55. Having a fixed premise for conducting business is a prerequisite to being formally registered or granted a business license. However, only a very small share of HEs (9 percent) is located in a permanent workspace other than their home (Table 4.5). Because of lack of access to credit coupled with the significant growth of the informal sector, it has become very difficult for HEs to afford a rented premise. On average, over 35 percent of them conduct their business in their own homes. Others are forced to be mobile (e.g., the _Machingas_ ). Most rural HEs operate from home and are less mobile than urban HEs.

56. For urban HEs, however, operating from one‟s home is often not optimal, as it limits access to bigger markets. This strengthens their motivation for hawking, an option which runs them into constant fights with local authorities (as discussed in the next subsection).

**Table ‎4.5:  Place of Conducting Business Among HEs, 2006 (percent)**

||Rural|SecondaryUrban|Dar es Salaam|Total|
|---|---|---|---|---|
|Own home - with business space|19.5|16.4|16.9|18.4|
|Own home - no special business space|17.2|13.8|13.5|15.8|
|Structure attached to house|0.8|0.9|1.4|0.9|
|Perm. building other than home|7.4|11.1|10.3|8.8|
|Fixed kiosk/stall – market|5.5|10.8|9.0|7.3|
|Vehicle, cart, temp stall – market|4.0|9.6|3.8|5.3|
|Fixed stall – street|3.5|4.2|7.8|4.4|
|Vehicle, cart, temp stall – street|1.1|3.7|6.4|2.6|
|Other temporary structure|8.0|10.9|9.6|8.9|
|Construction site|1.3|1.1|2.0|1.4|
|Customer's/employer's house|1.1|0.6|0.8|0.9|
|No fixed location / mobile|30.6|16.9|18.4|25.4|
|Total|100|100|100|100|

_Source: Calculations based on the ILFS 2006 data_

# 4.3.2 **_Implications of Urban Planning Policy of LGAs_**

57. The town planning policy of the Local Government Authorities (LGAs) has not been proactive in tapping the opportunity presented by HEs to support its job creation agenda. With rapid urbanization fuelled mainly by rising rural-urban migration, the LGAs are under increasing pressure to allocate legitimate areas for conducting businesses.<sup>17</sup> Large urban areas, however, have limited business premises in the more economically active and lucrative urban locations, and the rent in these areas is usually high. In the case of Dar es Salaam, the largest city in Tanzania and the fastest growing in Africa, this has become a major challenge because the growth of traders has far exceeded the ability of city authorities to respond effectively. As a result, traders congest in populated areas for assured market. Since they cannot afford the cost of renting, most end up as mobile traders.

17 During its Innovative Cities Global Dialogues (June 22-23, 2010), the World Bank Institute (WBI) argued that, although urbanization presents many challenges, it provides enormous economic opportunities for growth, poverty reduction, and a better quality of life. This argument is based on the fact that most wealth is created in cities, which account for some 70 percent of global GDP; and that no advanced country has achieved its levels of development without urbanizing. As shown in this report, the performance of urban HEs is significantly better than those of rural HEs. This shows that, if well managed, urbanization will be a key driver of productivity in HEs, with enormous potential for the poor to participate in economic growth, improve welfare, and fight poverty.

28