Abstract:
In Tanzania the development of informal sector has been profoundly characterized by two parallel phenomena which are perhaps contradictory in character. One is the increasing politicization effort encouraging people to engage in small and Medium Entrepreneurship (SME). This has led to the proliferation and mushrooming of small business most of which are in the form of petty trading, at least everywhere in the urban centres. The second is the parallel increase in events suggesting prevalence of crime and bureaucratic hurdles which affect SME and counter reaction from the small traders. While the second can be characterized as due to the increasing repressive action by city authority over vendors, the counter reaction behaviour of itinerant and small traders toward city authority is also evident in most urban areas. Generally, the sector is characterized by constant tension and feuds between small traders on one hand and urban authorities on the other. Drawing on research findings, the present paper explicates challenges of reducing poverty in Tanzania using the strategy of developing the small business entrepreneurship under the situation where there is an increasing level of petty crime and bureaucratic hurdles.
