Current and future challenges and opportunities in
Tanzania.
Tanzania has undergone
impressive political and economic developments and improvements in social
welfare in recent years. However, the country continues to face considerable
development challenges, not least in essential areas such as economic
distribution, population growth, corruption and a stronger division between
party and state. At the same time, new opportunities are arising which have the
potential to become decisive for the necessary changes and reforms.
POVERTY AND
INEQUALITY: HIGH GROWTH, BUT NOT FOR ALL
Tanzania
has been a macro-economic success story for nearly two decades. The rate of
economic growth increased from 3.5 pct. in the 1990s to 7 pct. in the 2000s.
Despite the global financial crisis, growth rates have been remarkably stable
over the last decade, and they are expected to continue or even increase in the
foreseeable future. At the same time, the country has experienced high
population growth – from 11 million people in 1963 to around 45 million in
2012. Population growth remains high, at nearly 3 pct. annually. If this growth
rate continues, there will be 53 million Tanzanians in 2018 and 100 million in
2042.
Economic
growth and decades of massive international aid have created many good results,
but it is important to recall that the growth began from a very low starting
point and that poverty in Tanzania has proven extremely stubborn. With an
annual GDP per capita of USD 532 (2011) and a Human Development Index rank among
the lowest 20%, Tanzania is one of the poorest 15 nations in the world. More
than two-thirds of the population live below the internationally recognized
income poverty line of USD 1.25 per day and almost 90 pct. live on under two
dollars per day. Around one-third live below the "basic needs poverty
line" corresponding to around USD 0.96 per day.1 Measured by this limit,
official poverty levels declined slightly from 39% of the population in 1992 to
34% in 2007, to 28% in 2012. Due to population growth, however, this relative
decrease still means that the actual number of people living below the poverty
line has remained relatively constant level of 11-12 million Tanzanians.
Official surveys show a constant level of inequality from 2001 to 2007 (Gini
0.35). Other calculations, however, show a 20% increase in inequality in the
same period.2 the degree of inequality can be illustrated by the fact that the
richest 20% of Tanzania’s population accounts for 42% of total consumption,
whereas the poorest 20% consume only 7%.
