Economic growth fails to benefit poor

Tanzania's impressive macroeconomic performance is not being translated into real improvements in the lives of ordinary people, it was claimed during last week's Consultative Group (CG) meeting for Tanzania. While there is widespread recognition of the benefits of recent policy reforms, including macroeconomic stability, reduced inflation, and a growing focus on poverty reduction, the underlying message at the meeting was that more effort needed to be made for the benefits to reach the majority of Tanzanians, most notably the rural poor. These concerns were raised by both the NGO Policy Forum and the donor community during the informal CG discussions that brought together over 200 participants from a wide range of private sector and civil society stakeholders. "The people do not eat policies and reforms," warned the NGO Policy Forum at the beginning of the meeting. "None of us can afford the luxury of conflating progress in policy arenas with real differences in the quality of life of the people." The NGO Policy Forum cited the need for meaningful commitments to be made to pro-poor growth and to simple, functional and accountable systems of local government if Tanzania's rural poor - over 80 percent of the population - were to experience tangible results from the poverty reduction process. Donor agencies praised Tanzania's efforts in fulfilling some of the Poverty Reduction Strategy (PRS) objectives, most notably in increasing primary school enrolment and in attaining high rates of child immunisation, but warned that "much more needs to be done in actually reducing poverty". "There is a widening gap between urban and rural poverty, increased income inequality and little change for young people. More concerted and focused efforts to reduce rural poverty are urgently needed," said the Joint Development Partners Statement to the meeting. Many of these claims are supported by the 2000/2001 Household Budget Survey, which was released earlier this year and reported "increased inequality" between rural and urban poverty. "It is just relative. They were comparing the growing private sector and the poverty that continues to exist," Tanzanian Finance Minister Basil Mramba claimed, responding to questions about the growing gap between the rural and urban poor. "The task for us is to create a middle class in between the rich few and the poor," he added. "We can do this by supporting the small- and medium-scale enterprises in industry, agriculture and trade." Mramba said that, alongside improving access to markets through improving rural roads, agriculture itself needed to be improved. "We have to develop more than just subsistence farming. You can't have four acres of land and say that you are a farmer. You have to improve agricultural practices and inputs into agriculture and get into small and medium scale farming," he said. However, sceptics warn that the recent Local Government Reform and Land Acts have done little to resolve the situation and need to be looked at again. "There are still countless numbers of taxes that a farmer has to pay if he wants to sell his products legally at the market. Also, the Land Act, which was rewritten in 1999, still makes it virtually impossible for farmers to mortgage their land, so they find it difficult to find credit and develop their agriculture," an economics expert told IRIN.