President Jakaya Kikwete has said that despite growing at an impressive rate, the country’s economy was yet to make an impact on the majority of ordinary Tanzanians engaged in the agricultural sector.
He made the remarks during his address to the 17th Annual Research on Poverty Alleviation (REPOA) workshop in Dar es Salaam yesterday.
He said though the country’s economy has been growing at an impressive rate of 7 percent per annum, household poverty has decreased by only 2 percent from 35.7 percent to 33.6 percent in the period of between 2001 and 2007.
He said there is a need for the government to find solutions to the twin problems of poor agriculture and rural-urban migration. He said the current priority is to ensure that agriculture becomes modern and productive.
President Kikwete said the leading sectors of communication and transport have not yet touched ordinary people, 80 percent of whom practise agriculture. He said while some other sectors of the economy have been growing at high rates, agriculture was only growing at 4.5 percent annually.
“When agriculture is transformed many sectors will benefit including agro-processing, manufacturing and service industry…incomes of people engaged in these sectors will also improve”, he noted.
He said to lift people from poverty there must be an involvement of the informal sector since it absorbs a big proportion of the labour force with substantial assets and resources. He said the worst thing is that most of the people engaged in the informal sector are not paying taxes.
“If this sector is properly organised and supported it can make a huge impact on country’s development and poverty reduction”, said Kikwete.
Kikwete mentioned that mining and tourism are crucial for economic transformation, and that the main challenge was how to ensure that they directly benefit ordinary citizens.
He underscored the need to improve services and promotion of the tourism sector so as to achieve the target of attracting one million foreign tourists per year. He said currently Tanzania receives only 800,000 foreign tourists per year.
Meanwhile, Netherlands Ambassador, Dr Ad Koekkoek said that economic transformation depends on good government policies and attraction of direct foreign investment.
He said Tanzania stand to record economic transformation since it has an abundant natural resources and labour force. He said among other sectors, the horticulture sector is crucial because it can enable the country increase its foreign current gains.
He said apart from foreign currency, the horticulture sector can create many job opportunities. “Horticulture can be successfully practiced in Tanzania due to good climatic condition especially in the northern zone”.
Presenting a paper titled “Socioeconomic Transformation for Poverty Reduction”, Dr Philip Mpango, Executive Secretary, Planning Commission said the research conducted in 2001 suggests that for Tanzania to become a middle income country by 2025 it has to ensure a sustainable GDP growth of 8 percent for 15 years.
Dr Mpango said some strides have been made towards poverty reduction whereas per capita income is now growing at 3.3 percent.
He said for the country to graduate from poverty there should be efforts to make sure that the number of people employed in the agricultural sector decrease to 74.6 percent in 2010, 61.2 percent in 2011 and 41.2 in 2025.
For his part Prof Ibrahim Lipumba said the government should now focus on implementing its development plans. He said Tanzania has so many good development plans but most of them end up on shelves.
“Most of the plans are in writings…we should focus on implementation”, he noted.
Prof Lipumba said that the government should ensure that foreign investors are reliable, adding that an environment should also be created to allow local investor participation.
In his welcoming remarks, REPOA Executive Director, Prof Samwel Wangwe said during the meeting researchers are likely to exchange experience and identify priority sectors for socioeconomic transformation. This year’s theme was “Socioeconomic Transformation for Poverty Reduction in Tanzania”.