CHAPTER ONE

1.0 INTRODUCTION

This chapter addresses the introductory part of the research. It basically includes
background of the study, statement of the problem, and significance of the study.

1.1 Background of the Study

Private sector is a section of the national economy that is not owned by the government.
The business conducted under this sector is carried out by companies or entrepreneurs
who focus or aims on profit maximization and customer satisfaction (Sachdeva, 2021).
According to the Investopedia team (2020), the private sector is the part of economy that
run by individuals and companies for profit and not state owned and controlled.

Therefore, it encompasses all for profit business that are not owned or operated by the
government. Examples of private sector are Sole proprietor, Partnerships, Legal,
Plumbers, Technicians, Contractors, Developers and Designers,

Private sector is crucial towards development of social and economic development of

every county and reduce absolute poverty. Combined with public sector efforts, private
investment, particularly in competitive markets, has a great potential towards growth
(World Bank, 2005b: 273) private sector function as engine towards social as well as
economic growth through creating productive jobs as well as sustainable income to
people, while government act as a regulatory through funding as well as provision of
services, private sector initiatives and investment can help to provide basic services and
conditions that cache poor by improving health, education as well as infrastructures
(World Bank, 2005b: 273)

According to Economic and Social Inclusion Corporation (ESIC) Social development is

about improving the well-being of every individual in the society so that they can reach
their full potential. Social development means investing in people. It requires removal of
barriers so that all citizens can journey towards their dreams with confidence and dignity
(Szirmai, A 2015).

1
According to California Association for Local Economic Development (CALED),
economic development is the creation of wealth from which community benefits are
realized. It is more than a job program an it’s an investment in growing your economy
and enhancing the prosperity and quality of life for all residents. In the economic study of
the Public sector, economic and social development is the process by which the economic
well-being and quality of life a nation, region, local community or an individual are
improved according to targeted goals and objectives. The private sector provides around
90% of employment in the developing world including formal and informal jobs.
Delivers critical goods and services and contributes to tax revenues and the efficient flow
of capital. (Robinson, D 2014)

In Africa, the private sector is active in all economic areas. As a percentage of total GDP,
agriculture contributes an average 25% industry contributes 30%, while services are
largest contribution at 45%. This sector distribution is characteristics of almost African
countries. In south Africa the private sector makes up more than 70% of the South
African economy, the economy operates in the same way. Only high investment more
than 25% of the GDP would be ideal for an economy with South Africa’s developmental
needs in the productive capacity of the economy can enable faster economic growth
(Stevenson, L. 2011).

In East Africa, there is presence of the African Continental Free Trade Area (ACFTA)
which is not just a free trade agreement’ it’s about establishing a unified continental
market with 1.2 Billion potential customers and where the private sector is a major
engine to make it happen. This was the tone of the meeting that was held on 25 April
2019 in Arusha about how the East African Private Sector including small and Medium
Enterprises (SME’s) could benefit from AfCFTA. ‘’Together African economies have a
collective GDP of 2.5 trillion USD, making it the 8 th largest economy in the world. That
makes the continent much more attractive to investment, both from within and from
outside the continent,’’ said Andrew Mold, Acting Director of ECA in East Africa. ‘This
should encourage business people to take advantage of AfCFTA and make the investments
necessary to sustain economic growth and create employment’ (Brouwer, M .2016)

2
opportunities for Tanzania’s growing population, particularly youth, while contributing
tax revenue for public goods and services. The private sector also offers innovation,
technical expertise and efficient distribution of goods and services. (USAID) (Mahtaney, P 2013).

1.1 Statement of the Problem

The private sector is the engine of growth, Successful business drive growth, create jobs
and pay taxes that finance services and investment. In developing countries, the private
sector generates 90% of jobs, 60% of all investments and provide more than 80% to the
government revenue. In Tanzania, the competitiveness of the private sector has remained
low due to due to high cost of undertakings business, weak business linkages and
collaborations, inadequate investment in research and development, inadequate access to
finance and low quality of our products as well as services and other unconducive
business environment (Stevenson, L 2011)

So, the aim of this research is to oversees how the Private Sector can contribute towards
Social - Economic Development in Tanzania

1.2 Research Objective

1.2.1 General Objective

To assess the roles of private sector on social-economic development in United Republic

of Tanzania (URT)

1.2.2 Specific Objectives

I. To identify the social-economic activities done by private sector

II. to examine the extent to which the community participates to the social-economic
activities under private sector

III. To identify the relationship between private sector's activities and social economic
development

3
1.3 Research Questions

1. What are the challenges that hinder the growth of private sector in Tanzania?

2. what are the strategies used to improve the growth of private sector development
on the study area?

3. What are ways forward towards the challenges facing development of private
sector in Tanzania?

1.4 Significant of the Study

The study will encourage the government and other reguratories authorities to improve
methods that can be used to facilitate growth of private sector development and enhance
the social-economic development of the people and country at large.

The study will encourage private sector to expand and invest more into their daily
activities after realization of their potential towards social as well as economic
contribution in the county and after creation of conducive environment by the
government.

The research will identify all the challenge that can be a stepping stone to the formulation
of solutions, to the private sector as well as government also could be usefully to students
who wish to step in private sector and aspire the growth of the private sector to the
enhancement of social-economic development.

4
 CHAPTER TWO

LITERATURE REVIEW

2.1 Theoretical Framework.

OCED (2016) demonstrated the ways that the private sector and the government work
together on the issue of sustainable development in mostly developed counties and has
failed to show how the private sector and government can deal with sustainable
development in the third word counties.

Hipsphser (2017) showed that both centralized and planned economy like USA and non-
functioning state like Somalia can both lead to poverty reduction and economic growth,
but for a country like Somalia which is non – functioning, its level of development is
different or is not the same with that of country like USA which is economically planned
and this proves that things like cultural characteristics, geographical location and the kind
of government shows that improving living standard is uneven in different societies.

Saimai (2015) demonstrated ways that can be used to eradiate problem such as poverty,
hunger and misery in developing or third word counties, stagnation in the developing
countries is due to different factors such as poor governance and corruption. So through
eradication of these problems the economic development in the third world countries can
be achieved and help to clear a way for sustainable development.

Mahtaney (2013) argued that it is hard for future generation to meet their needs because
they are being compromised by indicators such as environment problems, poverty and
income measure and income measure and increase in unsustainable practices, this is true
case because we can see in many counties especially the developing countries different
indicators such as many countries environmental degradation and poor governance may
lead to the compromising of the need of the generation.

OECD (2011) Commented on policies used to help the development of small and
medium sized enterprises in the Republic od Moldova, since the early 2000 economic
growth has averaged 4.6 per annually. The economy grew by 3.6 per cent in 2019, driven
by investment, private consumption, higher wages and social benefits.

5
Stevenson (2011) showed that the private sector is important in the contribution of job
creation and increase in market competition, unemployment is a very big issue especially
in the third word countries. The emergence of private sector has led to the increase in job
opportunities because the private enterprises and companies are established so there is a
need of skilled and non-skilled labour to go work on the companies.

2.2 Development theory

The development theory has been discussed and postulated by three theories thus the
mercantilist theory, liberalist and the Neo Matrix theory. The liberalist postulate the
development and eradication will only come into an end when the state leaves its
mandate to the market thus the market should be the one running the economy and the
mercantilist argue the integration of the market and plan thus the state and the market
should work hard to run and bring development but furthermore to eradicate poverty in
the society and particular state.

2.3 Economic Modernity theory.

Hulme and Mosely (2000), revealed that focusing on economic development the classical
modernization theory perspective considers increase in democracy and human choice as a
direct outcome of economic development. They furthermore believed that economic
development is central to increase pool of women eligible for positions of social power.
They believed that an increase economic development associates with a more broad-
based distribution of educational and occupational resources. Rankin and Katherine
(2002), noted that higher levels of economic development bring more social services to
the society. Hence the increase of social services near the people, also elevate the living
standard of individuals and furthermore facilitates the eradication of poverty in the
society.

6
 CHAPTER THREE

RESEACH METHODOLOGY

3.0 Introduction

This chapter explain various methodologies that were used in gathering data and data
analysis which are relevant to the research. The methodologies will include areas such as
location of the study, research design, types of data, and types od data collection method
and its management. Research methodology simply refers to the practical “how” of any
given piece of research. More specifically, it is about how a researcher systematically
designs a study to ensure valid and reliable results that address the research aims and
objectives (Jansen, D & Warren, K 2020).

3.1 Research Design

According to Bhat (2020), research design the framework of research methods and
technique chosen by a researcher. The design allows the researcher to hone in on research
methods that are suitable for the subject matter and set up their studies up for success.
Research design also refers to the framework of market research methods and technique
that are chosen by the researcher to allow them to utilize the methods that are suitable for
study and set up their studies successfully in the future as well (Vetter, 2021)

The study will involve qualitative research design. According to Bhandari (2020),
Qualitative research involves collecting and analysing non -numerical data, such as text,
video or audio to understand concepts, opinions or experiences. It can be used to gather
in depth insight into a problem or generate new ideas for research. Qualitative research is
commonly used in the humanities and social services, in the subject such as
anthropology, sociology, education health sciences and history. It is used to understand
how people experience the world, while there are many approaches to qualitative
research, they tend to be flexible and focus on retaining rich meaning interpreting data.

Also, the main tool will be used is interview. An interview can be defined as a
qualitative technique which involves conducting intense individual interview with a small

7
number of respondents to explore their perspectives on a particular idea, program or
situation (Boyce, C & Neale, P 2006)

3.2 Area of the Study

Area of the study is the description of the study in terms of geographical location,
population and activities (Kothari, 2004). The study area that the research will be
conducted in the City of Dar es Salaam. This is because Dar es Salaam is most important
city for both business and government. The City contains high concentration of trade and
other services and manufacturing compared to other parts of the country so it will be easy
to collect different data through interviews with different people. This is why Dar es
Salaam City is suitable for conducting the research.

3.3 Data collection

Data collection is the systematic approach to gathering and measuring information from
variety of sources to get a complete and accurate picture of an area of interest. Data
collection enables a person or an organization to answer relevant questions, evaluate
outcomes and make predictions about future probabilities and trends (McLaughlin, 2020).

The research will involve both primary and Secondary data collection. Primary data
collection is the process of gathering data through surveys, interviews or experiments. In
Primary data collection the method that will be used is interviews from different people
in the organization so as to get the required information involving the research.

But also, there will be the use of Secondary data which refers to the data collected by
someone other than the Primary user. The information will be obtained from books and
files as well as the newspaper from different writers.

8
3.4 Ethical Consideration

Ethical consideration in research refers a set of principles that guide your research
designs and practices. Scientists and researchers must always adhere to a certain code of
conduct when collecting data from people. The goal of human research often includes
understanding real-life phenomena, studying effective treatments, investigating
behaviors, and improving lives in other way. What you decide to research and how you
conduct that research and how you conduct that research involve key ethical
considerations (Bhandari, 2021)

TIME FRAME

NOVEMBER DECEMBER JANUARY FEBRUARY

Writing research
proposal

Defence

Data collection

Writing paper

Submission

9
 BUDGET

INDEX: Description: Days Unit Cost Actual Cost

(Tsh) (Tsh)
Transport Transport cost will
support the researcher to
3 5,000/= 15,000/=
move around the City of
Dar es Salaam
Communication Includes cellular data and
internet cost 3 9,000/= 27,000/=

Stationery Cost of notebooks, pens,

pencil, rim paper 1 70,000/= 70,000/=

Printing Cost of printing the first

and final draft 1 20,000/= 20,000/=

Food Cost of food expenses in

the research days 3 10,000/= 30,000/=

Grand Total
162,000/=

10
 REFERENCE

Brouwer, M. (2016). Governmental forms and Economic Development: Amsterdam.

Springer

Cieslik, J. (2018). Entrepreneurship in Emerging Economics: Warsaw. Palgrave

Macmillan

Gutmann, J. (2017). Private Sector Corruption: Berlin. Springer.

Hipsphser, S. (2017). Poverty reduction, the private sector and Tourism in Mainland

South East Asia: Bangkok. Palgrave Macmillan

Kothari. (2004). Research Methodology: Methods and Technique 2nd (edt). New Delhi

Mahtaney, P. (2013). Globalization Sustainable Economic Development, New York.

Palgrave Macmillan

OECD. (2011). Competitiveness and Private Sector Development, Republic of Moldova

2011: OECD publishing

OEDC. (2016). Private Sector Engagement for Sustainable development: Paris. OECD
publisher

Robinson, D (2014). Economic Development from State and Local perspective: New
York. Palgrave Macmillan

Stevenson, L. (2011). Private Sector and enterprises development: Cario. Edward Elgal
publisher

Szirmai, A. (2015). Social Economic development: London. Cambridge University press.

Viola. (2017). Private Sector Corruption Measurent.

11
Yegorov, I. (2016). Alternative Mechanism for the Socio-economic Development of
UKRAINE: Berlin. Rosa Luxembourg foundation

12