As the populous nation in East Africa, Tanzania stands to gain (or lose) with its human capital.
This essentially means building better mechanisms for utilizing human capital to reduce poverty and achieve sustainable development.
The World Bank’s Human Capital Report (Tanzania Economic Update: Human Capital, The Real Wealth of Nations, 2019) reveals.
Tanzania’s Human Capital projections
Tanzania’s bureau of statistics (NBS) population projects put Tanzania ahead with more than 55 million people than its trade-counterpart Kenya with 47.6 million people according to recent census reports.
This means Tanzania stands on a viable ground to revitalize its economy and expand production horizons via the effective utilization of its diverse human capital, including investing in both children and adults.
Per the World Bank Human Capital report, imminent issues that derail economic development in Tanzania, primarily poverty—are limited by higher rates of population growth, which are not accompanied by better living standards, offering better social services such as education, health, transportation, and water.
Despite the Tanzanian Household Budget Survey (HBS-2017/2018) showing a slight decrease in poverty since 2012 (for instance rural basic needs poverty from 84.1 to 81 per cent respectively), the World Bank argues that, the number of people living in poverty has increased, which compels the need to enforce robust measures towards accelerating inclusive human capital growth.
The World Bank displays human capital to be a combination of knowledge, skills, and health that people accumulate throughout their lives, enabling them to realize their potential as productive community members.
It is no doubt that human capital is the inevitable currency for development, which requires tight investments including nutrition, health care, education, and jobs/skills.
In relation to Tanzania, where youth unemployment stands at 13 per cent and its associated cost on human capital development inaction rising up, preparation of a workforce that adapts efficiently to the current global economic landscape, is of paramount importance.
Human Capital Project
The World Bank Group ushered in the Human Capital Project in 2017, which is a project with an array of expectations aligned on helping nations creating political spaces to prioritize the transformation of their respective human capital investments.
The project has over 40 countries, converged with a clear-cut objective that eyes, rapid progress towards a world with its children well learned, nourished and prepared for sustainably for their future, with healthy minds and skills, to be productive individuals.
This is one of the vital tools in the human capital project weighed on each country involved, whereas—according to the World Bank, the HCI quantifies the contribution of health and education to the productivity of the next generation of workers.
The HCI can be used in Tanzania, to assess the levels of income lost due to human capital gaps and the respective possibilities of retaining the income loss over time and space.
Tanzanian human capital landscape
Per the World Bank report, the HCI shows that, if a Tanzanian child is born today and survives past age five, there is a one-in-three possibility of stunting, while chances of brain development and earnings consequences might follow in adulthood.
Further, the HCI indicates that a girl in Tanzania might not complete primary education but expected to complete less than eight years of schools with a lesser ability to attain significant teachings while in schools.
Surprisingly, the report goes further and entails that: on the overall basis, taking into account the young population’s life expectancy, children and youth productivity stand to reach only 40 per cent as they would have been with a completer quality education and full health.
Additionally, in comparison to other nations, Tanzania’s environments put children at higher rates of stunting and less schooling years. Hence, given the country’s current development landscape (Gross Domestic Product, growth of 7.2 in the second quarter, 2019), the latter is below expectations, making Tanzania attain number 35, down the bottom on a global scale.
“Tanzania’s performance on the Human Capital Index is too low to expect large gains in standards of living in the future. As the country is expected to attain middle-income status within a year or two, it needs to make a concerted investment in its people as its most important asset for future development,” said Quentin Wodon, World Bank Lead Economist and co-author of the 12th Tanzania Economic Update.
The report highlighted various priority areas for human capital investment that are fundamentally essential in transforming the latter.
Improving educational outcomes is one of the vital aspects of the latter, whereby the effectiveness of learning and length of schooling are factors considered. Per the report, this means that priorities for schooling include solving the early-grade “traffic jam” reducing dropouts and expanding system capacity for secondary students.
This also entails recruiting teachers (especially more female teachers) to meet standards, while emphasizing mathematics, science and building up in-service training.
Improving health outcomes is also vital, whereby—it is important to usher programs addressing multiple drivers of malnutrition simultaneously (consequently reducing stunting) and combining services across sectors such as health and nutrition, psychosocial and sanitation.
More importantly, accelerating the demographic transition is yet crucial to improving human capital. This goes to address fertility issues in Tanzania, which drain government efforts as well as household’s resources to move forward.
Per the report, the latter will improve all components of HCI, but also increasing standards of living and reducing poverty. Expansion of family planning and reproductive health services, including maternal and child health.
While Tanzania’s wealth has raised by 45 per cent over the last two decades, per capita wealth decreased from US$20,900 to US$17,451 accelerated by high population growth, which in turn depends on fertility rates— the number of children women have on average over their lifetime.
Despite fertility rates declined from a peak of 6.8 children per woman in the 1960s to 5.0 in 2016, the pace of the decline is slow, and Tanzania’s fertility rate is still slightly higher than the SSA average of 4.9.