Wanted: Jobs for youth, lower healthcare and import costs

In 2024 alone, over 1.2 million pupils sat for their Primary School Leaving Examination.

However, this number shrinks dramatically as the education level advances—only 516,695 candidates completed Form Four last year.

According to official data, 477,262 students passed their secondary school exams, and just 214,141 were recently selected to join A-Level institutions and government-owned technical colleges across the country.

The National Bureau of Statistics (NBS)’s insightful report, ‘Investing in Tomorrow’s Labour Force: Socioeconomic Implications of the Demographic Transition in Mainland Tanzania,’ paints a stark picture of the current employment landscape.

Although overall unemployment reduced from 11.7 percent in the year 2006 to 9 percent in 2021, the youth bear a disproportionately larger burden.

It is estimated that 15 percent of youth between the ages of 15 and 24 were unemployed in the country in 2021, a figure that equates to 6 percentage points more than the national average.

This is further compounded by the state of informal work.

 The majority of the working population is engaged in the informal economy, an economy characterised by more precarious work arrangements and weak protection.

In 2021, this accounted for 29.9 percent of working-age women and 28.4 percent of working-age men.

 Among the youth specifically, 29.1 percent of working youth (mostly women who live in cities) were in the informal economy.

 The majority, especially the youth, end up in low-skill occupations, 59 percent of which fall in the undereducated category.

The grim forecasts of the NBS report then highlight the sense of urgency.

 The country’s employed labour force will increase by a combined number of 19.9 million, but the unemployed one will increase by an astonishing 30.7 million over the next four decades.

Focusing on youth, however, the data is worse: 1.1 million youth were unemployed in 2021, which would be projected to increase to approximately 14.7 million jobless youth by 2060.

The anecdotal evidence of this severe jobs deficit is palpable.

 In January this year, a staggering 201,707 applicants responded to an advertisement for just 14,648 teaching posts.

 That translates to nearly 14 job seekers vying for every available slot.

A similar scenario unfolded the following month, when the Tanzania Revenue Authority (TRA) advertised 1,596 positions and received 135,027 applications—an average of 85 applicants per vacancy.

Analysts warn that such numbers reflect a deep structural problem in the labour market: the economy is simply not generating enough jobs to match the available manpower.

Budgetary interventions

Institute of Management and Entrepreneurship Development chief executive Donath Olomi underscored that solving Tanzania’s pervasive unemployment challenge requires a comprehensive and systemic approach, rather than a singular budgetary fix.

”The issue of unemployment is not something to be solved with one budget; it is a systemic issue,” he said.

However, Dr Olomi identified immediate, actionable steps that the national budget could facilitate.

“There are short-term initiatives that can be undertaken, such as allocating budget towards internship programmes so that youth can gain practical experience and enhance their skills.”

Dr Olomi pointed out a critical barrier to youth employment.  “One of the challenges in securing employment is the lack of experience, which often leads to young people missing opportunities as they cannot demonstrate their value to prospective institutions. Programmes like BBT [Building a Better Tomorrow] should be strategically scaled up to reach more beneficiaries.”

He said there is a strong inclination among Tanzanian youth towards self-employment, but prevailing systems often hinder their formalisation.

“Many youth have shown a great inclination towards self-employment, but the existing systems are somewhat unsupportive, leading many to prefer operating informally.

“The moment you attempt to formalise, you encounter unfriendly levies and taxes. For instance, once registered with TRA, demands for tax returns begin within the first few months of business, regardless of sales. Many young entrepreneurs find this highly challenging and opt to remain informal, often selling goods online,” Dr Olomi said.

He stressed the importance of improving the overall business environment, noting that “favourable tax revenues are derived from thriving businesses”.

He further added that “reducing tax burdens and ensuring access to affordable credit are crucial, as many young people aspiring to be self-employed face significant challenges due to the high cost of loans”.

An economist from the University of Dar es Salaam, Dr Najima Msuya, says, “The government must scale up funding for vocational training and innovation hubs. Equipping young people with practical skills will unlock opportunities for self-employment.”

Entrepreneurship advocate and consultant Michael Mwakyoma stressed the importance of financing, noting,

“Access to capital remains a major barrier.A youth-focused national fund, with affordable loans and mentorship, can spark thousands of startups across sectors,” he said.

Meanwhile, A Mzumbe University economist, Mr Baraka Mpoki, pointed to agriculture as a key driver.

“Agri-tech and value addition offer untapped potential. The budget should support youth cooperatives and subsidise modern farming tools to make agriculture attractive again,” he said.

The experts agree that beyond job creation, the budget should address systemic issues such as regulatory bottlenecks and limited access to markets.

Targeted tax relief to spur job creation

The government, analysts say, should come up with deliberate policy measures, including the scrapping or reduction of nuisance taxes, levies, and fees on key sectors such as agriculture, fisheries, livestock, entertainment, tourism, and start-ups—sectors that employ a significant portion of the working population to spur job creation.

The Tanzania Startup Association (TSA) says in its 2025/26 budget submission, the government should consider introducing a 10-year tax holiday for locally domiciled venture capital (VC) and private equity (PE) funds.

TSA argues that the current tax regime—comprising a 30 percent Capital Gains Tax (CGT) on unlisted equity, a 15 percent withholding tax on non-resident fund distributions, and 18 percent VAT on fund management—makes Tanzania one of the least competitive destinations for investment in the region.

 “Despite having enabling regulations, Tanzania’s VC/PE landscape remains virtually non-existent, primarily due to an uncompetitive tax environment,” TSA stated.

Highlighting successful Tanzanian-founded start-ups such as Ramani ($32 million), NALA ($40 million), and Wasoko ($125 million), TSA argues that the country’s innovation ecosystem is ready for capital injection, but unfavourable tax policies are holding it back.

The association is now urging the government to include a targeted, time-bound 10-year tax holiday on Corporate Income Tax and Capital Gains Tax for CMSA-licensed, locally domiciled VC and PE funds in the 2025/26 Finance Act.

TSA warns that Tanzania is losing out to more attractive jurisdictions such as Rwanda and Mauritius, which offer 0 percent CGT, and Kenya, with a 15 percent rate.

 According to TSA, more than $600 million in potential assets under management (AUM) could be unlocked if Tanzania reforms its investment tax regime.

High treatment costs (related story on Page 8)

While Tanzanians generally express satisfaction with the quality of healthcare services, the high cost of treatment remains a pressing concern, one that many hope the upcoming budget will address.

Dar es Salaam resident Raphael Msumi (not his real name) shared the story of a family member who was referred from Tanga to Muhimbili National Hospital.

 The family had to pay Sh450,000 for just two diagnostic tests—an X-ray and a CT scan.

 “This is too expensive for a public hospital,” he lamented.

A brief survey by The Citizen found that an MRI scan of the brain at Muhimbili costs Sh604,000, while a brain CT scan goes for Sh250,000. An X-ray is priced at Sh40,000.

Prices are comparatively lower at other government hospitals such as Benjamin Mkapa, Temeke, and Mwananyamala, where CT scans and MRIs range between Sh100,000 and Sh150,000.

 Temeke Hospital, however, does not have an MRI machine.

At the privately-run TMJ Hospital, a CT scan costs Sh375,000, while X-ray tests at the three public hospitals range from Sh15,000 to Sh40,000.

Consultations on petroleum sector

Meanwhile, the Tanzania Association of Oil Marketing Companies (Taomac) also emphasises the critical need for consultation on any impending tax reforms.

Taomac executive director Raphael Mgaya articulated this concern.

 “We expect that if there are any tax changes, we should be consulted so that we can contribute our insights”, underscoring the importance of their input as a significant revenue source for the country.

He affirmed that “in terms of the regulatory environment, we have recently had effective engagements with EWURA to address any challenges”.

Additional reporting by Jacob Mosenda and Salome Gregory