World Bank lauds lower poverty rates

07Dec 2019
Correspondent
Dodoma
The Guardian
World Bank lauds lower poverty rates
  • But many still living precariously, says new report

POVERTY in the country has diminished by two percentage points in four years from 28.2 per cent to 26.2 per cent this year.

Bella Bird

This observation has been made in a new report evaluating poverty in Mainland Tanzania prepared by the World Bank.

Launching the report in Dodoma yesterday, the minister for Industries and Trade, Innocent Bashungwa said these results arise from various efforts made by the fifth phase government.

Research for the study was conducted by the National Bureau of Statistics (NBS) in consultation with other stakeholders, including the World Bank.

The report dwells on social and economic growth in the past few years, where it says that the rate of basic needs poverty has been falling.

It attributes this to gradual improvements in access to basic services and infrastructure, in the ownership of assets and in human capital.

The assessment says a slow but sure pace of a structural transformation with employment shifts from agriculture towards more productive industries and services also contributed.

The pace of poverty reduction has been less responsive to economic growth, the report noted.

It says the country recorded sustained economic growth and poverty reduction over the past decade, but the poverty reducing impact of economic growth has been slowing down.

An analysis of the government’s 2018 Household Budget Survey (HBS) confirms the report’s findings that the basic needs poverty rate declined from 34.4 per cent in 2007 to 28.2 per cent in 2012, and to a further 26.4 per cent last year.

“Further reduction in poverty is welcome news,” said Bella Bird, World Bank Country Director for Tanzania, Zimbabwe, Zambia and Malawi, who was in Dodoma for the launch.

“But it is important for the country to accelerate the trend, as the number of poor is still high and the majority of Tanzanians are vulnerable to falling back into poverty at the slightest shock,” she stated.

“Almost half of the population lives on less than $1.90 per person per day, so there is a lot of work ahead to improve the living standards of all citizens.”

The assessment shows emerging signs of a structural transformation which can be seen in the increasing share of industry and services in total employment. Agriculture is employing fewer workers and those who remain in the sector are diversifying towards non-farm wage and self-employment.

“With an increase in economic returns outside agriculture, there is a growing need for investments in human capital, especially among the poor and the vulnerable,” the director noted.

“Increasing access to productive employment opportunities is key to sustaining the momentum picked up during the last decade,” she emphasized.

Among other key findings, the assessment shows a rise in ownership of communication and transport assets as well as in access to basic services like improved water and sanitation facilities, energy and road network.

School enrolment rates have also increased, and a higher proportion of the labour force is working in secondary and tertiary sectors.

Despite these improvements, overall education level and access to basic services remain low, particularly for the poorest and for those living in rural areas. This is reflected in recent growth being less pro-poor, widening the welfare gap between the rich and the poor.

Even though there are emerging signs of increased participation of the poor in the growth process, the assessment shows that they continue to suffer from lack of capacities as well as limited access to better job opportunities.

It also shows that persistent high population growth is a major challenge for poverty reduction efforts in the country but it can also be a huge opportunity with the right investments and policy initiatives.

The assessment further shows that the government can help reduce vulnerability to poverty through well-targeted social assistance programmes, most of them already in place.

The government can invest in improvements in both the quantity and quality of education and enhancement of productive employment opportunities, it asserts.

These initiatives combined with investments made by the government and the country’s development partners to better measure and understand the determinants of poverty reduction in Tanzania are important towards designing more effective policies to accelerate poverty alleviation and promote shared prosperity in the future, the report underlines.