Full text article. Also available at https://www.iiste.org/Journals/index.php/JEP/article/view/52005/53741This paper is about the challenges of employment for graduates of the Higher Education Institutions (HEIs) in Tanzania which has been a serious issue of concern for both the students, parents, universities, the government, and the public. With the rapid expansion of higher education in Tanzania, there is a widely shared concern that graduates face substantial difficulties in the job search and are often forced to accept unfavourable early employment. This article focuses on the relationship between higher education and the employability of graduates. It draws on statistics and a critical review of the literature. Employability of graduate students has been understood as a collection of capacities or achievements, which constitute a necessary but not sufficient condition for getting employed. Using Tanzania as a case study, the paper, therefore, analyses the extent to which the HEIs in the country do foster competencies relevant for employment and work, and the extent of readiness of these institutions in fostering more “employable” competencies of their graduates.