Determinants of Host Communities’ Households’ Income Diversification Strategies in the EACOP Project. Experience from Communities around Lake Victoria in Tanzania.

Income diversification is a key strategy for households to manage economic shocks and adapt to changing socio-economic conditions. This study examined the determinants of income diversification among households affected by the East African Crude Oil Pipeline (EACOP) project, focusing on the role of Local Content Policy (LCP) implementation. A mixed-methods approach was used, combining quantitative and qualitative data analyzed through Kendall’s tau b and thematic analysis. The study assessed the influence of gender, education, occupation, and LCP capacity-building initiatives on income diversification. Findings show that while gender and education play a role, the most significant determinant is the level of LCP implementation. Households receiving training, financial support, and resources demonstrated a stronger ability to engage in new income-generating activities such as modernized agriculture, motorcycle (bodaboda) transport, and retail trade. Qualitative insights emphasize that community engagement, regulatory flexibility, and ongoing mentorship are vital for sustaining diverse income sources. The study concludes that effective LCP implementation builds household resilience by providing affected communities with skills and resources for economic transformation. It recommends enhancing policy frameworks, expanding access to financial services, and promoting gender-inclusive strategies. Future research should examine the long-term economic effects of LCP initiatives on income diversification in large-scale project-affected communities.