Informal Sector Energy Use in Tanzania

This 1994 report by the Stockholm Environment Institute examines energy use within the urban informal sector of Tanzania, specifically in Dar es Salaam, Mbeya, and Shinyanga. It analyzes the relationship between capital intensity, energy efficiency, and employment, noting that the sector serves as a critical economic survival mechanism, particularly for women. The study finds a dichotomy between subsistence-oriented activities using traditional fuels and small-scale businesses using modern energy, concluding that the informal sector provides significant employment without substantially increasing total urban energy consumption due to capital limitations.

• The informal sector in Tanzania is characterized by a dichotomy between subsistence-oriented activities and small-scale businesses. The former, including food preparers and beer brewers, rely on traditional technologies and fuels, while the latter, such as grain millers, carpenters, and metal workers, use electricity in a manner similar to formal sector operators.
• Energy efficiency in the informal sector is closely linked to capital intensity. The most capital-intensive subsectors, such as grain milling, demonstrate the highest energy efficiency (approximately 60%) due to their reliance on electricity. Conversely, the least capital-intensive subsectors, specifically food preparation and beer brewing, are the least energy efficient, with overall efficiencies of about 20% and 15% respectively.
• The informal sector serves as a vital employment buffer, especially for women who have entered the sector as a survival strategy during economic hardship. Food preparation and beer brewing are the easiest subsectors to enter and exit due to low capital and skill requirements.
• Despite its importance for employment, the informal sector constitutes a small fraction of total urban energy consumption. This is because capital limitations prevent informal operators from accessing the high-intensity technologies used in formal industry, such as cement or fertilizer factories.
• There are distinct intercity differences in fuel procurement and scale of operation. Dar es Salaam firms exhibit higher gross revenues and more employees per establishment than those in Mbeya or Shinyanga, suggesting a more competitive and potentially less profitable environment. Fuel use varies by city: Mbeya shows higher firewood use, Dar es Salaam higher charcoal use, and Shinyanga lower kerosene use due to local costs and availability.
• Awareness of environmental issues among informal entrepreneurs is mixed and generally secondary to profitability. While many in Dar es Salaam recognize that charcoal use contributes to deforestation, those in Shinyanga are more likely to disagree. Most operators across all cities agree that city authorities should clean up the local environment.

APA

Hosier, R. (1994). Informal Sector Energy Use in Tanzania. Stockholm Environment Institute. https://www.sei.org/mediamanager/documents/Publications/SEI-EEDseries-25-InformalSectorEnergyUseInTanzania-1994.pdf

Chicago

Hosier, Richard. Informal Sector Energy Use in Tanzania. Stockholm Environment Institute, 1994. https://www.sei.org/mediamanager/documents/Publications/SEI-EEDseries-25-InformalSectorEnergyUseInTanzania-1994.pdf.

Wikipedia

{{cite report |last1=Hosier |first1=Richard |title=Informal Sector Energy Use in Tanzania |publisher=Stockholm Environment Institute |date=1994 |url=https://www.sei.org/mediamanager/documents/Publications/SEI-EEDseries-25-InformalSectorEnergyUseInTanzania-1994.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{hosier1994informal, author = {Hosier, Richard}, title = {{Informal Sector Energy Use in Tanzania}}, institution = {Stockholm Environment Institute}, year = {1994}, url = {https://www.sei.org/mediamanager/documents/Publications/SEI-EEDseries-25-InformalSectorEnergyUseInTanzania-1994.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }