economic growth, rural growth and poverty dr. donald mmari repoa national poverty policy week 2013 1
TRANSCRIPT
Economic Growth, Economic Growth, Rural Growth and Rural Growth and
PovertyPoverty
Dr. Donald MmariREPOA
National Poverty Policy Week 2013
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OutlineOutline Introduction and context
Growth and income poverty reduction
Rural growth: agricultural output and productivity
Towards improving productivity & competitiveness
Conclusion
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Introduction and ContextIntroduction and ContextProgress on selected goals and targets
of MKUKUTA & various researches
Explores the interplay between economic growth, productivity, and rural poverty
Examples drawn from selected case studies
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Growth and Income Growth and Income Poverty ReductionPoverty ReductionThe economy (GDP) has grown in the last
decade and at a high rate:◦ Average 7% within target (6-8%) by 2010 (6.4% in
2011, and 6.9% in 2012)◦ Attributed to improved infrastructure, energy
availability, & good weather and efforts to supply inputs
◦ GDP per capita growth17.9% in 2012 (Tshs.1,025,038 compared to Tshs 869,436 in 2011)
Growth has also exhibited a strong resilience to external shocks.
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Growth and Income Poverty Reduction-2Growth and Income Poverty Reduction-2
Imports increasing faster than exports (with little diversification)
Poverty rate declined from 33.4 % to 28.2% in 2012 (5.2 percentage point)-significant but still high
Still pervasive in rural areas (33.3% compared to 21.7% in other urban, and 4.1% in Dar es Salaam)
Inequality remained stable at a high level at Gini Coefficient of 0.35 (2007 HBS), BUT all expenditure shares increased but dramatic decline in HH consumption (National accounts 2001-2010)
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Growth and Income Poverty Reduction-3Growth and Income Poverty Reduction-3
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Suggests change in income distribution, especially profits and labour incomes
HH was highest in the 1990s, averaging 82% (71% in 2012)
% share of GDP
Composition of GDP 2001 2010 Change in % share
Gross Investments 17.4 32.0 +14.6
Imports 21.3 38.9 +17.6
Exports 17.0 27.8 +10.8
Government consumption 11.9 16.1 +4.2
Household Consumption 75.0 62.6 -12.4
Growth and Income Poverty Reduction-3Growth and Income Poverty Reduction-3
Agricultural sector growth ◦ Growth averaged 4.3% for ten years, against MKUKUTA
target of 10% by 2010. ( 4.3 % also in 2012), and below GDP growth rate
◦ Agriculture share 21.6 % (24% in 2010, 29% in 2001), but 74% of labour force
◦ Underemployment rising- 13.1% in 2006, up from 4.3% in 1991
◦ 68% percent of labour force young, and 31% migrating
◦ Seasonal, informal and casual labour in non-farm sector
◦ Self employment in informal sector (53% on own farm)
◦ Growth rate of non-monetary agriculture grew faster than monetary agriculture- transformation?
◦ Share of traditional agricultural exports to total exports have declined from 56% in 1996 to 15% in 2010
◦ Replaced by minerals from just 6% to 41% 7
Rural growth: output and Rural growth: output and productivityproductivity
Index of export volume for traditional export crops 1961-2008
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40
60
80
100
120
140
160
exp
ort v
olum
e in
dex
(196
0=10
0)
Rural growth: output and productivity 2Rural growth: output and productivity 2
Productivity of smallholders a big problem for both cash and food crops
Yield of tea per hectare by type of producer
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0.00
2.00
4.00
6.00
8.00
10.00
12.0019
7719
7819
7919
8019
8119
8219
8319
8419
8519
8619
8719
8819
8919
9019
9119
9219
9319
9419
9519
9619
9719
9819
9920
0120
0220
0320
0420
0520
0620
0720
0820
09
Prod
ucti
on in
tons
/hec
tor
Estates Small scale
Rural growth: output and productivity 3Rural growth: output and productivity 3
Comparison of coffee yields –Tanzania and Vietnam
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0
500
1,000
1,500
2,000
2,500
3,000
Yiel
d (K
g/ha
)
Tanzania Vietnam
Rural growth: output and productivity Rural growth: output and productivity 44
Sugarcane yield differences (TCH) by type of producer, 2000/01 and 2007/08
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2000/01 2007/08
Estates Outgrowers Estates Outgrowers
Kilombero 60 30 77 40
Mtibwa 50 47 65 25
Rural growth: output and productivity 5Rural growth: output and productivity 5
Average yield rates by outgrowers 2009/10
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Location Farming type Yield (TCH)
Dwangwa Pivot irrigated 140
Furrow irrigated 115
Rain fed 70
Kilombero Rain fed 37
Mtibwa Rain fed 25
Rural growth: output and productivity 6Rural growth: output and productivity 6
Yield (Tonnes/ha) by type of producers
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Crop SmallholdersLarge-scale
farmers
Banana 6.9 15.8
Coffee 0.4 1.5
Mango 10.5 81.54
Pigeon pea 0.4 2.33
Oranges 8.6 32.23
Palm Oil 19.7 35.77
Maize 0.73 4Sorghum 0.43 2.7
Rural growth: output and productivity 7Rural growth: output and productivity 7
Quality is also a serious concern Share of high grade coffee(1-5) in coffee export
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Towards improving Towards improving productivity and productivity and competitivenesscompetitivenessLow productivity in agriculture directly linked to
intensified poverty for agricultural labour forceSolution to rural growth and poverty revolves
around increased productivity, efficiency & quality
Need to intensify present government commitments (eg. FYDP, MKUKUTA, BRN, Kilimo Kwanza, ASDP), paying attention to:◦ Agricultural support services – skills and training◦ Rural infrastructure –roads, storage, processing◦ Essential economic services-finance, inputs, market
system◦ Institutional/organizational arrangements – policy,
contract farming, land regime◦ Coordination- Agriculture vs other sectors
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ConclusionConclusionThe key message is that growth has
continued to be strong but it has not translated into sufficient employment and productivity increase
Focused approach to target constraints to agricultural productivity, efficiency, and output quality
Supplementary efforts to support growth and employment in labour intensive sectors in rural and urban activities with potential for enhanced linkages
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Conclusion-2Conclusion-2
Harnessing of the growth potential of MSMEs to generate productive employment and decent incomes and productivity enhancement, especially those in rural and peri-urban
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Thank you for your attention
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