National Strategy for Growth and Reduction of Poverty
UNITED REPUBLIC OF TANZANIA
FIRST DRAFT – NOT FOR QUOTATION
MKUKUTA
National Strategy for Growth and Reduction of Poverty
POVERTY AND
HUMAN DEVELOPMENT
REPORT 2009
Research and Analysis Working Group
MKUKUTA Monitoring System
Ministry of Finance and Economic Affairs
October 2009
Acknowledgements
The Poverty and Human Development Report (PHDR) 2009 was produced by the Research and Analysis Working Group (RAWG) of the MKUKUTA Monitoring System. Research on Poverty Alleviation (REPOA), as secretariat to the group, coordinated the production of the report under the supervision of Professor Joseph Semboja. Lead technical reviewing was provided by Valerie Leach of REPOA and members of RAWG. Acknowledgment is gratefully accorded the International Labour Organisation for the technical assistance provided by Alana Albee.
Many people contributed to this year’s report, and their contributions are gratefully acknowledged.
Special thanks go to the staff of the National Bureau of Statistics (NBS) for providing timely data and analysis from national surveys, and to the various government ministries, departments and agencies (MDAs) who forwarded data from their administrative systems. Data for the status chapter were compiled by Danford Sango and Thadeus Mboghoina of REPOA.
The status Chapter 1 was drafted by Denis Rweyamamu of REPOA, Kate Dyer of Maarifa ni Ufunguo, Paul Smithson of Ifakara Health Research and Development Centre, Ben Taylor (formerly of Water Aid) and Rehema Tukai of REPOA. Per Tidemand of Dege Consult provided a background paper on local government reform for Cluster III.
The analysis of poverty in Chapter 2 is based on a background paper by Johannes Hoogeveen, Manager InfoShop at Twaweza, Dar es Salaam and Remidius Ruhinduka of the Economics Department of the University of Dar es Salaam.
Chapter 3 on the role of the state was written by Prof. Joseph Semboja of REPOA, based on discussions with a range of researchers including Dr Servacius Likwelile, Alana Albee, staff of the Government of Tanzania, REPOA and the World Bank. It was inspired in part by a paper presented by Thandika Mkandawire of UNRISD at REPOA’s 14th Annual Research Workshop in Dar es Salaam, March 2009.
The report was edited by Chris Daly.
Table of Contents
Acknowledgements 2
Table of Contents 3
Introduction 9
Chapter 1: Progress towards the Goals of growth, social well-being and governance 10
MKUKUTA Cluster I: Growth and Reduction of Income Poverty 10
Cluster-wide Indicators 10
GDP Growth 11
GDP Growth by Sector 11
Household Income (Consumption) Poverty and Inequality 17
Income Poverty 17
Income Inequality 18
Income Poverty and GDP Growth 18
Goal 1: Ensuring sound economic management 20
Inflation 20
Central Government Revenue 21
Fiscal Deficit 21
Exports 21
Goal 2: Promoting sustainable and broad-based growth 22
Domestic Credit to the Private Sector 22
Foreign Direct Investment 22
Interest Rate Spread 24
Unemployment 25
Infrastructure 26
Roads 26
Ports 26
Environmental Impact Assessments 27
Goal 3: Improving Food Availability and Accessibility at Household Level in Urban and Rural Areas 28
Food Self-sufficiency 29
Districts with Food Shortages 29
Households Who Consume No More than One Meal a Day 29
Goals 4 and 5: Reducing Income Poverty of Both Men and Women in Rural and Urban Areas 29
Smallholder Agriculture 30
Goal 6: Provision of Reliable and Affordable Energy 31
Customers Connected to Sources of Electricity 32
Main Source of Energy for Cooking 32
Electricity for Production 32
Electricity Generation and Utilisation 33
Conclusions and Policy Implications – Cluster I 34
Implications for Monitoring – Cluster I 35
MKUKUTA Cluster II: Improvement of Quality of Life and Social Well-Being 37
Goal 1: Equitable access to quality primary and secondary education for boys and girls, universal literacy among men and women, and expansion of higher, technical and vocational education 37
Literacy 38
Pre-primary Education 38
Primary Education 39
Net Primary School Enrolment Rate 39
Percentage of Primary Cohort Completing Standard VII 41
Percentage of Students Passing the Primary School Leaving Examination 41
Percentage of Teachers with Relevant Qualifications 42
Pupil/Teacher Ratio 43
Pupil/Text Book Ratio 43
Quality in Primary Education and Financial Allocations 43
Secondary Education 45
Transition Rate from Standard VII to Form 1 45
Net Secondary Enrolment 45
Percentage of Students Passing the Form 4 Examination 47
Higher Education 47
Enrolment in Higher Education Institutions 47
Technical and Vocational Education and Training (TVET) 49
Goal 2: Improved survival, health and well-being of all children and women and especially vulnerable groups 49
Life Expectancy 50
Infant and Under-Five Mortality 50
Malaria Control 52
Immunisation 54
Nutrition 55
Maternal Health 58
HIV/AIDS 60
HIV Prevalence 60
HIV/AIDS Care and Treatment 63
Mother-to-Child Transmission 64
Tuberculosis Control 65
Access to Healthcare Services 66
Utilisation 66
Goal 3: Increased Access to Clean Affordable and Safe Water, Sanitation, Decent Shelter, and a Safe and Sustainable Environment 69
Access to Clean and Safe Water 69
Proportion of Population with Access to Piped or Protected Water 69
Time Taken to Collect Water 71
Household Expenditure on Water 72
Citizens’ Satisfaction with Water Services 74
Water Sector Policy, Strategy and Financing 74
Household sanitation 76
School sanitation 78
Incidence of cholera 80
Goal 4: Adequate social protection and provision of basic needs and services for the vulnerable and needy 81
Goal 5: Effective systems to ensure universal access to quality and affordable public services 81
Child Labour 81
People with Disabilities 83
Children with Disabilities Attending Primary School 83
Orphaned Children Attending Primary School 83
Eligible Elderly People Accessing Medical Exemptions 84
Public Satisfaction with Health Services 85
Income Poverty and Social Protection 85
Conclusions and Policy Implications – Cluster II 86
Education 86
Health 87
Water and Sanitation 88
Social Protection 88
Implications for Monitoring – Cluster II 89
Education 89
Health 89
Water and Sanitation 90
MKUKUTA Cluster III: Governance and Accountability 92
Goal 1: Structures and systems of governance as well as the rule of law are democratic, participatory, representative, accountable and inclusive 93
Birth Registration 93
Gender Equity 94
Citizens’ Participation in Local Governance 94
Information Dissemination and Accountability of Local Government Authorities 97
Goal 2: Equitable allocation of public resources with corruption effectively addressed 98
Revenue Collection 98
Public Procurement 99
Audits of Central and Local Government Offices 99
Budget Allocations to Local Government Authorities 100
Formula-based Budget Allocations 101
Allocation of Human Resources 102
Development Funds 104
Local Governments’ Share of Public Expenditures 105
Revenue Collection 105
LGA Expenditure Patterns 106
Corruption 106
Regulation of the Natural Resources Sector 107
Goal 3: Effective public service framework in place to provide foundation for service delivery improvements and poverty reduction 108
Percentage of Population Reporting Satisfaction with Government Services 108
Education 108
Health 108
Water 109
Conclusion 109
Goal 4: Rights of the poor and vulnerable groups are protected and promoted in the justice system 110
Court Cases Outstanding for Two Years 110
Prisoners in Remand for Two or More Years 110
Juveniles in detention 110
Goal 5: Reduction of political and social exclusion and intolerance 111
Goal 6: Improve personal and material security, reduce crime, and eliminate sexual abuse and domestic violence 111
Number of Inmates in Detention Facilities 111
Crimes Reported 111
Sexual Abuse 111
Domestic Violence 112
People’s Perceptions of Public Safety 112
Goal 7: National cultural identities enhanced and promoted 113
Conclusions and Policy Implications – Cluster III 113
Implications for Monitoring – Cluster III 115
Chapter 2: An analysis of household well-being in tanzania 116
Household Consumption 116
Composition of Consumption 117
Basic Needs Poverty 119
Food Poverty 121
Distribution of Consumption 122
Progress against MKUKUTA and MDG Poverty Reduction Targets 123
Household Expenditure Patterns 124
Food share 124
Goods with High Income Elasticities 125
Asset Ownership 129
Consumer Durables 129
Productive assets 132
Savings 133
Household Occupation and Place of Residence 134
Main Sources of Employment 134
Poverty Incidence by Occupation and Place of Residence 135
Conclusion 137
Chapter 3: The Role of the State in a Developing Market Economy 139
Introduction 139
State Involvement in Economic Management 139
Proposed Functions of a State 140
Defining the Vision 140
Establishing Medium-term Development Strategies 141
Strengthening and Aligning the Institutional Framework for Implementation 142
The Institutions of Government 142
The Private Sector 143
The Market 144
Maintaining Macro-economic Stability 145
Ensuring Good Governance 146
Addressing Blockages to Facilitate Implementation 146
Infrastructure Development 146
Human Resource Development 147
Social Protection 148
Knowledge Creation, and Research and Development for Innovation 148
Managing the Environment 149
Conclusion 149
Mkukuta Indicators – summary of data and Targets 152
MKUKUTA Cluster I: Growth and Reduction of Income Poverty 152
MKUKUTA Cluster II: Improvement of Quality of Life and Social Well-being 158
MKUKUTA Cluster III: Governance and Accountability 164
Introduction
The Poverty and Human Development Report (PHDR) has been produced on a regular basis by the Government of Tanzania as a key output of the national monitoring system associated with its poverty reduction strategies, the PRS from 2000-2004 and the National Strategy for Growth and Reduction of Poverty 2005-2010 (Mkakati wa Kukuza Uchumi na Kupunguza Umaskini, commonly known by its Swahili acronym, MKUKUTA). The reports have provided consolidated national analysis of trends and outcomes in development, as well as discussion of key socio-economic issues.
PHDR 2009 is the fifth in the series published since 2002. This report marks the end of the first phase of MKUKUTA. It is a key document for reviewing the accomplishments of MKUKUTA and for examining the challenges facing the country. The report is structured in three chapters.
Chapter 1 reviews progress towards key development targets based on the national indicator set for MKUKUTA’s three major clusters of desired outcomes: growth and reduction of income poverty (Cluster I); improvement of quality of life and social well-being (Cluster II); and governance and accountability (Cluster III).
Chapter 2 expands on the status of income poverty reported in the first chapter. It provides analysis of household well-being in Tanzania since 2000/01 using new data from the Household Budget 2007.
Chapter 3 outlines the role and principal functions of the State in economic management and the broader socio-economic transformation of Tanzania. This discussion is central to the development of MKUKUTA II, including delineation of the roles and responsibilities of all development actors in realising the national vision.
Chapter 1: Progress towards the Goals of growth, social well-being and governance
This chapter provides a consolidated view of the progress of Tanzania’s National Strategy for Growth and Reduction of Poverty 2005-2010 (MKUKUTA). It uses the nationally agreed indicator set as the framework of analysis, and presents the most recent data for the goals and targets of MKUKUTA’s three major clusters of desired outcomes: growth and reduction of income poverty (Cluster I); improvement of quality of life and social well-being (Cluster II); and governance and accountability (Cluster III). Conclusions, recommendations for further strengthening of the MKUKUTA Monitoring system and a summary table of statistics are provided at the end of each cluster.
MKUKUTA Cluster I: Growth and Reduction of Income Poverty
The overall outcome for Cluster I of MKUKUTA is broad-based, equitable and sustainable growth. Progress towards this outcome is measured against a set of cluster-wide indicators, together with indicators for six supporting goals:
The supporting goals for the overall outcome of MKUKUTA’s Cluster I are:
Goal 1: Ensuring sound macro-economic management
Goal 2: Promoting sustainable and broad-based growth
Goal 3: Improving food availability and accessibility at household level in urban and rural areas
Goals 4 and 5: Reducing income poverty of both men and women in urban and rural areas
Goal 6: Provision of reliable and affordable energy to consumers
This section begins by analysing progress towards achieving targets for the cluster-wide indicators.
Cluster-wide Indicators
There are four cluster-wide indicators for MKUKUTA’s Cluster I. They are:
§ Gross Domestic Product (GDP) growth per annum
§ GDP growth per annum for key sectors
§ Gini coefficient
§ Headcount ratio, basic needs poverty line
GDP Growth
GDP growth per annum has almost doubled over the last decade from 4.1% in 1998 to 7.4% in 2008 (Figure 1). Since 2000, GDP growth has averaged approximately 7% per annum, which is historically high for Tanzania and comparable to the performance of the fastest growing economies in sub-Saharan Africa (SSA).[1]
As Figure 1 illustrates, GDP growth peaked in 2004 at 7.8%, but severe and prolonged drought during 2005/6 negatively affected the economy. Since then, GDP has been gradually recovering to reach 7.4% in 2008. The global economic and financial crisis is also having an adverse impact (see Box 2). GDP growth is projected to fall to 5% in 2009, and then gradually increase to 7.5% by 2012.
Figure 1: Real GDP Growth 1993 – 2006 (at 2001 constant prices)*
Source: Ministry of Finance and Economic Affairs (MoFEA) – Economic Survey 2008
Note: * In 2007, the National Bureau of Statistics updated GDP estimates in the National Accounts to reflect 2001 prices (NBS, 2007). The previous set of estimates was based on 1992 prices. Therefore, the historical data series for GDP growth, GDP-derived indicators and annual inflation under Goals 1 and 2 presented in this report will differ from figures presented in earlier PHDRs. Box 1 provides further detail on the NBS revision exercise.
GDP Growth by Sector
The principal theories of economic transformation recognise that the share of the agricultural sector will contract with national development, leaving space for expansion of the industrial and service sectors. Analysis of sectoral contributions to Tanzanian GDP since 1998 indicates modest structural change (Figure 2). Services constitute the largest sector in the economy, and the sector’s share in total GDP has increased slightly from 45% in 1998 to almost 48% in 2008. Within this sector, ‘trade and repairs’ together with ‘real estate and business services’ are the major contributors. The contribution of construction and mining to GDP also increased from
