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How to beat rural poverty

28th November 2012
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Editorial cartoon

The big debate currently going on around the country is about how the people, especially those that live in poverty, can start benefitting from the country’s abundant natural resources.

There is an apparent feeling that the country’s resources are benefitting other people, leaving the majority of Tanzanians to languish in poverty.

The debate is striking a more desperate note as the majority of Tanzanians feel little impact of the apparent good news that the economy has since last year performed strongly, in the face of difficult external environment and persistent high inflation.

The latest World Bank update praises Tanzania as a model of sound economic performance in the African continent, posting a growth rate of over six per cent in 2011 and 2012, surpassing other regional economies and demonstrating impressive resilience to the global economic crisis.

According to the World Bank with a GDP growth rate of 6.5 per cent during 2011/12 and manageable fiscal and current account deficits, Tanzania has performed better than most developed countries.

What’s more the Bank sees the country maintaining the strong growth path through 2014.

But for the ordinary Tanzanian, especially in the rural areas, not much has changed for the better, especially as far as the standard of living is concerned.

The concern is shared by the World Bank which points out in the update that Tanzania’s macroeconomic success story has not yet translated into improved conditions for a large proportion of rural households.

We are talking here of approximately 30 million people or about 75 per cent of the total population, who account for 80 per cent of the poor living in the country.

A significant proportion of these households live today under conditions very similar to their parents or even their grandparents. The Bank points out that less than four per cent have access to electricity, own a vehicle, or a tv set while less than one per cent own a fridge. Only around seven per cent have bank accounts.

A good part of the country’s rural hinterland has no permanently accessible roads, limiting their production and marketing options.

The major improvements over generations are limited to a significantly increased primary school enrolment rate and to increased access to telecommunications through the extensive use of mobile phones

The Bank’s proposed mode of fighting the debilitating poverty is simple and subject to fine-tuning, revolving around promoting agricultural commercialisation which would boost farmers’ incomes and encouraging them to move towards high value products and non-farm activities and managed urbanisation.

The bank sees increased urbanisation as a source of new job opportunities for rural migrants, but also helping to establish backward and forward linkages between the rural and urban areas, further boosting the economy.

It means managing urbanisation by creating safety net systems for the migrants who do not succeed, the improvement of the business environment for individual and small and medium enterprises operating

in cities and implementation of innovative mechanisms to encourage

financial and technological transfers from urban to rural areas.

As the Bank says these are the challenges that Tanzanian policymakers have to deal with in order to stimulate the three transformational forces and to manage them appropriately over the long-term.

SOURCE: THE GUARDIAN