2011.02-Working Paper-Tanzanian Government Poverty Alleviation Strategiess

Tanzanian Government Poverty Alleviation Strategies —Philippa Brant 1

  　　The importance of countries developing clear and comprehensive development and poverty alleviation strategies has become undeniable. Since its independence in 1961, and union with Zanzibar in 1964, the United Republic of Tanzania has formulated various plans to guide its economic development and poverty alleviation. This paper charts the changes in Tanzania’s underlying development philosophy and policies as evidenced through the Tanzanian Government’s poverty alleviation strategies. It can be divided into three broad stages. The immediate post-independence era was characterised by a socialist development philosophy and policy of self-reliance; despite being wellintentioned, severe economic concerns ultimately lead to the adoption of structural adjustment policies in the 1980s and 1990s; and, towards the end of the twentieth century, the need to place poverty reduction at the forefront was recognised through the formulation of national strategies for growth and poverty reduction. These strategies, and their effective implementation, are fundamental to the Tanzanian Government’s efforts to achieve sustainable growth and social wellbeing for its people.

Socialist Development and Self-Reliance

  　　The first development strategy espoused by the Tanzanian Government itself after independence was the Arusha Declaration; a socialist development model to guide Tanzania’s policies and contribute to alleviating poverty. Declared in 1967 by President Nyerere, the strategy was based on providing basic social needs to peasants while preserving the peasant mode of production. Uniquely for the time, President Nyerere envisaged socialism without revolution and upheaval.
  　　The policy was to build a socialist state under a democratic socialist government, which must be chosen and led by the peasants and workers themselves. It included the formation and maintenance of cooperative
organisations, government nationalisation of the principal means of production, and government facilitatation of
collective ownership of the resources of the country. The key aspect was to achieve development through
socialism and self-reliance. Indeed, embracing the tenets of ‘Third World’ dependency theory, the Arusha Declaration states: “It is stupid to rely on money as the major instrument of development when we know
only too well that our country is poor. It is equally stupid, indeed even more stupid, for us to imagine that we shall
rid ourselves of our poverty through foreign financial assistance rather than our own financial resources.” The Tanzanian Government focused on improving the lives of people in rural areas and shifted priority from urban-led industrialisation to agricultural development. The objective was to create a society of equals, and all capable citizens were required to work.

  　　There is voluminous literature debating the pros and cons of the Arusha Declaration policies. Throughout the 1970s this strategy was supported by many within the international community, particularly the socialdemocratic
countries such as Canada, the Netherlands and the Scandinavian nations. The poverty orientation of Nyerere’s policies also met with support from the World Bank for a number of years. Nyerere was seen as enlightened and his policies well-intentioned and inspired by humanitarian concerns. However, as early as the mid-1970s the Tanzanian economy was suffering from the negative effects of its ambitious and increasingly unrealistic development policies.
  　　The late 1970s and early 1980s were characterised by disagreements between the Tanzanian Government and the World Bank/IMF over the best strategy to pursue to correct the increasingly dire economic situation in the country. A series of negative external shocks exacerbated the economic problems, including the oil crisis, sharp drop in the previously-high coffee prices, and the war with Uganda. The World Bank and IMF became increasingly concerned about the rapid inflation, balance-of-payments problems, and the domestic price system and exchange rate policies. The Government was frequently unable to provide basic services and the distribution of goods was stifled by bureaucratic red tape. Nyerere instigated self-imposed austerity measures through the National Economic
Survival Plan (1981-82) and the Structural Adjustment Program (1982-86), designed to address the economic problems and at the same time maintain the integrity of the Arusha Declaration principles by avoiding the IMF/World Bank policy prescriptions. However, this period saw increased disillusionment with Nyerere’sleadership,both with in Tanzania and from the‘friendly’donor countries. In 1985, Nyerere voluntarily resigned as President.

Structural Adjustment Policies

  　　The new Tanzanian Government, led by Ali Hassan Mwinyi, signed an agreement with the IMF (and subsequently with the World Bank), signifying a radical change of direction in economic policy. Through the 1986 Economic Recovery Program and the 1989 Economic and Social Adjustment Program a series of short-term stabilisation measures and measures aimed at stimulating growth were implemented. These encompassed: liberalisation of domestic and foreign trade policies, privatisation of key economic sectors, establishment of a private banking system, foreign ownership of Tanzanian enterprises, and so on. However, much as the same way as in other developing countries throughout the world, the SAPs resulted in increasing social problems and poverty in both urban and rural areas. As the African Business magazine of September 1994 explained: “The removal of subsidies
on consumer items, wage freezes, the introduction of consumer charges on social services, and the laying off of
workers...have all combined to make life very tough...”. The poverty and development situation in Tanzania
became very problematic in the early-mid 1990s, with the IMF and other donors suspending assistance; their concern further exaccerbated by a massive tax and corruption scandal that erupted in 1994.
  　　In response to the increasing tensions and crisis in Government of Tanzania-donor relations, the Danish Government commissioned an investigation to find a way forward. The 1996 Report of Independent Advisors on Development Cooperation Issues Between Tanzania and its Aid Donors criticised all sides in their handling of
issues and, in addition to recommending the government set up an aid coordination unit, the report argued that
“both to improve effective utilisation of foreign aid and to mobilise and utilise domestic resources efficiently to
promote poverty alleviating growth, Tanzania’s national leadership needs to articulate a development vision – a
vision that inspires its own population and provides hope for the future.” In 1996 the IMF approved a new loan of
US$ 234 million, which had a domino effect, paving the way for other donors to increase their aid and provide debt relief, and for commercial banks to provide loans.

Development Vision 2025

  　　In 1996 Tanzania created a vision to guide its development into the twenty-first century, replacing its previous strategy, the Arusha Declaration. Vision 2025 is an ambitious document, designed to mobilise efforts towards improving the conditions in Tanzania; to become a middle-income country free from poverty. It articulates that Tanzania in 2025 will be a place with: high quality livelihood; peace, stability and unity; good governance; a well-educated and learning society; and a competitive economy capable of producing sustainable growth and shared benefits. The Vision recognises impediments to realising previous visions and strategies, including: dependency on donors, weak capacity for economic management, failures in good governance, and ineffective implementation
mechanisms. The Vision was developed through extensive consultation with all facets of society, and benefited from the financial and technical assistance of the UNDP, Japan and Ireland.
  　　There are three main driving forces for achieving the Vision, each of which has numerous elements within them. They encompass: A developmental mindset imbued with confidence, commitment and empowering
cultural values, including (i) development oriented culture of hard work and creativity, (ii) culture of saving and investment, (iii) developmental community spirit, (iv) broad human development strategy, (v) a learning society, (vi) incentive system to reward such attributes as excellence, creativity, innovation, and (vii) education as a strategic change agent. The second driver is competence and spirit of competitiveness, including: (i) sound macroeconomic management, (ii) infrastructural development, (iii) promotion of science and technology education, (iv) promotion of Information and Communication Technologies (ICTs), (v) utilisation of domestic resources, (vi) transformation of the
economy towards competitiveness, (vii) development of the capacity to anticipate and respond to external changes. The third driving force is good governance and rule of law, including: (i) unleashing the power of the market and private sector, (ii) striking a balance between the State and other institutions, and (iii) promoting democratic and popular participation. Overall, Development Vision 2025 seeks to improve the quality of life of all citizens through building a strong and resilient economy.

National Poverty Eradication Strategy
  　　At the 1995 World Social Summit in Copenhagen, Tanzania pledged its commitment to eradicate poverty. In order to achieve its objective of reducing abject poverty by 50 percent by 2010, and total eradication of abject poverty by 2025, the Government formulated a National Poverty Eradication Strategy (1998) to guide poverty reduction programs in the mid-term. The NPES emphasises the importance of economic growth and improvement in social services. It stresses the different and mutually important roles of government, private sector, NGOs, donors, and the people in poverty eradication. In the preamble it states: ‘Despite the fact  that the Government has a role to create an enabling environment for poverty eradication, it is the duty of individuals to resolve and work towards eradicating
poverty’ (NPES 1998, p. viii). The UNDP provided financial and technical assistance in formulating this strategy.
  　　The strategy identifies the causes of poverty in Tanzania, relating to both internal and external factors. Internal
factors are: i) economic policies that did not promote growth, ii) insufficient support to the agricultural sector, iii) inadequate support to rural industries, iv) disruption of local institutional structures, denying participation of the people, v) low level technology leading to low productivity, vi) poor gender division of labour, vii) laziness, irresponsibility and lack of self-motivation, viii) diseases, and ix) big families. The external factors are: i) debt burden (equal to approximately 39 percent of recurrent budget in 1997), ii) unequal exchange in international trade, and iii) refugees from neighbouring countries.
  　　The NPES also outlines the challenges facing the poverty eradication initiatives. These include, the dependency syndrome – of people on the government and of the government on donors; issues in accountability,
transparency, and good management of resources; unfavorable terms of trade and unfair competition; the need to develop social safety nets to mitigate negative effects of the social and economic structural changes; population growth; poor transportation systems and infrastructure; and the need to increase participation and social mobilisation.
  　　Specific goals focus on improved economic growth and people’s income as a basis for poverty eradication,
and the provision of education, water, health, housing, infrastructure and employment by 2010. The strategies and policies are classified into three groups: those creating an enabling environment, those building capacity, and those focused on sectoral policies and strategies. The first requires adherence to the principles of good governance, coordination, and people’s participation, the second requires enhanced economic capacity and the third focuses on priority areas of education, health, water supply, employment, environment, and settlement. The NPES also creates an important implementation framework for achieving the poverty eradication objectives.

Poverty Reduction Strategy Papers

  　　As a requirement for access to debt relief through the Heavily Indebted Poor Countries (HIPC) initiative, the
Government of Tanzania needed to formulate a Poverty Reduction Strategy Paper (PRSP 2000-2005). The PRSP
concentrated on efforts aimed at (i) reducing income poverty, (ii) improving human capabilities, survival
and social wellbeing, and (iii) containing extreme vulnerability among the poor.
  　　The broad agenda of reforms ,in cluding the establishment of effective poverty monitoring and surveying systems, were mainly designed in the context of World Bank, IMF, and other international donors’support. This strategy also saw the introduction of the idea of ‘mainstreaming’ or ‘cross-cutting areas’, such as gender, the environment and HIV/AIDS. It was identified though that the poverty reduction program would be constrained severely by available resources. Specific government interventions identified in the strategy were the abolition of primary school fees, catalysing local communities in self-help endeavours (i.e. to construct classrooms, water facilities etc), and employment creation through skill development. A list of key indicators and objectives was developed to guide
and monitor progress.
  　　A major concern with the structural adjustment policies and PRSPs is that they require integration of a comprehensive macroeconomic framework that simultaneously tries to incorporate pro-growth and pro-poor strategies and attaches highest priority to global economic integration (Craig & Porter 2003). Like many countries, Tanzania has felt the effects of these social and economic structural changes and thus the subsequent strategies have tried to address these issues.

MKUKUTAI : National Strategy for Growth and Reduction of Poverty (NSGRP) 2005-2010

  　　MKUKUTA is an instrument for focusing strategies and mobilising resources towards poverty reduction in Tanzania, particularly focusing on equitable growth and improved governance. Completed in 2005 for implementation in the 2005-2010 period, it follows the first generation Poverty Reduction Strategy Paper of 2000. MKUKUTA is centred around three clusters which MKUKUTAI : National Strategy for Growth and Reduction of Poverty
(NSGRP) 2005-2010 are interrelated and mutually reinforcing and it includes specific targets for poverty reduction outcomes. It was developed in consultation with government, Parliament, faith-based groups, the private sector, civil society, districts and villages, and development partners, and is heralded as a key example of good ‘national
ownership’of a development strategy.
  　　The desired outcomes for poverty reduction are: i) growth and reduction of income poverty; ii) improved quality of life and social well-being; and iii) good governance and accountability. The strategy signifies a shift from priority sector-based to outcome-based poverty initiatives.

Cluster I: Growth and Reduction of Income Poverty
  　　Broad outcome:
  　　Broad based and equitable growth is achieved and sustained

  　　Goals:
  　　· Ensuring sound economic management.
  　　· Promoting sustainable and broad-based growth.
  　　· Improving food availability and accessibility.
  　　· Reducing income poverty of both men and women in rural areas.
  　　·  Reducing income poverty of both men and women in urban areas.
  　　· Provision of reliable and affordable energy to consumers.
Cluster II: Improvement of Quality of Life and Social Well-Being

Broad outcomes:
  　　· Quality of life and social well-being, with particular focus on the poorest and most vulnerable groups improved
  　　· Inequalities in outcomes (e.g. education, survival, health) across geographic, income, age, gender and other groups reduced
Goals:
  　　· Ensuring equitable access to quality primary and secondary education for boys and girls, universal literacy among men and
women and expansion of higher, technical and vocational education.
  　　·  Improved survival, health and well-being of all children and women and of specially vulnerable groups
  　　· Access to clean, affordable and safe water, sanitation, decent shelter and a safe and sustainable environment and thereby, reduced vulnerability from environmental risk.
  　　· Adequate social protection and provision of basic needs and services for the vulnerable and needy.
  　　·  Effective systems to ensure universal access to quality and affordable public services.
Cluster III: Governance and Accountability
Broad outcomes:
  　　·  Good governance and the rule of law
  　　· Accountability of leaders and public servants
  　　· Democracy and political and social tolerance
  　　· Peace, political stability, national unity and social cohesion deepened
Goals:
　　· Structures and systems of governance as well as the rule of law are democratic, participatory, representative, accountable and inclusive.
  　　· Equitable allocation of public resources with corruption effectively addressed
  　　· Effective public service framework in place to provide foundation for service delivery improvements and poverty reduction
  　　· Rights of the poor and vulnerable groups are protected and promoted in the justice system
  　　· Reduction of political and social exclusion and intolerance
  　　· Improved personal and material security, reduced crime, eliminate sexual abuse and domestic violence
  　　· National cultural identities enhanced and promoted

MKUKUTA Review

  　　In order to inform the new policy to followon from MKUKUTAI , a review was conducted by the government, including consultations with key stakeholders and local communities. A number of challenges with the process and strategy were identified through the review. These include: implementation of MKUKUTA has shown that what was envisaged has only worked partially- some areas, such as alignment of systems, processes and program, and sector coordination, have not been fully accomplished; the outcome-based orientation of MKUKUTA has not been fully internalised by all key actors/implementers; concerns about pro-poor growth – there needs to be sharper focus on linking growth and poverty reduction through interventions such as increased infrastructure development, agricultural productivity, long-term finance, entrepreneurship development, and overall strengthening of the business environment; MKUKUTA enhanced the principles of government leadership, national ownership and result-orientation, but the JAST principles, General Budget Support and untied aid have not been fully embraced by development partners; need to localise development frameworks and associated processes of budgeting and monitoring; core and sectoral reforms instituted in the past decade have had mixed results; inadequate capacity in many LGAs in terms of human resource, project/ program implementation, poor reporting and financial management, and accountability has been a concern in implementation of MKUKUTA; lack of unifying growth strategy to guide strategic direction of investments and interventions; Decentralisation by Devolution
Policy (D by D) highlights insufficient human capacity;

  　　unpredictability of Medium Term Expenditure Framework (variations in figures compared with estimates); and,
capacity constraints in undertaking monitoring and evaluation processes. Overall, the biggest concern was that the relatively good economic growth has not yet been translated into significant poverty reduction results and improvements in the social wellbeing of the communities. The subsequent strategy has endeavoured to address these identified challenges and issues.

MKUKUTAII : N a t i o n a l Strategy for Growth and Reduction of Poverty 2010-2015 (Draft)

  　　MKUKUTA II is in the final stages of drafting for implementation in the period 2010/2011 – 2014/2015. It builds upon MKUKUTA I including incorporating monitoring and evaluation results and consultation with key stakeholders. Its emphasis continues to be on the role of governance and growth for poverty reduction. The strategy is built upon four key fundamentals: (i) efficient use and development of factors of production, including human capital/resources; (ii) strengthening and establishing well-functioning institutions and markets; (iii) provision of infrastructure; and (iv) ensuring good economic governance.

Strategies & Objectives
  　　Cluster I: Growth for reduction of income poverty The overall objective is to sustain a high growth rate of the economy in an exclusive and poverty-reducing way. The strategy is to create income opportunities across all sectors of society through pro-poor public investment and empowerment arrangements in order to generate more equitable participation in production and sharing of benefits. Efforts will be directed towards areas identified as the country’s growth drivers, namely, agriculture, infrastructure, tourism, manufacturing and mining, taking into account Tanzania’s comparative and competitive advantages. Rural development and agriculture is a priority sector as this encompasses the majority of the population and the majority of the poor population.
  　　The broad outcomes are: (i) inclusive and accelerated growth achieved and sustained, (ii) employment
opportunities for all, including women and youth, created, and (iii) good economic governance ensured and enhanced. Policies and interventions are directed towards the following five overarching goals, each with a number of operational targets and interventions:
  　　1. Pursuing sound macroeconomic management
  　　2. Reducing income poverty through promoting inclusive, sustainable and employment-enhancing growth
  　　3. E nsuring creat ion of p rod uct ive and d ecent employment, especially for women and youth
  　　4. Ensuring food security and climate change mitigation
  　　5. Allocating and utilising national resources equitably and efficiently for growth and poverty reduction, especially in rural areas
Cluster II: Improvement of Quality of Life and Social Wellbeing
  　　The strategy focuses on improving the quality of social services - education, survival, health, safe and clean water, sanitation, decent shelter, and a safe and sustainable environment – and on delivery to the targeted majority poor. In addition to improved wellbeing, the objective is to create human capital through a learning population. This encompasses two broad outcomes: (i) quality of life and social wellbeing for enhancing capabilities, with particular focus on the poorest and most vulnerable groups, improved, and (ii) inequities in accessing economic opportunities,
environment and natural resources, and social services along geographical areas, income, age and gender, reduced. Policies and interventions are directed towards the following six overarching goals, each with a number of operational targets and interventions:
  　　1. Ensuring equitable access to quality education at all levels for males and females, and universal literacy for adults, both men and women
  　　2. Ensuring expansion of higher, technical and vocational education to support growth
  　　3. Improving survival, health and wellbeing of all children, women and vulnerable groups
  　　4. Increasing access to affordable clean and safe water, sanitation and hygiene
  　　5. Developing decent human settlements while sustaining environmental quality
  　　6. Providing adequate social protection and rights of the vulnerable and needy groups with basic needs, services and protection
Cluster III: Governance and Accountability
  　　Governance and accountability are considered fundamental components in achieving a favorable environment for economic growth and poverty reduction. Building upon best practices and objectives identified in MKUKUTA I, this strategy seeks to address further constraints to good governance. In particular, it works towards provision of a sound policy environment,including provision and enforcement of property rights, human rights, an efficient regulatory regime, absence of corruption and appropriate institutions to support peaceful human coexistence. Issues relating to
governance around natural resource activities, such as mining and tourism, are a particular concern. The three
broad outcomes in this area are: (i) democracy, good governance, human rights and the rule of law deepened and ensured, (ii) peace, political stability, social cohesion and national unity consolidated and sustained,
and (iii) accountable, responsive, effective and efficient leadership in public service ensured. Policies and
interventions are directed towards the following five overarching goals, each with a number of operational targets and interventions:
  　　1. Ensuring systems and structures of governance uphold the rule of law and are democratic, effective, accountable, predictable, transparent, inclusive and corruption-free at all levels
  　　2. Improving public service delivery, especially to the poor and vulnerable
  　　3. Promoting and protecting human rights, particularly rights of poor women, children, men and more vulnerable citizens
  　　4. Improving national, personal and material security
  　　5. Promoting and protecting culture of patriotism, hard work, moral integrity, self-confidence and cultural
diversity and inter-cultural dialogue

  　　The goals and priorities of MKUKUTA II are very similar to those outlined in MKUKUTA I, with some slight rewording or combining and splitting of goals. The only notable difference was the addition of ‘climate change mitigation’ alongside food security in Cluster I, reflecting the impact of these global challenges.

Interdependence and Cross-Cutting Themes
  　　The strategy acknowledges that the three clusters are mutually reinforcing; growth cannot be achieved without
a healthy and well educated population and growth facilitates resources which are needed to invest in social well being and development. Neither growth nor wellbeing is possible if resources are misappropriated, or there is an ineffective policy environment or insufficient social protection. In addition, the strategy identifies cross-cutting issues that impact all three clusters, such as the environment and HIV/AIDS. The interdependence of goals within and across clusters poses challenges to the specification and measurement of operational targets and initiatives. MKUKUTA II identifies employment as a major link between growth and poverty reduction and thus brings it in as a key cross-cutting issue within the strategy. A rights-based perspective to all issues will continue to be stressed.
Implementation
  　　Public-private partnerships: Because of public sector constraints in budgetary resources and financing capacity, the government is encouraging private sector investment and participation in key areas, particularly public utilities and infrastructure such as roads, ports, power, water supply, and waste management services. Government incentives, guarantees and appropriate institutional mechanisms will be further developed to help facilitate private sector involvement and partnerships with the state. Capacity Development: The Government recognises that human resources remains one of the critical constraints in the successful implementation of MKUKUTA II. It is thus crucial to build the human resource base and improve technical capabilities of personnel and institutions to improve service delivery. Technical Assistance will primarily be directed toward capacity development. South-South Cooperation is identified as a key modality for capacity development.
Financing Arrangements
  　　Significantly,the Government of Tanzania has determined that 80 percent of Tanzania’s total budget will be directed towards MKUKUTA II, affording poverty reduction the highest priority. Within the MKUKUTA II budget, 50 percent will be directed towards Cluster I, 40 percent to Cluster II, and 10 percent to specific measures in Cluster III. The Government recognises that the gap between domestic resources and total MKUKUTA II budget is approximately 40 percent, which will need to be funded from external sources. Current donor commitments are less than the total financing gap, so additional resources will be required. If additional funds are not found MKUKUTA II interventions will need to be scaled-down.

Conclusion
  　　A number of issues have been identified by the Government that may impact on the ability to reduce poverty. These include: the translation of growth into poverty reduction; financing gap, including lack of aid predictability; human capacity constraints; institutional weakness; and service delivery.
  　　Whilst Tanzania has had extensive development and poverty alleviation strategies and visions since its
independence, the challenge has been, and continues to be, in implementation. It is the responsibility of both
the Tanzanian Government and the international donors to develop policies in line with these objectives, direct
funds towards priority areas, and address the identified implementation challenges.
  　　The Tanzanian Government is lauded for its longterm planning, comprehensive strategies and national ownership, although the massive financing gap between available resources – government and donor – and the
policies and programs identified in the current strategy and Vision 2025 highlight the difficulties in developing
poverty alleviation plans that are both comprehensive and detailed yet also clear and achievable.

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