Browse Policies

The National Development Strategy

Tanzania

2008

Context

National policies in Tanzania are categorized into the long-term national development strategy known as Vision 2025, the medium-term national poverty reduction strategies and specific sector or cross sector policies. The development of Tanzania's poverty reduction strategies (PRS) can be divided into two generations, the first comprising the Poverty Reduction Strategy Paper (PRSP) and Zanzibar Poverty Reduction Plan (ZPRP), and the second generation comprising the National Strategy for Growth and Reduction of Poverty (NSGRP or MKUKUTA) and the Zanzibar Poverty Reduction Plan (ZPRP or MKUZA). 

Analysis | Lessons | Good Practices

Analysis

Development Vision

The national development strategy in Tanzania is guided by Development Vision 2025 which was produced in 1998. Tanzania Vision 2025 was precipitated by the realisation that the policy reform process that had been initiated in the mid-1980s was not underpinned by a nationally owned long term development philosophy. Vision 2025 was crafted with a view to filling that gap.

The goal of Vision 2025 is to transform Tanzania from a least developed country to a middle income country with a high level of human development free from abject poverty by 2025.  It is envisaged that the Tanzania economy will have been transformed from low productivity agriculture dominated economy to a semi-industrial economy with modernised and high productivity agriculture that is well-integrated into the rest of the economy.

Tanzania of 2025 is envisaged to be imbued with five attributes: high quality of livelihood; peace, security and unity; good governance and rule of law; a well educated and learning society; and a strong and competitive economy.

The crafting of Vision 2025 identified factors that had inhibited implementation of past plans with a view to taking the necessary precautions and avoiding pitfalls of the past.  Four factors that had posed challenges to effective implementation of past plans were identified as: aid dependence; low capacity for economic management; failures in good governance and the organisation of development in order to effectively mobilize domestic resources and capabilities to meet the emerging challenges of market-oriented and private sector-led development. "As a result, these structures have not been supportive of evolving social relations which promote the participation of all partners in development and have equally failed to effectively mobilize domestic resources and capabilities to meet the emerging challenges of market-oriented and private sector-led development."[1]; and the ineffective implementation arrangements. Point is made to 2.2.4 "Ineffective Implementation Syndrome" Vision 2025 [2] "Tanzanians have developed a propensity to prepare and pronounce plans and programmes, and ambitions which are not accompanied by effective implementation, monitoring and evaluation mechanisms. As a result, implementation has been weak."

Successful implementation of Vision 2025 is buttressed on five driving forces: good governance and rule of law; competitiveness of the economy; developmental mindset and empowerment culture; democratisation and popular participation; monitoring, evaluation and review.

A major concern of Vision 2025 is about implementation. It is in this context that Vision 2025 states that it is essential to review progress of implementation every five years to gauge progress and make the necessary adjustments. Hence, the five years National Strategy for Growth and Reduction of Poverty (or MKUKUTA, a popular Swahili acronym) was in place in 2005 and the Zanzibar Strategy for Growth and Reduction of Poverty (ZSGRP, or Mkakati wa Kuondoa Umaskini Zanzibar (MKUZA), a more popular (Swahili acronym) in 2006.

Tanzania started to address poverty as a major policy concern in 1996 within the framework of the macroeconomic policies which were being implemented.  These initiatives started with the formulation of the National Poverty Eradication Strategy (NPES) in 1997.  However, soon after the policy and strategy document was ready for implementation the discussions about debt relief were beginning to link debt relief to poverty reduction.  These initiatives coincided with the World Bank's introduction of the Comprehensive Development Framework which essentially recognized that development had to be pursued in a comprehensive manner taking into account economic as well as social and political processes. It is in this context that the international financial institutions (IFIs) came with the concept of Poverty Reduction Strategy Paper (PRSP) which was partly tied to HIPC debt relief funds. Tanzania responded quickly to the demand to prepare Poverty Reduction Strategy Paper (PRSP) and Zanzibar Poverty Reduction Plan (ZPRP) in order to gain access to the HIPC debt relief resources.

The concepts of Poverty Reduction Strategy Papers (PRSP) and Zanzibar Poverty Reduction Plan (ZPRP) have introduced a new dimension of integrating the poverty concern in the policy making process of indebted countries with the underlying principles of ownership and leadership, participation, a multi-dimensional conception of poverty, and the linkage of poverty to debt relief. The PRSP and ZPRP processes made the availability of resources for poverty reduction more predictable, and in general, there was a significant improvement in public expenditure management and the poverty reduction strategy was subjected to reviews annually since 2000 giving room for improvements as lessons were being learned in the process of implementation.

However, questions have been raised on the effectiveness of the PRSP/ZPRP approaches. The lessons learned from the first generation of the poverty reduction strategy were carried forward into the second generation of poverty reduction strategy.

Drawing lessons from experience with PRSP/ ZPRP, the preparation of the revised PRS known as National Strategy for Growth and Reduction of Poverty (NSGRP or MKUKUTA) and Zanzibar Poverty Reduction Plan (ZPRP or MKUZA) have made important improvements compared to the earlier PRSP and ZPRP in putting greater emphasis on growth and income poverty reduction, replacing "priority sectors' approach with "Priority outcomes", increased focus to governance issues, integration of MDGs policy actions into cluster strategies, greater mainstreaming of cross cutting issues and extending the period required for a comprehensive review of the strategy from 3 to 5 years. The NSGRP/ ZSGRP were prepared with broad and extensive consultation with government ministries and agencies, the donor community and the civil society in Tanzania. The NSGRP/ ZSGRP place more emphasis on growth as a means to reduce poverty. It has also put more emphasis on good governance and accountability.

MKUKUTA/MKUZA have recognized that poverty has many dimensions, often caused and reinforced by underlying unequal distribution of resources, incomes and opportunities. The strategy identifies three major clusters of poverty reduction outcomes: (i) growth and reduction of income poverty; (ii) improvement of quality of life and social well-being, and (iii) good governance (See Figure 1).

Each cluster contains specific goals and actions; and many of these are interrelated and support each other. Interventions to address inequalities are included in each cluster.

Major clusters of poverty reduction outcomes

Figure 1: Major clusters of poverty reduction outcomes.

 

One of the major prerequisites for poverty reduction is high economic growth. In general, growth depends on the quantity and quality of inputs including land and natural resources, capital, labour and technology. Quality of inputs implies embodied knowledge which is a basis for innovation, technological development, increases in productivity and ultimately, competitiveness.

There is a strong relationship between the three clusters; and indeed between productive and service sectors. Growth leads to higher incomes, thus reducing income poverty, assuming equitable distribution. Higher incomes enable households to improve human capabilities through better education, health, nutrition, shelter, i.e. social well-being. Human capability is, in turn, one of the critical sources of long-term growth. Also, growth enables the government to collect revenue for provision of public services such as health, education, administration and infrastructure.

Governance, on the other hand, provides conditions within which growth, well-being and poverty reduction take place. A socio-political environment is required that ensures equal access to productive resources, social services and human rights. Equity cuts across all the three major clusters.

Tanzania's macroeconomic[3] performance has been impressive since the late 1990s. The entire 2001 GDP series growth rates range from 4.1 percent to 7.8 percent during the period 1998 to 2006, an average of 6.2 for nine years period and 7.2 in the last five years. The GDP growth rate in 2007 was recorded at 7.1 as compared to 6.7 in 2006. It has registered GDP growth rates coupled with ongoing economic, governance and institutional reforms and the transformation of the rural economy. With such an average GDP growth, Tanzania is well on the way to achieving the 8 - 10 per cent growth per annum that would be required to achieve the MDGs. The concern is that growth has not been sufficiently broad and income inequality increased slightly, mainly in urban areas and the gap between urban and rural incomes may have increased. Recent data shows that an estimated 35.9 percent of the 36 million people are living below the poverty line. Poverty in Tanzania is exacerbated factors such as infectious diseases, natural disasters, illiteracy, lack of capital and technology and weak infrastructure.

Growth in the agricultural GDP has been used to indicate reduction in rural poverty.  Rural households, especially those for whom agriculture is the primary source of income, account for almost 85 percent of the poor. However, the contribution of agriculture to GDP stood at 24.6 percent in 2007. The agricultural GDP grew by 4.0 percent in 2007 as compared to 3.8 in 2006 against the targets of 9 percent by 2010. The growth in agricultural GDP is attributed to improved weather, the GoT's commitment in improving irrigation infrastructure and scaling-up of agricultural supportive services, including extension services, marketing and financing through the Agriculture Input Trust Fund. Given the population growth rate of 2.9, it implies that per capita income in the rural areas only increased by 1.0 percent which would have only marginal effect in the reduction of income poverty.

Taking stock of recent developments in management of the economy and drawing from the experience of the PRS process it can be observed that good progress has been made in three areas:

1. Deepening participation: participation in the process of policy making and development management has been broadened and deepened over time. The reforms of the late 1980s and 1990s have entailed economic and political liberalization and democratization which has meant enhanced participation of key stakeholders in the policy making process.  It has come to be accepted that policy making is no longer a monopoly of the government but government provides a stage whereby various interests are played out. Participation of various groups in society has therefore become an accepted practice in recent policy making initiatives. The policy process is now more participatory and this has raised more expectations as well as demonstrating the government's willingness to engage in open debate about most areas of policy. Civil society organisations (CSOs) are now more engaged in policy debates and discussions and the cynicism that used to surface between the Government and CSOs had been reduced considerably towards more effective partnerships.

2. Moving towards a development framework: the PRS process has become an important framework for coordination of poverty reduction strategies as an essential part of development within the Government regarding poverty reduction initiatives in Tanzania. Increasingly Ministries, Departments and Agencies (MDAs), External Development Partners and CSOs consider the Poverty Reduction Strategy as their guiding frame and a reference point in defining their priorities and articulating their sector development strategies. As the government budget continues to be aligned with the PRS and more donors continue to offer their development assistance in the form of government poverty reduction budget support (PRBS) and basket funding, the PRS process is being consolidated and is akin to the development strategy itself.  In addition, the PRS process is increasingly becoming the coordinating framework for development initiatives in the country. The government budget has continued to be aligned with it in terms of ensuring financing of priorities identified in the PRS.

3. Developing a monitoring system: the poverty monitoring system that was adopted for monitoring PRS in 2001-2004 has evolved into MKUKUTA/MKUZA Monitoring System (MMS) in 2006. The new monitoring system was adapted to the broader mandate and coverage of MKUKUTA/MKUZA especially its result orientation and deeper integration of MDGs into the national indicator set. The creation of a comprehensive poverty monitoring system means improved information about performance as well as providing the opportunity to improve the quality of policy by making use of feedbacks.

 

Challenges

The challenge of poverty eradication is manifested in three dimensions:

·        First, the challenge of raising the level of growth to 8-10 percent.

·        Second, to recognize that translating growth into poverty reduction is not automatic. The outcome is influenced by the quality of growth. The challenge is to make growth broadly shared.

·        Third, the large income disparities between rural and urban areas as well as between regions and between households have to be addressed.    

The challenge to reducing hunger and extreme poverty is also multi-dimensional:

·        The prospects of achieving this target are likely to be reduced by recent developments in food prices rises in the world market. 

·        While Tanzania is an agricultural economy the supply response is likely to be slow due to capacity problems.  Food security is a function of production, accessibility and utilization of food resources.

·        Social and cultural factors

·        Challenges of land degradation, erosion and encroachment of water sources;

·        Climate changes leading to drought or seasonal rainfalls, and desertification; and

·        Poor farming practices are likely to continue to be major challenges[4].

[1]http://www.tanzania.go.tz/vision.htm

[2]http://www.tanzania.go.tz/vision.htm#2.0%20TANZANIA%20PAST%20VISIONS%20AND%20IMPEDIMENTS

[3] The economic statistics are given in 2001 basic prices. The basic prices include other taxes on production while those at factor costs do not. The 2001 GDP series are in absolute terms, and the figures are higher than the 1992 GDP series due to the following (i) The 2001 GDP estimates were produced at basic prices while the 1992 GDP estimates were produced at factor costs. (ii) The 2001 estimates utilized additional data collected from different surveys in the country, for example the 2001 Household Budget Survey.

[4] For more information see: "National Strategy for Growth and Reduction of Poverty" (NSGRP), 2005 (http://www.tz.undp.org/docs/MKUKUTA_20FINAL-June.pdf).

 


Lessons

The following lessons learned from the experience with Tanzania's PRSP/ZPRP have been incorporated into the second generation of poverty reduction strategies in Tanzania:

In addition, the following lessons learned provide for considerations for addressing future challenges:



[1] http://www.tz.undp.org/docs/MDGprogressreport.pdf


Good Practices