Agriculture is no backbone, it’s a last resort

"In Tanzania, employment transitions away from agriculture were associated with positive welfare changes, suggesting non-negligible pull effects."

In December 2023, the World Bank published a simply mesmerizing report on the state of Tanzania’s economy. Only a nerdy economist, such as myself would be so smitten by a World Bank Country Economic Memorandum for the United Republic of Tanzania which contains such scintillating sentences as “agriculture registered a net bilateral inflow of employees vis-à-vis both industry and services.” Since you are reading this, there’s a good chance that you are among the few in the country who understand that sentence.

But let us think about the millions who don’t, because both the language and the subject are impenetrable. Would Juma, who recently lost his factory job in Mwanza and now grows food for his family just outside Tabora, know that the sentence is actually about him? Would Selina, a single mother bringing up two daughters in Iringa, understand that those words carry an important message for their futures?

I found the report fascinating because of what it says about the last 20 years of our economic history and what this means for Juma’s family, Selina’s daughters and millions of others across Tanzania. What it says raises major questions about our economic future and asks us to look again at some of our long-held beliefs about Tanzania’s economy.

Juma left school in 2005 after completing his O-levels. He hadn’t done very well but he still hoped that his education would allow him to escape the toil of farming. After a few years doing odd jobs in Tabora and (reluctantly) helping on his parents’ farm, he moved to Mwanza seeking better opportunities. He first sold water in plastic bags, then helped out in a carpentry workshop, and finally was a piga debe seeking bus passengers. After seven years of searching he found a steady job in a factory making soft drinks.

Sadly, three years later, he lost his job. So much for the better opportunities in Mwanza, he thought, and headed back home to Tabora. By returning to farming, at least he would be sure that his wife and their new baby would eat, even if money would be difficult.

Juma’s story is typical. For the last two decades, according to the World Bank report, Tanzania’s economy has grown fast by global standards. This is what enabled the country to graduate from low-income to lower-middle-income status in 2020. Growth brought new investment, new industries, new and improved public services, new infrastructure and new job opportunities – like those that Juma was able to take advantage of while in Mwanza.

But it hasn’t been growth that benefited everyone. Between 2012 and 2018, poverty in Tanzania – measured against the national basic-needs poverty line – only fell by a tiny 1.8 percentage points. Given the population growth, the number of people living in poverty actually increased by 1.3 million during the same period. Furthermore, median consumption per person was more than 10% lower in 2021 than it was in 2014. Wealthier Tanzanians experienced a much smaller drop in consumption than everyone else, a sign of widening inequality.

Despite it being unequal, growth began to change the structure of the economy for a while. Fewer people were dependent on farming for their livelihoods. Between 2006 and 2014, agriculture’s share of total employment shrank from around 76% to 67%, while the share of employment in services and industry expanded, and Juma got a job.?

But the last six years reveal some worrying trends. Since 2012, exports (which had been increasing very rapidly) have stagnated. They have also pivoted away from agricultural produce and towards extractives, especially gold. More relevant, and painful, for Juma, however, is the shift away from industry. As a share of employment, industry fell between 2015 and 2021, while agriculture grew.

In other words, many young Tanzanians were facing the same situation as Juma – losing jobs in industry and struggling to find alternative non-farm work. Some hang around on the economic edges of towns and cities, in a precarious existence in which they hardly know where their next meal will come from. Others follow Juma’s example and return to agriculture, not because they want to but out of desperation.

What about Selina? Her eldest daughter, Neema, is about to finish her VETA training as an electrician, but knows how hard it can be to find work even with qualifications, especially as a woman. Neema wants to move to Dar, but Selina does not like the idea of her daughter moving to on her own to the city. She wants Neema to stay in Iringa and help on the farm or find work at the market or in a hotel, while looking for a chance to put her skills as an electrician to use. The World Bank report shows that jobs in services and industry offer much better income, on average, than agriculture (4-10 times as much), but only for the lucky few who can get such a job.

Why would a young person want to stay on the farm when they can see the lucky few prospering elsewhere? But will they get that same luck, or end up among those who – like Juma – turn back to agriculture as a last resort?

The report invites us to review our rose-tinted attitude to our agricultural economy. We keep being told that it is “the backbone of the economy”, providing jobs and incomes for most Tanzanians. Perhaps, but what kind of backbone is it when people see it more as a last resort coping mechanism rather than as a means to get ahead in life? And when the money is potentially so much better in other areas?

Here’s another gem of a sentence from the World Bank report: “In Tanzania, however, employment transitions away from agriculture were associated with positive welfare changes, suggesting non-negligible pull effects.”

Exactly! Juma and Neema could have told you that. As I said, a mesmerizing report.

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This article was first published in The Citizen newspaper on January 24, 2024