Tanzania requires Sh161bn every month to end poverty

Dar es Salaam. Tanzania is striving at reducing poverty; but Sh161.1 billion is needed each month to enable the total population to meet life’s basic needs, the National Bureau of Statistics (NBS) says. The amount has increased from the Sh103.3 billion ($64.6 million) estimated in 2011/12.

This amount of money can be accounted for under social protection programmes that involve the giving of stipends. However, economic analysts raise concerns of sustainability of the system.

In its latest Household Budget Survey, the state-run statistics agency notes that the poverty rate dropped from 28.2 per cent in 2011/12 to 26.4 per cent in 2017/18.

The poverty gap - which measures the depth of poverty, and helps in calculating how much money would be needed to bring the poor population to above the poverty line – also dropped from 6.7 to 6.2 per cent in the same period.

Spending Sh161.1 billion every month would help to empower close to 14 million Tanzanians who spend less than Sh49,320 a month: poverty line cases.

However, the question is how the money could be spent to ensure sustainability of the empowerment programme. Economics Prof Honest Ngowi of the Mzumbe University (Dar es Salaam Campus) says social welfare programmes can help short-term, and cautions on their sustainability.

“The best alternative can be through creating employment opportunities for the poor - and pay them a living wage. Otherwise, if you want to dish out free money, then you should invest in bigger projects which can generate a monthly profit of over Sh161.1 billion,” Prof Ngowi suggested, challenging the formula as more theoretical than practical.

Tanzania has social protection programmes which target poor, vulnerable households with a basic unconditional cash grants.

The programmes are implemented through the Tanzania Social Action Fund (Tasaf) that’s aimed at increasing income and consumption, improving the ability to cope with shocks, and protecting the human capital of children among the extremely poor.

The Finance ministry was quoted in April as saying the World Bank was to increase Tasaf funding from $300 million to $450 million.

The Tasaf scheme, which is in its third phase, has four components including the Productive Social Safety Net (PSSN), which is made up of a basic grant (unconditional cash transfer), a conditional cash transfer and a public works subcomponent.

Other components are enhancement of livelihoods and increasing incomes. This involves community savings; investments and livelihood-enhancing grants; targeted infrastructure development; and capacity building (to ensure adequate programme implementation by communities, local government authorities, and regional and national-level players).

Poor regions

According to the National Bureau of Statistics, about 31.3 per cent of rural dwellers spend less than Sh49,320 a month (the poverty line) on basic needs compared to 15.8 per cent of those living in urban areas.

The rates had dropped from 33.3 per cent (for rural areas) and 21.7 per cent (for urban areas).

Poverty remains most prevalent in Rukwa Region, where about 45 per cent of its residents live below the accepted poverty line.

Other areas with high poverty rates (with their percentage points shown in brackets) are Simiyu (39.2), Lindi (38), Geita (37.5), Mwanza (34.6), Kigoma (34.5), Tabora (34.5) and Singida (34).

On the other hand, poverty rates are at their lowest in Dar es Salaam (eight per cent), followed by Kilimanjaro (10.5) and Njombe (13.2).

Food poverty

Apart from the basic needs poverty, eight per cent of the Tanzanian population is so poor that it cannot manage to consume Sh33,748 monthly on food alone.

This means that they fall below the food poverty line.

According to NBS, extreme poverty is more pronounced in rural areas (9.7 per cent) than in urban areas (4.4 per cent).

At the regional level, the incidence of poverty - in terms of food poverty - is the highest in Rukwa Region (19.8 per cent) and lowest in Kilimanjaro Region (2.1 per cent).

The food poverty line increased from Sh26,085 per month in the 2011/12 financia year, to Sh33,748 in 2017/18. The basic needs poverty increased from Sh36,482 to Sh49,320 per adult per month, in the same period.

Poverty distribution

NBS states that 81 per cent of the population living below the basic needs poverty line is found in rural areas, while 16.1 per cent reside in urban areas - except Dar es Salaam, where therate is 3.0 per cent.

However, when compared to the 2011/12 survey, there is a change in the distribution of poor people.

The proportion of poor population in rural areas decreased from 84.1 per cent in 2011/12 to 81.0 per cent in 2017/18, while the poor in Dar es Salaam doubled from 1.5 to 3.0 per cent.

Poverty also increased in other urban areas, dropping from 14.4 to 16.1 per cent, according to NBS.

The survey results also show that Mwanza has the highest number of poor people, while Njombe has the lowest.