2 November 2012

Tanzania: Economy Impressive Despite Rural Poverty

THE World Bank released its second Tanzania Economic update report in Dar es Salaam, indicating that the economy performed impressively, with more than six per cent growth rate, reduced fiscal deficit and declining inflation.

Despite these pleasant economic facts most Tanzanians remain trapped in abject poverty despite reports of impressive performance of the country's macro-economy. 'With an economic growth rate of 6.5 per cent, manageable fiscal and current account deficits, Tanzania performed better than most developed countries and better than many fast emerging economies, including India and Brazil," said Jacques Morisset, the main author of the report and the bank's Lead Economist for Tanzania, Uganda and Burundi.

The report, however, raised concern over the country's strong economic growth that has eluded rural households that constitute about two-thirds of the total population and 80 per cent of the majority poor who remain condemned to appalling living conditions. The document discussants at a breakfast dialogue in a city hotel scoffed the country's claimed macro- economic achievements, saying Tanzanians remain too poor to apprehend the statistics.

"My conclusion is that our economy is practically doing badly," charged Mr Jenerali Ulimwengu, a seasoned journalist and commentator. He described Tanzania's rural areas as neglected and unlivable places due to poor infrastructure, market inaccessibility and low productivity.

The Managing Director of Tanga- based Katani Limited, Mr Salum Shamte, warned that the piecemeal approaches by which the government attempts to address rural poverty have sometimes complicated instead of addressing the problem. "In the absence of public and private partnership, there will be no headway."

The main problem with the economy in Tanzania is that growth has concentrated in only a few capital intensive sectors - mining, tourism and telecommunications - that alienate most Tanzanians, thus failing to create widespread jobs, raise incomes of masses and reduce poverty. Discussing the report, the British High Commissioner to Tanzania, Ms Diane Corner wondered weather Tanzanians were really ambitious to fight poverty.

"With all these natural resources and fertile land for agricultural production, are Tanzanians really ambitious to fight poverty through agriculture," she queried. Yet, the report has ranked Tanzania among the world's top performers, recording solid growth and strengthened fiscal discipline despite increases in the rate of inflation.

It further projects positive economic prospects for the 2012-2014 period when Gross Domestic Product is forecast to grow at between 6.5 and seven per cent. Through the document, the World Bank recommends close monitoring of public accounts to ensure fiscal and debt sustainability as well as optimal use of public resources.

The World Bank Country Director for Tanzania, Uganda and Burundi, Mr Philippe Dongier, said that Tanzania continues to stand out as a model of sound economic performance in the African continent, surpassing other regional economies and demonstrating resilience to the global economic crisis.

The World Bank launched the Economic Update, a biannual series, last February to foster constructive policy dialogue between stakeholders and policymakers as well as stimulate debate on essential economic issues. Meanwhile, the United Nations has emphasized that technology and innovation are fundamental in defeating poverty and raising the living standards through creation of sustainable livelihoods.

Launching the United Nations Conference on Trade and Development (UNCTAD) titled "Technology and Innovation Report 2012" yesterday, the UN Resident Coordinator in the country, Mr Alberic Kacou said there is increasing evidence that there can be no sustainable development without building innovation and technology capabilities.

Mr Kacou, who is also the Representative of the United Nations Development Programme (UNDP), said the report which focuses on Innovation, Technology and South-South collaboration, calls for developing countries to harness the potential of the south-south collaboration.

"By harnessing the potential of the South-South collaboration, developing nations can stimulate greater technological growth in the developing world, by establishing framework on South-South technology and innovation," he explained. The report also notes that exchange between developing countries accounted for 55 per cent of global trade in 2010, compared to 41 per cent in 1995, adding that the process is leading to appropriate technology diffusion, transfer and innovative capacities.

He explained that the UN is working with the two governments in Tanzania, including that of Zanzibar, to reduce income poverty, through promoting inclusive, sustainable and employment enhancing growth. He explained that Tanzania is among 16 African countries receiving development assistance from Brazil, through a joint African-Brazil Initiative, in the areas of Agriculture innovation market place, launched in 2010.

"The joint initiative that strengthens ties between Brazilian Agricultural Research Corporation (EMBRAPA) and African researchers, is supporting 125 projects in Africa, including development of cotton varieties and pest management in Tanzania," he explained.

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