19 March 2018

New Report On Tanzania Shows Income Inequality Declining As Rural-Urban Disparities Remain

Dar es Salaam — A new report on the Dimensions of Inequality in Tanzania was released Monday in Dar es Salaam by the Social Development Policy Division (SDPD) of the Economic Commission for Africa (ECA) and REPOA, a Tanzanian independent research institution.

With a Gini coefficient of 0.43, overall inequality in Africa remains high relative to other regions. However, Tanzania is one of the few countries in Africa where inequality has declined by nearly 8 percent from 0.39 in 2001 to 0.36 in 2012, according to the report.

The decline in inequality is attributed to, among other things, improvements in redistributive policies in the country. Despite the drop in inequality, there are significant rural-urban, wealth and gender disparities, particularly in health outcomes, according to a new report from the ECA.

The study was commissioned by the ECA as part of its Africa-wide project on "Promoting Equality: Strengthening the Capacity of Select Developing Countries to Design and Implement Equality-Oriented Public Policies and Programmes". The country report focused on presenting the status and trends on inequality in Tanzania across several dimensions.

Although there are declining trends, the report shows that individuals in the wealthiest quintiles still account for nearly half of the total income in Tanzania. Individuals in the wealthiest quintiles appropriate 48 percent of the total income, whereas individuals in the poorest quintiles only get 6.2 percent of the income being generated in the country.

Notably, inequality of education has declined in the past two decades with the largest decline between geographical zones. Water inequality is also on the decline but at a very low rate. However, inequalities in health outcomes are rising and there are significant disparities in wealth dimensions.

In sanitation, the rural-urban gap remains large and is increasing with urban areas outpacing rural areas. There are also disparities between rural and urban areas in the education, health and water dimensions of inequality.

According to the report, youth unemployment, rather than the overall unemployment is the biggest inequality and development challenge. Women in Tanzania are one and a half times more likely to be unemployed at 12.3 per cent than men at 8.2 per cent with implications for household income and welfare in general.

As the report makes clear, low productivity, lack of market integration and inefficiencies in the agriculture value chain, and exploitative monopoly power of traders, are the key drivers distancing the rural incomes from the urban incomes.

Addressing participants drawn from government ministries, the academia and civil society at the dissemination workshop in Dar es Salaam, Saurabh Sinha, Chief of the Employment and Social Protection Section at the ECA, stated that "generating productive and decent jobs coupled with improving access to education, health, water and sanitation in both rural and urban areas will not only make a significant dent on various forms of inequality but will also indirectly impact poverty".

At the same meeting, Donald Mmari, Executive Director of REPOA noted; "While improving access to social services remains key to addressing inequality and poverty, improving quality of these services, particularly that of education and skills among youths is necessary for preventing intergenerational inequality and poverty, failure of which will compromise the nation's ability to benefit from its demographic dividend."

The report, which provides the most current national rates on inequality in Tanzania includes data that illustrates wide variation by location, gender and by income status on various forms of inequality in the country.

It is couched within the 2030 Agenda for Sustainable Development of "leaving no-one behind', and is specifically in line with Goal 10 and target 10.1 which aims to "...progressively achieve and sustain income growth of the bottom 40 percent of the population at a rate higher than the national average". It calls for an integrated policy approach in order to reduce inequality in Tanzania in tandem with the national development plans and the SDGs in general.

In particular, the report makes clear reference to policy interventions that have a direct bearing on inequality in Tanzania. These include fiscal policies, government spending, social protection, labour market and employment policies, among others.

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