Dar es Salaam. Tanzania’s latest Employment and Earnings Survey 2023/24 paints a picture of an economy expanding in formal jobs, yet increasingly characterised by deep and persistent disparities in pay.
Formal employment continues to rise, reaching 4.07 million workers, up from 3.72 million the previous year.
But data from the National Bureau of Statistics (NBS) shows a widening gap in earnings that could challenge the country’s drive toward inclusive growth.
The survey, released in early November 2025, shows an economy generating opportunities, but one where only a small share of workers enjoy relatively high salaries while millions remain in low-earning brackets.
Average monthly cash earnings in the formal sector stand at Sh609,354, yet this means hides a stark divide. Public-sector employees earn an average of Sh1.27 million, more than double the Sh549,373 in the private sector.
The divide is clearer in wage bands: 60.6 percent of public-sector workers with permanent contracts earn above Sh700,000, compared with just 24.9 percent in the private sector.
Such figures raise questions about the effectiveness of Tanzania’s inclusion agenda, central to frameworks such as the Third Five-Year Development Plan and Dira 2050.
The private sector remains the main employer, accounting for 2.85 million people, more than double the public sector’s 1.22 million.
Manufacturing leads in job creation with 17.7 percent of all formal workers, followed by education at 15.9 percent. Yet it also houses some of the lowest-paid industries, including accommodation and food services.
Economist Rehema Kalugendo said yesterday in an interview with The Citizen, the imbalance reflects Tanzania’s structural economic setup. “High-paying industries remain highly specialised, absorbing a limited number of skilled workers.
“The majority of workers remain trapped in low-wage activities where productivity gains are slow and wage progression limited,” she added, noting that the implications are far-reaching, as wide salary gaps reduce workers’ ability to save, invest in education, or withstand shocks.
The survey shows that 61 percent of regular formal-sector employees are youth aged 15 to 35.
This dominance is often seen as an asset, but low earnings across youth-heavy industries challenge Tanzania’s ambition to build a dynamic and competitive workforce.
Labour market specialist Prof Charles Senga noted that youth employment patterns mirror wage distribution.
“Most young workers enter sectors that are growing in numbers but not in earnings,” he said. “If the majority remain in low-paying segments, long-term economic transformation will stall.
A youthful workforce earning below living-wage levels cannot build the middle class Tanzania aspires to.”
Dar es Salaam remains dominant, hosting 33.7 percent of the formal workforce and accounting for 31.9 percent of the total wage bill. The next regions, Morogoro and Arusha, follow at 7.3 percent and 5.6 percent respectively.
This concentration reflects long-standing differences in infrastructure and investment.
Prof Senga said the regional divide is unsurprising but increasingly concerning. “When high-paying jobs cluster in one region, wealth also becomes geographically concentrated,” he said. “This undermines balanced development and complicates inclusion and cohesion goals.”
Despite employing fewer people, the public sector accounts for Sh15.9 trillion of the national wage bill, compared with Sh21 trillion spent by the much larger private sector.
This means the cost per public-sector worker is significantly higher, raising questions about fiscal sustainability as the government continues to expand sectors such as education, health, and public administration.
Ms Kalugendo noted that while public-sector salaries reflect specialised skills, they demand constant balancing. “High public-sector compensation is important for retaining talent,” she said. “But when the gap becomes too wide compared to the private sector, it risks discouraging private investment and limiting competitiveness.”
The survey identifies 364,787 newly recruited workers, with the private sector taking the largest share at 268,236.
Most new hires fall in service and sales jobs (26.7 percent) and professional roles (17.5 percent). Yet many newly created roles remain in lower wage categories with limited prospects for upward mobility.
Prof Senga cautions that momentum in job creation must match improvements in job quality. “Employment growth is positive, but if wages remain stagnant, the broader population will not feel the benefits of economic expansion,” he said.
Experts point to policy directions critical for closing the wage gap and ensuring that growth becomes more inclusive.
Ms Kalugendo said Tanzania must strengthen wage-setting mechanisms, especially within the private sector. “Periodic minimum wage reviews that reflect inflation and productivity growth are essential if workers are to keep pace with living costs,” she said.
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