Poverty and Human Development Report 2009 - UNDP in Tanzania

ExECUTIvE SUMMARy
The Poverty and Human Development Report (PHDR) is a key output of the Government of
Tanzania’s poverty monitoring system. It provides consolidated analysis of progress towards national
development goals as well as discussion on important socio-economic issues affecting the country.
PHDR 2009 is the fifth report in the series since 2002, and marks the end of the first phase of the
National Strategy for Growth and Reduction of Poverty 2005-2010 (commonly known by its Swahili
acronym, MKUKUTA). The report highlights the achievements and challenges of the first phase of
MKUKUTA and looks ahead to inform the next phase of Tanzania’s development strategy.
As for earlier years, PHDR 2009 comprehensively reviews progress towards key development
targets based on the national indicator set for MKUKUTA’s three major clusters of desired
outcomes: Cluster I – growth and reduction of income poverty; Cluster II – improvement of
quality of life and social well-being; and Cluster III – governance and accountability. Two thematic
chapters are also included in this year’s report. Expanding on the status of income poverty
outlined in Cluster I, Chapter 2 more closely examines households’ economic well-being in
Tanzania since 2000/01, while Chapter 3 discusses the role and principal functions of the State
in economic management – a topic of central and immediate importance towards realising the
vision of socio-economic transformation in Tanzania.
Progress Towards the Goals of Growth, Social Well-being and
Governance
growth and Reduction of Income Poverty
The rate of economic growth per annum has risen strongly over the last decade from 4.1% in 1998
to 7.4% in 2008, which is historically high for Tanzania and comparable to the fastest growing
economies in sub-Saharan Africa. However, growth in 2009 is expected to fall to 5% as a result
of the global economic crisis, before recovering to 7.5% by 2012. Analysis of growth rates by
sector, based on the revised series of national accounts produced in 2007, indicates continuing
but modest structural change. The services sector has become a dynamic component of the
national economy with annual growth rates of 7.5% since 2000. Communications is the fastest
growing services sub-sector, averaging 14% per annum over this period. Services now make up
48% of total GDP. The manufacturing sector has also grown strongly – at around 8% per annum
since 2003 – and accounted for 9.4% of total GDP in 2008. In comparison, the agriculture sector
has performed less well, averaging 4.4% growth since 2000, well below MKUKUTA’s target of
10% by 2010. The sector’s contribution to GDP has declined to 24% in 2008.
Timely increases in official aid receipts and the passage of a stimulus package in the Government’s
2009/10 budget are helping to minimise the impact of the global recession domestically, but the
full scope and depth of the downturn on Tanzania are not yet known.
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