Putting Tanzania's Hidden Economy to Work: Reform, Management and Protection of Its Natural Resource Sector (World Bank country study, 0253-2123)

Putting Tanzania's Hidden Economy to Work is part of the World Bank Country Study Series. These reports are published with the approval of the subject government to communicate the results of the Bank's work on the economic and related conditions of member countries to governments and to the development community. 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 make traditional contributions to the economy. Hidden values and untapped potential remain uncounted. Some 582,000 tourists visited Tanzania in 2004, contributing 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 its way 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 firs pillar of good governance eliminates corruption, improves transparency, controls illegal activities, and improves accountabilities, monitoring, and compliance. The second pillar of good management eliminates price distortion, improves capture of resource rents, and reduces waste. A third pillar of safety nets reduces conflict and social vulnerability. This paper tells a story about conditions in Tanzania's hidden economy, the parts of the natural resource sector often ignored in conventional economic analyses and studies, and makes recommendations for future policy actions. The paper draws primarily from extensive background studies undertaken of the forestry, fishery, wildlife, mining, and tourism sub sectors (COWI 2005) as well as a wide range of complementary studies undertaken by the World Bank and others. It de-emphasizes those sectors with factors of production that are not readily traded or exported (such as land and water), although some examples are given relating to soil quality and water management based on extensive studies undertaken within the agriculture and water sectors. The story is relatively simple: pricing distortions, coupled with institutional weakness and the lack of rule of law, have created an environment that undermines economic growth. This paper also acknowledges that Tanzania has already taken positive steps to making some of the needed corrections to protect its natural resources. In recent analyses of corruption indicators world-wide (World Bank Institute 2006), Tanzanian stands out among those nations as having made significant progress towards improving accountability and reducing economic leakages. Anti-corruption legislation was drafted for parliament attention in early 2007. Revisions to the Deep Sea Fishing Authority Act were passed into law in early 2007. Moreover, changes in institutional arrangements, taxation, and general management of the resource sector show promise and have contributed positively to general economic growth. Yet, the sector remains fragile and vulnerable in other respects: perceptions of unequal income distribution, impacts of climate change, and other external influences must also be addressed to build on past successes

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.

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 make traditional contributions to the economy. Hidden values and untapped potential remain uncounted. Some 582,000 tourists visited Tanzania in 2004, contributing 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 its way 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 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. This book is about the hidden part of the economy - the uncounted, the illegal, the unnoticed, or the squandered. This publication 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 accountabilities, monitoring, and compliance. The second pillar of good management eliminates price distortion, improves capture of resource rents, and reduces waste. A third pillar of safety nets reduces conflict and social vulnerability.--Publisher's description 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. This book is about the hidden part of the economy--the uncounted, the illegal, the unnoticed, or the squandered. It 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 accountabilities, monitoring, and compliance; the second pillar eliminates price distortion, improves capture of resource rents, and reduces waste; the third reduces conflict and social vulnerability.--Publisher's description