Africa: Politics and Societies South of the Sahara

Economic Liberalisation in Tanzania Fails to Address Poverty

Posted in African Politics, Global Africa, Tanzania by ruben eberlein on June 12, 2009

[Policy Forum, Dar es Salaam] In its recent publication, ‘Tanzania: the story of an African transition’ the IMF argues that in the last two decades the Tanzanian economy went through a period of successful transition in which economic liberalization and institutional reform led to a recovery of GDP growth to more than 7 % per year since 2000. A note by the Policy Forum demonstrates that this ‘successful transition’ has failed to bring poverty reduction, that most of the progress has occured in Dar es Salaam and not in rural areas, and that it is associated with the poorest getting poorer and the richest richer.


1 Economic transition has not reduced poverty significantly.

Surveys by the National Bureau of Statistics (NBC) show the absence of any noticeable poverty reduction. Between 2001 and 2007 the fraction of poor people in Tanzania declined very little. The decline is so small that it is not possible to say with a high degree of certainty whether poverty actually went down, or whether it remained unchanged. Improvements, if any, are concentrated at Dar es Salaam.

2 There are more poor people today than in 2001.

While the percent of people living in poverty went down slightly since 2000/01, because the population has increased, the total number of people living below the poverty line increased by 1.3 million in the same period.

3 The very rich got richer and the extremely poor got poorer.

Extremely poor households became poorer, while very rich households got richer between 2000/1 and 2007. The poorest 10 per cent of the population are worse off. In contrast, the wealthiest households got better off.

4 Tanzania is not on track to achieve MDG/MKUKUTA poverty targets.

Already in 2000/01 Tanzania was off track, between 2001 and 2007 the situation got worse. The MKUKUTA target, which aims to achieve the MDG target by 2010, is entirely out of reach.

5 Tanzania has performed poorly compared to other countries.

Whereas in Tanzania headcount poverty declined by 2.4 per cent between 1991 and 2007, it dropped in Uganda, Ghana and Vietnam by 10 times as much: approximately 23 to 24 per cent. India too achieved a much higher reduction in poverty (by 7 per cent) over a much shorter period.

6 Up to half the people are undernourished.

Tanzania has made progress in this area and the fraction of malnourished children has reduced since 1991. Nevertheless almost 4 out of every 10 children aged 0 to 59 months are chronically undernourished and about 1 out of every 5 children weighs too little. Only half of the overall population consumes sufficient calories to sustain the calorie requrements required for heavy (agricultural) work.

7 People own more assets, but their overall value remains the same.

In line with the limited change in consumption, the overall value of assets owned remained almost constant. Excluding cell phones, the value of assets declined slightly. When mobile phones are included, the overall value of assets increases by 3 per cent expressed in 2000/01 prices.


Economic liberalization in Tanzania has, to date, failed on an important count: to reduce income poverty for most people. This is not to deny advances in other areas (e.g. more poor children are enrolled in school, more assets are owned), but it illustrates that for the majority of Tanzanians the ability to sustain themselves did not change significantly. From this perspective, it is hard to argue that the economic transition in Tanzania has been a success. Addressing this challenge honestly and imaginatively needs to be at the top of the policy and political agendas.

Summary of the complete booklet by Policy Forum (in association with Twaweza). Growth in Tanzania: Is it Reducing Poverty? Dar es Salaam. 8 pages, March 2009. The IMF’s contribution to this war of statistics can be found here.

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  1. […] February 9, 2015 Whitney Goldberg Leave a comment This cartoon illustrates that even with economic liberalization in Tanzania, many people believe poverty has not been adequately addressed. The website this photo was taken from is […]

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