Poverty and Human Development: where do we go from here? The Annual National Policy Dialogue 19 November 2009 POVERTY MONITORING GROUP

Poverty and Human Development: a snap shot Pluses Minuses Relatively high growth Slow poverty reduction A fall in Unemployment Primarily in small informal business with low earnings and productivity. High underemployment Improved net secondary school enrolment, attendance and literacy (64% in 2001 to 66 % in 2007) Slight drop in net primary enrolment since 2007. Risk of many youth being left behind Continued drop in IMR & under-5 mortality Drop in coverage of DPT-Hb3 (93% in 2004 to 83% in 2007), Improvement in life expectancy (53 (m )& 56 (w)) High maternal mortality (births taking place at home remain high) Improved food self-sufficiency. Drop in malnutrition High prevalence of stunting Drop in HIV prevalence Downward trend in access to clean and safe water

Human Development: status and progress Tanzania’s Relative Standing in HDI in Key Areas comparison of relative progress in HDI

Slow Progress in poverty reduction Poverty Line   Achievements Targets 2000/01 2007 MKUKUTA (2010) MDG (2015) Basic Needs Poverty Mainland 35.7 33.6 19.5 Rural 38.7 37.6 24 Urban 25.8 24.1 12.9 Food Poverty 18.7 16.6 11

off-track in achieving poverty reduction targets

Little change in consumption levels Little change in consumption levels since 2001 Extremely low consumption levels 98% of Tanzanians consume less than Tsh 30,000 (2001 prices) and Tsh 58,000 in 2007 prices 80% consume less than Tsh 20,000 (38,600 in 2007 prices)

Per capita consumption by wealth Wealth Quintile 2000/01 2007 % change Poorest Quintile 3,978 3,895 -2% 2nd 6,551 6,660 2% 3rd 9,163 9,490 4% 4th 12,972 13,635 5% Least Poor Quintile 26,056 27,836 7% Tanzania Mainland 9,997 10,470

A physically weak population? Caloric intake increased marginally since 2001 25% of the population do not consume enough to carryout even light work 50% do not consume enough to carryout heavy work

Malnutrition: Progress but still a concern   Stunting (height-for-age below -2SD) Underweight (weight-for-age below -2SD) Wasting (weight-for-height below -2SD) 1999 Mainland 44.00% 29.50% 5.30% Urban 26.1 20.7 5.9 Rural 47.8 31.4 5.2 2004/5 Mainland 38.00% 21.90% 2.90% 26 17.3 2.9 40.9 23

Some improvement in health, But:

Food self-sufficiency Not a famine prone country. Food production can meet the demand (SSR=104%) But several regions are food insecure: Arusha, Kilimanjaro, Lindi, Manyara, Mara, Mtwara, Shinyanga, Singida and Tabora (Rapid vulnerability survey (2008) In total 20 districts have been identified as having food shortages in 2007/08, the lowest number since 2002/03

WHY POVERTY IS NOT DECLINING FAST? Key issues Underlying factors Heavy reliance on agriculture for livelihood 75% of the population depends on agriculture. An increasing number of people has to share a smaller pie Agriculture growth 4.4% during 2000-2008, while population growth over 3% in rural areas Low productivity (and low income earning potential) 95% of food is grown under traditional rain –fed agriculture. Informal agricultural sector has growth from 37% of GDP to 40% since 1998 Over reliance on primary agriculture (limited or no value addition) Low fertility soils, minimal use of productive farm inputs, pre- and post harvest crop losses Weak rural infrastructure (irrigation, roads, electricity, marketing) Barriers for private investments (business licensing, registration, import/export procedures ) Lack of opportunities elsewhere Lack of education and skills prevents rural people from moving out agriculture to other lucrative sectors Limited space for non-farm activities (knowledge, credit, marketing), specially for the poorest

Diversifying out of agriculture   Income from non-farm self-employment Quintile 2000/01 2007 % hh mean % change Poorest 36.2 10,853 46.0 10,891 0.4 2nd 43.5 14,662 51.7 22,253 51.8 3rd 43.9 21,912 54.3 43,894 100.3 4th 49.7 34,896 53.9 54,221 55.4 Least Poor 49.5 65,292 48.2 125,135 91.7 Dar es Salaam 46.9 81,850 51.0 108,053 32.0 Other urban 59,891 46.6 98,063 63.7 Rural 42.3 19,178 52.1 32,305 68.4 Tanzania Mainland 44.6 31,209 50.8 50,999 63.4

Can current education support this move? Substantial gains in education. But quality of education and lack of skilled workers are becoming constraints High pupil/teacher ratios (54:1) Negative perception (school is useless/uninteresting, Dar 24%) Falling cohort completion rate (78% in 2006 to 62.5% in 2008) One in five pupils not attending school at any given time Falling transition rate from Standard VII to Form 1 (67.5 % in 2006 to 51.6% in 2008) Only a quarter of candidates pass basic mathematics at the Form 4 exam Drop (26%) in the number of grads in technical and vocational education and training (BEST 2009)

Where do we go from here? WAKE UP and THINK BIG

A Two Pronged Approach to long term development GROWTH EQUITY PRIVATE SECTOR PUBLIC SECTOR PPP

Policy direction: Private sector led growth Issue Required Policy Actions Inadequate private investment Provide an enabling business environment: Remove barriers to private investment (simplifying business licensing, registration, import/export procedures) Remove controls on ownership rights (land), NTBs such as customs and admin procedures Address infrastructure issues (e.g. energy and transport) Develop the financial market and credit culture Improve quality of labour/public service Maintain macroeconomic stability Improve transparency/governance

Policy direction: Equity through rural development Issue Required Policy Actions Low agricultural productivity Developing markets Provision of rural infrastructure (irrigation, rural roads, electricity, communications, and marketing facilities) Provision of farm inputs (fertilizer, credit, seeds) Address crop losses (storage, transport, packaging) Promote the use of modern technology Heavy reliance on agriculture Promote non-farm activities/value addition Facilitate migration out of agriculture to other sectors through education, skills development and urban planning

Policy direction: Equity through provision of basic services Issue Required Policy Actions Inadequate access to basic services Improve access to basic services such as health and education services, water and sanitation Inadequate social safety nets Targeted social safety nets for the vulnerable Inadequate attention on cross-cutting issues Mainstream gender and environment into the national development agenda High population growth Interventions to reduce fertility rate, education, empowerment of women and effectively implementing the National Population Policy

Thank you