Wages and Collective Bargaining in Tanzania: 2016–2017 Analysis

Abstract

This report analyses to state of wage bargaining in Tanzania looking at the labour/employment legislation, the current minimum wage and how they are derived by sector. The report also analyses the conditions of service in the collective bargaining agreements focusing on what some of the agreements provide for. The methods used to compile this report were both qualitative and quantitative; it included carrying out key informant interviews with some experts at Trade Union Congress of Tanzania (TUCTA) and the Association of Tanzania Employers (ATE). However, the report compilation was majorly based on desk research, where documentary evidence on policies on wages and collective bargaining agreements were reviewed. The report compilation was not without limitations and therefore the readers of this work should be cognizant of the following facts that: whereas both quantitative and qualitative techniques were used, quantitative data was very limited due to inadequate data on CBA’s, with most of the concluded agreements hard to find; this was a cross sectional study which means that the findings are a result of one time observation, perhaps the findings could have been different if it were a longitudinal study which would have been subject to several observations over a longer period of time. The United Republic of Tanzania has the second largest economy in the East African Community (EAC). Just like the other five EAC partner states, the country is largely dependent on agriculture, with about half of its labour force employed in the sector. The country has been moving on a steady economic path over the last few decades, thanks in part to the political and social stability, coupled with some government reforms that have allowed the economy to move from a command economy where government was in full control to a market economy where the markets dictate. The reforms have helped boost the country’s annual GDP growth rate over the last 15 years. Today, in macroeconomic terms, Tanzania has been a quiet success story. Official calculations of gross domestic product though problematic largely due to a rural economy with a big informal sector shows growth has averaged 7 per cent a year since 15years ago when the country turned away from socialism, yet these achievements are overshadowed by the slow response of poverty to match the growing economy. One of the reasons for continued poverty is that, although growth is real, it has been far from even. Agriculture, which employs at least 70 per cent of the population, has lagged, with an annual growth in the sector of around 3-4 per cent. This has barely kept up with population expansion of nearly 3 per cent, meaning a lot of people are being left behind. Although wages have generally been increasing they have been affected by the high inflation rate in consumer prices which has averaged 5 Per cent in the last five recent years. This report has THREE substantive sections: The wage bargaining review for 2016; Conditions of service in the Collective bargaining agreements; Conclusions and recommendations