Tanzania: High Growth Still to Benefit the Poor

from All Africa

Inter Press Service (Johannesburg)

Stephanie Nieuwoudt
Nairobi

Just more than a year after Jakaya Kikwete was elected president of Tanzania his name was mentioned in the halls at the Africa Union (AU) summit in January in Addis Ababa, Ethiopia, as the possible new chairperson of the AU.

In the end the job went to John Kufuor, president of Ghana, to celebrate that country's 50th year of independence. But the fact that Kikwete's name was mentioned made delegates take note of the progress Tanzania has made under his leadershipûnot least towards achieving the Millennium Development Goals (MDGs).

"Kikwete is interested in working out the details of attaining the MDGs," says Bernard Olayo, health systems specialist at the MDG Centre in Nairobi, Kenya. The MDG Centre was set up by the United Nations (UN) to work with different countries to develop financial plans for the achievement of the MDGs.

Olayo met Kikwete in January this year when he visited Tanzania with Jeffrey Sachs, chief of the UN Millennium Project which has been involved in developing an action plan against poverty. According to Olayo, he found Kikwete to be positive about finding solutions to problems.

He recounts an anecdote: "When Kikwete was recently asked to give the opening address at a seminar about poverty reduction, he did not just want to give the address but insisted on participating in the whole seminar." This is unusual as politicians frequently sweep in and out of conferences without making further inputs.

Olayo praises the Tanzanian government's programme to supply free primary school education to all children. The registration of primary school learners has shot up from four to eight million children between 2000 and 2007.

Africa is a continent with a high incidence of children leaving school after completing their primary school education due to factors such as school fees and a lack of facilities.

Now thousands of young Tanzanians are being encouraged to continue their schooling thanks to a project where the government helps communities to build secondary schools across the country.

"The best way to develop a nation is to improve the educational system so that its citizens can take their place in the world markets," Olayo argues.

Tanzania has many assets which should aid it in its quest towards achieving the MDGs. The country has vast mineral wealth - tanzanite, gold and copper - and is famous for agricultural produce including cloves, coffee, cotton and tea. Several companies are currently busy with oil exploration.

Tanzania offers an extremely investor-friendly climate. This includes reduced rates of import duties and sales tax on capital goods.

The government also allows the unconditional repatriationùin freely convertible currencyùof net profits, foreign loans, royalties, fees, charges in respect of foreign technology, remittance of proceeds and payment of salaries and other benefits to foreign employees working in Tanzania.

All investments in Tanzania are guaranteed against nationalisation and expropriation. The government has also completed its national strategy for growth and reduction of poverty (which is known by its Kiswahili acronym Mkukuta) in June 2005.

According to a report by the International Monetary Fund and the International Development Association, Tanzania has made progress in reducing income poverty (MDG 1), malnutrition (MDG 1), gender inequality in primary education (MDG 3) and child mortality (MDG 4).

But a lot more is needed to address maternal mortality (MDG 5).

The backdrop for these developments has been higher rates of real economic growth. Tanzania's gross domestic product grew by 6.8 percent in 2005 compared to 6.7 percent in 2004. Manufacturing contributed growth of 9 percent in 2005, slightly up from 8.6 percent in 2004.

Agriculture showed a small drop to 5.2 percent in 2005, down from 5.8 percent in 2004. Poverty is still rife in the rural areas. Especially small-holder farmers barely manage to eke out a living.

"More than 80 percent of the Tanzanian population rely on agriculture," says Josephat Mshighati, programme coordinator of the Right to be Heard programme of Oxfam in Tanzania.

"Although health education and agriculture are given high priority in the Mkukuta growth plan, more is needed to help agriculture. The government should look more to this sector where national subsidies are badly needed.

"Farmers run around looking for inputs like fertilizer, improved seeds and insecticides which are often prohibitively expensive," Mshighati points out.

In Tanzania more than 90 percent of the agricultural workforce consists of women. Many of them are single mothers who keep the rural economy alive. Not only do they work on their own pieces of land, but they also make up the greater part of the workforce on commercial farms where they are often underpaid.

Kikwete's presidency brought a ray of hope to the agricultural sector as he has initiated the agricultural sector development programme which, over nine years, aims to transform rural agriculture to becoming more productive.

The programme includes supporting different components of the sector through subsidizing agricultural inputs for farmers.

According to Olayo, international donors approve of the Kikwete administration. Underscoring this fact was the recent British donation of 105 million British pounds to aid Tanzania's fight against poverty.

In January this year several rich countries and institutions signed a memorandum of understanding on a joint assistance strategy for Tanzania (JAST).

These include Belgium, Canada, Denmark, the European Commission, Finland, France, Sweden, Switzerland, Britain, United States, the World Bank and the African Development Bank.

In terms of JAST development partners will help Tanzania fight poverty and ensure sustainable development. Government and development aid programmes will be consolidated.

But the Kikwete administration has been tainted by two incidents. In 2006 there was excitement about the American Richmond company's plan to install power generators as the country is plagued by power shortages. The company did not deliver on the 172 million US dollar deal.

Cabinet ministers were implicated but Kikwete reacted by merely reshuffling his cabinet.

In January this year the UK's "Guardian" newspaper reported that a British defence company, BAE Systems, in 2001 allegedly paid a Tanzanian middleman a commission of 12 million US dollars to ensure that it got the contract for a radar system.

Even though this deal was signed before he came to power, Kikwete's refusal to comment on the investigations has angered critics.