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Introduction
The National Strategy for Growth and Reduction of Poverty (NSGRP) is a second national organizing framework for putting the focus on poverty reduction high on the country’s development agenda. The NSGRP is informed by the aspirations of Tanzania’s Development Vision (Vision 2025) for high and shared growth, high quality livelihood, peace, stability and unity, good governance, high quality education and international competitiveness. It is commit ted to the Millennium Development Goals (MDGs), as internationally agreed targets for reducing poverty, hunger, diseases, illiteracy, environmental degradation and discrimination against women by 2015. It strives to widen the space for country ownership and effective participation of civil society, private sector development and fruitful local and external partnerships in development and commitment to regional and other international initiatives for social and economic development.
The NSGRP builds on the Poverty Reduction Strategy Paper (PRS(P)) (2000/01 -02/03), the PRS Review, the Medium Term Plan for Growth and Poverty Reduction and the Tanzania Mini-Tiger Plan 2020 (TMTP2020) that emphasize the growth momentum to fast -track the targets of Vision 2025. The NSGRP is expected to last 5 years, i.e. from 2005/06 to 2009/10. The end point of the strategy
coincides with the targets of the National Poverty Eradication Strategy (NPES - 2010); it is two thirds of the way towards the MDGs (2015) and 15 years toward s the targets of Vision 2025. The longerterm perspective (5 years) is considered to be a better time frame than that of three years. It allows for a more sustained effort of resource mobilisation, implementation and evaluation of the poverty reduction impact.
The strategy requires increased commitment and resources from domestic stakeholders and development partners in the medium term. To increase the effectiveness of aid , Tanzania will pursue the principles laid down by the Tanzania Assistance Strategy (TAS) and Joint Assistance Strategy (JAS) for harmonisation alignment of aid modalities.
Context of the strategy
There has been improved economic performance at the macro-level in the past six years. GDP growth rate consistently rose reaching 6.2 percent in 2002. National Accounts estimates show that the growth rate dropped to 5.6 percent in 2003 due to drought that led to reduced food supplies and decreased power supply. In 2004 there has been a remarkable rise to record 6.7 per cent GDP growth rate. During the same period, inflation has been under control. The annual inflation rate was 4.4 percent in 2003 compared to 6 percent in 2000. The rate increased from 4.0 percent in July 2003 to 4.6 percent at the end of March 2004 due to drought and the sharp rise in oil prices. Foreign reserves reached 8.9 “months of imports” compared to 6.3 “months of imports” in 2000. At the end of March 2004, the reserves could cover imports of goods and services for about 8 months, which is above the target of 6
months. The nominal exchange rate is market-determined with interventions limited to smoothing fluctuations.
Increases in investments in infrastructure such as roads, telecommunications, mining and tourism have been recorded owing to increased inflows of foreign di rect investments (FDI) and domestic revenue effort. Progress has been noted in the social services and public support services. Significant improvement in performance is evident in areas such as primary education and road network. Overall, the current levels of delivery of services require further improvements in quantity and quality, which calls for sustained investments in all sectors.
These positive results reflect years of enduring structural reforms in a stable social -political environment, underpinned by implementation of the three years of the PRS(P) which focused more on priority social sectors. A number of challenges remain, including maintaining socio -political stability as the country strives for still higher economic growth, equity and improved q uality of life. The target GDP growth rate for the NSGRP is estimated to be 6 -8 percent per annum over the period 2005-10.
However, policies will be required to ensure that the pattern of growth is pro poor and benefits at the macro-level are translated into micro-level welfare outcomes.
The PRS(P) was linked to debt relief under the enhanced High Indebted Poor Countries (HIPC) initiative. Debt relief and other resources were mainly channelled into “priority sectors” of education, health, water, agriculture, rural roads, the judiciary and land. S pending on these areas was considered to have greater impact on poverty reduction. However, the resources were not sufficient, for the “priority sectors” to achieve the envisaged goals and targets over three years. To that effect, poverty and inequality levels are still high. Hence, it will require all sectors and much more resources to bring about growth that is required to reach the targets of poverty reduction outcomes in this strategy. For this reason, the NSGRP adopts the “outcomes-approach” which counts on the contribution of all sectors towards specific outcomes on growth, improved quality of life, good governance and equity. The approach encourages inter-sector collaboration in devising more efficient ways of achieving these
outcomes.
The PRS(P) was linked to debt relief under the enhanced High Indebted Poor Countries (HIPC) initiative. Debt relief and other resources were mainly channelled into “priority sectors” of education, health, water, agriculture, rural roads, the judiciary and land. S pending on these areas was considered to have greater impact on poverty reduction. However, the resources were not sufficient, for the “priority sectors” to achieve the envisaged goals and targets over three years. To that effect, poverty
and inequality levels are still high. Hence, it will require all sectors and much more resources to bring about growth that is required to reach the targets of poverty reduction outcomes in this strategy. For this reason, the NSGRP adopts the “outcomes-approach” which counts on the contribution of all sectors towards specific outcomes on growth, improved quality of life, good governance and equity. The approach encourages inter-sector collaboration in devising more efficient ways of achieving these
outcomes.
The strategy pays greater attention to further stimulating domestic saving and private investment response, infrastructure development, human resource development, increased investments in quality education, science and technology and use of Information and Communication Technologies (ICTs), a competitive knowledge-based economy and an efficient government. In addition, the strategy seeks to:
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Deepen ownership and inclusion in policy-making processes by recognising the need to institutionalise participation rather than a one-off event. Public debate on growth, equity and governance issues will continue throughout the five years of the strategy, along with arrangements for monitoring and evaluation;
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Pay greater attention to mainstreaming cross-cutting issues - HIV and AIDS, gender, environment, employment, governance, children, youth, elderly, disabled and settlements; and
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Address discriminatory laws, customs and practices that retard socio -economic development or negatively affect vulnerable social groups.1
There has been, in the meantime, improved understanding of the characteristics of poverty such as levels and geographic pattern of poverty and inequality and vulnerability. The emerging poverty issues and strategic options have been included. These have increased pressure for results and additional financing requirement.
Embarking on a “new approach” presents formidable challenges. Foremost of these, relate to setting criteria for prioritisation as part of implementation planning. Criteria that will guide prioritisation will be informed by, among others, the on-going commitments; quick win strategies with immediate and wide or broad coverage of the poor (e.g. governance reforms, micro-credit, child nutrition, malaria and HIV and AIDS, water programmes, agricultural productivity, trade, communications and others);
and those that demonstrate greater inter-dependence between/among sectors. The policy packages and indicative “groupings” for collaboration of sectors and other actors towar d specific outcomes and targets (see Annex) were arrived at through sector consultations. Activities and associated budgeting will be done as part of the PER/MTEF and sector development review processes based on the desired outcomes of the NSGRP.
Mobilisation of domestic resources will be accelerated through improvement in tax administration, enhanced domestic savings and mobilisation of community and private sector resources. In addition to seeking more foreign aid, the Government will ensure that the obje ctives of debt sustainability, and macroeconomic stability, are attained, and business-environment conducive to private sector development and foreign investments is in place. The NSGRP emphasises accountability in the use of both domestic and foreign resources.
Outline
The NSGRP has eight chapters. Chapter II presents the status of poverty and challenges ahead. Chapter III outlines the consultation process while Chapter IV spells out the framework of the strategy. Chapter V outlines the strategy in details. Implementation arrangements are discussed in Chapter VI and monitoring and evaluation in Chapter VII. Chapter VIII presents the financing arrangements for the strategy.
Footnotes:
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Throughout the text, these include children, persons with disabilities, youths (unemployed, youths with unreliable income and female youths), and elderly persons, people living with long illness and HIV and AIDS, women (widows, other women
who are not able to support themselves). Drug addicts and alcoholics can also be included.
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