Tanzania’s Strong Economic Growth Shows Signs of Trickling Down

May 7, 2015

DAR ES SALAAM, Tanzania, May 7, 2015 – Sustained rapid economic growth and concerted efforts around national strategies to alleviate poverty have led to a decline of approximately one percentage point per year in the rate of poverty in the country between 2007 and 2012, constituting the first significant reduction in 20 years.

The latest World Bank ‘Tanzania Mainland Poverty Assessment’ confirms earlier findings by the Government’s 2012 Household Budget Survey (HBS) that the basic needs poverty rate declined from around 34 percent to 28.2 percent during that period.

The reduction in poverty is important news that should be applauded,” says Philippe Dongier, Country Director for Tanzania, Burundi and Uganda.But what is more important is for the country to accelerate the trend further so as to address the important challenges that still remain. The majority of Tanzanians remain close to the poverty line. In fact, more than 70 percent of the population lives on less than US$2 per day. There is a lot of work ahead to improve the living standards of all Tanzanians.”

There are emerging signs of pro-poor growth,” adds Dongier.These can be seen in the improved levels of education, access to basic services and ownership of land and other assets among poor households. In addition, the economic returns to the poor’s economic activities have also increased, particularly outside agriculture.”

Among other key findings, the Assessment shows a reduction in the level of deprivation of those who remained in poverty as well as a slight decline in inequality at the national level. But despite these positive changes, the number of poor remains high, particularly in rural areas, and the welfare disparity between the geographic regions is widening.

Poverty declined more rapidly in Dar es Salaam than in the rest of the country. The capital city has experienced the highest poverty reduction at a rate above 70 percent between 2007 and 2012, while rural areas registered a reduction of only 15 percent.

Even though there are emerging signs of increased participation of the poor in the growth process, they continue to suffer from lack of capacities and limited access to better job opportunities. Persistent high population growth will continue to challenge poverty reduction efforts in Tanzania. However, the investments made by the Government and its development partners to better measure and understand the determinants of poverty reduction in Tanzania are important steps towards designing improved development programs.

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