Motorbike scheme breaks cycle of unemployment in Tanzania

An innovative ‘revolving motorcycle project’ set up by an academic at the University is changing the lives of young people in Tanzania.

Dr Nicola Banks, of the Global Development Institute (GDI) has been working in Arusha, northern Tanzania, researching the social impacts of youth unemployment. After seeing first-hand how young people were struggling to earn a living, Nicola designed a scheme that helps them gain financial independence. Youth unemployment is a big problem in Tanzania.

In the low-income community where Dr Bank’s research is based, around 70% of young men lack stable jobs. One of the most popular ways for young men to earn a living is by becoming a Piki Piki (motorbike taxi) driver. But most drivers do not own their own motorcycles outright, instead spending a majority of their weekly earnings on renting their vehicles. This can cost around 6000 Tanzanian shillings a day (£1.85), leaving the drivers with very little money to live on, let alone save for longer term goals.

Dr Banks, an ESRC (Economic and Social Research Council) Future Research Leader at GDI, came up with the scheme after meeting a local Piki Piki driver who was struggling to save money for university. She said: “My research in Arusha shows above all that life is incredibly tough. It is an ongoing struggle for young people. I was lucky enough to meet an inspiring young man called Bakari who was well educated, very hardworking and had grand plans. But I was frustrated after the meeting as I knew unless there was a radical change in his life, there wasn’t going to be anyway he could meet those plans.”

Working with local NGOs, Slum Dwellers International (SDI) and Tamasha Vijana, Dr Banks designed a project to work with Bakari and some of his fellow Piki Piki drivers, blending concepts of asset transfer programmes, traditional savings groups and social enterprise to illustrate a new and innovative model for working with young people. Along with Executive Director of the GDI, Professor David Hulme, Dr Banks personally donated the group’s first motorcycle.

Now the project is up and running, the group has purchased their second motorbike and are close to buying their third. Long term, the scheme has the potential to triple the take-home income of the drivers, allowing them to plan and invest for the future.

Dr Banks said: “The concept of the savings group is simple. The first member receives a motorcycle and puts the 6,000 shillings usually spent on rental into a group savings account instead. Once there is enough money to purchase a second bike, two drivers then save until there is enough to buy a third and so on. “Once all six members of the savings group own their own bike they continue to save until a seventh motorcycle is bought. This motorcycle is passed onto another savings group for the process to start again, potentially making it a scalable and sustainable business model.”

Bakari said: “I have always struggled with my life, but life always goes on. I have never stopped struggling and that is why I joined this project. But now, in my community, I am a role model. I am confident, I am no longer afraid of life. My life is my own responsibility, and not that of anyone else.” Every year an estimated 800,000 young men and women enter the labour market in Tanzania. These include school and college graduates and people who have migrated to urban areas from the countryside. The University has produced a short film about the scheme, its impact on the community and its potential for the future.