2.1. DESK REVIEW
catalyst for development. They need to be empowered and prepared to be good citizens who can make proper decisions as entrepreneurs and be fully engaged in all aspects of economic development.
The desk review focused on: assessing the general landscape in which a typical Tanzanian youth entrepreneur operates; the opportunities and challenges surrounding them, and how these are reflected in their respective groups (i.e. MSMEs and prospective innovators). This is followed by an in-depth analysis of government policies targeting youth and youth-led enterprises in Tanzania in general and how they have “cascaded” down in the “PSSA Zones of Influence” and beyond.
2.1.2. Multiplier Effects of Youth Challenges
The limited involvement of youth in agribusiness is a result of multifaceted challenges. One challenge has multiplier effects on other challenges. For example, limited access to loans from commercial banks to youth is due to a lack of land ownership and bank regulations/practices that require loan applicants to secure their applications with non-movable assets. Thus, to overcome limited access to bank loans and value chain financing from buyers, youth need more flexible loan products. In order to reach youth with access to finance, banks must develop new products appropriate for youth capacities, contexts and needs. Banks need to support more favorable business startup environments by allowing for the use of movable assets to secure loans for youth entrepreneurs. The government needs to enact contract farming laws to enable youth to use secure market contracts as loan guarantees. Providing training to youth without addressing other challenges, such as land access and unfavorable business environments, results in insignificant outcomes. Organizations working in isolation to address youth challenges may result in duplication of efforts, ineffectiveness, and inefficiency. Partners in the youth agribusiness ecosystem must work together to address youth challenges. [7] [6]
2.1.1. Tanzanian Youth a Demographic Dividend
Tanzania’s population is projected to increase from 53.9 million in 2015 to 186.9 million by 2065. The country has one of the world’s fastest-growing youth population. Young people aged 15–34 are projected to increase from 17.8 million to 62.3 million by 2065. The average Tanzanian is 17.5 years old, and 44 percent of the population is under 15. Tanzania needs to capture this “demographic dividend,” but this will depend on the drive and determination of young people themselves and the effectiveness of policies to capitalize on their potential. [3] The youth population in Tanzania is an important demographic that should not be ignored. This group suffers from high unemployment and faces many constraints in their efforts to create self-employment through entrepreneurship. About 53.3 percent of youth in Tanzania are unemployed, and the number of youths accessing micro-credit is only 4 percent. The unemployment rate for youth aged 15-35 years in the United Republic of Tanzania has increased from 12.1% in 2014 to 12.6% in 2020/2021. The highest youth unemployment rate in both periods is observed in Zanzibar at 24.6% and 27.6% in 2020/2021. Yet this age group represents a labor force in its prime. [4] Recent analysis shows that the number of formal sector jobs created annually has decreased, with the number of new private sector jobs at a third of 2013 levels. With almost 800,000 new entrants to the workforce every year, and only a small percentage of them able to find formal employment, it is vital to support youth in identifying, creating, linking, and obtaining business and employment opportunities. Understanding Tanzanian youth and their situation is critical to formulating and enforcing appropriate policies to support youth entrepreneurs, startups, and businesses. Young people are change-makers, innovators, and the [5] [1] [2]
2.1.3. Startup Ecosystem in Tanzania
Tanzania is experiencing significant startup growth. Startups in the country increased by 15%, from 587 in 2021 to 673 from 2021 to 2022. This growth is driven by a rising entrepreneurial spirit, especially among youth pursuing self-employment. Most agriculture enterprises can be categorized as startups. The financial resources (i.e., the volume of funding) channeled to any sector can be used as a proxy to indicate the potential for growth in that sector. In 2022, the most funded sectors in Tanzania were financial technology (Fintech) and agriculture, with each receiving 27.7 percent of funding. Fintech and agriculture funding suggest that investors consider these sectors to have high potential, indicating that these industries may be experiencing significant growth, innovation, and market demand in Tanzania and globally. [8]
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Youth Enterprise Policy Analysis Report
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