Social Issues in tanzania
Information on the social issues ongoing in tanzania:
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%.
The modest reduction in poverty illustrates that economic growth has not been sufficiently broad-based. Growth is concentrated in telecommunications, financial services, retail trade, mining, tourism, construction and manufacturing. While growth was formerly driven largely by public spending and international aid, this is no longer the case. Growth today is generated mainly by the private sector, but the sectors with the highest rates of growth are predominantly capital-intensive and concentrated in large urban areas. Growth has largely failed to affect the great challenges, generating more employment and additional jobs in all parts of society and improving incomes for the vast majority of the population.
One major cause for the lack of poverty reduction despite economic growth is that Tanzania has not succeeded in raising productivity in agriculture over the last decades. Tanzania remains predominantly agricultural, with three quarters of the population living in rural areas. Eighty percent of Tanzania’s poor live in rural households. Growth in the agricultural sector remains low, at around 4% per year, and in the rural areas the growth in productivity can barely keep up with population growth. The birth rates in rural areas are high (6.1 births per woman compared to 3.7 in the urban areas).
While donors and the government have used significant resources to improve the social sectors, similar necessary support has not been given to agriculture and other productive sectors. Lack of secure land tenure to ensure that the traditional users in the rural districts do not lose their land is one of the most essential issues, constraining investments that could enhance productivity. Processing of food and other agricultural produce and other forms of manufacturing is also very limited in the rural areas creating very few additional employment opportunities.
For the same reason, Tanzania is experiencing significant out-migration of young people from low productivity agriculture to urban informal service sectors, where productivity is just as low. Unemployment is high and growing rapidly, especially in the urban areas and among youth. The official unemployment rate is 12% and is highest in the cities, reaching 32% in Dar es Salaam (2006). In addition, one-third of those employed are so-called “working poor”: technically employed, but whose income is less than the basic needs poverty line of USD 0.96 per day. They often work either in farming or in the urban informal service sector in low-productivity, part-time jobs. An estimated 700,000 new young job-seekers enter the labour market each year, but only a fraction of them have a realistic possibility of obtaining a stable job that can give them the possibility to provide for a family. The flow from countryside to city of rural-urban migration will continue in years ahead, and Dar es Salaam is already one of the fastest growing cities in Africa.
With the recent discoveries of significant gas reserves in addition to its already large mineral resources, Tanzania’s long-term economic prospects appear promising, and these resources have already attracted foreign investors. However, the benefits to be derived from the exploitation of natural resources will not significantly materialize for another 10 years or so, and it is crucial to ensure macroeconomic management. In recent years, the Government has increased its use of both interest-bearing and low interest concessional borrowing.