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Tanzania Economic Update: Can Tanzania Eradicate Extreme Poverty?

By: Jacques Morisset

STORY HIGHLIGHTS
  • The fourth economic update outlines a new way of lessening extreme poverty by transferring cash directly to the most vulnerable people
  • Cash transfer programs have proven effective in other parts of the world, and a recent pilot program in Tanzania has been successful
  • Scaling up the existing conditional cash transfer program could result in real, significant improvements to the quality of life of Tanzania’s poorest citizens

DAR ES SALAAM, December 13, 2013 -- It is late evening in Chanzulu, in the Kibaha District, about 60 km from Dar es Salaam. Mama Shida has just finished a hard day’s work. She has tended her crops as well as her chickens and prepared the evening meal for her family which has four school-going children. Since 2010, Mama Shida has been a beneficiary of the conditional cash transfer program managed by the Tanzania Social Action Fund (TASAF). Under the pilot program, Mama Shida receives the equivalent of $18.

This is not a large amount of money, but it is sufficient for her to provide her family with more food, and food of higher quality, than was previously the case. The money she receives also frees her from the need to constantly engage in cultivating subsistence crops, giving her time to raise chickens and thereby to generate additional income. With a group of other women, she has established an association to transport eggs and chickens to nearby markets. Mama Shida’s life is still hard, but it has improved. She has high hopes and aspirations for the future, and a potentially realizable path to achieve these aspirations.

Mama Shida is one of thousands of households receiving benefits under TASAF, a conditional cash transfer pilot program currently being implemented in 40 villages. With the demonstrated success of this pilot program, the Tanzanian authorities are now planning to scale up the program to ensure that many more Tanzanians receive the same benefits as Mama Shida.

The planned scale up of this program represents a radical new approach to eradicating poverty in Tanzania. For the first time in recent history, the government is taking measures to introduce a comprehensive social protection program to the country. Scaling up the existing conditional cash transfer program to achieve national coverage could result in real, significant improvements to the quality of life of Tanzania’s poorest citizens, potentially facilitating transformations in their lives that could allow them to escape the poverty trap. The program will cost approximately $250 million per year, equivalent to approximately 2.5% of the government’s budget. This is a significant expenditure, but one that would be justified for a program that is potentially transformative.

While results from the recently completed 2011-2012 Household Budget Survey indicate a decline in Tanzania’s poverty rate, approximately 12 million Tanzanians still live below the poverty line, a similar number to that of 2000-2001. The new program has the potential to drive a significant reduction in the number of poor Tanzanians, making its implementation a matter of top priority.

Tanzania Economic Update 3: Opening the Gates: How the port of Dar es Salaam Can Transform Tanzania