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Badilisha Lugha KISWAHILI

When economic growth does not translate into less poverty

17th October 2012
The government can not eradicate poverty but can support people to eradicate poverty. (File photo)

As the world marks the International Day for the Eradication of Poverty today, the recently released 2011 Poverty and Human Development Report indicates that the high level of economic growth recorded over the last decade has not translated to a significant decrease in the poverty rate.

Basing on key findings on the performance of Mkukuta I, the Tanzanian economy has grown by 7 percent per annum over the last ten years thus achieving the Mkukuta I target of an average annual growth of between 6 and 8 percent. However, this has not translated to significant decrease in poverty.

According to the report released by the Research and Poverty Analysis Working Group of the Mkukuta Monitoring System, economic growth can drive broad based and sustainable development and poverty reduction if productive assets and employment opportunities can be extended to income poor areas.

The report coordinated by Research on Poverty Alleviation (REPOA) as the secretariat to the RAWG calls for a shift from a growth to an inclusive growth paradigm whereby investment is required to create opportunities for people in remote and resource–rich areas so that greater dividends can be realized from agriculture, tourism and trade.

Economic experts argue that poverty eradication must be internally and externally driven and that the poor must be well involved in the whole process of eradicating poverty. The poor should be the key players in the process.

An expert of Business Strategies and Economics, Dr. Elisante Gabriel says the right way to eradicate poverty is for the poor people themselves to recognize they are the basis in poverty eradication.

“Some leaders mislead people by telling them the government would eradicate poverty…this is wrong because the government is supposed to support the people to eradicate poverty,” says Dr. Gabriel who is also the Director of Youth Development in the Ministry of Information, Youth, Culture and Sport.

He says Tanzanians take poverty as an input instead of an output which affects poverty eradication efforts.

Dr. Gabriel says instead of just coming up with solutions to poverty, the important thing would be finding the root cause of poverty first. Instead of just giving out loans to the poor for example, the best way would be tackling the root cause of their poverty.

He gives an example of education, where many schools have been built but the quality of education provided is poor.

Today we have people completing primary education without mastering how to read and write. “This is a process which is caused by a combination of factors… we also have university graduates who are not employable,” he says.

Dr. Gabriel says focusing on entrepreneurship skills is not a proper way of eradicating poverty. What is important is having entrepreneurship spirit, because even those with entrepreneurship skills are still looking for employment.

He says in order to improve the economic situation of the country three things must be taken into account. These are value chain which requires adding value to services and products, cost chain which requires conducting Cost Benefit Analysis and supply chain specifically on movement of human capital and raw materials.

An Economist at the Institute of Finance Management John Kingu says macroeconomic growth must have a good link with micro level economy for its impact to be felt by poor people.

He says what is currently happening is the absence of a good link between macroeconomic growth and micro level economy which has resulted to the growth of the economy not having a significant impact in eradicating poverty.

Kingu cites the mining sector which he says if well managed could greatly contribute to the growth of the country’s economy.

“This sector is not owned by Tanzanians and so the profit is being expatriated… there is a need for the government to put more efforts in tax collection so as to subsidize the basic needs of the people,” says Kingu

The Poverty and Human Development report says the lack or shortage of food to sustain good health is a clear manifestation of extreme poverty thus food security at the household level is a fundamental goal in achieving sustainable poverty eradication and development.

With respect to national food security, Tanzania has been self-sufficient in food production since 2005 with a peak in 2007 of 112%. However, food shortages continue to be experienced in some regions. The most recent data by World Food Programme indicates that around 23% of all households in rural mainland Tanzania were food-insecure

Households with poor food consumption were most prevalent in Mtwara (20%), Manyara (17.6%) and Arusha (6.8%). The highest prevalence rates of households with border line food consumption were Dodoma (37.8 %), Morogoro (33.8%) and Manyara (42.9%)

Around three-quarters of the population depend on under-developed smallholder primary agricultural production for their livelihoods.

The PHDR says modest improvements have been noted with respect to smallholder participation in out-grower schemes, access to irrigation, and access to credit and diversification into non-farm activities.

The Southern Agricultural Growth Corridor of Tanzania (SAGCOT), a large-scale, public-private partnership to develop the region’s agricultural potential and the Tanzania Agriculture and Food Security Investment Plan are promising developments in the sector. However, there is need to consolidate these initiatives and ensure that more benefits accrue to smallholder farmers and food-insecure households.

The report also suggests that an expanded road infrastructure has the potential to directly contribute to poverty reduction if , building and maintaining rural roads is given a priority as these are essential for market development and exploit labour-based technology, in particular, the employment of local communities in road construction and other public works.

It says a reliable power supply for producers and consumers underpins economic growth, facilitates productive employment and contributes to quality of life but the current power crisis has been a disincentive for investors.

On education the report says substantial progress has been made to increase access to education. The net enrolment rate (NER) in primary schools increased from 66% in 2001 to a peak of 97% in 2007 and 2008. Overall, gender parity in access to primary education has been achieved.

However, since 2008, the NER has steadily declined to 94% in 2011, a trend that must be turned around. In 2011, it is estimated that nearly half a million 7 to 13 year-olds did not enroll in school.

The transition rate from primary to secondary schools also rose dramatically from 12% in 2002 to 60% in 2006, but has since fallen to 45% in 2010. The NER in secondary schools has steadily increased from 6% in 2002 to 35% in 2011 – an impressive achievement – but the rate falls short of the MKUKUTA target of 50%.

The report however noted that the analysis of learning outcomes, paints a worrying picture of the quality of education received by Tanzanian children.

A large-scale national survey conducted in 2011 revealed alarmingly poor numeracy and literacy skills among primary-aged children.

The findings indicate an urgent need to improve the quality of tuition, which in turn, will depend on the increased and equitable deployment of qualified teachers and resources to all areas of the country.

The significant decline in students passing Form Four examinations further points to the need to address educational quality.

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