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| Prof Ndulu |
Dar es Salaam. Despite recording an overall economic growth rate of
seven per cent, Tanzania’s rural economy is still growing at barely one per
cent.
The Bank of Tanzania (BoT) Governor, Prof Benno Ndulu, said although
the country has made strides in reducing other dimensions of poverty, income
poverty is still higher in the rural areas, leading to increased pace of
rural-urban migration.
He said despite a fairly impressive seven per cent average GDP growth
rate, income poverty measured in terms of private consumption expenditure
excluding social services had declined marginally to 33.4 per cent against the
25 per cent target set by the Millennium
Development Goal (MDG).
“To a very large extent, this slow achievement is driven by the fact
that agriculture, on which 75 per cent of Tanzanians depend for their
livelihood, grew at a low four per cent rate barely three per cent above the
population growth rate,” said Prof Ndulu when delivering a keynote address at
the international seminar organised by African Economic Research Consortium
(AERC) yesterday.
In his analysis, Prof Ndulu who is also the former AERC executive
director puts a clear picture on how the government’s efforts to reduce other
poverty dimensions like health and education services delivery between the 2000
and 2010 fiscal years are yet to significantly tame income poverty at
individual and macro-levels in the country.
“Thus although the national income growth per capita averaged nearly
four per cent over this period, for the rural economy it was a low one per cent
and poverty is significantly higher in the rural areas,” the central bank
governor noted.
According to him, income poverty in the country cannot be seriously
addressed without increasing significantly incomes from smallholder
agriculture, informal and activities of Small and Medium Enterprises (SMEs) in
urban areas, which have an increasing number of the urban poor.
Growth in the country has contributed a lot more to reduction of other
dimensions of poverty through increased revenue collection from around 18 per
cent in 2000 to 28 per cent in 2010/12, according to the BoT governor.
Prof Ndulu advised that more efforts are needed to increase revenue
collection because like other African countries, Tanzania was still depending
on the generosity of foreign donors to finance social services, including
health.
According to a latest report by the ministry of Finance and Economic
Affairs on the trend of economic growth, agriculture recorded a growth rate of
four per cent in 2007 while in 2008 it grew at 4.6 per cent, in 2009 at 3.2 per
cent, in 2010 at 4.2 per cent and almost at the same rate this year.
Source: The Citizen, www.thecitizen.co.tz, reported by Ludger Kasumuni
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