OVER the past decade, Tanzania has experienced an impeccably steady economic growth rate of over 7 percent.
This growth rate was mainly driven by increased domestic and foreign investments in the manufacturing and service sectors that was facilitated by the economic and financial reforms and prudent monetary and fiscal policies that the country has undertaken over the past two decades or so.
The GDP per capita increased from USD 308 to USD 525 between 2001 and 2010, while the GDP increased from USD 10 billion to USD 22.9 billion during the same period (World Bank, 2014).
In addition, the country continues to amass other economic opportunities that if well exploited can enhance economic growth further.
Even though demographic transition has been found to beneficial to the general public in various aspects, there is no guarantee that these benefits, especially economical, will be triggered down to the poor.
Many developing regions, including Tanzania, are facing a youth bulge, meaning that young people comprise the highest proportion of the population.
These regions are at risk of losing what could be a tremendous opportunity for economic growth and development if they do not capitalize on this young and economically productive population -also referred to as the “demographic dividend,” defined as the increase in economic growth that tends to follow increases in the ratio of the working-age population-essentially the labor force-to dependents.
In Tanzania, education can optimize the demographic dividend, specifically, education can bring more workers into formal employment, and this can increase productivity as well as the nation’s tax base, which may help increase overall employment and growth.
An educated labor force could potentially afford a country to attract more competitive production phases with higher value added.
On the individual level (microlevel), education can help reduce unemployment and underemployment. It can also improve skills and knowledge so workers can use more advanced technologies.
This may lead to improved efficiency in the market and hence more sustainable growth.
The development of a more skilled labor force may also lower the unit cost for skilled workers and attract greater levels of foreign direct investment and higher wages for the employed.