2008年-世界发展银行全球_Small_Enterprise_Growth_and_the_Rural_Investment_Climate___Evidence_from_Tanzania_35页_415kb

Summary of "Small Enterprise Growth and the Rural Investment Climate: Evidence from Tanzania"

Core Content

This paper examines the characteristics, growth patterns, and constraints of small nonfarm enterprises in rural Tanzania. It highlights the importance of these enterprises in contributing to rural employment and income generation, despite the challenges they face. The study uses data from the Rural Investment Climate Survey (RICS) conducted in 2005, which includes interviews with rural households, community leaders, and nonfarm enterprise owners.

Main Findings

• Rural Enterprise Importance: About 68% of Tanzania's population lives in rural areas, and nonfarm enterprises are a significant source of income for approximately 1.2 million rural households. These enterprises are crucial for job creation and poverty reduction, especially in regions with high agricultural activity.

• Sectoral Composition: The majority of rural nonfarm enterprises are engaged in trade (57%), followed by services (21%) and production (19%). Agricultural trade is the most common activity, with 42% of enterprises trading unprocessed agricultural products and 31% trading processed ones. Only 2% are involved in agricultural input trading.

• Enterprise Size and Age: Most rural nonfarm enterprises are small, with over 60% being one-person operations. The median age of an enterprise is 5 years, and new enterprises tend to be small and informal. There is little regional variation in size and age, except in Kilimanjaro and Tabora.

• Informality and Productivity: Informal enterprises dominate the rural nonfarm sector, with only 14% registered in rural areas compared to 27% in towns. Despite lower sales, informal enterprises in the manufacturing and mining sectors report higher sales than their formal counterparts. One-person enterprises are more productive than larger ones, and labor productivity tends to decline with enterprise size.

• Constraints to Growth: The study finds that constraints to enterprise growth in rural Tanzania are mainly supply-side, including limited access to finance, poor road infrastructure, and lack of rural cell phone communication. Demand-side constraints are less significant due to the strong performance of the agricultural sector.

• Seasonality: Seasonality is a key feature of the rural nonfarm sector, with most enterprises (75%) heavily affected. Sales typically peak before planting and after harvesting seasons. This seasonality is closely linked to agricultural activity, and households use nonfarm enterprises to substitute income during off-seasons.

• Entrepreneurship and Education: Formal schooling is an important prerequisite for entrepreneurship, with 75% of rural entrepreneurs having only primary education. Secondary education is less common in rural areas but more prevalent in rural market towns.

• Start-up and Closure Dynamics: The annual start-up rate in rural Tanzania is 11%, which is lower than in other Sub-Saharan countries. The main reason for business closure is lack of access to formal credit. Surprisingly, lack of market demand is not a primary concern, and reasons for closure and start-up are often similar, suggesting that entrepreneurs may not distinguish between constraints.

Key Information

• Data Source: The Rural Investment Climate Survey (RICS) collected by the National Bureau of Statistics (NBS) in 2005, covering 150 communities, 1,239 enterprises, and 1,610 households.

• Methodology: The study uses a stratified multi-stage cluster sampling method to ensure geographical and climatic representation. It combines survey data with subjective and objective measures of business constraints.

• Policy Implications: The findings suggest that improving the rural investment climate, particularly through better access to finance, infrastructure, and communication, can significantly boost enterprise growth and employment in rural areas. The paper also emphasizes the need for policies that support small and informal enterprises, as they are vital for rural development.

Conclusion

The paper concludes that while the rural nonfarm sector in Tanzania is characterized by low productivity and high informality, it plays a critical role in economic development and poverty reduction. Marginal improvements in the investment climate can have a substantial impact on enterprise growth, particularly in the context of a growing agricultural sector. The study underscores the importance of understanding the specific challenges faced by rural enterprises and tailoring policies to address these issues effectively.