Communities need motivation in order to effectively participate in environmental
conservation. However, potential socio-economic incentives for improving environmental
conservation and livelihoods of communities surrounding Kondoa Rehabilitated Areas
(KRA) are poorly known. The aim of this study was to analyze potential socio-economic
incentives for effectively and sustainably improving environmental conservation and
livelihoods of the communities surrounding KRA. The cross-sectional research design
was employed. Simple random sampling technique was used to select 30 respondents
from each of the four study villages, making a total of 120 respondent households. The
study villages were Mafai, Ntomoko, Kalamba-Juu and Kalamba-Chini. Data were
collected using questionnaires, focus group discussion and interviews. Ms-Excel and
SPSS 20.0 computer programs were used to analyze data. Both descriptive and inferential
statistical analyses were carried out. The findings revealed that 91% of respondents
reported main socio-economic incentives available in KRA being provision of tree
seedlings, fertilizer, improved seeds, beekeeping inputs and education programs. Binary
logistic regression analysis indicated that statistically significant factors influencing
adoption of socio-economic incentives in KRA are awareness (P < 0.01), land size owned
(P < 0.05) and education level (P < 0.05). Roles of socio-economic incentives in
improving conservation were improved afforestation, source of energy, controlled human
activities and increased awareness. The study further revealed that 61% of the total annual
household income was accrued from practicing activities related to socio-economic
incentives. Chi-square test revealed that contribution of socio-economic incentive to total
household income was statistically significant at P < 0.05. It was concluded that identified
socio-economic incentives had a great potential of adoption in KRA. Beekeeping, tree
seedlings and education programs were found to be statistically useful in both improving
environmental conservation and livelihoods of KRA surrounding communities. The study
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recommends capacity building interventions and incorporation of socio-economic
incentives in national biodiversity strategies and environmental conservation policy
frameworks.