Supporting business functions influencing the formalization of charcoal business in Tanzania

Charcoal business, production, and sustainability are all under the control of government regulations. In Tanzania, the entire charcoal value chain employs approximately two million people. As a result, there are unreliable records for registered actors, and it is difficult to accurately quantify the annual amount of charcoal production and revenue collected by the Tanzanian government. Supporting functions are legally provided activities and services to support charcoal actors to formalize their business, including participation in the formulation of forest laws, market infrastructure development, training, access to information, and financial services. Supporting business functions available for charcoal actors such as producers, wholesalers, and retailers to facilitate the formalization of the charcoal business in Tanzania. 

This study was conducted to determine the supporting functions that are important to charcoal actors in Tanzania to formalize their activities. A total of 107 charcoal actors were administered a semi-structured questionnaire using the multiple sampling technique, which involved 31 wholesalers and 42 retailers trading in two of the largest markets, one in Dar es Salaam and the other in Zanzibar. Both markets depend on charcoal production in Handeni district, located in Tanga Region. Principal component analysis (PCA) indicated that formalizing the charcoal sector in Tanzania necessitates public-private partnerships (22.9%), financial services and legal environments (21.9%), and market infrastructures (15.6%). We concluded that the charcoal business needs the collaboration of the government with non-government organizations to share resources such as forest staff, vehicles, and incentives to motivate the participation of actors in the training of the legal procedure of charcoal business management, the formulation of registered charcoal groups or associations, and the establishment of charcoal selling centres. Moreover, the development of forest laws should be participatory to involve charcoal business stakeholders to have a reasonable cost of issuing licenses and other permits.