Tanzania’s Economic Growth Pattern Analysis And Its Impact On Participants

The economic growth of Tanzania has been stable, impressive and growing fast at an average rate of 7% since 2000, but with minimum impact on poverty reduction. Recently, Tanzania Development Vision(TDV-2025) set a goal, that is, to transform the nation into a semi-industrial or middle income nation. This goal created a need to investigate whether Tanzania’s economic growth benefit all the groups(poor and rich) that contribute to its growth.The study was conducted based on five objectives; the first objective investigated the economic growth pattern and behavior of the productive sectors. The second objective was to show the relation between sectors during economic transformation and beyond economic growth. The results of the two objectives indicate that, despite the haphazard structural changes, there is a direct connection between structural changes and economic growth. Whereby, a 1% increase of pupils/students in primary, secondary, high school, vocational/college and university, create a change of 0.25%, 0.14%, 0.74%, 0.33% and 0.63% to the employment respectively. Similarly, a 1% changes to the employment in agriculture, industry and service sectors increase GDP by 0.322%, 0.092% and 0.208% respectively. Therefore, education is the determinant factor for changes in the employment, while employment triggers changes in the GDP.The third objective assessed the agricultural sector’s wider role in economic growth and its impact on poverty reduction, based on the agricultural and farmer’s income scenarios. The results indicate that an increase in population(household size) and poorer quality public services tend to exacerbate poverty and accelerate structural transformation. As a result, the majority of the poor are left behind. However, there is no sufficient evidence that shows a connection and attribution between economic growth and improvement of farmers’ income and or poverty reduction. Therefore, economic growth and farmers’ incomes are increasing with the shift of labour forces from agriculture to nonagricultural activities which instigates poverty in rural areas. The fourth objective investigated equitable ways of sharing the resources. The results show that poor people benefited disproportionately from economic growth in the regime period of 2007–2012, unlike in the regime period of 2001–07. In other words, economic growth benefitted the higher income group of people, due to widespread corruption and unaccountability within the government. The situation requires major positive changes in the way the government manages public resources and provide services. The priorities should be the need for increases in productivity, transparency and accountability.The final objective narrates constraints to economic growth and provides insight for effective growth that will accelerate poverty reduction while enhancing inclusive growth. Although the results shows relatively inclusive growth, but high growth rates in GDP do not necessarily affect standards of living for everyone, unless the change is greater than the change in the population growth rate over the same period. If the economic growth rate is higher than the population growth rate, the impact of the GDP will be reflected in the results in poverty reduction.