By Jehovaness Aikaeli:
Despite the many programmes implemented to reduce rural poverty in
Tanzania, and notably rural development strategies comprising
agricultural programmes inter alia, rural income has not been well
improved; and that remains a critical economic problem.
According to the study on the Determinants of Rural Income in Tanzania
(An Empirical Approach) which was funded by REPOA, Tanzania continues
to be among the poorest economies in the globe (ranking 152 out of 179
countries recorded in the UNDP human development report, 2008) even
after four decades of independence, and this owes mainly to low
income, notably in its rural areas.
More than 80 percent of the country’s poor people live in the villages
and rely on agriculture as their main source of livelihood. Although
human development index for Tanzania rose from 0.4 in 2004 to 0.5 in
2006, poverty is still widespread and acute, and it is essentially a
rural phenomenon. Rural dwellers work under cyclical structural
constraints and they are subject to frequent natural calamities while
at the same time besieged with among others, lack of market linkages,
unavailability of credits, absence/poor irrigation schemes, low
education and inadequate health services.
The major objective of this study, which was done by Jehovaness
Aikaeli, was to estimate determinants of rural income in Tanzania by
exploring, among others, the effects of geographical factors.
The household budget surveys indicate higher and deeper poverty in the
rural areas than in the urban centres, mainly due to relatively low
incomes in the villages. Between 2001 and 2007, poverty decreased but
at a slower pace in rural areas than in the urban areas. This shows
that besides poverty being more severe in the villages, the
alleviation process is less favourable to the poor rural areas than
the urban centres. In terms of the head count index (percentage of
households below the poverty line), the overall basic needs poverty
incidence fell by 2.4 per cent in Mainland Tanzania during 2001–2007,
while in the rural areas it declined by 1.3 per cent. During the
referred period there was an overall decrease in food poverty in the
Mainland by 2.2 per cent in its rural areas it fell by 2.0 per cent.
Analysing the level of education as one of the factors that affect
rural per capita income, the study found 16.2 per cent of all heads of
rural households surveyed did not attend primary school, while 69.5
per cent got primary education and 14.3 percent managed to have
further education, from secondary level to higher education. With
regards to non-farm rural enterprises, about 75 percent of all rural
non-farm entrepreneurs have primary education and the remaining 25
percent got higher than primary education, but most of them ended at
the secondary school level. Education of the household head has
indicated a positive impact on per capita income, indicating that,
investment in education is income improving.
Looking at access to finance, the study found that 60 per cent of the
rural enterprises singled out a problem of little access to loans as
an investment constraint in the villages. Because of difficulties
involved in applying and receiving loans, only 10 percent of rural
households and 19 percent of non-farm rural enterprises indicated
demand for loans, and in general only 12 percent of all applications
got loans.
Markets inaccessibility is the other main constraint facing rural
households. The findings of the study show that transport is one of
the severe constraints to the investment climate which holds back the
marketing process. In most of the communities roads were only passable
seasonally.
With regards to electricity, telecommunications and water
infrastructure, nearly 40 percent of surveyed communities were
electrified; however, most of the households even in those electrified
communities lacked connectivity to power. On average, public
electricity supply was for example interrupted 71 times in 2004. Many
enterprises and households do not have access to telecommunications
altogether.
For example, scarcely 13 percent of all surveyed enterprises had fixed
and/or mobile phones. This apparent communication barrier features as
one of the major impediments demarcating rural people from access to
market information.
The few variables described above show some of the limitations to
rural sector performance in Tanzania.
Despite the many programmes implemented to reduce rural poverty, and
notably rural development strategies comprising agricultural
programmes among other things, rural income had not improved
significantly. This, therefore, leaves a number of questions
unanswered as to why rural income continues to remain low.
The study recommended that the government put more emphasis on the
improvement of schools and their curricula, specifically in the rural
areas. Education is imperative to social capital reform and skills
development that are part and parcel of rural development, as well as
consistent implementation of Land Act reforms to enable more people in
rural areas to develop land.
The study further suggests that the supply of necessary equipment at
affordable prices will be good motivation to rural producers, as well
as encouraging both agriculture and rural non-farm economic activities
for quicker income improvement. Empowering women through the provision
of adequate education and legal reforms for equal opportunities will
have a positive impact on rural income.
The study urges the government to make sure that rural roads
infrastructure including bridges should be maintained to remain
passable throughout the year in order to help linking markets in
addition to the enhancement of communication facilities to offset
information problems.. A crucial question of strengthening the
capacity of the government to combat calamities particularly in the
areas prone to devastating floods and drought is emphasized.
On the government side, its role can be fulfilled in two dimensions:
first, through the provision of public goods either from the
government, or by public-private partnerships; and second, through its
capacity to combat effects of natural calamities when communities are
affected. In the first context, market links by means of information
and communication through telecoms, and the ease with which roads can
connect markets are deemed to be fundamental to rural income
generation.