Thursday, November 13, 2008

CAPACITY ENHANCEMENT ON SOCIAL – ECONOMIC AND PARENTING SKILLS FOR ELDERLY PEOPLE CARING FOR ORPHANS AND VULNEABLE CHILDREN IN MWANANYAMALA WARD

1.0 Introduction
The numbers of orphans and vulnerable children are now overwhelming and have drawn a lot of concern, not only in Tanzania, but also elsewhere in Africa and World over. Traditionally, the extended family has been often the cares and supporter of the orphans however most of them are poor and there seems to be increasing evidence of a breakdown in this structure as an adequate safety net for vulnerable families. The result of this is not only the economic development of the care givers that is being negatively affected, but also the social, cultural, and psychological aspects of human life.The limited availability of support and intervention by government, NGOs and community aiming at elderly people caring the OVC has reduced the capacity of the elders to care and support the OVC such that in turn place children at risk of run away and join street children, drug or substance abuse, truancy and drop out of the school, self-exploitation, criminal behaviour, child labor, and sex abuse. Not only the direct effects on the children but also the absence of parental care, isolation from emotional connection and support along side the stigma and exclusion, OVC and their older carer experience grief and possible confusion following the loss of their parents and children.
2.0 Kinondoni Municipal Council Profiles:
Kinondoni Municipal is within the city of Dar Es Salaam. The Municipality is bordered by the Indian Ocean to the North East, Ilala Municipal to the South, Bagamoyo District to the North, Kibaha District to the West and Kisarawe District to the South West. The municipality is well linked by roads and other communication networks to the rest of the city and other parts of the country. Major road links are: - Morogoro Road, Bagamoyo Road, Kawawa Road, and Mandela Road and, Sam Nujoma Road. Kinondoni Municipal has four (4) divisions namely: Magomeni, Kinondoni, Kibamba and Kawe. These divisions are then divided into twenty seven (27) wards, which in turn are sub divided into sub wards commonly known as Mtaa (singular) or Mitaa (plural). There are 127 Mitaa. According to the 2002 Census, the Kinondoni Municipality has a population of 1,088,867 people with a growth rate of 4.1%. The rapid population increase is influenced by both natural causes and immigration (birth rates and net immigration rates respectively). The Municipality has an area of 531KM2 and the population density is estimated at 2051 persons per square kilometre. Employment and Economic ActivitiesIt is estimated that 360,000 residents of Kinondoni Municipality are employed in both private and public sectors. Out of these, 95% are employed in the private sector while the rest 5% are employed in the public sector. A working force of 200,000 people is self-employed. The majority of the residents are involved in petty business, fisheries, livestock keeping and agriculture including horticulture. Only 3% of the working force is engaged in subsistence agriculture in the peri-urban areas. There are no big farms but small plots ranging from 2.5 to 6 acres. Others make small gardens around their houses in which various vegetables and root crops like cassava and sweet potatoes.
2.1 MWANANYAMALA WARD PROFILE
Mwananyamala ward is one of the twenty seven wards in Kinondoni district Dare salaam located on the west of the Indian Ocean Coastline bordering with the wards of Makumbusho; Tandale; Magomeni,Msasani; Kijitonyama and Manzese.Mwananyamala ward is consisting of six streets that include: Msisiri A, Msisiri B; Mwinjuma; Kambawa; Kopa; and Bwawani. Among the six streets three are surveyed, these are Msisiri A, Msisiri B, and Bwawani. The other three are un-surveyed one those are Kambawa, Kopa and Mwinjuma where houses are squatters and densely populated which most of them are in informal settlements that owners do not have land tenure
2.1.1 Leadership and administrative;
The ward leadership and administrative is divided into three levels.lst level: Ward Development Committee that is composed of seven departmental committees led by the
1st level Ward Executive officer in collaboration with a councillor
2nd level: Street Government- led by the Street (Mtaa) Executive Officer
3rd level the owest level- the Ten cell leadership- Balozi
2.1.2 Climate:
Mwananyamala ward have a typical coastal equatorial climate that is characterized by being hot and humid with small seasonal and daily variations in temperature. It is generally hot and humid throughout the year with an average temperature of 290C .The hottest season is from October to March while it is relatively cool between May and August with temperature around 250C. There are two rain seasons: - short rain from October to December and long rain season between March and May. The average annual rainfall is 1300mm. Humidity is around 96% in the mornings and 67% in the afternoons. The climate is also influenced by the Southwest monsoon winds from April to October and Northeast monsoon winds between November and March. (Source Kinondoni profile)
2.1.3 Population
Mwananyamala ward is occupied mostly with the indigenous coastal region tribes These includes: Wakwere, Zaramo, Ndengereko and other tribes who have migrated to the ward from all over the country caused by rural urban migration. The rapid population increase is influenced by both natural causes and immigration (birth rates and net immigration rates respectively). The ward has 10643 households with an average 4.2 people per house that are living in 4323 houses. (2002 census)
2.1.4 Employment and Economic Activities:
It is estimated that 30% of residents in Mwananyamala ward are employed in both the private and public sector. Another 30% is self-employed through various activities ie carpentry, garage, metal work and welding tailoring and small garden including horticulture. The majority of the residents are involved in petty business, of food vendors, selling vegetable and fruits, second hand clothes etc. There are no big farms but small plots for gardening around their houses in which various vegetables for family food and the surplus for generating income. The other proportion of population is not employed mostly spent time at corners called vijiwe/ camps and commuter buses callers’ wapiga debe (source ward office)
2.1.5 Education:
The ward has four Government Primary schools and one private owned primary school as summarized below:
SNO SCHOOL BOYS GIRL TOTAL
1 Mwongozo 560 554 11142
2 Kinondoni 570 535 11053
3 Msisiri A 468 650 11184
4 Msisiri B 553 495 10485
5 Answar 230 105 335
Total 2381 2339 47202.
1.6 Health service:
Mwananyamala ward population is served by one government district hospital which also serves the whole Kinondoni District; seventeen (17) dispensaries; one (1) laboratory and fifty two (52) pharmacies both of them privately owned.
Safe and clean water:
The main source of water for Mwananyamala residents belong to Dar Es Salaam Water and Sewerage Authority (DAWASA), which contributes 80% of water being consumed daily and the rest 20% is contributed by 3 deep wells and rain harvested water.2.1.7 Security:
Security matters Mwananyamala ward is served by three (3) police post assisted by ward militia and community based traditional security system called sungusungu that involve all community members.
3.0 Statement of the problem
3.1 Extent of the problem:
In 2003 it was reported that there were 43 million orphans in sub-Saharan Africa, which is 12.3 per cent of all children. Twelve million of these are orphaned due to AIDS. (Children on the Brink 2004, UNAIDS/UNICEF/USAID) The situation in Tanzania is very similar as it is estimated to have orphans up to 2.5 million (14 per cent of all children in Tanzania) and the number of orphans is projected to increase and by 2010 to reach up to 4.2 million. The results of the participatory study that was conducted in Mwananyamala ward in Kinondoni Municipal revealed that there is a total of three hundreds and seventy five (375) orphans of which two hundreds and fifty five equivalent to 68% of all orphans in Mwananyamala ward live with their grandfathers and grandmotherAmong the causes and contributing factors of high number of orphans in Mwananyamala ward is as follows: 60 % parents died due to HIV/ AIDS; 20% early pregnancy among girls and 20% divorce among familiesTraditionally, the extended family has often supported orphans. But as the numbers of orphans are now overwhelming and rising, and as most extended families themselves are poor there seems to be increasing evidence of a breakdown in this structure as an adequate safety net for vulnerable families.Recent quantitative analysis of data from 27 sub-Saharan African countries showed that one third of all households are headed by older people. Over 60 per cent of orphaned children live in grandparent-headed households in Namibia, South Africa and Zimbabwe, and over 50 per cent in Botswana, Malawi and Tanzania. (Help-Age International 2004)In Tanzania 4 percent of children who have lost both parents are living in a household headed by a person over the age of 55 and as the HIV and AIDS epidemic advances, the number of children living with grandparents is increasing in relation to those living with other relatives. Between 1992 and 2000 the proportion of orphaned children living in a grandparent-headed household increased from 45 to 53 per cent, compared to a reduction of those living with other relatives from 40 to 31 per cent. (Roeland Monasch, March 2004)The study by Rapid Appraisal Analysis and Action Planning (RAAAP) (2004) conducted in Tanzania revealed that 53% of all orphaned children in Tanzania are cared for by their elderly grandparents.The results of the participatory study that was conducted in Mwananyamala ward in Kinondoni Municipal revealed that there is a total of three hundreds and seventy five (375) orphans of which two hundreds and fifty five equivalent to 68% of all orphans in Mwananyamala ward live with their grandfathers and grandmother.The life condition of elderly people caring the orphans is not only the economic development problems but also the social, cultural, and psychosocial aspects of the elderly people and the children life. The lives of many older people in Tanzania which is the same phenomena in Mwananyamala ward are characterized by high degree of poverty, ill health, poor housing inadequate agricultural inputs, entrepreneurship skills, access to credit services and capital for businesses creation hence leading to reduced quantity and quality of food, lack of purchasing power, unemployment and discrimination among the elderly people.The causes of poor life condition for elderly people in Mwananyamala and other parts of Tanzania is that most of them have no means of income generating activities. Both of them have retired from work or have no more energy to participate in income generating activities. Worse enough are routinely excluded from obtaining the credit service they need to start small business because of age discrimination and lack of assets to offer as security they are deigned to access any loans for business creation and have no premises for business.
3.2 Consequences of poor life condition for elderly people caring orphans:
The consequence of this depletes the elderly people resources, and often jeopardizes the livelihoods of the elders and the orphans and vulnerable children they care.The limited availability of support and intervention by government, NGOs and community aiming at elderly people caring the OVC has reduced the capacity of the elders to care and support the OVC such that in turn place children at risk of run away and join street children, drug or substance abuse, truancy and drop out of the school, self-exploitation, criminal behaviour, child labor, and sex abuse.Further more not only the direct effects on the children but also the absence of parental care, isolation from emotional connection and support along side the stigma and exclusion, OVC and their older carer experience grief and possible confusion following the loss of their parents and children.
3.3 What need to be changed?
Older people often play a role in comforting orphans on death of their parents and in providing support and guidance yet the older themselves are under pressure, with psychological problems of their own following the death of their children- grief, loss, anger, fear and the worry of bringing up orphaned children hence impacts and affect the whole community of Tanzania at present and in future. Despite their immense social contribution in caring the orphans neither by the Governments nor the international organizations and the majority of the NGOs, CBOs and community pay much attention to elderly people, in reality elderly people receive little support and acknowledgment.A broad range of interventions are unfortunately mostly aiming at supporting the OVC in isolation and doing very little or nothing to the elderly people caring the OVC in terms of material, physical, emotional, and social needs for the wellbeing of the children they care. The work that is done by the elderly people is a crucial contribution around child care and an investment into the next generation, but their labours are mostly taken for granted. Therefore there is a need to address the problems that elders are facing by enhancing their capacity of socially, economically and emotionally to enable them to achieve an adequate level of caring the orphans for children’s survival, development and wellbeing.
3.4 Responses by international and regional institutions in the supporting the elderly people:
The international, Regional and National community has made a number of commitments to fighting HIV and AIDS, OVC and to reduce poverty as well as to mainstream older people in various programs, however, so far little has been done by national governments or the international community to put in practice the policies, programmes and resources to act upon these commitments. The commitments that have been made include the following:
Firstly, the UN Declaration of Commitment on HIV/AIDS (2001) commits member states to ‘ensure the development and implementation of multi-sectoral national strategies that address gender and age-based dimensions of the epidemic and strengthen family and community-based care. It further commits governments to review the social and economic impact of HIV/AIDS at all levels of society, especially on women and the elderly, and particularly in their role as caregivers.Secondly, the Madrid International Plan of Action on Ageing (2002) commits all UN member states to the improvement in the assessment of the impact of HIV/AIDS on the health of older persons infected and for those caring for infected or surviving family members (orphans) to the provision of adequate information, training, treatment, medical care and support to older persons and to ‘introduce policies to provide support, health care and loans to older caregivers to assist them in meeting the needs of children and grandchildren in accordance with the Millennium Declaration.’Thirdly, the Africa Union (AU) Policy Framework and Plan of Action on Ageing (2002) commits AU member states to ‘protect the rights and needs of older people affected by HIV/AIDS and other epidemics, including the recognition that older people are sexually active and at risk group and that they are the major providers of care for those who are sick and for orphaned grandchildren.
3.5 Tanzania Government response:
The Government of Tanzania is a signatory to all these international commitments and it is also bound by national policies such as the Poverty Reduction Strategy, the National Policy on HIV/AIDS and the National Ageing Policy.The Tanzania’s National Strategy for Growth and Reduction of Poverty (NSGRP, 2005/06-2009/10) mainstreams vulnerable groups including older people, children, women and people living with AIDS and proposes a range of initiatives to deal with HIV prevention, including the care and support of those affected. It also aims at mitigating the effects of HIV/AIDS through the development of social protection measures such as pensions/ cash transfer for older people and social safety nets for children and other vulnerable group including orphans.Furthermore, in October 2003 the Tanzanian Government launched the National Ageing Policy, which recognizes older people as a resource in development, and their rights within the framework of Tanzania’s constitution. The policy commits the Tanzanian Government to, amongst other things, review costs and access to quality health care for older people, raise awareness of their needs, counsel and train older people in the care of people living withAIDS, and ensure that they participate in the planning and implementation of development plans. Furthermore the National Ageing Policy seeks to establish a credit fund for older people and encourage district councils and civil society to build the capacity of older people to engage in income generation activities and access to cash transfer. This policy context provides a conducive and enabling environment in which to respond to the needs of older people and support their contributions to society hence that they are able to support the Orphans and vulnerable children. However, the challenge lies in the implementation of policies and international commitments. The development of key strategies at national and local level, financing mechanisms and the allocation of responsibilities are critical to ensure that policy initiatives are turned into action at the local level where it can really make a difference to the lives of poor and vulnerable old people hence support the orphans and vulnerable children.
3.6 Non Government Organization response:
There are few NGOs that have programs for elderly people in Tanzania these include: Help Age International. This is an organization that its mission is to work with and for disadvantaged older people in Tanzania to achieve a lasting improvement in the quality of their lives and to realize their rights, to participate in civil society and to access to health services. Help Age International Tanzania has been seeking to create a wider understanding and recognition of ageing issues with civil society and the Government by supporting a strong movement of older people, strengthening ageing organizations, facilitating interaction with Government and mainstreaming ageing into the development agenda.Among the intervention strategies includes:Addressing the needs of older people at the community levelResponding to the needs of older people in EmergencieAddressing the nutritional situation of older peopleAddressing the violation of older people’s rightResponding to the impact of HIV/AIDS on older people and their familiesDespite the progress made by Help Age International and others in the conduct of policy- or practice-focused on ageing and older people in Tanzania, huge gaps still remain compared to the challenges facing older people and ageing populations in Tanzania. These includes: Lack of information and understanding the key areas of concern around the number of older people in Tanzania; The situation of older people and the nature of family structures; The HIV/AIDS impact on older people and that older people taking care of families and orphans and analysis and sound understanding of the social, psychological, physical and economic effects.
3.7 How does the problem relate to the project host CBO?
MWAWODE is a non-for profit organization established in 2000 with a mission to provide supportive services and empower its members and marginalized members (women, elderly and orphans and vulnerable children) of community to be able to lead better lives economically, socially and culturally. MWAWODE is in the initial stage and have managed to support only ten elders living with orphans by supporting them with small loans amounting to fifty thousand shillings each. This support has helped the elderly people to support the orphans by food, clothes and scholastic material.However, issues and needs of elderly people caring orphans were not properly coordinated though there were some ongoing OVCs activities. The Mwananyamala Ward community participatory needs assessment and the prioritization process came out with a need of enhancing the social economic and parenting skills to elderly people in particular, as a crucial thing in care and support for OVCs in the community. In this case, MWAWODE shall work to support the elderly people caring OVC by conducting a training in designing, managing micro project and parenting skills, as well as mobilizing resources and small loans to support the elderly people for income generating activities.
4.0 PROJECT TITTLE AND PROJECT IMPLEMENTATION:
CAPACITY ENHANCEMENT ON SOCIAL – ECONOMIC AND PARENTING SKILLSFOR ELDERLY PEOPLE CARING FOR ORPHANS AND VULNEARBLE CHILDREN
4.1 Target group
The target group for the project are into two categories that of direct and indirect. The direct one is the elderly people caring the orphans and the indirect one are the orphans cared by the elderly. The elderly people will benefit from the project by being exposed and trained in micro-project designing and management. In addition to that elderly people will be facilitated to access small loans as capital for income generation. Elderly people will participate in the process of initiating and managing the micro economic project for their income generation. This will result to the enhancement of social - economic capacity. Funds generated from the micro project will enable the elderly people to support themselves and orphans cared by them to purchase food, clothes, and scholastic material. Orphans will be able to have food, clothes and attend schools through the support and care from their grand parents.
4.2 Stakeholders:
Stakeholders are the major players, groups or institutions of the project these can be direct and indirect stakeholders. These will include: the elderly people; the orphans MWAWODE CBO leaders and members; Mwananyamala Ward Development Committee; Kinondoni Municipal Council; Community Development Officer; Hep Age International Tanzania, and the Financial Institution FINCA, PRIDE AFRICA.
5.1 Project Vision:
Enhanced & capacitated community members in Mwananyamala especially the marginalized, poor members of the community children and the elderly to be free from Poverty, illiteracy, and diseases such as HIV and AIDS
5.2 Mission statement:
To provide supportive services and empower community members especially marginalized members of community to be able to lead better lives economically, socially and culturally.
5.3 Project goal:
To enhance the capacity of elderly people caring OVC, socially, economically and emotionally for the wellbeing of Orphans and vulnerable Children in Mwananyamala
5.5 Specific objectives
  • Enhanced capacity of the elderly people caring OVC in designing, initiating, and managing micro-projects for income generating in Mwananyamala Kinondoni Municipal Council by the end year 2008.
  • Elderly people caring orphans and vulnerable children able to access credit services ( small loans) to start income generating activities in Mwananyamala Ward by the year end 2008
  • Enhanced capacity of elderly people in supporting OVC with Psychosocial Care and Support by the year end 2008

5.6 MWAWODE COMMUNITY ORGANIZATION TO RUN THE PROJECT:

Mwananyamala Women Development (MWAWODE) a registered community based organization with registration number 1548 of 2nd September 2005. MWAWODE headquarters is at Mwananyamala “A” Plot no 14 Block 25 B Msisisiri Street near Roman Catholic Church; Kinondoni District with Telephone Number: 0754599249; EMAIL: mwaode@yahoo.com

MWAWODE VISION:

MWAWODE seeks to develop & capacitated MWAWODE, members and community around especially the marginalized, poor members of the community children and the elderly to be free from Poverty, illiteracy, diseases such as HIV and AIDS and advocate the basic rights for the children, women and elderly people are respected

MWAWODE MISSION STATEMENT:

With support from members and stakeholders, MWAWODE will provide supportive services and empower its members and marginalized members of community to be able to lead better lives economically, socially and culturally.

MWAWODE GOAL:

To contribute to the improvement of the living standard of its members as well as that of the marginalized community members, especially women old people and children of Mwananyamala ward.MWAWODE as a project host organization MWAWODE shall support elderly people caring OVC in facilitating and conducting training in designing, managing micro project and parenting skills as well as mobilizing resources and small loans to support the elderly people for income generating activities.

5.7 Management of the Project:

MWAWODE community based organization will be specifically responsible for project management and monitoring. This will include the project spending against the approved budget and monitoring on the overall implementation process. To achieve the intended objectives the structure of MWAWODE organization structure made up of sections with specific functions will be applied. These include the project coordinator, MWAWODE chairperson, secretary and members.

Financial Accountability:

The Coordinator of MWAWODE and the Chairperson, as per MWAWODE standard operating procedures, will ratify all expenditure proposed by the Coordinator against the budget line.

Activities:

MWAWODE will be involved in a number of social development activities with the elderly people. Activities are intending to enhance the social economic capacity of the elderly people caring orphans These will include: training on initiating and managing micro-projects for income generating through self-employment in the community; training on parenting to be provided to elderly as most of them retired a long time ago caring children and especially orphans who have some psychological problems due to the death of their parents; facilitating elderly people to access small loans to start income generating activities; monitoring and evaluation of the project implementation.

6.0 MONITORING AND EVALUATION:

Monitoring and EvaluationMWAWODE will facilitate the participatory monitoring and evaluation that will involve the stakeholders of the project including the elderly people. The monitoring will be conducted from the beginning of the project up to the end of the project. This will involve monitoring resource utilization, activity conducted these include the training workshops, facilitation of loans. Evaluation will be conducted at the middle of the project and the final evaluation will be conducted at the end of the project to assess the impact of the project. The participatory methods will be applied that will include the PRA, beneficiary assessment and stakeholders consultative meeting. Moreover, MWAWODE coordinator will compile the findings and develop the report that will be shared to stakeholders of the project. These to include: the donor, the beneficiaries and other partners.

7.0 Sustainability of Development Activities

Financial Sustainability.

The programme will provide training and capacity building for the elderly caring orphans from the community on self-employment project design and management. The training, will enable the elderly people to identify and start productive micro-projects for income generation activities, In addition to that the MWAWODE will facilitate and give loans to the elderly people at the beginning as a revolving fund The loan will be given under simple terms to allow repayment.For funding the project proposal will be shared to Help Age International so that they can fund the project. Help Age International organization mission is to work with and for older people in Tanzania to achieve a lasting improvement in the quality of their lives.

7.1 Managerial Sustainability:

The project will be managed under the normal MWAWODE structure. The Executive Secretary’s Office of MWAWODE will be the leading agency for the programme implementation, and have overall responsibility for carrying out activities. The project will be incorporated into MWAWODE strategic plan of which one of its strategic objectives is to support elderly people to realise their social economic development through providing soft loans for income generating.Elders themselves will be involved in all stages of the project implementation from planning of the activities and monitoring. Both men and women will be involved.In addition to that MWAWODE for project sustainability will provide training on initiating and managing micro project to elderly people. From the skills acquired elderly people will be able to initiate and manage micro project for their income generation activities.Moreover a Training of Trainers on parenting and caring OVC will be provided to the MWAWODE members by the CED student so that they will be able to facilitate training on parenting skills to elderly people after the CED student have graduated.The Mwananyamala Development Committee will be consulted to include the elderly people support interventions into the Ward community development plans that will also forwarded to the Kinondoni Municipal council level to set aside some funds to support elderly people and orphans in Mwananyamala.

Indicators for the project sustainability will include:

  • Number of elderly people accessing loan
  • Number of micro project initiated and managed by the elderly people
  • Number of orphans that are attending schools
  • % of orphans that are supported by elderly people for their social economic development

Participatory monitoring methods will be applied. These includes: PRA, interviews and Focused Group Discussions.

8.0 Conclusion

The capacity enhancement on social economic and parenting skills for elderly people caring orphans have the potential to contribute significantly to the wellbeing of orphans. It is the responsibility of all stakeholders to ensure that support of orphans is taken in the tradition institutionalized way of caring orphans from the family, community and government level. The social economic enhancement of the elderly caring orphans is the viable and sustainable intervention for the development of orphan’s social economic wellbeing.

Wednesday, November 5, 2008

Highly Indebted Poor Countries Initiative (HIPC) a case of Tanzania

Introduction
Over the past few years the World Bank, together with its partners, has evolved new processes and operational instruments in an effort to increase the resources of poor indebted governments and to improve the effectiveness of all domestic and donor-supplied resources in the fight against poverty. These include: a new set of procedures to allow higher levels of debt relief; the articulation by governments of Poverty Reduction Strategy Papers (PRSPs); and financial support to implement these strategies through Poverty Reduction Support Credits (PRSCs). Since human development is central to all poverty reduction efforts, these new approaches have tended to place a heavy emphasis on increasing financial resources for the social sectors, particularly education and health, and on improving sectoral performance.
It is the intention of this paper to examine the progress, weaknesses and challenges so far, of the HIPC debt relief initiative on the levels and patterns of poverty-reducing in poor African countries. In the course of the discussion the paper will explore the historical background; criteria for benefiting debit relief; recommendation and finally the conclusion.
Background of Heavily Indebted Poor Countries (HIPC) Initiative
After almost two decades of repeated attempts to relieve many low income countries of their external debt burdens, in 1996 the World Bank and the International Monetary Fund (IMF) proposed the Heavily Indebted Poor Country (HIPC) Debt Initiative to provide comprehensive debt relief to some of the world’s poorest and most heavily indebted countries. The initiative was formally agreed by governments around the world in September1996 with the aim of ensuring that no poor country faces a debt burden it cannot manage.
In addition to that the initiative was launched in order to “provide a framework for all creditors, including multilateral creditors to provide debt relief to the world's poorest and most heavily indebted countries, and thereby reduce the constraint on economic growth and poverty reduction. The Initiative entails coordinated action by the international financial community, including multilateral organizations and governments, to reduce to sustainable levels the external debt burdens of the most heavily indebted poor countries (World Bank, 2004).
Fundamentally the initiative still aims to reduce, within a reasonable time, the external debt burden of qualifying countries to “sustainable” levels. The underlying and plausible premise is that excessive debt is an impediment to the broader development goals of sustainable economic growth and poverty reduction.
Over the following four years, public concern with excessive debt burdens, declining aid flows and a perceived over–stringency of the terms for receiving debt relief grew and, with the strong support of advocacy NGOs such as Jubilee 2000, this led to an ‘enhancement’ of the Initiative in late 1999. Following a comprehensive review in 1999, a number of modifications were approved to provide faster, deeper and broader debt relief and to strengthen the links between debt relief, poverty reduction, and social policies.
In order to help accelerate progress toward the United Nations Millennium Development Goals (MDGs), the HIPC Initiative in 2005 was supplemented by the Multilateral Debt Relief Initiative (MDRI). The MDRI allows for 100 percent relief on eligible debts by three multilateral institutions—the IMF, the International Development Association (IDA) of the World Bank, and the African Development Fund (AfDF).
In 2007, the Inter-American Development Bank (IaDB) also decided to provide debt relief to the five HIPCs in the Western Hemisphere.
Criteria for HIPC initiative assistance:
To receive debt relief under HIPC, a country must first meet HIPC's stingy requirements. Whereby at the HIPC's inception in 1996, the primary tough requirement were as follows:
The country's debt remains at unsustainable levels despite full application of traditional, bilateral debt relief. At the time, HIPC considered debt unsustainable when the ratio of debt-to-exports exceeded 200-250% or when the ratio of debt-to-government revenues exceeded 280%. In simple terms, a sustainable debt level is the level where debt does not grow faster than the economy. This means that Government will have enough revenue to pay the debt without having to accumulate arrears or ask for debt restructuring. Debt restructuring may be done through rescheduling where the terms of the loan are reviewed; cancellation where the debt is completely written off; Debt Buy Back where the borrower is allowed to buy back its debt at a discounted price and debt swap where the debt is converted into cash, equity, assets or environmental programmes. In other words, a sustainable debt level is the one which is manageable from the Government budget's perspective, meaning that the Government can, in any financial year, accommodate in its budget all the maturing obligations of domestic and external debt. Tanzania has been to the Paris Club seven times requesting restructuring of its debt from the member creditor countries. A country knows that it has a sustainable or unsustainable debt by carrying out a debt sustainability analysis referred to as Debt Sustainability Analysis (DSA). Under the Highly Indebted Poor Countries (HIPC) initiative there are ratios which are usually called indicators used to show the position of a country's debt level in terms of sustainability. Usually the IMF and World Bank conduct the DSA in collaboration with the Official of a debtor country.
· Be International Development Association (IDA)-only and Poverty Reduction and Growth Facility (PRGF) -eligible; This is the part of the World Bank that helps the earth’s poorest countries reduce poverty by providing interest-free loans and grants for programs aimed at boosting economic growth and improving living conditions. IDA funds help these countries deal with the complex challenges they face in striving to meet the Millennium Development Goals. They must, for example, respond to the competitive pressures as well as the opportunities of globalization; arrest the spread of HIV/AIDS; and prevent conflict or deal with its aftermath.
· Establish a track record of reform and sound policies through IMF- and IDA-supported programs, For the case of Tanzania these included: Good governance, Government financial management (Finance management bill and Public audit bill; Taxi reform; Improvement on business environment; improvement of utility performance; improvement of data base and monitoring capacity; adoption of Medium Term Expenditure framework (MTEF); Priority area education and health.
· Have developed a Poverty Reduction Strategy Paper (PRSP) through a broad-based participatory process. The government of Tanzania approved its full PRSP on 31ST August 2000; it was sent to IDA and IMF on October 2000, and the Boards of IDA and IMF endorsed the PRSP on November 200 and December 200 respectively
Once a country has met or made sufficient progress in meeting these criteria, the Executive Boards of the IMF and IDA formally decide on its eligibility for debt relief, and the international community commits to reducing debt to the agreed sustainability tough condition. This is called the decision point. Once a country reaches its decision point, it may immediately begin receiving interim relief on its debt service falling due.
In order to receive the full and final reduction in debt available under the HIPC Initiative, the country must:
· establish a further track record of good performance under IMF- and IDA-supported programs;
· implement satisfactorily key reforms agreed at the decision point, and
· adopt and implement the PRSP for at least one year.
Once a country has met these criteria, it can reach its completion point, at which time lenders are expected to provide the full debt relief committed at decision point.
Who received HIPC Initiative Assistance?
In 1996 forty-one countries (41) have been found to be eligible or potentially eligible for HIPC Initiative assistance. Under the original framework, only six countries reached their completion points, and a consensus emerged that the process needed to move more quickly. Consequently, the G-7 introduced the enhanced HIPC initiative at its fall 1999 meeting in Cologne, Germany.
The enhanced initiative reduced the ratios that qualified a country’s debt burden as unsustainable to 150 percent for net-exports and 250 percent for government revenue.
The second initiative also made it easier for countries to reach a decision point, allowed them to begin receiving debt relief as soon as they did so, and provided greater relief. Under the enhanced HIPC initiative, sixteen additional countries began receiving debt relief in 2000, In 2004 the HIPC program identified 42 countries, 32 of which are in Sub-Saharan Africa, as being potentially eligible to receive debt relief.
Tanzania reached the decision point under the HIPC Initiative and was approved the Executive boards of the IMF and IDA in April 2000 The debt relief agreed was US $ 2026 MILLION IN Net Present Value ( NPV) terms , calculated to reduce the NPV of Tanzania’s external debt to 150% of average 1996/97 – 1998/ 99 export as of end June 1999. The relief represented a reduction of 54% of the NPV of debt service over time.
On July 7, 2007, the South American nation of Guyana was declared to be no longer a "Heavily Indebted Poor Country". And it remains the only nation to be removed from the HIPC lis

List of Countries That Have Qualified for, are Eligible or Potentially Eligible and May Wish to Receive HIPC Initiative Assistance(as of March 2008)
Post-Completion-Point Countries (23)
Benin
Honduras
Rwanda
Bolivia
Madagascar
São Tomé & Príncipe
Burkina Faso
Malawi
Senegal
Cameroon
Mali
Sierra Leone
Ethiopia
Mauritania
Tanzania
The Gambia
Mozambique
Uganda
Ghana
Nicaragua
Zambia
Guyana
Niger

Interim Countries (Between Decision and Completion Point) (10)
Afghanistan
Republic of Congo
Haiti
Burundi
Democratic Republic of Congo
Liberia
Central African Republic
Guinea

Chad
Guinea Bissau

Pre-Decision-Point Countries (8)
Comoros
Kyrgyz Republic
Sudan
Côte d'Ivoire
Nepal
Togo
Eritrea
Somalia


How the HIPC Initiative is financed
The total cost of providing assistance to the 41 countries that have been found eligible or potentially eligible for debt relief under the enhanced HIPC Initiative is estimated to be about US$68 billion in end-2006 net present value terms. About half of this was to be provided by bilateral creditors this includes top five bilateral creditors ie Japan, United Kingdom, Italy, Belgium and France. The rest was to come from multilateral lenders. The IMF's share of the cost is financed primarily by the investment income on the net proceeds from off-market gold sales in 1999 that were deposited to the IMF's PRGF-HIPC Trust.
Additional contributions to this trust have been provided by member countries.
NB/=Debit relief committed so far under HIPC $ 2.7 billion and Debit relief delivered so far under MDRI is $ 3.4 billion



The progress and success from the HIPC Initiative
HIPC addressed its shortcomings by expanding its definition of unsustainable debts, making greater relief available to more countries, and by making relief available sooner. . Today, HIPC defines three minimum requirements for participation in the program as follows:
Firstly, as before, a country must show its debt is unsustainable; however, the targets for determining sustainability decreased to a debt-to-export ratio of 150% versus 200 to 250 % and a debt-to-government-revenues ratio of 250%. Versus 280%
Secondly, the country must be sufficiently poor to qualify for loans from the World Bank's International Development Association or the IMF's Poverty Reduction and Growth Facility (PRGF, the successor to ESAF), which provide long-term, interest-free loans to the world's poorest nations.
Lastly, the country must establish a track record of reforms to help prevent future debt crises.
In addition to the modified stingy requirements, the 1999 revisions introduced several other changes as follows:
Firstly, the six-year structure was abandoned and replaced by a "floating completion point" that allows countries to progress towards completion in less than six years.
Secondly, the revised HIPC allows for interim debt relief so that countries begin to see partial relief before reaching the completion point.
Thirdly, the PRGF heavily modified ESAF by curtailing the number and detail of IMF conditions and by encouraging greater input from the local community into the program's design.
Following these revision of requirements the HIPCs that have already obtained debt service relief are spending much more on social services than on debt service—on average four times as much—and have shown a marked increase in the share of health and education in the budgets under their Poverty Reduction and Growth Facility (PRGF) programs.
For the 33 countries for which packages have already been approved, debt service paid, on average, has declined by about 2 percent of GDP between 1999 and 2006. Yet for debt reduction to have a tangible impact on poverty, the additional resources need to be targeted at the poor.
Before the HIPC Initiative, eligible countries were, on average, spending slightly more on debt service than on health and education combined. Now, they have increased markedly their expenditures on health, education and other social services and, on average, such spending is about five times the amount of debt-service payments. During the course of the HIPC initiative (completion point already in November 2001) Tanzania’s total external debt dropped significantly from US$ 7.6 billion in 1998 to US$ 1.6 billion in 2003. Originally, Tanzania’s debt to export ratio was 484 % which is three times higher than the sustainability level defined by IMF and World Bank.
Tanzania reduced its annual debt payment by $170 million. The government used the savings to increase spending on education and to eliminate elementary school fees, leading to a 1.6 million-student surge in enrollment. For example the Tanzania Government PRSP estimates that HIPC debt relief has contributed approximately $62 Million to Government budget in 2001/02
Health MTEF budget estimates that HIPC debt relief would contribute $5.6 million to a total recurrent budget of approximately $36million in 2001/2002. The allocation of the $5.6 million was as follows:
HIV/AIDS advocacy and IEC $3.5 M
Expansive Program for Immunization $1.5 M
Malaria control $0.6 M
Mozambique on the same approach channeled its savings from HIPC debt-relief into a number of social programs: $13.9 million for child vaccination programs; $10 million to bring electricity to rural schools and hospitals and to rebuild infrastructure damaged by natural disasters; and $3.2 million to build new elementary schools and promote the education of young girls.
Challenges and weakness of HIPC Initiative
Challenges and weaknesses that faced the HIPC's scope and its structure included the following:
Firstly, the HIPC's definition of debt sustainability, that argued that the debt-to-export and debt-to-government-revenues criteria were arbitrary and too restrictive. As it was evidenced, and it was reported and highlighted that, by 1999, only four countries had received any debt relief under HIPC.
Secondly, the six-year program was too long and too inflexible to meet the individual needs of debtor nations.
Thirdly, the IMF and the World Bank did not cancel any debt until the completion point, leaving countries under the burden of their debt payments while they struggled to institute structural reforms.
Fourthly, the ESAF conditions often undermined poverty-reduction efforts. For example, privatization of social services ie health and education tended to raise the cost of services beyond the citizens' ability to pay in the name of cost sharing.
Fifthly, HIPC as a program was designed by creditors to protect creditor interests, leaving countries with unsustainable debt burdens even upon reaching the decision point. There is a widespread criticism that it was a fundamental mistake to let the creditors, led by the IMF and World Bank, work out the original framework of the HIPC initiative. Though it is acknowledged that the IMF and World Bank had undertaken an extensive consultation process across the world for the 1999 review of the initiative, the enhanced HIPC framework clearly followed the suggestions of the G7 summit of June 1999 in Cologne. As is reflected in most criticism of the HIPC framework voiced in many NGO forums and some United Nations organizations, developing countries, and especially debtor countries, had little or no say in the final adoption of the enhanced framework of the HIPC initiative. Given that some developing countries are major creditors to some HIPCs, their exclusion from the key decision making process constitutes a problem.
Sixthly, while country-by-country data demonstrate that these countries are seeing clear gains, it has taken time and effort to ensure that money is redirected to help the poor in ways that most reduce poverty. Even if all of the external debts of these countries were forgiven, most would still depend on significant levels of concessional external assistance, since their receipts of such assistance have been much larger than their debt-service payments for many years and difficult problems remain. For example while multilateral debt relief will lead to a substantial reduction of the existing debt stock, Tanzania’s external financing gap remains, so external borrowing will continue. The impact of HIPC on debt servicing the relief provided under the HIPC initiative reduces debt servicing by almost 55 percent. For instance, the US$169 million in debt service relief provided in 2001/02, correspond to about 11 percent of total government revenue in 2000 and is more than the entire budget for the Ministry of Education. In addition to that countries affected by war or natural disasters, pressing reconstruction needs may mean large new loans at the same time that old debt is being reduced.
Moreover, other countries face challenges to meet the criteria for reaching the decision point due to uneven policy records or poor governance resulting from civil conflict. Countries such as Somalia and Sudan have very large debts and are running arrears to various creditors that will require additional funding for the Initiative. Inadequate debt relief for such countries means that they will need to spend more on servicing debts, rather than on actively investing in programs that can reduce poverty. In another way this is like a poverty trap.
Eighthly, it is argued that the HIPC initiative has been designed around the concept of what debt reduction is needed according to inappropriate debt sustainability indicators, instead of what debt reduction is needed for sustainable development. This was especially the case under the original framework, which did not have any explicit link to poverty reduction. While the enhanced framework makes a formal link to poverty reduction by requiring HIPCs to develop and implement poverty reduction strategies, enhanced HIPC debt relief is still not calculated on the basis of a country’s need for sustainable development.
Recommendations
The paper makes four recommendations addressing the strategic issues facing the initiative.
The first is to clarify and communicate the purpose and objectives of the initiative and ensure that its design is consistent with these objectives.
The second recommendation is to make explicit the methodology and economic models underlying the debt projections used in the debt sustainability analyses and make the economic forecasts more realistic to assess better the prospects and risks facing individual countries.
Third, the initiative should maintain the standards for HIPCs’ policy performance to ensure that the risks to achieving and maintaining the initiative’s objectives are minimized. And when flexibility is desirable, there should be a clear and transparent rationale for relaxing the criteria.
Finally, the paper recommends a greater focus on pro-poor growth to provide a better balance among development priorities relative to the current emphasis on social expenditure.

Conclusion
Compared with other debt initiatives implemented over the past two decades, the HIPC initiative represents a huge step forward. It was a breakthrough in terms of its aim to provide a lasting exit from unsustainable debt and achieve debt sustainability and its approach to including multilateral creditors in sharing the costs related to debt relief. The HIPC initiative is to be commended for providing more debt relief to HIPCs than the sum of all previous debt rescheduling.
The enhanced initiative has also started to link debt reduction to poverty reduction. However, the enhanced HIPC initiative is unlikely to achieve a lasting exit from unsustainable debt for many HIPCs, as they suffers from some fundamental flaws in its design, such that continues to face considerable financing constraints, applies an inappropriate burden-sharing concept, and may lead to a reduction in traditional development assistance.
Finally, the costs of debt relief and poverty reduction programmes should not be seen as an economic burden but as investments in the future. Experience from the past for example, the 1953 debt relief provided to Germany after World War II shows that debt relief can pay for itself in terms of political stability and contributions to world growth. It should not be surprising that political instability, ethnic conflicts and war are re-occurring in poor countries facing unsustainable debt. A marginal cut in world military expenditures and to be allocated to a global poverty reduction strategy would boost global peace and reduce the costs of future peacekeeping efforts around the globe. Maintaining a sustainable debt position while seeking the additional financing needed to make progress toward the MDGs remains a serious challenge, even after debt relief under the HIPC Initiative.
























References
Booth, David and Lucas, Henry (2001) ‘Initial Review of PRSP Documentation’. Report commissioned by DFID for the Strategic Partnership with Africa. London:Overseas Development Institute. (Also available at www.odi.org.uk/pppg/monitoring_report.pdf.)
Cline, William R. (1997) ‘Debt Relief for Heavily Indebted Poor Countries: Lessons from the Debt Crisis of the 1980s’, in Z. Iqbal and R. Kanbur (eds), External
Peter Blair Henry Konosu, (April 24, 2008) Stanford University Graduate School of Business
http://is.muni,cz/th/g4029/fss-b/3-has-the-situation-improvement.pdf%20accessed%202th%20August%202008
http://swapec.hhs.sa/lunewp/paper/un; accessed 31st August 2008
http://un.org/ecosocdev/geninfo; accessed 31st August 2008
http://www3.interscience.willey.com/ccgi-bin; accessed 2nd Sept 2008
http://www.worldbank.org/oed pdf accesses 23rd August 2008
http://www.mof.go.mofdocument/ accessed 11Sept 2008

Major causes and impact of social economic and political conflict in Africa in general and Tanzania in particular

I.0 Introduction:
Africa continued to be the region with the greatest number of conflicts. These internal conflicts pose a serious threat to economic development, especially for the poor African community members.
Empirical evidence has shown that conflicts can tear down levels of economic development that took decades to achieve. Also, for a long time after their termination the spin-offs of conflicts continue to limit economic growth, political, social, inequalities between groups.
Eight out of 10 of the Africa poorest countries are suffering, or have recently suffered, from large scale violent conflict. Wars in Africa countries have heavy human, economic, and social costs and are a major cause of poverty and under development. For example, it is estimated that 3% of the country's 1990 population is in most current conflicts, such as in the Sudan and the Congo. In short in the past 30 years Africa has been especially badly affected by war.
It is the intention of this paper to analyze the major causes and impact of social economic and political conflict in Africa in general and Tanzania in particular. In due course of the discussion the paper will sight some definition of conflict.
Various scholars have attempted to define conflict in different perspectives. Among them is Harry Webne-Behrman, 1999 who defined conflict as a disagreement through which the parties involved perceive a threat to their needs, interests or concerns. A conflict is more than a mere disagreement - it is a situation in which people perceive a threat (physical, emotional, power, status, etc.) to their well-being. As such, it is a meaningful experience in people's lives, not to be shrugged off by a mere, "it will pass. Participants in conflicts tend to respond on the basis of their perceptions of the situation, rather than an objective review of it. As such, people filter their perceptions and reactions through their values, culture, beliefs, information, experience, gender, and other variables. Conflict responses are both filled with ideas and feelings that can be very strong and powerful guides to our sense of possible solutions.
According Galtung (1996) conflict could be viewed as a triangle with structure, attitudes, and behavior as its vertices. By structure, he means the conflict situation, the parties, and the conflict of interest among them. Conflict arises where the parties come to have incompatible interests, values or goals. He uses the term attitudes to refer to the tendency for the parties to see conflict from their own point of view, to identify with own side, and to diminish the concerns of others. Behaviors include gestures and communications, which can convey either a hostile or a conciliatory intent.
In addition, conflict occurs when two or more parties perceive that their interests are incompatible, express hostile attitudes, or take pursue their interests through actions that damage the other parties. These parties may be individuals, small or large groups, and countries, Interests can diverge in many ways: In another way conflict is generally defined as an interaction between interdependent people who perceive incompatible goals and who expect interference from the other party if they attempt to achieve their goal.
2.0 Major conflict causes:
Major conflict causes include political, economic, and social inequalities; extreme poverty; economic stagnation; poor government services; high unemployment; environmental degradation; and individual (economic) incentives to fight. For further clarifications these causes of conflict in Africa can be elaborated are as follows:
Group motivation: Since intra-state wars mainly consist of fighting between groups, group motives, resentments, and ambitions provide motivation for war. Groups may be divided along cultural or religious lines, by geography, or by class. Group differences only become worth fighting for, however, if there are other important differences between groups, particularly in the distribution. In addition to that political leaders and belligerents in Africa have made increasing use of ethnic hatred. Such abuse prolongs conflict, creates long term divisions that reduce the effectiveness of peace building efforts. For example conflict in Sudan with people in the south being heavily deprived by the northern part of Sudan which is dominated by ethnic group of Arabs and Islamic have been fighting due to ethnic, cultural religious and economic factors.
Inequality among community members:
Inequality between groups is probably the foremost cause of conflict in Africa. It is inequality between groups- rather than individuals-that increases the prospects of violent conflict Unemployment, lack of education and population pressure this is mostly in countries with high level of unemployment among men and where male educational levels are low face a far higher risk of conflict. Throughout Africa, factional conflict has drawn on a pool of marginalized or socially excluded young men, for example, the conflict in Liberia was fought by socially marginalized young men
The artificial boundaries created by colonial rulers as they ruled and finally left Africa had the effect of bringing together many different ethnic people within a nation that did not reflect, nor have the ability to accommodate or provide for, the cultural and ethnic diversity in such a short period of time. The freedom from imperial powers was, and is still, not a smooth transition. The natural struggle to rebuild is proving difficult. For example, the war between Uganda and Tanzania in 1998 to 1999 can be sighted as an example where Idd Amin claimed part of Kagera to belong to Uganda.
Failure of the social contract This derives from the view that social stability is based on a hypothetical social contract between the people and the government. People accept state authority so long as the state delivers services and provides reasonable economic conditions employment and incomes. This has been experienced in Congo, Liberia and sierra Leon
Land disputes in communities: This point to environmental degradation as a source of poverty and cause of conflict. For example, rising population pressure and falling agricultural productivity may lead to land disputes. Growing scarcity of water may provoke conflict.
Economic reform programs policies: The standard SAP policy package calls for cuts in government spending, privatization of state owned enterprises and the opening up of the economies of developing countries to foreign investment. After almost two decades of “adjustment” in Africa, the result has been raising income and wealth inequality with more and more populations being pushed below the poverty line. Among other conditions, SAP policies advocate: Privatization – SAP policies call for privatization of state owned enterprises to private owners, often foreign investors. Privatization is typically associated with layoffs and pay cuts for workers in the privatized enterprises; Cut in government spending – Reductions in government spending frequently reduce the services available to the poor, including health and education services, as well as farm subsidies; Imposition of user fees – Many IMF and World Bank loans call for the imposition of “user fees” – charges for the use of government-provided services like schools, health clinics and clean drinking water. For very poor people, even modest charges may result in denial of access to services. Under SAP, countries undertake a variety of measures to promote exports, at the expense of production for domestic needs. In the rural sector, the export orientation is often associated with the displacement of poor people who grow food for their own consumption, as their land is taken over by large plantations growing crops for foreign markets; Trade Liberalization – The elimination of tariff protections for industries in developing countries often leads to mass layoffs. In Mozambique, for example, the IMF and World Bank ordered the removal of an export tax on cashew nuts. The result: 10,000 adults, mostly women, lost their jobs in cashew nut-processing factories. Most of the processing work shifted to India, where child laborers shell nuts at home. There is little doubt that the impact of some of these measures has had a profound effect on the provision of basic social services to the poor who are always at the receiving end of some these policies.
3.0 The impact of conflict in Africa:
High number of refugees: There have been over 9.5 million refugees and hundreds and thousands of people have been slaughtered in Africa from a number of conflicts and civil wars. Conflict driven population migration and social displacement compounded with abject poverty conditions, acute level of malnutrition due to chronic food insecurity and deteriorating health condition exacerbated by collapse of the health system. Wars displaced whole populations and make millions homeless. The number of refugees increased from 2.5 million in 1970 to 17.5 million in 1992. An additional 24 million people were displaced, in large part because of wars and accompanying distress.
Disrupted production and exchange system coupled with conflict related economic and systemic, distortion as evidenced by illegal economic activities.
Sexual violence is used against girls in wartime, as it is against women, for many different reasons: as a form of torture, to inflict injury, to extract information, to degrade and intimidate, as a form of punishment for actual or alleged actions committed by themselves or their families and to destroy the cohesion of their communities. Perpetrators also attack very young girls through the mistaken belief that raping a virgin will protect from or cure HIV infection.
Genocides and politicizes are estimated to have claimed from 7.8 to 19.6 million lives since 1945; these figures do not count major international wars like Vietnam and the Persian Gulf. Deaths in Angola’s and Mozambique’s wars alone are estimated at one million each; battle-related deaths from active conflicts in 1993 are estimated at over 68,000.
War and militarization impose special burdens on children when children are forced to into armies become child soldiers and the number of orphans and homeless children grows. War affects physical and mental development destroys schools, and lead children in a habit of becoming violence. This is a case of Uganda rebels NRA led by Nkonyi who capture children for army.
Social structures. War destroys a society’s social fabric and coping mechanisms when civilians are direct targets or affected bystanders; returning to normal community life can take years following the deliberate destruction of social institutions and ways of life. War disrupts the support provided by wider family and community systems, causing divisions between groups, increases intra-group insecurity and hostility, disrupts inter-group economic relations, and promotes disease. For instance, after the killing subsided in Rwanda in mid-1994, deaths continued as refugees and the internally displaced fell victim to disease from lack of food and potable water. They destroy local and national economies, capital and investment, and skew productive economic activity, often deliberately.
Economically war destroys the resources for the society. Asset depletion and transfer are especially debilitating to pastoral and farming communities. War destroys the physical and social infrastructure, human capital, and local economic institutions. Killings or forced conscription can mean insufficient labor for productive work. War disrupts trade and economic activity. Armies target merchants; trading systems collapse. In Darfur Sudan, for example, war often stripped villages of all of their assets. Most of the dead were minority agriculturalists with no military capacity or protection.
4.0 Conflict in Tanzania
Tanzania is a country which is considered to be peacefully and stable country in Africa. The country is known to be an “oasis of peace” (Hofmeier 1997) on the troubled African continent. Although the country is among the few African states that have experienced a “classical” war – a war between two independent states (Matthies 1998) – the East African country can look back on 40 years of relative internal peace and stability. No civil wars, no military coups, no state-collapse, no warlords, neither ethnic nor religious, neither political nor social clashes have tormented the country and its people. However, Tanzania since independence 1961, it has been experiencing a range of conflicts that appear at different levels these includes: family to nation level. That can be categorized as: domestic, cultural, religious, political social economic conflicts.
Ethnicity is one of the cause of conflict among different tribes in Tanzania The most recent ethnic conflict is that of Wanyanchari and wanyanchori clans in Tarime which is due to cattle theft from one family that led to the whole tribe to fight and killing each other
Conflicts between pastoralist and peasant farmers which are contributed by inadequate land use planning. This has been happening in areas that are occupied by both farmers and pastoralist. The case is of Masai and farmers Kilosa where the peasants and pastoralist fought for land hence causing number of death and lost of property.
Land and property as result of mining industry. This has been a case in all areas that are found to be potential areas for mining by investors the compensations that is given to the local people who used to own the land and properties in those areas is not equivalent to what are paid as result there is conflict between community and investors. Case to site includes the Bulyanghulu, Geita, Tarime, Mererani for Tanzanite people have been displaced and some lost life in due cause of evacuation from mining areas by investors in support of the government
Politics and general elections: Tanzania has experienced political parties’ conflict in the country due to elections. The election of 1995 especially in the island of Zanzibar where up to date the opposition part CUF does not recognize the election results of 1995 to 2005.Such that it contributed to people to migrate or become refugees to Europe and other Africa countries.
5.0 Impact of conflict in Tanzania:
The impact of conflict in Tanzania affects societies and economy range from disturbing social fabrics hence creating displacement and separation of families. Taking the example of the conflict between the peasants and pastoralists when it happens people are killed, property destroyed and people are displaced or run away from their homes
Moreover, on political level the conflicts have resulted to some people to run away from the country . A case of Zanzibar election both of 1995, 2000 and 2005 people have to run away from Zanzibar. Relationship among the opposing parties, that of CCM and CUF members break away such that people are not collaborating in community activities such as burial, wedding ceremonies etc.
Furthermore Increase of orphans and widow due to HIV/AIDS this is due to family separations and life hardship caused by various domestic and economical conflicts among the community members.
6.0 Conclusion
Africa continued to be the region with the greatest number of conflicts. These conflicts pose a serious threat to economic development, especially for the poor African countries.
Empirical evidence has shown that conflicts can tear down levels of economic development that took decades to achieve. Also, for a long time after their termination the spin-offs of conflicts continue to limit economic growth, political, social, inequalities between groups.
Africa has the highest level of conflict in the world, and in 2000 almost eleven million people in Africa were internally displaced. War in Africa causes increasing suffering for civilians and innocent people. They suffer death and injuries and indirect consequences of famine and epidemic disease that have followed in the wake of war. All these lead to less development. Stunted economic performance exacerbated poverty condition, which in turn serve as the catalyst for violent social tension and conflict.
Tanzania, as part of Africa has not been left behind with the conflict as it has been happening in other African countries. Conflicts range from domestic, social political and economic one as a result there is big impact on the society, lost of properties, life of people orphans and vulnerable children and poverty among community members.
Therefore is a need for the community, government to develop and come up with permanent strategies to avoid conflict among the community members. These to include reducing the likelihood of conflict and promote inclusive development; reduce inequalities between groups; tackle unemployment; and, via national and international control over illicit trade, reduce private incentives to fight corruption ; proper land use and planning, proper policies that will support citizens






Reference:
1. Harry Webne-Behrman, (1999) The Practice of Facilitation 1998).
2. http://tanzania.fes-international.de/doc
3. http://siteresources.worldbank.org
4. http://medilink.org/Features/Articles/Warandepidemics.htm
5. http://www.granslacs.net/doc
6. http://web.africa.ufl.edu/asq/v3/v3i3a5.htm
7. http://www.dfid.gov.uk
8. http://www.globalissues.org/print/issue/83
9. http://www.globalissues.org/issue/83/conflicts-in-africa.
10. Wangoola, ‘Cattle Rusting and Conflicts in N.E Uganda

Thursday, October 30, 2008

The available Financial Services and concrete proposals on what should be done to ensure community members accesses reliable financial services: A

1.0 Introduction:
The Government has been implementing financial sector reforms in order to create an effective and efficient financial system. Although the reforms have resulted in an increased number of banks and non-bank financial institutions and increased efficiency of the financial system, there has not been a corresponding increase in access of financial services by the most of population especially the poor and the rural people that make up 80% of population which the is majority of the Tanzanians. There is a need to enhance accessibility of financial services to the poor and the rural population in Tanzania so that the financial institution can serve them. It is the intention of this paper to examine the availability of Financial Services and give concrete proposals on what should be done to ensure community members accesses reliable financial services: A case of Kinondoni Municipal in Tanzania is taken for the discussion.
1.1 Background:
Legislation passed in August 1991 led to a fundamental restructuring of the Financial Institution in Tanzania. Prior to the legislation, the government exercised a complete monopoly over the banking sector. Under the old system, the Bank of Tanzania acted as the central bank, while the government-run National Bank of Commerce (NBC) accounted for over 75 percent of the country's financial transactions. Although the Bank of Tanzania has retained its functions, which include the administration of the exchange control, the NBC has been subdivided with the creation of a separate National Micro-finance Bank (NMB). Both the NBC and the NMB have been privatized. Since the financial institution legislation was passed, several private Financial Institution and banks have registered with the Bank of Tanzania. In addition to some domestic financial institutions, numerous foreign banks have established operations, including Citibank of New York, Stanbic Bank of South Africa, Standard Charter Bank , EuroAfrican Bank, Akiba Commercial Bank, Exim Bank
1.2 Definition of Financial Services:
Bank of Tanzania define financial institution as an institution licensed by Bank of Tanzania and authorized to engage in banking business not involving the receipt of money on current account subject to withdrawal by cheque.
Financial services is the products and services offered by institutions like banks of various kinds for the facilitation of various financial transactions and other related activities in the world of finance like loans, insurance, credit cards, investment opportunities and money management as well as providing information on the stock market and other issues like market trends
A bank is an institution authorized to receive money on current account subject to withdrawal by cheque. A bank is a financial institution where people can deposit money. Banks provide a system for easily transferring money from one person or business to another. Using banks and the many services they offer saves an incredible amount of time, and ensures that funds "pass hands" in a legal and structured manner. There are also other types of financial institutions that operate just like banks.
Microfinance
According to wikipedia Dictionary, microfinance refers to the provision of financial services to low-income clients, including the self-employed. The term also refers to the practice of sustainably delivering those services. More broadly, it refers to a movement that envisions “a world in which as many poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers. Microfinance institutions exist in many forms — credit unions, commercial banks and, most often, non-governmental organizations (NGOs). Many microfinance institutions (MFIs) use social collateral in the form of peer groups to ensure loan repayment. Borrowers take out loans in groups of five to eight individuals. If a borrower defaults on her loan, the entire group typically is penalized and sometimes barred altogether from taking further loans
2.0 Kinondoni Community Profile:
Kinondoni Municipal is within the city of Dar Es Salaam. The Municipality is bordered by the Indian Ocean to the North East, Ilala Municipal to the South, Bagamoyo District to the North, Kibaha District to the West and Kisarawe District to the South West. The municipality is well linked by roads and other communication networks to the rest of the city and other parts of the country. Major road links are:- Morogoro Road, Bagamoyo Road, Kawawa Road, Mandela Road and, Sam Nujoma Road. Kinondoni Municipal has four (4) divisions namely: Magomeni, Kinondoni, Kibamba and Kawe. These divisions are then divided into twenty seven (27) wards, which in turn are sub divided into sub wards commonly known as Mtaa (singular) or Mitaa (plural). There are 127 Mitaa. According to the 2002 Census, the Kinondoni Municipality has a population of 1,088,867 people with a growth rate of 4.1%. The rapid population increase is influenced by both natural causes and immigration (birth rates and net immigration rates respectively). The Municipality has an area of 531KM2 and the population density is estimated at 2051 persons per square kilometer.
2.1 Employment and Economic Activities
It is estimated that 360,000 residents of Kinondoni Municipality are employed in both private and public sectors. Out of these, 95% are employed in the private sector while the rest 5% are employed in the public sector. A working force of 200,000 people is self-employed. The majority of the residents are involved in petty business, fisheries, livestock keeping and agriculture including horticulture. Only 3% of the working force is engaged in subsistence agriculture in the peri-urban areas. There are no big farms but small plots ranging from 2.5 to 6 acres. Others make small gardens around their houses in which various vegetables and root crops like cassava and sweet potatoes are grown for family food and the surplus for generating income.
2.2 Financial Services in Kinondoni:
The major financial services available in the Municipality includes National Bank of Commerce located in Magomeni, Kawe, Mbezi beach and recently opened in Mikocheni popularly Victoria bus stop and Mlimani City and one agency at University of Dar Es salaam. Others includes National Micro Finance Bank (NMB), CRDB at Mlimani City, Kijitonyama Millennium Towers and in Mbezi. Kinondoni Municipal council operates some credit facilities targeted toi women and Youth. These includes Kinondoni women and Youth Development Funds ( KWYDF), Women Development Funds ( WDF) and Village Community Bank (VICOBA) through Youth Employment Network for Urban Renewal ( K- YEN-UR) In addition to that there is FINCA nad PRIDE Africa with their offices at Magomeni and Savings and Credit Cooperative Organizations’ (SACCOS) which are being established from the level of mtaa to ward level
In summary is as in figure 1 below:

Figure 1; Banks and financial institution in Kinondoni Municipal
Na Institution Location Ward
1 NBC Ubungo Ubungo
2 NBC Mlimani Ubungo
3 NBC Mbezi Beach Kawe
4 NBC Kawe Kawe
5 NMB Magomeni Mzimuni
6 NMB Mwenge Kijitonyama
7 Postal Bank Manzese Manzese
8 Postal Bank Millenium Tower Mikocheni
9 CRDB Millenium Tower Mikocheni
10 CRDB Mlimani Ubungo
11 Akiba Commercial Bank Makumbusho Kijitonyama
12 Stanbic Bank Mikocheni Mikocheni
13 Dar es Salaam City Bank Travertine Mzimuni

2;Other financial institutions
Na Institution Location Ward
1 FINCA Magomeni Mzimuni
2 PRIDE Magomeni Magomeni
SACCOS
122 (active) 27 ( dormant) 149
(Source Kinondoni profile 2007)


3.0 Why community need financial institution services:
Community need to access financial institution for various reasons these includes keeping or depositing money; banks provide a system for easily transferring money from one person or business to another. While on the other hand financial institutions provide service for loans and credit facilities for communities to invest in business, building, farming, education for their children etc.
4.0 Shortcomings and constraints on accessibility of the financial Institution:
Although the reforms that took place in August 1991 on Financial Institution in Tanzania have resulted in an increased number of banks and non-bank financial institutions and increased efficiency of the financial system, there has not been a corresponding increase in access of financial services by the poor population that make up the majority of the population in Tanzania as well as in Kinondoni. Some of the shortcoming/ weakness includes:-
Firstly, problems in accessing loans and credits due to stringent requirements of lending institutions including collateral requirements and high interest rates as well as corrupt officials. The traditional banking system requires that a borrower have collateral to receive a loan. The majority of Kinondoni Municipal population (95%) is employed in the private sector and non formal sector that are poorer people who have no such collateral. Like land property title deeds. Most of the community members in Kinondoni leave in un surveyed area i.e. Manzese, Tandale, Mwananyamala, Kimara etc. that have no title deed such that community members can use as collateral for loan access. Furthermore, traditional banks are not generally interested in issuing small loans as the interest benefits do not exceed the transaction costs that most of the poor would have applied and be able to repay.
Secondly, With the Tanzanian banking sector undergoing significant reform, a consequence has been that almost all financial Institutions have stopped providing long-term loans and equity finance in favors of short-term lending. This has led to a shortage of funds available to small- and medium-sized enterprises that employ the majority of the community members (SMEs).
Thirdly, there is low level of business skills amongst the members that can translate to markets and lack of premises, which are always demolished by city council authorities in city cleaning operations and other resources required for growth. The result of such situation has made the members failing to extensively benefit through the loans they get and investment they launch fail for their economic growth.
Fourthly, it is clear, that poor households are not familiar with formal credits, which deliver funds through formal financial institutions, such as commercial banks. Not only that the majority of community members lack knowledge of what savings and credit co-operative societies (SACCOS) are and what the societies can do to make uses of SACCOS and do not know the benefit they can get from the SACCOS.
Fifthly, operationally, most of the SACCOS are having problem of charging high interest rate to about 2% per month, equals to 24% per year. This rate is considerably high to most of the poor community members to raise through their petty business and be able to repay the loans.
Sixthly, most SACCOS who can have served the poor community members also lack qualified co-operative officers, auditors, inspectors and consultants as a result many SACCOS in Kinondoni encountered operational problems such that most of them are dormant .It is reported that more than 27 SACCOS are dormant in Kinondoni ( Kinindoni profile 2007)
Seventhly, poor financial discipline and credit repayment culture among of the community members. Instead of using the loan in the activities aimed for the loan they utilize the loan to meet other needs that were not the part of the loan purpose. These includes buying commodities like TV, jewel especially for women etc as a result they fail to repay the loan.
5.0 Recommendation:
Firstly, the Government need to facilitate the appropriate design of linkage options, improve pro-poor financial policies and develop sustainable financial services tailored for the poor sector in the country. The Government to focus and support the formation of alternative financial intermediaries from the traditional banks such as Savings and Credit Cooperative Organizations’ (SACCOs). SACCOs are the most prevalent for poor and rural financial intermediary and a revised legislation in 1991 that re-established the voluntary nature of co-operative association, thus enabling poor and the rural communities to set up their own SACCOs. Such financial intermediaries are able to circumvent the large operating costs that fully fledged banks face operating in poor and rural areas.
Secondly, Government should implement the SME loan guarantee programs proposed in the SME Development Policy: The Government should set up government-backed pro-poor credit guarantee programs for individuals growing beyond the micro level; A loan guarantee fund would serve to reduce the risk to banks in cases of limited collateral, often facing informal entrepreneurs
Thirdly the government should undertake dialogue with lending institutions on informal entrepreneurs’ access to credit with a view to making more credit available to this part of the MSE market and improving the infrastructure for entrepreneurs. In addition to that government need to negotiate with banks to contribute a certain percentage of their loan funds for small business financing in the local community and formalization of property rights to allow more assets of the poor and rural population to be recognized as collateral, and formalize the informal business e.g. MKURABITA).
Fourthly, strengthening the overall legal and regulatory framework with a view to increasing the financial discipline and improving the credit repayment culture among the community members hence sustain the financial Institution especially the SACCOS and encourage community members especially the poor and women who are the majority in any economic activity at micro- level to become members of SACCOS wherever these financial institutions exist so that they are empowered to become better entrepreneurs.
Fifthly Financial Institutions (FINCA, PRIDE etc) to raise ceilings on micro-finance lending limits. The low lending limits currently in place tend to undercapitalize Micro Small Enterprises (MSEs) at the startup level, thus fostering low or no growth-potential venture creation. At present, most key microfinance institution serving the poor population women being the majority when requiring loans in excess of Tshs 5 million are referred to financial institutions (Commercial banks) having lending conditions, which in most cases cannot be met by poor/ women borrowers.
Sixthly, provide pro-poor and gender sensitivity training to credit officers serving the poor and women community members. Poor and women are different – they don’t think as “big” as their rich class counterparts and often are more cautious. Credit officers need to understand how to work with these clients, identify client needs, and coach the community members in the lending approach process. Pro poor and Gender mainstreaming workshops will help them recognize any gender bias they may have in their policies, procedures, perceptions or approaches.
Seventhly, improve the level of information among poor and women entrepreneurs regarding financing programmes and services. Produce a Guide to Financing for community members Entrepreneurs, designed to impart basic information to community-owned Micro Small Enterprises on sources of financing, terms and conditions, preparing financing proposals, and negotiating for credit. The aim is not only on lending institutions; community members also have to be oriented in the art of dealing with banks and packaging their loan requests for financing. They need to learn how to approach and negotiate with financial institutions, know the lender’s information requirements and how to prepare financing project proposals. The guide should be distributed widely throughout the community members, in both English and Swahili, and supported by information sessions, perhaps delivered in partnership with community member associations. The purpose is to get the message out to community-owned MSEs in order to improve their ability to source financing
5.0 Conclusion:
Financial Institutions are key for the economic growth for the community members. Therefore there is a need for the government to support the Micro-financial Institutions and SACCOS outreach to poor who are the majority of the population in Tanzania. Proper policy and training concerning access to financial institutions and micro entrepreneurship hence enhance accessibility of financial services to the poor and be a priority item on the agenda of the on-going financial sector reforms.
Reference:
1. Hardwick,P; Khan,B & Langmead, J (1994) An introduction to modern economic 4th Edition.
2. Kinondoni Municipal Profile (2007)
3. Niclas Berggen: The Benefits of Economic Freedom ( A survey) Volume viii No 2 2003
4. Principles of Economics Bankers work book series The Institute of Bankers
5. National Council on Economic Education, New York, NY
6. R.M. Khijjah, March 2004 PRESENTATION ON THE ROLE OF GOVERNMENT IN BUILDING SUSTAINABLE RURAL FINANCIAL MARKETS on The Future of Rural Finance in Tanzania Ministry of Finance, 8 March 2004
7. Robert,P & Quillfeldt, J; ( 1987) GCSE Economics
8. http://www.ingrimayne.com/ cited on 7th March 2008
9. http://economics.about.com/cs/studentresources/f/whatiseconomics.htm cited on 7th March 2008
10. http://academics.smcvt.edu/economics/Whatis.html cited on 7th March 2008

Community analysis to identify potential business/ investment opportunities in Mwananyamala wards Kinondoni Municipal. Tanzania

1.0 Introduction:
Business and investment opportunities in particular are considered important in contributing to the socio-economic empowerment of the community. Business opportunities enable the community members to meet their social economic needs ie food, shelter, education health etc. This paper presents a report on community economic analysis that was conducted in Mwananyamala ward Kinondoni Districts to identify the potential business or investment.
The report is divided into four sections. The first section gives a brief profile of Mwananyamala ward, The second section gives an overall objective of the community business/ investment analysis , The third section points out the participatory methods that were applied in identifying and analyzing the potential business opportunities in Mwananyamala ward; The fourth section highlights the findings whereby it was revealed that major business or investment opportunities in Mwananyamala ward are dominated by the non formal sector which employs about 60% of the population through various activities which includes: carpentry, garage; metal work; welding, tailoring, food vendors, selling vegetables, fruits, and petty business, selling second hand clothes and cultivating small gardens around their houses. Section five highlights some constraints that are faced by the Mwananyamala community in opening new business/ investments opportunities. The fifth section gives recommendation and conclusion.
2.0 MWANANYAMALA WARD PROFILE
Mwananyamala ward is one of the twenty seven wards in Kinondoni district Dare salaam located on the west of the Indian Ocean Coastline bordering with the wards of Makumbusho; Tandale; Magomeni, Msasani; Kijitonyama and Manzese.
Mwananyamala ward is consisting of six streets that include: Msisiri A, Msisiri B; Mwinjuma; Kambawa; Kopa; and Bwawani. Among the six streets three are surveyed, these are Msisiri A, Msisiri B, and Bwawani. The other three are un-surveyed, these are Kambawa; Kopa and Mwinjuma where houses are in squatters and densely populated which most of them are in informal settlements that do not have land tenure.
Mwananyamala ward is occupied mostly with the indigenous coastal region tribes i.e. Wakwere, Zaramo, Ndengereko and other tribes who have migrated to the ward from all over the country caused by rural urban migration. Mwananyamala ward population is as summarized in table 1
Table 1.
SNO MALE FEMALE TOTAL GROWTH RATE
1 21946 22585 44531 4.1 %
(Source Kinondoni municipal profile and 2002 census)
3.0 Purpose of the business/ investment opportunities analysis:
The overall objective of the analysis was to identify the potential business or investment opportunities and the constraints that are faced by the community in opening up new business/ investment opportunities in Mwananyamala ward.
4.0 Methodology applied in identifying the potential business in Mwananyamala ward:
Three primary method of data collection were applied to identify the potential business or investment in Mwananyamala ward. The first method was documentary review for secondary data collection. These included: Mwananyamala ward profile. Mwananyamala Ward Executive officer’s periodical reports and documents. The second method was that of interviewing the entrepreneurs in Mwananyamala ward these included: women dealing with food vendors (mama ntilie); Shop; hair saloons, carpentry and garage workshops owners. The third method was a transecting walk where the researcher did a walk to some street for observation on physical businesses premises found in Mwananyamala ward.
5.0 Findings of the study and analysis:
The documentary review on the Mwananyamala ward profile revealed that the potential business opportunities in Mwananyamala ward includes: carpentry, garage, metal work and welding, tailoring; whole sale and retail shops, bars and restaurants; petty business of food vendors, selling vegetable and fruits, second hand clothes; small garden (horticulture). These business opportunities create employment opportunities to 60% of the Mwananyamala ward residence. 30% of the population is employed in formal sector and the other 10% of the population is not employed mostly spent time at corners called vijiwe/ camps and commuter buses callers’ wapiga debe (source Mwananyamala ward profile at ward office)
The documentary review from the Ward Executive office summarized the business opportunities found in Mwananyamala ward as it is in Table 2 below:
TABLE2.
Na Business type Number
1. Guest house 19
2. Groceries 13
3. Whole sale shops 11
4. Retail shops 49
5. Bars 28
6. Petrol stations 1
7. Stationery shops 5
8. Saloon 10
9. Restaurants 12
10. Welders/Welding 15
11. Milling machine 9
12. Butcher 11
(Source Mwananyamala ward executive office data 2007)
In addition to that for triangulation purpose the researcher did a transect walk with the purpose of observing physical business and investments opportunities that are found in Mwananyamala ward. Most of business opportunities that were pointed out in the documentary review were also observed during the transect walk. These included: whole sale and retail shops that were selling consumable goods, building material, electronic, pharmacies and stationeries etc. These shops were found along the Komakoma Street to Mwananyamala hospital.
Another category of business opportunities observed were that of carpentry, metal and garage workshops. In addition to that other business included; hair saloon for men and women, butcher for meat and fish; restaurants, bars and guest houses.
Another business opportunity observed during the transect walk was the market place at Mbuyuni commonly known (Magengeni ) this market provide space for selling various types of consumable goods ie, vegetables, fruits, flour, sweet and Irish potatoes, cassava, cereals, beans etc.
Photo of section Mwananyamala Msufini/ Magengeni market
6.0 Constraints on creating opportunities for business and investment:
Business opportunities available in Mwananyamala face a number of constraints that hinder its rapid growth and development and therefore reduce the weight of its potential contribution to the community social economic growth, and a nation at large. The most commonly cited problems by respondents were as follows:
Firstly, is the tough procedures tied to accessing Financial Institutions facilities that includes high interest rates and the requirement for loan collateral. Since the majority of Mwananyamala ward are poor and are self employed in non formal business or petty business that are often denied to get loans from the microfinance and financial institutions. The majority of the community members are unable to meet the collateral requirements and the high interest rates that often go higher than 30 per cent that can be difficult for the small entrepreneurs to repay. Factors such as these are detrimental to the start-up and growth of business and investment opportunities among the community members.
Secondly, the low level of awareness on financing and business matters amongst the community members that includes designing, and managing business opportunities, dealing with financial institutions, preparing and presenting a loan application and linking credit with business development support. These inhibiting factors results for community members fear to venture into new business and when they initiate it does not sustain for long period as they do not have skills in managing the business.
Thirdly, lack of market access, affordable technology and capacity for the bulk purchase of materials, as well as the low levels of education of entrepreneurs are considered to be the inhibiting developing or growing of their businesses as a result a majority of the community population often experience greater constraints on their economic actions and growth.
Fourthly, lack exposure and socialization among the Mwananyamala community members which restrict their ability to identify higher growth potential business ventures compared to rich entrepreneurs. They are likely to be operating in groups from home, and often lack social, cultural and business support for their role as entrepreneurs. The community member’s entrepreneurs have no technical and business management skills, including the knowledge for negotiation with financial institutions, marketing and search for market outside their community for more profit.
Fifthly, limited access to proper business premises, this was observed during the transect walk about half of Mwananyamala ward is not surveyed such that it faces serious problems of being able to access proper business premises. It is very difficult to acquire plots for constructing proper business premises because of bureaucracy, corruption, and the very limited number of surveyed plots. A large proportion of informal business enterprises operate along the roadside whereby always they do experience harassment from city or local government authorities as they do operate in locations and premises that are not meant for business. City authorities demolish their premises during the city cleaning operations as a result they get loss and most of them fail to repay loans that they might have secured from loan institutions.
Sixthly , from the interview result that was conducted to women it was revealed that ,women and other community members in different stages of transition from the informal economy to the higher level of business that require business skills, face other unique challenges of finding the time required to attend training supported by donors and NGOs. There business requires fulltime presence depending on the type of business. Take a case of food vendors (mama lishe) hawkers (Machinga) have to move from one street to another around looking for customers as the authorized areas for the business are limited.
Seventhly, At policy level it was identified that there is no pro- poor and gender-sensitive micro-economic policies such that the present ones impose complex tax policies, compliance procedures; complex business registration and licensing procedures for the smallest micro-enterprises where the majority of the Mwananyamala community members especially women are found. This results small entrepreneurs not to be able to create new business opportunities. In addition to that it was reveled that for a person to secure a license for business requires undergoing a long process. These include: getting authorization signature from a street chairperson, followed by the ward Executive officer then to Municipal trade department. Not only that health officer have to inspect and approve the business premises. All these procedures take place along with corruption at all stages.
Ninth, most of the whole sale shops, the bars and garages were found to be owned by people who are not residents of Mwananyamala such that the profit made from the sale does not benefit the community members of Mwananyamala. The owners of the shops were mostly from upcountry tribes who will always invest back home for example the chagga in Kilimanjaro.
7.0 Recommended actions for new business opportunities creation:
Firstly, access to Credit: In order to facilitate access to credit for Mwananyamala community entrepreneurs, banks and Micro Finance Institutions (MFIs) need to allocate a certain portion of their loan able funds for poor and women entrepreneurs. This has to be supported by special lending and repayment arrangements. The central and local governments have to play supporting roles in soliciting funds for on-lending small medium entrepreneurs like that of “Kikwete one billion” and also provide credit guarantees for small medium entrepreneurs. Not only the government but also the donors and NGOs have to play crucial roles in supporting MFIs and banks by providing soft loans and also channel resources to associations of poor entrepreneurs.
Secondly, access to land and premises: Local Government and Municipal council authorities need to engage themselves in constructing shades for poor community entrepreneurs to address the problem of premises, coupled with measures to encourage private investors to engage in construction of premises suitable for small medium entrepreneurs like that of Urafiki and Mchikichini where small medium can make their business. In this regard, the government should provide certain incentives such as tax reliefs for some time and availing of lease-free land, etc.
Thirdly, Marketing Assistance: With regard to marketing support specific measures need to be taken by government and support organizations:- Linking community members entrepreneurs with medium and large firms to serve as market outlets; Provision of training on quality improvement and cost reduction modalities; Provision of information on market opportunities and appropriate/improved technologies; Construction of display centers and provision of advertising support; The Ministry of Industry and Trade to design programs in association with a local business services provider, with the possibility of technical and financial support from the International Labour Organization (ILO) as part of its support for small medium entrepreneurship development in Tanzania.
Fourthly, facilitating training to the community members on initiating new business opportunities by involving various organization and CBOs. A series of seminars and other business support and financing options should be developed and delivered in Mwananyamala ward. Micro Finance Institution and other organizations need to develop sessions for community members when starting micro-enterprises, majority of the community do not consider the longer-term sustainability of their enterprises. They have tended to start entrepreneurship based on the business ideas that are taken from neighbors and friends within their communities. In most cases, these ideas have brought the community members into a very competitive on local market that offers limited prospects for business growth. Community members need to identify business opportunities that will lead to profit. The case of Mwanayamala community it was observed that most of the business opportunities types are the same competing each other. You find in one street more than five hair saloon serving ten households. Along the street going to Mwananyamala hospital there are more than five pharmacies competing such that the profit made is very small from the pharmacy business.
Fifthly, the trainings planned by NGOs and others should adopt flexible training approaches to meet the community especially women’s needs. Training initiatives need to focus on community member’s free time versus the more traditional two to five-day classroom training approach. To achieve the desired knowledge transfer objectives, follow-up should be incorporated in the training to assist trainees with the practical application of the new knowledge. The delivery must take into account that they often cannot leave their businesses and communities to attend weeklong training programmes since they are dependent on the business income for their livelihood. Family responsibilities also require their presence at home. It is important that programme delivery schedules accommodate this, and offer flexible timing and delivery in communities.
Sixthly, provide training on dealing with financial institutions and borrowing mechanisms. There is a low awareness of financing options among the Small Medium Entrepreneurs. Workshops should be designed with the objective of helping people to learn how to prepare and develop proposals and approach financial institutions. People also require a better understanding of the mechanisms of borrowing and the relationship between the injection of funds at certain stages of their development and business growth. Such knowledge will help those entrepreneurs to work with the MFIs.
Seventhly, community members themselves need to be creative to initiate new business. For example construct toilet facilities at bus stop and market place and can make money. In areas that have no houses in low land create gardens and many other opportunities
8.0 Conclusion:
Business opportunities are a critical element of an effective poverty reduction strategy among the community members. Improved access and efficient provision of savings, credit, and insurance facilities in particular can enable the poor community members to increase their capital for poverty alleviation. Business opportunities can provide an effective way to assist and empower poor community members, who make up a significant proportion of the population in Mwananyamala and the country at large. Therefore there is a need for proper policies and capacity building on designing, creating and managing business opportunities among the community members of Mwananyamala and the nation as a whole.


Reference:
1. Hardwick,P; Khan,B & Langmead, J (1994) An introduction to modern economic 4th Edition.
2. Kinondoni Municipal Profile (2007)
3. Niclas Berggen: The Benefits of Economic Freedom ( A survey) Volume viii No 2 2003