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Tanzania (mainland and Zanzibar)

Country Profile

Tanzania is the largest East African country with an area of 9 37,062 km2 and population of approximately 40 million people. Tanzania is one of the poorest countries in the world ranked 159 out of the 177 participating countries measured on the United Nations Development Programme Human Development Index (2007/08). Per capita income is USD 340.

Tanzania has experienced an average of 6 per cent GDP growth over the last six years. Inflation has remained single digit. Foreign Direct Investment (FDI) has increased, as well as domestic investment in infrastructure, telecommunication, mining and tourism. In Zanzibar, recent data show that the economic growth rate in real terms has been sustained, recording 8.6% in 2002, 5.9% in 2003 and 6.4% in 2004. Inflation has also remained single digit, albeit above 5%. However, the prevalence of income and non-income poverty is still high in Tanzania with a large disparity between urban and rural areas.

According to the Household Budget Survey (HBS) of 2000/01, the proportion of the population below the national food poverty line is 18.7% and that below the national basic needs poverty line is 35.7%, indicating a small decline in the proportion of the population below the national poverty lines in the 1991/92 HBS. According to the Tanzania Poverty and Human development Report (PHDR) 2005, Tanzania is unlikely to achieve the national target of halving income poverty by 2010 if current growth rates are sustained over the period to 2010. The challenge is to ensure that future growth is pro-poor and generating employment.

Cooperative Situation

Cooperatives have a long tradition in Tanzania with the first cooperative founded in 1925 and the first Cooperative Societies Act enacted in 1932. The current profile of cooperatives in Tanzania is dominated by Savings and Credit Cooperative Societies which represent 54% of the total and 765,000 members. The cooperative movement is composed of one National Cooperative Federation (Tanzania Federation of Cooperatives), one cooperative apex body and 44 cooperative unions. Primary cooperatives are involved in several activities as agricultural marketing, assorted service providers, fisheries, manufacturing, etc.

In 2005 the Cooperative Reform and Modernization Program (CRMP) was launched in order to augment efforts in building member controlled cooperatives that are capable of fulfilling members’ economic and social needs. The ongoing implementation of the CRMP exposed the cooperative movement dynamism in Tanzania resulting in a 113% membership growth from 750,000 in 2005 to 1,600,000 members at the end of 2007.

The cooperative movement in Zanzibar is extensive. However, cooperative development stagnated after the Cooperative Union of Tanzania underwent reforms in 1991, which saw the cooperative movement in Zanzibar break away from the mainland federation to create its own structure. Currently, the organization and support structures of the cooperative movement are quite weak. Virtually no primary cooperatives provide financial contributions to the cooperative unions, and the cooperative unions in turn are not able to make annual financial contributions to the federation. Further, the cooperative movement in Zanzibar has no support institution for training and there is little donor support. Cooperative enterprises that were previously strong have withered, but there are a few primary cooperatives that have managed to survive and even flourish within this austere situation. Recent policy and legislative measures taken seek to breathe life back into the cooperative movement and provides some optimism for its revival.

Chalenge Fund Partners

The Challenge Fund facility of CoopAFRICA is concerned with three main areas of cooperative development: services, innovation and training. So far, CoopAFRICA held three calls for proposals under this facility. In the first call which closed in June 2008 a total of 145 proposals were submitted to CoopAFRICA. Eight proposals were selected for funding totalling USD 301,354. In the second call 141 project proposals were received in December 2008 from 6 countries, of which 22 projects have been selected. The projects for the second round are worth an estimated sum of USD 1, 330, 000. Applications submitted during the third call, held in May 2009, are currently being processed. Small grants of up to USD 20,000 are considered and selected throughout the year without a special call.

The following projects from Tanzania mainland and Zanzibar have been selected for funding through the CoopAFRICA Challenge Fund:

Chaani Mcheza Shauri - (pdf file, 231kb): Strengthening Chaani Mcheza Shauri Cooperative’s Capacity Project (Zanzibar) The project will provide a grinding machine to Ona Mbele Cooperative in order to extend the scope of work and services they offer the community. It will also improve and increase working capacities, eventually increasing annual income and strengthening Ona Mbele’s infrastructure by installing and connecting electricity to the building and the grinding machine thus transforming the energy source from fuel to electricity. Management and Financial training will be provided to the women on the project to ensure that they have the requisite skills to increase production, capital and demand for their services.

Dunduliza Company LTD - (pdf file, 1017kb): Implementation of an Interconnection System in the Dunduliza SACCOS Network (mainland). This project will introduce a communication tool to facilitate the monitoring of cash balances for all Savings and Credit Cooperatives (SACCOS) organized through Dunduliza. This project will help to increase the reach and effectiveness of SACCOS, provide microfinance for the poor and hence contribute to reduce poverty.

Moshi University College of Cooperative and Business Studies MUCCoBS – Institute of Cooperative and Continuing Development Education(ICCDE) - (pdf file, 238kb) : Enhancing Business Enterprises Competitiveness to People With Disabilities (PWDs) Through Training and Facilitation of Access to Credit (mainland) ICCDE in collaboration with the Moshi University Cooperative College of Co-operative and Business Studies, will empower people with disabilities (especially disabled peoples’ organizations) through training that builds skill in financial and business management of microenterprises. Access to savings and credit will be made available, to enable the strengthening of these microenterprises for profitable businesses. This project seeks to address problems associated with accessibility and representation that people with disabilities encounter in everyday life.

Trade Union Congress of Tanzania: Formation of Workers Savings and Credit Cooperative Societies and Establishment of Workers Cooperatives Banks Project (mainland) The project will improve the living conditions of unprotected informal economy workers through the formation of 100 new workers SACCOs and the establishment of workers cooperative banks. Entrepreneurship skill training and access to credit facilities will be provided to ensure that the informal economy workers will be able to undertake income-generating activities and alleviate income poverty. This is expected to be achieved by strengthening the ability of national and local trade unions and cooperative organizations, to work together constructively in the informal economy.