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PRESS RELEASE December 11, 2019

Modest Reduction in Poverty in Tanzania: More Can Be Done to Accelerate Pro-Poor Growth

DODOMA, December 11, 2019 – Mainland Tanzania recorded sustained economic growth and poverty reduction over the past decade, however the poverty reducing impact of economic growth has been slowing down, according to the latest World Bank ‘Tanzania Mainland Poverty Assessment.’

The Poverty Assessment, which is an analysis of the Government’s 2018 Household Budget Survey, confirms its findings that the basic needs poverty rate declined from 34.4 percent in 2007 to 28.2 percent in 2012, and to a further 26.4 percent in 2018.

Further reduction in poverty is welcome news,” said Bella Bird, World Bank Country Director for Tanzania, Zimbabwe, Zambia and Malawi. “But it is important for the country to accelerate the trend, as the number of the poor is still high, and the majority of Tanzanians are vulnerable to falling back into poverty at the slightest shock. Almost half of the population lives on less than $1.90 per person per day, so there is a lot of work ahead to improve the living standards of all citizens.”

The assessment shows emerging signs of a structural transformation which can be seen in the increasing share of industry and services in total employment. Agriculture is employing fewer workers and those who remain in the sector are diversifying towards non-farm wage and self-employment.

With an increase in the economic returns outside agriculture, there is a growing need for investments in human capital especially among the poor and the vulnerable. Increasing access to productive employment opportunities is key to sustaining the momentum picked up during the last decade,” added Bird.

Among other key findings, the Assessment shows an increase in ownership of communication and transport assets as well as in access to basic services like improved water and sanitation facilities, energy and road network. School enrollment rates have also increased, and a higher proportion of the labor force is working in secondary and tertiary sectors. Despite these improvements, overall education level and access to basic services remain low, particularly for the poorest and for those living in rural areas. This is reflected in recent growth being less pro-poor, widening the welfare gap between the rich and the poor.

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 is a major challenge for poverty reduction efforts in Tanzania, but it can be a huge opportunity with the right investments and policy initiatives.

The government can help reduce vulnerability to poverty through well-targeted social assistance programs, a majority of which are already in place. The government can invest in improvements in both the quantity and quality of education and enhancement of productive employment opportunities. These initiatives combined with 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 effective policies to accelerate poverty alleviation and promote shared prosperity in the future.