This study examines the United Republic of Tanzania’s prospects of harnessing the
demographic dividend in the light of its Vision 2025 aspiration to transform the country
from a least developed agricultural based economy to a semi-industrialized and
modernized middle-income economy. The demographic dividend is the economic benefit
a country may enjoy as the ratio of working-age adults significantly increases relative to
young dependents due to rapid decline in birth rates if the surplus labour force is well
educated, skilled, and gainfully employed.
Tanzania’s demographic and economic profiles favourably position it to benefit from the
demographic dividend. Over the past decade, Tanzania has experienced an impeccably
steady economic growth rate of over 7%. The discovery of gas and other mineral
resources, increase in direct foreign investment, and growing regional integration provide
further opportunities for enhancing this growth. Due to high and slowly declining fertility
levels in the midst of steadily declining child mortality, Tanzania has high child
dependency burden with about 44% of the total population being below age 15.
The modelling results show that Tanzania’s per capita income could increase from the
current level of $514 to $9,018, representing a massive demographic dividend of USD
3,147 per head. However, accomplishing this is not automatic or guaranteed. In order
to earn such a demographic dividend, the country should simultaneously prioritize
investments to accelerate fertility decline; stimulate creation of mass quality jobs,
improve investments in education and health care and optimize governance and
accountability in use of the country’s resources. Reinforcing on-going efforts to address
the key economic and structural bottlenecks in the implementation of Vision 2025 and
walking the talk on the country’s FP2020 commitment to increase contraceptive use from
the current 27.4% to 60% by 2015 would help lay the foundation for moving Tanzania
towards harnessing the demographic dividend in the next four decades or so.