The significance of high and shared growth in national development is explicitly acknowledged in Vision 2025, the Long Term Perspectives Plan 2015-25, the Five-Year Development Plan 2011/12- 2015/16. The successor Five Year Development Plan is also expected to emphasize on accelerating economic growth and transformation through industrialization. The economic structure of Tanzania suggests that new sources of growth dynamism appear to emerge (e.g. in mining and tourism), with falling contribution of agriculture to the GDP. However, these new patterns of economic structure, new sources of dynamism, potential drivers of productivity and competitiveness are not well understood, particularly how the existing endowment of a variety of natural resources can facilitate structural transformation and bring economic dynamics towards a competitive industrial economy
Research in this area will focus on understanding the growth process in Tanzania with a view to examining the drivers of its structural change, the existing natural resources in Tanzania and the conditions and policies under which they provide comparative advantages, and how they can be transformed to provide competitive advantages for Tanzania to realise socioeconomic transformation consistent with the desired outcomes of inclusive growth for poverty eradication.
The diversity of natural resources ranges from minerals, forestry, wildlife, scenic features, to agricultural land, lake and ocean water, oil and natural gas. Recent discoveries of natural gas have added impetus to the potential for Tanzania to develop its productive capacity, through linkages with other sectors of the economy, such as enhanced energy security and efficiency, supply of feedstock to petrochemical and other employment intensive industries, and through is potential to provide revenues needed to finance infrastructure and human resource development.
Research in this area will focus on:
a. Minerals, oil and gas
The experience of other countries with minerals or oil and gas wealth suggests that unless deliberate efforts and strategies are adopted, exploitation of these natural resources is not likely to automatically transform the economy and to raise the welfare of the people. Research on natural resources will address the challenges of harnessing the resources to realise socioeconomic transformation. The research is expected to unravel what it takes to avoid the natural resource curse and instead harness natural resource wealth for socioeconomic transformation for inclusive development. It will explore issues related to linkages with non-oil sectors, including domestic supplier development and local content, energy security, and petrochemical industrial potentials.
b. Agriculture development, rural transformation, and structural change
The economic literature and development experience of structural transformation suggest that as economies grow and develop, they undergo
structural changes from predominantly agrarian-based production to manufacturing and service-based production that is increasingly driven by high productivity, technology and knowledge. Such a structural change is often accompanied by increased productivity in the agricultural sector, strong linkages between agriculture and other sectors (industry and service sectors) which in turn absorb labour released from agriculture. The labour force also shifts to non-agricultural activities in urban areas.
These structural characteristics do not appear to be the case for Tanzania, even as the contribution of agriculture to GDP continues to decline. The proportion of the labour force dependent on agriculture has fallen slightly from 75% in 2002 to 68% in 2014. This is still a high proportion, and productivity has not increased sufficiently to raise the level of incomes as theory suggests. Technology application is largely limited, fragmented farming practices are still widespread, and linkages between agriculture and industry are still weak. Land utilization, environmental degradation and climate change are also important elements of research in this area.
Research will therefore be directed to exploring the type of agriculture and rural transformation that is feasible and appropriate to secure structural change that fosters desirable socioeconomic transformation under the existing circumstances in Tanzania. It is expected to bring new insights on what it would take for Tanzania to transform its agriculture and the rural economy.
Research will also explore critical issues and dynamics of rural labour market such as underemployment, constraints to productivity change, rural diversification and relationship between agriculture and non-farm industrial and service activities.
c. Forestry, wildlife and fisheries
Tanzania is known to have vast reserve of forestry and large tract of land reserved for wildlife. There is also a long coastline and inland lakes and rivers giving it abundant fish catch. However, the extent to which these resources benefit the communities and enterprises in the respective areas, and their potential to transform into a modern industrial society through addition and exports is not well researched or documented. This research will aim at exploring these relationships and inform policy dialogues and potential institutional reforms in these subsectors