Sunday, November 2, 2008


CED (Community Economic Development) is a development of people by the people for the people. Is the process by which community initiate and generate their own solution to common problems such as un-employment, poverty, job loss, environmental degradation and loss of community control in a holistic way.
Micro – enterprises provide not only self employment and livelihood but help increase in production, expand trade , provide materials and components to other industries, and above all supply goods and services to customers. So far there is no universally accepted definition of the Micro –enterprises, definitions based on the countries level of development. According to Tanzania small Medium enterprises (SMEs) Development Policy Micro – Enterprises is an economic activities with employees between 1-4 and Capital investment in machinery up to 5 million.

The annual per capita Gross Domestic Product of Tanzania is estimated at US $260 making it one of the poorest country in the world. About half of the citizens live below the povety line with an income of less than US $ 100. (Rugumamu, 1999)
In the late 19th Century before colonisation, there existed local and international trade, as well as cottage industries such as weaving, blacksmithing and woodworking in Tanzania. These were stifled and suffocated by colonial regulations and competition from imports (Temu, 1997) Throughout the German and later British colonial period, a consistent policy was adopted to maintain the colony as a producer of raw materials for use in industries in Europe, consequently, Tanzania was dependent on manufactured goods from the colonial masters. Tanzania was a producer of row material for use in Europe industries and depends on manufactured goods from the colonial masters. There was also a deliberate move to limit the participation of indigenous Africans in business activities (Rugumamu 1993). Whites Conducted manufacturing, import and operate a sub-wholesalers and retailers, Arabs operated mainly as retailers and Africans was restricted to very small firms such as Dukawalas (Tiny Shops)

Local entrepreneurship was discouraged in favour of government. Community based or co-operative owned ventures. Regulations were introduced to bar Civil Servants and leaders of ruling party from engaging in business activities. Since almost all educated Africans were Civil Servants, business activities was left to Asian and those indigenous people without a substantial education (Term 1997).

The late 1970s unfortunate event international oil crisis and costly war between Tanzania and Uganda in 1978/79 eroded purchasing power of national currency forcing wage earners to undertake petty business activities to supplement their meagre earning (Omari 1999). Also real crop prices dropped compelling peasants and their offspring to ether diversify income sources by engaging in small ventures within the rural areas or migrate to urban centres.

In 1980 trade liberation and radical transformation programme with encouragement & support of the World Bank and IMF. The programme involved liberalization of virtually all sectors of the economy of, and the privatisation and retrenchment of workers form the civil service and other public institutions. Those who cannot find jobs, as well a salaried worked have resorted to running micro and informal business to make the ends meet (Bagachuwa and Maliyamkono, 1990)

Major constraints of Micro-enterprises in most of Developing countries are lack of supportive business environment, lack of managerial and technical skills and lack of capital for growth. In recognition of the importance of the Micro- enterprise, the government of Tanzania has put in place supportive polices and programs in order to create enabling environment to address source of the constraints facing the sector. National strategy for Growth and Reduction of Poverty, Small and Medium Enterprises Development Policy, National Micro-finance Policy, Sustainable Industrial Development Policy, Program of “Business Environment Strengthening for Tanzania (BEST), the Small and Medium Enterprise Development Policy.

Most Are Provider Of Basic Employment And Income Generation For A Family Or A Co-Operative Group With a limited capacity to re-invest capital in their business and become globally competitive. SMEs in developing countries contribute only about 16% to GDP while in most Africa countries contribute only about 16% to GDP while in most African countries they contribute less than 10%

Large part of population in Tanzania (about 80%) lives in rural areas and most of them depend not only on agriculture but also on MEs activities for their income generation, the data in the 2000/01 Integrated Labour Force Survey show that the informal sector accounted for the second largest portion of employment persons 16% of labour force of 17,827. 578 million people, more people in urban areas about 35% compared to rural areas 11% with agricultural activities having the largest share (about 81%) (Tibandebage, etal 2003)

King and Mc Grath (1999) pointed out that people in rural areas are pushed to operate MEs by lack viable alternatives.

According to URT (2003) estimates show that there were about 700,000 new entrants into the labour force every year about 500,000 were school leavers, only 40,000 of them were employed by public sector leaving about 660,000 unemployed most of them ending up in opening small businesses. Therefore Micro-enterprises were apparently best option to address the problem of joblessness.

According to the integrated labour force survey (2001/2002) the total labour force (aged 15 year and above) had increased from 11.2 million in 1990/91 to 17.8 million in 2001. This implies that 650,000 new people had been entering the labour market every year (URT, 2005).

Micro – enterprises tend to be effective in the utilization of local resource using simple and affordable technology to undertake their activities, like making craftwork, small scale mining and processing activities such as tinsmiths and blacksmith.

The Republic of Paraguay in Central America had a marked by a large informal sector with features of re-export of imported consumer goods to neighbouring countries as well as the activities of thousands of micro- enterprises and urban street vendors. A large percent age of the population deceived their living from agricultural activity often a subsistence basis. The formal economy grew by an average of 3% per year during 6 years, GDP declined slightly in 1998 and 1999 , real income stagnated at 1980 (US Central Intelligence Agency, 200. accessed April 26, 2001 at URL Http://

Micro –enterprises play a critically important role in the coping strategies of the populations of all countries in Western and Central Africa, particularly the very poor households and women who lives in rural areas. Micro enterprises is one of the main instrument of job creation. Micro enterprises generate employment and income for the mass of poor living in urban and rural areas. Its main characteristics, MEs are organized along traditional lives and characterized by obsolete technologies and virtually non – existent management. MEs are present in all sectors of the rural and urban economy the financial resources of MEs are scarce.

MEs features: are owned by the artisan, no separation between family Accounts and those of business, family member provide manpower, have fewer than 5 employees, many are run by woman, they have a limited access to the financial sector, management skills and technical trading are week, it is relatively easy to start one up and they have little access to support services

According to IFAD the large majority of the poor and poorest are in rural. Micro-enterprises sustainable poverty reduction builds on self-help. IFAD has helped the poor to help themselves by providing loan-able funds, creating access to financial services and assisting the poor to establish their own financial institutions.

Women enterprises in Tanzania by UDEC October 2002 Entrepreneurs is widely seen by policy maker and donors as a mean of economically empowering marginalized groups, including disadvantaged woman such as a single head of households or woman in rural area (Hannan - Andersson,1995).

Promoting sustainable enterprises is about strengthening the institutions and governance systems which nurture enterprises- strong and efficient markets need strong and effective institutions. It is also about ensuring that human, financial and natural resources are combined equitably and efficiently in order to achieve innovation and enhanced productivity. This call for new forms of cooperation between government, business, labour and society at large to ensure that the quality of present and future life and employment is maximized whilst safeguarding the sustainability of the planet.

Major constraints of Micro-enterprises in Tanzania are lack of supportive business environment, lack of managerial and technical skills, lack of entrepreneurship and lack of capital for growth. Most of policies implemented by government and other international organization such as ILO are not even known by stakeholders, they remain as policy which help not a targeted group. Community Economic Development can bring together policy makers and community in order to find a way of addressing the community problems toward Community Economic Development. When small traders participate in identifying their problems and proposing what they think is a solution to that problem contribute a lot toward finding a solution.

Most of Small business especially in town are selling manufactured products from outside for example selling used clothes, toys, (mitumba) this means that Micro-enterprise in Tanzania contribute to declining of local industry. Youth are moving around each corner selling a product produced outside and not that produced locally. After exposition of the product Tanzanian now days prefers more of outside product even if with poor quality. With CED micro-enterprise can produce and consume what they produce for their own benefit. Government should also take a serious measure to attract local small traders as they are doing to foreign investors. Tanzania is endowed with a lot of natural resources, but the question is why and what are the causes being poorest country in the world. Through community participation the question can get an answer. Presence of micro-finance institutions (MFI) like Small Enterprise Development Agency (SEDA) will improve the social – economic and health status of households in poor communities through the development of micro-enterprise.

i) Conclusions concerning the promotion of sustainable enterprises, International Labour Conference, June 2007.
ii) Dar Es Salaam stock exchange: working in partnership with SMEs IN WEALTH CREATION/ trading modules, 2007
iii) Impact of Electricity Services on Micro-enterprise in Rural Areas in Tanzania. By Godwin C. Maleko, December 2005
iv) Impact of National Policy and Legal Environments on Employment Growth and Investment in Micro and Small Enterprises by Jens Dyring Christensen and Michelin Goedhuys.
v) Rural finance from unsustainable projects to sustainable institutions for the poor. By IFAD
vi) Small Enterprise Development Agency (SEDA) – Tanzania by Caroline Pinder. accessed on 10/09/7002

vii) Small and Micro-enterprises in Africa
By L’ Harnattan

viii) Small and Micro-enterprises in Africa by H Harmattan

ix) Women enterprises in Tanzania by UDEC October 2002

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