An economic analysis of productivity trends in Tanzania Tobbaco Processing Company (TTPC) 1968-1982

Among the problems facing Tanzanian economy is the deteriorating labour productivity. This is a big obstacle that hinders the development process of an economically poor nation, In an attempt to improve the poor economy, problems of low labour productivity have been acknowledged. Tanzania's faster economic progress depends on the state of labour productivity in those sectors which earn her foreign exchange. This is because foreign exchange is needed in most developmental work. Since the bulk of Tanzania's export come from the agricultural sector the foreign exchange earnings are determined by what quantity and quality of agricultural products is exported. Labour productivity plays an important role in determining the amount of foreign exchange earned from the exports. When value is added by processing these products more foreign exchange could be earned and hence the importance of the labour productivity state in the agro based industries. Tanzania Tobacco Processing Plant is one of the agro-based industries which earn the country the needed foreign exchange. It is therefore useful to examine the state of labour productivity in such a plant. This study attempts to establish trends of labour productivity in Tanzania Tobacco Processing Plant at Morogoro. It also tries to identify the factors causing chances in the Productivity of Labour at the plant level. Our effort was specifically directed towards examining the effect of Capacity Utilization, Labour Intensity, Training, Operative-employee ratio, Incentive and the Supply of raw materials on labour productivity at TTPC. The study adopts both descriptive and econometric methods using time series data covering a period of fifteen years. It has established that, during the fifteen years labour productivity exhibited a rising trend with a marked rise between 1969 and 1979. The regression results indicated that automation and the provision of incentives as the significant factors having positive effects on labour productivity. The remaining factors, namely, capacity utilization, training, operative employee ratio and the supply of raw materials have no bearing on labour productivity at TTPC.