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ENTREPRENEURSHIP DEVELOPMENT IN LINDI MUNICIPAL: THE CASE OF SALT WORKS AND FISHERY SUB SECTORS
SHABA KINASA ZEPHANIA
A DISSERTATION SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTERS OF BUSINESS ADMINISTRATION OF THE OPEN UNIVERSITY OF TANZANIA.
2011
CERTIFICATION
The undersigned certifies that he has read and here by recommend the acceptance of the document; Entrepreneurship development in Lindi municipal; the case of salt works and fishery sub sectors by the Open University of Tanzania in partial fulfillment of the requirements of the award of masters of business administration of the Open University of Tanzania.
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Dr. Deus Ngaruko
(Supervisor)
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Date
DECLARATION
I Shaba Kinasa Zephania do here by declare that this dissertation is my own original work and that it has not been presented to any other university for a similar or any other degree of award
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Signature
COPY RIGHT
No part of this dissertation may be reproduced, stored in any retrieval system or transmitted in any form by any means being electronic, mechanical, photocopying, recording or otherwise without prior written permission of the author or the open university of Tanzania in that behalf.
DEDICATION
In my deep heartfelt, I would like to thanks all those who participated in one way or another to make my study successful. Above all is my almighty GOD who made me healthier and courageous enough to undertake this study.
Special thanks to Dr Deus Ngaruko who guided me throughout the study and thus made me successful, may God bless him. Again my special thanks should go to my beloved wife Juliana Yonafika Mrutu and my dearest sons and daughters, who in one way or another missed my company as the head of family and thus were forced to tolerate.
Not only those but also my thanks should go to as far as Mrs. Irene Aurelia Tarimo .Assistant lecturer faculty of Science, Technology & Environmental studies of the Open university of Tanzania (the director of the regional center), her guidance and encouragement during the session of the coursework and in early preparations of this dissertation contributed a lot to my success.
However I should not put aside Miss Neema Magambo (tutorial assistant faculty of Science, Technology & Environmental studies) in the centre among the OUT staffs in the centre responsible for guidance and coordination. I won’t be fare and rational if I will not appreciate services given by Mwajuma Jackson Mwita a personal secretary to the director of the centre. To windup, I would like to thanks my employer and fellow staff of the Tanzania Prisons service for their tolerance having missed me during my study.
ABSTRACT
Entrepreneurship development in Tanzania is of no doubt very important as it creates employment opportunities to cater for people who can not secure formal employment these includes non schooled, school dropouts, school leavers, colleges leavers, retired and employed people due to pension and salary insufficiencies respectively. Policies emphasizing entrepreneurship development have been put in place and various researches based on entrepreneurship have been conducted, results and recommendations have been given to work on but unemployment problem is still alarming.
The purpose of this study was to explore the factors influencing entrepreneurship development in Lindi municipal, to see if there are challenges to work on. The study employed interview, questionnaire and observation methods during data collection, whereby the sample of 50 respondents from the Lindi municipal was involved.
Results indicate that there are many unexploited entrepreneurial opportunities; there are factors which favour entrepreneurship development and some which hinder it. The study recommends the following; entrepreneurship should be dealt in categorically, school curricula should include entrepreneurship development, financial institutions should be entrepreneurial focused, to build self esteemed entrepreneurs government should adopt into entrepreneurship revolution, to educate and to sensitize people on entrepreneurship and the religious leaders should be reminded on their role of developing entrepreneurship in their respective areas given that they are close to the people and they have power to influence people.
TABLE OF CONTENTS
CERTIFICATION ii
DECLARATION iii
COPY RIGHT iv
DEDICATION v
ABSTRACT vi
TABLE OF CONTENTS vii
LIST OF TABLES xi
LIST OF FIGURES xiii
LIST OF FIGURES xiii
LIST OF APPENDICES xiv
LIST OF ABBREVIATIONS xv
CHAPTER ONE: BACKGROUND INFORMATION 1
1.1 Introduction 1
1.2 Lindi municipal profile 2
1.3 Entrepreneurial opportunities available in the municipal 3
1.4 Business and entrepreneurship 5
1.5 Cooperative marketing and community development 5
1.6 Entrepreneurship development, a needier area 6
1.7 Statement of the problem 7
1.8.0 Objectives of the Study 8
1.8.1 Specific objectives 8
1.9 Research hypotheses 9
1.10 Significance of the study 9
CHAPTER TWO : LITERATURE REVIEW 11
2.1 Introduction 11
2.2 Theoretical literature 11
2.3 Characteristics of entrepreneurship 13
2.4 Entrepreneurship Entry Routes 15
2.5 Entrepreneurship development: Pull - push influences 16
2.6 Types of entrepreneurs 16
2.7 Fish catches in Tanzania 17
2.7.1 Fish training institutions in Tanzania 17
2.7.2 Successful fishing 18
2.7.3 Salt making process: design, layout and principles 19
2.7.4 Salt producers in Tanzania 20
2.7.5 Logistics of salt distribution 20
2.7.6 Salt works and fishery industry in the municipal 20
2.7.8 Uses of salt 23
2.8 Entrepreneurship development in Tanzania: policy review 23
2.8.1 Entrepreneurship trainings 25
2.9. Policy statements 27
2.9.1 Fishery policy statement 28
2.10 Eligibility of salt works and fishery opportunities 28
2.11 Chapter summary 29
CHAPTER THREE: RESEARCH METHODOLOGY 30
3.1 Introduction 30
3.2 Research design 30
3.3 Area of study 30
3.4 Study population 31
3.5 Sampling techniques 31
3.5.1 Sampling frame 32
3.5.2 Sampling unit 32
3.5.3 Sample size 32
3.6 Data collection methods 33
3.7 Data analysis 33
3.7.1 Regression models 34
3.8 Expected limitations 35
CHAPTER FOUR 37
DATA ANALYSIS AND RESEARCH FINDINGS 37
4.1 Introduction 37
4.2 Socio-economic structure 37
4.3. Availability of entrepreneurial opportunities in Lindi municipal 40
4.4 Utilization of opportunities available in the municipal 43
4.5. Factors influencing entrepreneurship 44
4.6.0 Entrepreneurship development: Negative influencing factors 46
4.6.1 Lack of capital 47
4.6.2 Laziness of the people 47
4.6.3 Lack of courage 49
4.6.4 Municipal taxes 49
4.6.5 Bureaucratic practices and the development in entrepreneurship 50
4.7.1 Training and education offered by extension officers 52
4.7.2 Role of NGO’s in promoting entrepreneurship development 56
4.8 Relationship of the study variables 56
4.9.1 Entrepreneurship development Vs the level of education 59
4.9.2 Entrepreneurship development Vs entrepreneur’s age profile 59
4.9.3 Initial capital investments Vs entrepreneurship development 60
4.9.4 Marriages and entrepreneurship development 60
CHAPTER FIVE: DISCUSSION, CONCLUSION AND RECOMMENDATIONS 62
5.1 Introduction 62
5.2 Summary 62
5.3. Venture capital 66
5.3.1 Bureaucracy 68
5.3.2 Laziness, customs and traditions of the people 69
5.3.3 Lack of entrepreneurship education 70
5.3.4 Cumbersome tax and administrative procedures 71
5.4.0 Recommendations 72
5.4.1 Entrepreneurship development should be a categorical plan 72
5.4.2 Developing entrepreneurship curricula in schools 73
5.4.3 Lending – entrepreneurship development focused 73
5.4.4 Building of self esteemed entrepreneurs 74
5.4.5 Entrepreneurship revolution 75
5.4.6 The role of religious leaders in developing entrepreneurship. 76
5.4.7 Educating people, sensitizing and removing of wrong perceptions 76
5.4.8 Special cases of entrepreneurship 77
5.5 Area of further research 77
REFERENCE 79
APPENDICES 81
LIST OF TABLES
Table 1: Respondents highest level of education 38
Table 2: Percentage distribution of respondent's sex 38
Table 3: Percentage distribution of the respondent's occupation 38
Table 4: Marital status of the respondents 39
Table 5: Initial capital investments of the entrepreneurs 40
Table 6: Opportunity for salt works 40
Table 7: Opportunity for fisheries 41
Table 8: Opportunity for raising livestock 41
Table 9: Opportunity for crop production 42
Table 10: Opportunity for other micro economic income generating activities 42
Table 11: Respondents engaged in salt works 43
Table 12: Respondents engaged in fishing activities 43
Table 13: Respondents engaged in crop production 43
Table 14: Respondents dealing with livestock raising 44
Table 15: Respondents engaged in other micro economic income generating activities 44
Table 16: Responses on how experience contributes to entrepreneurship development 45
Table 17: How family support and moral encouragement favours entrepreneurship 45
Table 18: How lack of capital hinder entrepreneurship development 47
Table 19: How laziness of people hinder entrepreneurship development. 47
Table 20: How lack of courage hinder entrepreneurship 49
Table 21: How municipal taxes hinder entrepreneurship 50
Table 22: How bureaucratic practices hinders entrepreneurship 51
Table 23: How entrepreneurship trainings and education offered by extension officers contributes to entrepreneurship 53
Table 24: Percentage of respondents attended seminars based on entrepreneurship 53
Table 25: Percentage of respondents attended workshops based on entrepreneurship 54
Table 26: Percentage of respondents attended crash courses based on entrepreneurship 54
Table 27: Percentage of respondents attended vocational trainings based on entrepreneurship 55
Table 28: Percentage of respondents attended trainings based on fisheries 55
Table 29: Percentage of respondents attended tourist attraction entrepreneurial trainings 55
Table 30: How business education offered by NGO's contributes to entrepreneurship development 56
Table 31: Analysis of the relationship between endogenous and exogenous variables for salt works entrepreneurship 57
Table 32: Analysis of the relationship between endogenous and exogenous variables for fisheries entrepreneurship 58
LIST OF FIGURES
Figure 1: Percentage distributions of the responses on how experience contributes to ntrepreneurship development. 46
Figure 2: Responses on how laziness of the people hinders entrepreneurship development 48
Figure 3: Responses on how bureaucracy in loan obtainment hinders entrepreneurship development 51
LIST OF APPENDICES
Appendix 1: Research questionnaire 81
Appendix 2: Interview guide questionnaire 91
LIST OF ABBREVIATIONS
ADB African Development Bank
ASDP Agricultural Sector Development Program
CBE College of Business Education
CDTF Community Development Trustee Fund
DADPS District Agricultural Development Program Support
DEDPS District Entrepreneurship Development Program Support
DUEC Dar es Salaam University Entrepreneurship Centre
DMMO District Mangrove Management Officer
ESDP Entrepreneurship Sector Development Program
EACM East African Common Market
HBS Household Budget Survey
LM-MTEF Lindi Municipal Medium Term Expenditure Framework
LMMO Lindi Mangrove Management Officer
MBI Management Buy In
MBO Management
MCDOs Municipal Community Development Officers
MDGs Millennium Development Goals
MEO Municipal Education office
MFO Municipal Fisheries Officer
MMO Municipal Medical Officer
MUCC Moshi University College of corporation
NBNL National Basic Needs Line
NED National Entrepreneurship Day.
NEDF National Entrepreneurship Development Fund
NFPL National Food Poverty Line
NGO’s Non Government Organizations
NIGP National Income Generating Program
NSGRP National Strategy for Economic Growth and Poverty Reduction
PPAs Participatory Poverty Assessments
PRBS Poverty Reduction Budget Support
PRSP Poverty Reduction Strategy Paper
PSEDF Presidential Small Entrepreneurship Development Fund
PSD Private Sector Development
PTF Presidential Trustee Fund
PMMP Poverty Monitoring Master Plan
REDPS Regional Entrepreneurship Development Program Support
RGDP Regional Gross Domestic Product
SACCOS Savings and Credit Co- operative Societies.
SEDA Small Entrepreneurship Development Agency.
SELF Small Entrepreneurship Loan Facility.
SIDO Small Industries Development Organization.
SMEs Small and Medium- sized Enterprises
SPSS Scientific Package of Social Sciences
TPB Tanzania Postal Bank
TWENDE Tanzania Women Entrepreneurship Network Development.
URT United Republic of Tanzania
VETA Vocation Education and Training Authority
VEDPS Village Entrpreneursip Development Program Support
WEDPS Ward Entrepreneurship Development Program Support
WES Ward Executive Secretary
WYDF Women and Youth Development Fund
WDF Women Development Fund
YDF Youth Development Fund
ZMO Zonal Mining Officer
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CHAPTER ONE
BACKGROUND INFORMATION
1.1 Introduction
Entrepreneurship development in Tanzania is of no doubt very important because it contributes into employment creation and income generation and hence the growth of the economy. It is among the tasks put forward in the National Strategy for Reduction of Poverty (NSGRP) of 2005 build from the Poverty Reduction Strategy Paper (PRSP) of the year 2000/2001 - 2002/2003. Private sector development (PSD) which is a pre-condition to the achievement of economic growth and reduction of poverty, addresses among other things entrepreneurship development.
This is in connection to the point that Tanzania is faced with the challenge of achieving high economic growth which will lead to high income and hence the wellbeing of the people given that Tanzania is a committed member of the Millennium Development Goals (URT, 2005).
Salt works and fishery are among the economic opportunities that Tanzania is blessed with. Lindi municipal is among the areas in Tanzania that is blessed with these opportunities. Tanzania is rich in water bodies which supports fishery and salt works, the water bodies includes the large three lakes of Tanganyika, Victoria and Nyasa, there are also small lakes like Rukwa, Eyas. Manyara, Natron to mention the few.
It has a large area of sea water covering the eastern coastline. Fish is among the few renewable resources in Tanzania, it is a very source of nutritious to the low income earners almost one third of the population because it is affordable even to low income earners (URT-Fishery policy, 1997).
According Kichwa.(salt works manager) (2006).Salt is manufactured along the 900 km coastline of Tanzania and in the main land by solar evaporation of sea brine, lake brine and sub soil, salt is produced for edible and industrial purposes. There are chief salt producers such as coastal salt works Co. and, Mtondwe salt works in Bagamoyo District, Kibo matches and Saramov salt works in Tanga There are also small scale producers In Dar-es-salaam, Lindi and Mtwara. People residing along the coast line are there fore expected to have been used this entrepreneurial opportunity which they are economically comparatively advantaged to.
1.2 Lindi municipal profile
People residing in Lindi municipal are among the potential beneficiaries of salt works and fisheries found along the coastline of the municipal. According to the Lindi Municipal Medium Term Expenditure Framework (LM-MTEF) the 2002 population and housing census indicates that the Lindi municipal has a total population of 41,549 out of which 21,249 are male and 20,300 are female. Population projections 2010 indicate that the municipal will have 62,659 people out of which 30,817 are male and 31,842 are female (LM-MTEF, 2010/2011).
Regional Gross Domestic Product (RGDP) at Current Basic Prices indicates that Lindi region holds 19th position among 21 regions in main land Tanzania its GDP is Tshs 470,192 m in 2009 rates. Annual per capita GDP at Basic prices in 2009 is 519,274 and the region is among the lowest 10 regions in the country. Others are Singida, Dodoma, Shinyanga, Kigoma, Pwani, Tabora, and Mtwara when listed in their ascending order in terms of GDP per capita rates; the top tens are Dar es Salaam, Iringa, Ruvuma, Arusha, Kilimanjaro, Mbeya, Mwanza, Mara, Manyara and Tanga: (URT ,2009).