Tanzania's employment landscape is defined by a stark contrast between formal and informal sectors, with informal employment dominating at 71.8% (25.95 million workers), while the formal sector accounts for only 28% (10.17 million workers). Within the formal sector, private companies employ 91.75% (9.33 million) of the workforce, and the public sector comprises 8.25% (0.74 million). The informal sector remains concentrated in agriculture and fishing, which account for 65-70% of informal jobs (16.87-18.17 million), followed by retail trade (10-15%, 2.60-3.89 million), manufacturing (5-8%, 1.30-2.08 million), and construction (4-6%, 1.04-1.56 million). The unemployment rate in Tanzania decreased slightly from 9% in 2021 to 8.9% in 2022, reflecting incremental improvements in labor market conditions. However, the prevalence of informal employment underscores significant challenges in achieving economic stability and equitable growth.

Projections indicate that by 2030, formal employment will rise to 38%, with an estimated 15.81 million workers transitioning into formal jobs, reducing the informal workforce to 62% (25.79 million). Key growth sectors in formal employment include manufacturing and industry (25% of formal jobs), services and tourism (22%), and modern agriculture (20%). However, regional disparities persist, with urban centers like Dar es Salaam showing higher formal employment rates (14.6%) compared to rural areas. Addressing these challenges requires targeted policies to bridge skill gaps, enhance infrastructure, and incentivize formalization, ensuring balanced economic transformation and improved living standards for all Tanzanians