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BoT: We should do more to reduce income poverty

27th March 2012
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BOT governor Prof Benno Ndulu

The Bank of Tanzania (BOT) governor Prof Benno Ndulu has called for broader approach in measuring progress in poverty reduction and assessing its impact on the common man.

He said the country’s annual economic growth has averaged an impressive 7 percent over the last decade though the rate of income poverty reduction remained unacceptably modest.

In his keynote address during the opening of the 14th policy seminar by the African Economic Research Consortium (AERC) Ndulu said income poverty measured by the head count index showed that it declined marginally from 35.7 percent in 2001 to 33.6 percent in 2007, even though the GDP growth rate averaged 7.1 percent over the period.

He despite the low achievement, the government is aware that poverty is multi dimensional, including the social well-being of the citizens.

“Income poverty only measures private consumption expenditure. The poor supplement this with public consumption of basic services which improve their social well being,” he explained.

“It is therefore necessary to take this broader approach in measuring progress in poverty reduction and in assessing the impact growth has on reducing poverty,” Prof Ndulu said.

According to the BoT chief there is an improvement in provision of social services including health and education.

“Tanzania has made significant strides in meeting the Millennium Development Goals (MDGs) in areas of poverty, education and health…the situation is poor in meeting the income poverty reduction goal”, he noted.

In his speech read by Deputy Finance Minister, Gregory Teu, Minister for Finance, Mustafa Mkulo applauded AERC for devoting their time and resources to share their knowledge, particularly on policy research with economists from African continents.

“It is my hope that this seminar has involved different researchers and policy makers who will take their time in sharing and exchanging experiences on challenges of health, economic growth and poverty reduction in the continent,” he said.

Mkulo said that AERC has been taking a lead among academics and policy practitioners in identifying factors that will contribute to growth and poverty reduction.

For his part, AERC Executive Director Prof William Lyakurwa said the aim of the seminar is not only to share experiences, but also provide necessary policy advice needed if Africa is to ensure economic growth and poverty reduction.

Lyakurwa stressed that studies have shown that a malnourished child is likely to experience an underdeveloped brain, poor health, poor performance in school and miss out on the best opportunities in life as an adult hence complicating the poverty cycle.

“I can confidently say that without the benefit of good health and nutrition during our childhood we probably would not have been here as we are today,” Lyakurwa.

He added that by marrying the separate fields of health economics and growth theory, economists can explore the mechanisms by which a population’s individual and collective health status affects a nation’s economic growth performance.

The theme of the conference attended by government officials, governors and other participants from over 20 countries was: “Health, Economic Growth and Poverty Reduction in sub-Saharan Africa”.

SOURCE: THE GUARDIAN
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