Tanzania’s Conditional Cash Transfer Program Helps Reduce Extreme Poverty

November 18, 2016

  • A new World Bank evaluation shows that a conditional cash transfer program has successfully helped reduce extreme poverty, especially among female-headed households
  • The cash transfer program is part of the World Bank-supported Tanzania Productive Social Safety Net Project, which aims to increase food security among vulnerable groups
  • Piloted in 2010, the program also supports the government’s broader social protection strategy

DAR ES SALAAM, November 18, 2016 – In 2012, Beata Masigazwa enrolled in the country’s conditional cash transfer program and began to receive a small amount of money each month to buy proteins, fruits and vegetables for her family. Less than a year later, she had saved enough money from her stipend to buy her own sheep, goats, pigs, ducks and chickens, which she now rears on her homestead in Nkwenda village in Chamwino and sells to her neighbors.

“We have been empowered by this program,” said Masigazwa, a single mother of seven children. “We were behind but we have made good progress.”

Masigazwa’s family is just one of more than one million families, the majority of them headed by women, who exemplify the success of the conditional cash transfer program (CCT). According to a recent impact evaluation using 7,400 randomly-selected households in Tanzania and Zanzibar, the program has contributed to the reduction of extreme poverty, especially among female-headed households who constitute 54% of beneficiaries. It has also contributed to the improved consumption of food and access to health and education services, enhancing and protecting the human capital investment in children.

“The program’s achievements to date have been remarkable,” said Bella Bird, the World Bank Country Director for Tanzania. “To sustain such impressive progress and in order to achieve the required impact at scale, we encourage the government to ensure sustainable financing and to continue investing in the implementation capacity at different levels.”

The CCT program is part of the World Bank-supported Tanzania Productive Social Safety Net Project, which aims to increase income and food consumption for vulnerable groups, and strengthen their ability to cope with shocks. Despite respectable economic growth rates averaging 7% over the past decade, the poverty rate remains at 28%, with about 9% of the population (four million citizens) affected by food poverty. Funded in part by IDA, the Bank’s fund for the poorest, the Tanzanian government piloted the conditional cash transfer program in 2010 in support of its broader social protection strategy.

 Families enrolled in the program received a small amount of cash (approx. $13 each month) as incentive to increase household consumption of food, particularly proteins, as well as health and education services which they would otherwise have had to forego.

Building on the pilot’s successes as well as the lessons learned, the government embarked on the implementation of a wider Productive Social Safety Nets (PSSN) program in 2012. In August 2015, the program achieved a massive scale up to reach 1.1 million households across 10,000 villages nationwide, making it the second largest government-run CCT program in Africa, after Ethiopia’s.

The evaluation set out to provide an in-depth profile of PSSN beneficiaries and to assess the program’s targeting performance. The findings confirm several of the critical premises; for instance, among target beneficiaries, literacy and school attainment are low. Households have low food security and are vulnerable to shocks, and routine health checks for children under-fives are rare. These premises have informed the program’s implementation thus far, particularly in regard to targeting and expected outcomes.

Key findings of the evaluation and beneficiary profile information include:

  • PSSN households are poorer than non-targeted households with PSSN communities
  • Lower literacy levels among PSSN households: 42% PSSN beneficiaries ages 15 and above in PSSN households cannot read simple text in any language, compared to about one-third among the national poor. The highest illiteracy rates are among women at 48% compared to 32% for men.
  • School enrollment rates are low, especially among the youngest and oldest children: Compared to the national enrollment, 57% of all children ages five to 19 among PSSN households are enrolled in school, with financial constraints as the most significant barrier to school enrollment.
  • PSSN members tend to be sicker (31%) than the national poor (22%) and have lower health care use, driven primarily by cost constraints and social norms.
  • More than half (51%) of PSSN households are headed by women, compared to less than one-third among the national poor. Women-led households tend to have lower incomes than male-headed ones in the Tanzanian population.
  • The share of food in total consumption among PSSN households is very high, suggesting they are among the poorest in the country. Their median and average monthly consumption – both below TZS 30,000 (equivalent to roughly $15) – are lower than the national food poverty line, showing that 69% of PSSN households live below the basic needs poverty line.

PSSN is a multi-donor financed from multiple sources including the government, several development partners including the World Bank.