Corporate Social Responsibility (CSR) is a consistently used business practice in Tanzania, with huge corporations such as MIB Bank. Twiga Cement and Coca-Cola endorsing and investing in a large number of CSR schemes. Despite its potential to greatly help local communities, it is a concept that has not taken root in Tanzania. For a number of reasons, whether it be poor organization, a failure to engage and educate local communities or businesses being held back by a desire to put its shareholders and profits first, CSR seems to be misunderstood and at times misused. This holds Tanzania back, especially considering how important sustainable practices and further community engagement could greatly help both Tanzania and the corporations that operate within them. It can improve employment prospects for Tanzanian men and women across all sectors, help Tanzania’s environment become cleaner and safer and it can ensure sustainable and continued economic growth for Tanzania, which benefits everyone from the business directors to the local farmer.
What is CSR?
CSR stands for social corporate responsibility. It involves companies using their resources and money to try and benefit the communities they work in. This includes keeping pollution down, providing more energy and resources to the community and working alongside the community to improve conditions for the local people. This can take many forms, from making its manufacturing or extracting processes more sustainable to helping pay for classroom equipment to ensure local students have the tools to succeed. It can also involve companies donating some of its profits to local projects such as building new irrigation systems or helping refurbish local community centers. By providing these resources and funding, the companies can enhance their reputations both locally and across the region they operate in by helping to gain a loyal customer base, who trust and support the business due to their positive investment in the community.. When done well, CSR has the potential to improve society for the better and benefit everyone within it.
Why is CSR important to Tanzania?
While CSR schemes can be a huge benefit to any country or region willing to embrace them, it can be even more important for Tanzania. Firstly, by working with businesses to implement sustainable practices, it can ensure that Tanzania can maintain its key resources. Around a quarter of Tanzania’s economy is taken up by mining, industry and construction. In particular, as of 2013, 89% of Tanzania’s mineral export wealth comes from gold, although diamonds and tanzanite also contribute to Tanzania’s export wealth. Therefore, it is vital that businesses mine these resources sustainably so that more people can use and profit from their natural resources for many generations, not just for short term profitability.
Another key aspect of the Tanzanian economy is farming, with agricultural workers representing around half of the employed workforce in Tanzania. However, climate change and unsustainable irrigation and farming practices mean that it is becoming harder and harder to farm successfully in Tanzania. Due to these challenges, people will struggle to grow crops or earn money, in turn leading to more people in poverty.
CSR projects take many different forms, but a key aspect is that they encourage businesses to use sustainable practices. This includes reducing water, soil and air pollution that can badly damage the farming land and environment. This will hugely benefit local farmers, who with more clean water and high quality land can continue to grow crops and farm successfully. It also means convincing extractive industries that they can still grow and produce profits for its shareholders without drying up Tanzania’s natural resources, which need to be preserved to ensure long term profit and economic growth for Tanzania. Therefore, CSR can be crucial in protecting Tanzania’s economic and environmental future.
Another factor to remember is the disparity between the economic growth in Tanzania and how much of it is reaching the people of Tanzania. In a recent World Bank report, they state how while the country has enjoyed sustained economic growth for the past 20 years, Tanzania’s wealth per capita- the sum of all its human, physical and natural capital has decreased. This reflects how Tanzania’s natural resources, which as mentioned previously contribute heavily to Tanzania’s wealth overall, are not being managed effectively and are therefore not creating sustainable economic growth for the whole of Tanzania.
Tanzania also has one of the largest poor populations in Africa, with around 21.3 million citizens living below the poverty line. The World Bank report also states how with the population in Tanzania set to grow exponentially (the Tanzanian population is expected to triple to 138 million by 2050), there will be huge pressure on natural resources and necessities. This will be compounded by increased urbanisation and climate change. In simple terms, more people (who are already struggling with poverty and rely on natural resources) will have to compete for less space, farmable land, water and reliable energy supplies.
CSR can help manage the worst affects. By getting businesses to commit more funding and expertise to local communities, they can help limit the worst effects of poverty, whether it be improving energy supply, helping to educate people and protecting the land from environmental damage, or by introducing schemes that will help jobseekers gain further qualifications and skills that will help them earn the money to improve their living standards.
How is CSR operating in Tanzania now?
The good news is that progress is being made. Government legislation implemented in 2017 has made sure businesses carry out their social responsibilities to the areas they operate in, whether through education and training, more sustainable practices or through providing funding equipment and facilities in the local communities. It also forces them to commit a small percentage (around 0.7%) of their income to CSR schemes. It is a huge step forward from businesses using their own discretion when deciding what their social responsibilities were.
In a recent article by the Citizen, they report on and highlight the key points of a recent social responsibility forum held in Dar Es Salaam focusing on women employment in extractive industries. At this forum, they commend extractive industries for their steps towards taking up greater social responsibility. However, they also recommend that more should be done to educate girls at the school and university level. More women should be trained and educated in these industries to ensure in the future that these companies can cultivate local women to help them implement more effective and sustainable practices. They emphasized how it would be both economically valuable and socially beneficial to include more women in the extractive industries. What this conference reflects is that while steps are being made to make CSR better understood and more effective and better understood, more can always be done, especially at the local level.
Without continuing to highlight the importance of CSR schemes to both businesses and the community, their positive impact is reduced as companies sacrifice genuine positive change for profitability or some quick publicity. This is reflected in a 2017 study looking at the CSR policies implemented in the Msalala district of Tanzania by extractive and mining industries. While the Bulyanhulu Gold Mine Company did provide dispensaries, latrines and school desks, the majority of the public response from those surveyed was negative. They felt they were not included in the use of CSR funds and companies in the region also scored poorly amongst the public on dealing with issues of environmental pollution, inflation, healthcare and poverty. This shows how even with the legislation, CSR schemes can still struggle to deliver positive change to local communities
This is not just an isolated case. A comprehensive study of CSR in Tanzania done by a student at the university of Dar Es Salaam concludes that while businesses are quick to proclaim how effective their CSR schemes are, in reality these companies often use these schemes to generate further publicity and create a greater demand for their service/product. Supporting the local community is often a secondary concern. To solve this, the study concludes that more needs to be done to educate and involve the community in CSR schemes and help push the government to act as a coordinator and enforcer to ensure these schemes are a huge success for both businesses and the local people. This reflects that there is still much more that can be done to raise awareness of the concept in the local communities and ensure businesses help communities by aiding gender equality in employment, implementing sustainable business practices and helping to engage and solve problems within the local community.
So, what more can be done?
With this article looking at how useful CSR is and how it can benefit Tanzania, it is also important to outline the steps that are needed to make it successful.
Community engagement is a key aspect, and ensuring that local businesses, schools, workers and groups are aware of CSR schemes and become more and more invested in making sure that these schemes truly benefit the community. As part of this, it also involves educating people on the key reasons why CSR schemes are important. It is also crucial that young students are educated on the importance of CSR, as they can then take these ideas with them as the progress into further studies and a career. Therefore, outreach into schools and universities is important, whether it be through lectures, debates, seminars or even longer educational programs. These ideas will help them become more employable but also help integrate these important ideas into whatever sector they go into, whether that be the private sector industries, into government or just into public life. This can then create more engagement on these issues with businesses, meaning there are more people who are ready and willing to work in tandem with businesses to ensure the greatest benefit to the local people and communities.
Alongside this, a crucial step is trying to continue to push businesses to invest in the local community. This can be done not only through creating demand for CSR schemes by educating the markets and consumers these businesses are selling too, but through negotiating agreements between non profits, businesses and local institutions that will bring about even more mutually beneficial CSR schemes. In the long run, it will also be vital that the government becomes increasingly involved in co-ordinating CSR schemes to ensure that both business and societal interests are met. In an ideal world, they will come up with even stricter guidelines that ensure companies are forced to carry out their responsibilities and that they work with local communities to ensure that the local people are able to participate and improve their areas.
CSR therefore offers plenty of opportunity for businesses and communities to work together and create truly positive change, but there is plenty of work to do to ensure that the CSR concept can deliver on its huge potential.
-Citizen Article on CSR forum, March 30th 2019: https://www.thecitizen.co.tz/news/CSR-is-key-to-social-sustainability/1840340-5049158-tftwi0z/index.html
-World Bank Report May 2019: https://www.worldbank.org/en/news/press-release/2019/05/05/accelerated-natural-resource-degradation-puts-tanzanias-development-goals-at-risk—new-world-bank-report
-2017 Study on the impact of CSR studies in the Msalala District by Jonas Kilave: http://scholar.mzumbe.ac.tz/handle/11192/2114
-Shukrani Mbirigend, Corporate Social Responsibility in Tanzania, Misconception, Misuse and Malpractices, Chapter 7 in particular, Dar Es Salaam Student Study: https://www.researchgate.net/publication/277389003_Corporate_Social_Responsibility_in_Tanzania_Experience_of_Misconception_Misuse_and_Malpractices:
-All Statistics not found within other cited works were taken from the publicly available archives of the National Bureau of Statistics, done by Tanzania’s Ministry of Finance