Recent Estimate and Target     7
MNRT Annual Revenue and Budget FY2004 (billion TSh)     8
Synopsis of Sectoral Weaknesses, Incidence, and Corrective Options     20
Sources of Income in Villages, Tanzania, 2002     52
Summary of Objectives, Priority Recommended Actions, and Indicative Results Indicators     59
Fisheries (Freshwater)     62
Fisheries (Marine)     64
Forestry     66
Wildlife     68
Tourism     70
Mining (Large Scale)     71
Mining (Artisanal)     73
Carbon Resources     76
List of Figures
Governance Indicators for Tanzania, 1998 and 2005     25
Freshwater Fisheries, CPUE, and Total Catch, 1995-2003     36
TANAPA 2001/2002 Primary Revenue     40

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