Report shows how nation is trapped in poverty

BY AISIA RWEYEMAMU

15th December 2013

Twelve million Tanzanians are still trapped in absolute poverty, World Bank’s Country Director for Tanzania, Uganda and Burundi Philippe Dongier told reporters in Dar es Salaam yesterday.

 

Referring to the country’s latest household budget survey, Dongier said poverty is still high despite the slight decrease of food prices, adding that this was only enough for survival.

 

The fourth Tanzania Economic Update Report by World Bank reveals that over four million Tanzanians still live under extreme poverty, despite the currently recorded rapid and stable economic growth.

 

At least 4.2 million people are extremely poor, and living below poverty line.  For survival they have to optimise between keeping the eldest children at school and pulling them out.

 

According to the report, Tanzania economy growth is driven by the communication, transportation and retail trade sectors predominantly located in cities.

 

The report argues that increasing productivity in agriculture and creating good jobs off the farm are not enough to get everyone out of poverty.

 

Global experience shows that, even when agriculture productivity increases the poorest families tend to be left. 

 

Without access to targeted safety net, most extremely poor households in Tanzania depend on their relatives or use other social ties to survive in times of hardship. 

 

As the economic updates put it, the families of vulnerable Tanzanians are themselves often very poor and thus cannot always provide support.

 

The safety net in Tanzania currently amounts to only one per cent of a total public expenditure which is equivalent to less that 0.3 per cent of Gross Domestic Product (GDP).

 

This is insufficient to urgently address vulnerability among the poor, said Jacques Morriset, the Bank’s Lead Accountant for Tanzania, Uganda and Burundi.

 

Moriset urges that while investment in infrastructure, agriculture, education and health are essential for inclusive growth, well targeted cast transfer programme can improve the living conditions of extremely poor households.

 

The experience with TASAF has shown people can do a lot with just a little extra money and that they tend to spend their money wisely; some spend it on their children’s immediate well being while others save it to invest or to cushion themselves in the future hardship. 

 

The report also highlights that the Tanzania economy is likely to grow up at approximately seven per cent annually for the next two years, with inflation stabilizing at around five per cent, largely due to falling food price and tight monetary policies.

 

The current account deficit should remain equivalent to a value of 13-15 per cent of GDP, unless there are significant changes in global commodity price and in the demand for Tanzania product.  

 

This is according to the World Bank’s latest Tanzania Economic Update released in Dar es Salaam yesterday.

 

However, the special focus on this fourth economic update a concern for policymakers as for ordinary citizens.  The economic update discuses the bold new way of licensing extreme poverty by transferring cash direct to the most vulnerable people.

 

Cash transfer programmes have proven effective in other parts of the world such as Brazil and Mexico. The Tanzania Economic Update is a biannual publication which reports on the state of the country’s economy.

SOURCE: GUARDIAN ON SUNDAY