Slide 1

TANZANIA, THEUNITED REPUBLIC OF

SADC WORKSHOP ONINFORMAL SECTOR

AND

INFORMAL EMPLOYMENT

National Bureau of Statistics, Tanzania and Ministry of Labour

Contents

 Introduction

Section I: Data collectionSection I: Data collection

 The Integrated Labour Force Survey The Integrated Labour Force Survey

 Informal Sector Module

 Informal Employment

 Challenges

Contents

Section II: Data analysis and interpretation

Informal Sector

Informal Employment

Introduction

Rationale of informal sector/employmentRationale of informal sector/employment

Tanzania economy is largely informal, the informalsector has a significant contribution to GDP and employsquite a big proportion of Tanzanians of whom mostly areinformally employedTanzania economy is largely informal, the informalsector has a significant contribution to GDP and employsquite a big proportion of Tanzanians of whom mostly areinformally employed

Understanding their magnitude and othercharacteristics will help the policy planners tounderstand the situation and plan for betterment of thissectorUnderstanding their magnitude and othercharacteristics will help the policy planners tounderstand the situation and plan for betterment of thissector

Integrated Labour Force

 It is a household based Survey (private HHs) It is a household based Survey (private HHs)

 Covers the whole country Covers the whole country

 It is conducted in a period of twelve months It is conducted in a period of twelve months

ILFS METHODOLOGY

A three-stage sampling technique was used

The sampling was based on the National MasterSample (NMS) that covers Tanzania Mainland and

Zanzibar

A simple random sampling technique wasadopted at the first stage of sample design todetermine representative samples of villages(140) and EAs (244) in rural and urban areasrespectively

ILFS METHODOLOGY

The second stage involved random selection of80 households in each selected village and 30households in each selected urban EA

The third stage of sampling which involvedrandom selection of households to formrepresentative samples of 20 and 30 householdsin each selected village and urban EA respectively

ILFS MODULES

 Household Characteristics

 Labour Force

 Informal Sector Informal Sector

 Child Labour Child Labour

 Time Use Time Use

INFORMAL SECTOR

Questions administered in the informal sector

Type of employment

i.e paid employee, self employed (non-agric with andwithout employees), Unpaid family helper (non-agric.), Unpaid family helper (agric.), On your ownfarm or shamba

Name and location of the place (establishment)

Type of main production /service produced/rendered by your company /business [ISIC]

INFORMAL SECTOR

Type of enterprise:-

Central Government

Local Government

Parastatal

Political party

Partnership Registered

Non Governmental Organization

Religion Organization

Co – operative - Registered

International/Regional organization

Group one

INFORMAL SECTOR

Type of enterprise:- (cont…)

Household -Fetching water/ collecting firewood

Other household economic activities

Co – operative - Unregistered

Private own account

Private Sector employed

Partnership Un-Registered

Other private, specify

Group two

Group three

INFORMAL SECTOR

The number of people paid by working inenterprise on continuous basis

Information on whether the enterprise keeps anywritten records or accounts

Composition of accounts,

i.e balance sheets of assets and liabilities, investment/withdraw of capital by the business owner(s),withdrawals of income by the business Owner(s),earnings Retained within the Business as saving

INFORMAL SECTOR

INFORMAL BUSINESS OWNERS

 Time when was the business started

Reasons for conducting the kind of businessthey operate

The place where they conduct their presentbusiness

Information on where the business operated allyear around

INFORMAL SECTOR

INFORMAL BUSINESS OWNERS (cont…)

 Loan access or credit for business purposes inthe last 12 months

Source of loan/credit

i.e Relative or friend, rotating savings & credit group , co –operative, business association, NGO, donor project , privatemoney lender , middle person/agent, supplier, governmentinstitution, bank or financial institution, social security schemeand other sources

INFORMAL EMPLOYMENT

Information Collected

 Type of main production or service produced orrendered the company or business

Working status

paid employee, self employed (non-agric with andwithout employees), Unpaid family helper (non-agric.),Unpaid family helper (agric.), On your own farm orshamba

INFORMAL EMPLOYMENT

Information Collected (cont…)

 Type of work contract

Permanent

Casual

Oral

Written

On contract

Not applicable

Coverage of social security schemes

e.g. (NSSF, PPF, LPF, ZSSF, FETC

Challenges: Data collection

 Periodicity of data collection

 Can only provide national estimates,estimates of informal sector/employment atlower level is impossible

END OF PART ONE

Thank you for Listening

James E. Mbongo

National Bureau of Statistics, Tanzania

Data Analysis (IS)

Informal SectorInformal Sector

Tanzania defn of informal sector :Tanzania defn of informal sector :

Adopted from the 15th ICLS in 1993and modified to suit the TanzaniasituationAdopted from the 15th ICLS in 1993and modified to suit the Tanzaniasituation

Data Analysis (IS)

Features of Informal SectorFeatures of Informal Sector

Is considered as a subset of householdenterprises or unincorporated enterprisesowned by householdsIs considered as a subset of householdenterprises or unincorporated enterprisesowned by households

Are not separate legal entitiesindependently of the households orhouseholds member that own them.Are not separate legal entitiesindependently of the households orhouseholds member that own them.

Data Analysis (IS)

Features (cont..)Features (cont..)

Are not separate legal entitiesindependently of the households orhouseholds member that own them.Are not separate legal entitiesindependently of the households orhouseholds member that own them.

Do not have a complete set of accounts

May or may not employ paid labour andthe activities may be carried out inside oroutside the owners’ home

Data Analysis (IS)

Features (cont..)Features (cont..)

All or at least some of the goods or servicesof the business have to be produced for sale

Comprises informal own-account enterprisesas well as enterprises of informal employers

Enterprises rendering professional orbusiness services (e.g. doctors, teachers,lawyers, etc) are included if they meet therequirements of informal own-account

Data Analysis (IS)

Criteria used to derive the formal orinformal sector

 Respondents in group one, are consideredin formal sector

 Those responded group two are in informalsector

 Respondents in group three were subjectedto further diagnosis…

Data Analysis (IS)

Qn. Number of people paid by working in your/thisenterprise on continuous basis?

None………............................ 1

Less than 10 (employees).... 2

10 and above (employees) .. 3

Don’t know............................. 4

If the answer code = 1, are considered in informal sector

If the answer code =3, are considered in formal sector

Answer code 2 and 4 goes to further probing…

Data Analysis (IS)

Qn. In order to be able to monitor the activities of theEnterprise, do you /does your employer keep any writtenrecords or accounts?

I Don’t know........................................................... 1

NO............................................................................2

YES, Order Book/record .......................................3

Sales book/records................................................4

Accountancy book ................................................5

Final accounts for Business year......................... 6

If the answer code = 1 or 2, are considered in informalsector

If the answer code >=3, are subjected to further probing…

Data Analysis (IS)

Qn. Do the accounts show all of the following Balancesheets of assets and liabilities, Investment/ withdraw ofcapital by the Business Owner(s), withdrawals of incomeby the Business Owner(s), earnings Retained within theBusiness as saving?

YES…………..…..1

NO……….…..…...2

Don’t know……...3

If the answer code = 1, are considered in formal sector

If the answer code >=2, are considered in informal sector

Data Analysis (Informal Emplo)

Tanzania defn. of Informal employment

(It is still under discussion)

Tanzania used a job based concept ofInformality (adopted from ICLS 2003) withregard to status in employment and theNational definition of informal sector

Data Analysis (IE)

Criteria for informal employment:

 Contributing family workers (agriculture andnon-agriculture)

 Own-account workers on own farm or shamba

 Paid employees and self-employed workers(non-agriculture, with or without employees) in theinformal sector or household production units

Data Analysis (IE)

Criteria for formal employment:

All paid employees and self-employedworkers (non-agriculture, with or withoutemployees) in the formal sector (defined ealier)

END OF PART TWO

Thank you for Listening

James E. Mbongo

National Bureau of Statistics, Tanzania