The Political Economy of Poverty Reduction in Tanzania

Background

DEEP is committed to accelerating progress in tackling extreme poverty in Tanzania by supporting the implementation of policies, strategies, and investments that more effectively target the poorest and address the underlying barriers and opportunities for poverty reduction. As part of this commitment, DEEP is developing a research engagement strategy that reflects the political economy of poverty reduction in Tanzania. This briefing note is intended to inform the DEEP Challenge Fund, which will commission new research, and to guide how both this new research and findings from related DEEP studies can meaningfully contribute to poverty reduction efforts in Tanzania during the DEEP programme and beyond.

Recommended citation

Lenhardt, A. and Temu, A and Muranganwa, P. (2024). The political economy of poverty reduction in Tanzania. Data & Evidence to End Extreme Poverty (DEEP), Oxford Policy Management.

https://doi.org/10.55158/DEEPPB2

Overview of poverty trends in Tanzania

The extreme poverty rate, as measured by the international poverty line, remained unchanged in Tanzania between the last two survey periods recorded by the World Bank (2012–2018). This contrasts with the preceding decade during which poverty nearly halved from a peak of 84% in 2000 to 45% in 2011. The stable rate of extreme poverty between 2011 and 2018 also translated into 4 million more people living in extreme poverty in 2018 compared to 2011, taking into account population growth. Although Tanzania’s poverty rate remains one of the lowest among neighbouring countries (only Kenya’s is lower), progress on extreme poverty reduction seems to have plateaued and there is a significant risk of reversal with persistent threats to livelihoods and wellbeing such as global economic shocks (Covid-19, the war in Ukraine), climate change and disease outbreaks.

Meanwhile economic growth has been relatively high in Tanzania: between 2011 and 2018, GDP growth averaged 6.4%. The fact that poverty remained stable during this period of significant economic growth suggests that the benefits have not been pro-poor. However, the preceding decade where growth rates were similar can be considered pro-poor. Key questions are thus: (1) What has been the state of political economy of poverty reduction across different political and economic development phases of Tanzania? (2) What has happened during such phases in terms of policies, strategies and investments, and what lessons can be learnt from the poverty plateauing period of 2011 to 2018?

Tanzania shifted to ‘growth from above’ between 2011 and 2018, primarily driven by mineral exports, mainly gold, that had minimal impacts on poverty

Pattern 1: Rural versus urban poverty

The political economy of poverty in Tanzania is most clearly reflected in the stark imbalance between policies, strategies and investments in rural and urban areas. Despite promises in political manifestos, Tanzania’s political economy has struggled to meaningfully address the rural–urban divide, resulting in persistent exclusion and poverty, particularly extreme poverty, in rural regions. Rural areas suffer from low agricultural productivity, largely due to inadequate infrastructure, limited access to credit, and poor integration into markets. In contrast, urban areas disproportionately benefit from government investments in a broad array of infrastructure and social services. Addressing these imbalances is essential for Tanzania to effectively tackle extreme poverty. This challenge is well covered in World Bank (2019), see also Tacoli et al. (2015). It is clear that forthcoming policies, strategies and investments must address the rural–urban divide in Tanzania.

Pattern 2: Growth from below versus from above

A study by the Chronic Poverty Advisory Network (CPAN) (Shepherd et al. 2019), which combined quantitative and qualitative evidence from multiple sources, highlighted key factors driving ‘growth from below’. In the decade leading up to 2015, sustained exits from poverty in Tanzania were attributed to asset accumulation in farming, the growth of non-farm businesses, investments in housing and transport, and increased savings. Education, particularly secondary, played a critical role, alongside diversification into agriculture and non-farm businesses that required significant start-up costs. These efforts were bolstered by entrepreneurship, strong business partnerships, stable and mutually supportive spouse relationships, access to loans, and upward mobility in the financial sector.

Conversely, factors contributing to temporary escapes from poverty (that is, where people exit from but later fall back into poverty) included poor livestock productivity, vulnerability to disease, theft and conflict, as well as land loss – especially for female-headed households. Additionally, shocks such as the death of a breadwinner, poor health and financial hardships, often compounded by multiple crises, pushed households back into poverty. During this period, the Tanzanian government took firm measures to improve policy implementation and poverty reduction strategies, including combating corruption and developing policies in social protection and health insurance (Golooba-Mutebi 2019). Although ‘growth from below’ occurred in Tanzania, it was noted that this growth was ‘not particularly facilitated by policy measures’ (Ibid). The development of competitive agroprocessing, such as the sunflower seed industry, serves as an example of this grassroots-driven growth.

Tanzania shifted to ‘growth from above’ between 2011 and 2018, primarily driven by mineral exports, mainly gold, that had minimal impacts on poverty. Failure to harness the potential in minerals for poverty reduction was observed even during the period of declining poverty (2000–2011), and it is argued that poverty could have dropped to lower than 40% if mining had contributed to wealth distribution. For example, (Curtis et al. 2008; Cooksey 2012a) critique the failure of the mining sector to contribute to poverty reduction despite having a high export growth rate. The same observation was made during the poverty plateauing period. Analysts such as Mashindano (2009) discerned the weak relationship between the mining sector’s exports, economic growth in general, and poverty reduction in Tanzania.

This is critically important considering that the country intends to harness oil, gas and other precious minerals such as helium, nickel and uranium. Without correct policies, strategies and investments designed to ensure equitable distribution, the economy will continue to grow in terms of export earnings and GDP, but poverty reduction will stagnate or slowly decline. The warning is evident in literature (see Kinyondo 2024; Kinyondo et al. 2017; Kabemba 2016). Curtis and Lissu (2008) use the term ‘trickling down’ to discuss the potential for mining to benefit people living in poverty, meaning that this is a form of growth ‘from the top’. They argue that, despite multinational companies extracting gold, the economic benefits have not trickled down to local populations, especially in rural areas – further augmenting the rural–urban divide.

Unfavourable mining contracts signed with foreign mining companies, evidenced by litigations when revoked by subsequent regimes, highlight one of the challenges – the potential for a ‘resource curse’. This phenomenon is where countries rich in oil, gas and precious minerals like nickel and helium experience high economic growth but manifest limited improvements in poverty reduction. Examples of such litigations in Tanzania include: The Ntaka Hill Nickel Project Dispute (2023), Acacia Mining versus Tanzanian Government (2017) and Petra Diamonds Dispute (2021). Gold, natural gas and other resources have boosted export earnings and GDP, but poverty levels, especially in rural areas, remain high. The political economy of poverty within the mining nexus deserves attention as Tanzania articulates its Vision 2050. Growth from natural resources often shifts focus away from other areas, as both politics and economics target these resources, further affecting
efforts to redress poverty.

Distribution of power and responsibilities for poverty reduction policy

Executive, legislative and political power and leadership are crucial in addressing poverty. Authorities, the wealthy, and elites, especially when intertwined, may resist strong redistributive policies, strategies, programmes and projects. Powerful interest groups can shape and enforce policies and other measures to protect their interests and, in the process, deny others from entering the beneficiaries’ circle. Recognising and understanding these dynamics is key not only for effective analysis, but also articulation, of poverty reduction strategies.

The presidency

The institution of the presidency in Tanzania wields significant power and influence, with the capacity to directly influence policy and strategies and therefore impact poverty reduction efforts. This is important because effective policies often originate from a strong political will where the leader prioritises ending poverty as a central policy goal. A president who is genuinely committed to social equity can create an environment conducive for reforms, ensuring proper resource allocation towards programmes aimed at alleviating poverty. Since independence in 1961, Tanzania has been led by six highly capable but ideologically diverse presidents, each contributing in different ways to the fight against poverty. As the country forges ahead with its emerging development vision, it is important to draw lessons from each of these leadership phases.

Phase 1: Julius Nyerere (1964–1985)

As Tanzania’s founding president after the union of Tanganyika and Zanzibar, Nyerere championed socialism as a vehicle to uplift all Tanzanians, placing significant emphasis on equity. His strategy, centred around Ujamaa villages and state ownership of enterprises, aimed to end poverty through collective efforts and state control. Implicitly, President Nyerere’s era was comprehensively focused on poverty reduction in its broadest sense. While this phase successfully built national unity and structures that facilitated access to services for poor people (such as villages where services were concentrated, schools including those for adult education, health centres, community welfare centres), the economic outcomes were less favourable. With the country struggling to achieve sustainable growth through collective and communal actions, economic performance suffered, jeopardising efforts to reduce poverty.

Phase 2: Ali Hassan Mwinyi (1985–1995)

Mwinyi’s presidency marked a sharp pivot towards economic liberalisation. His reforms were designed to dismantle the rigid socialist structures that had dominated Tanzania’s economy under Nyerere, encouraging private sector development and political pluralism, that is multipartyism. Although the private sector experienced revitalisation during his tenure, the economy faced challenges in governance and regulation, as socialist instruments were inadequate for guiding growth in a liberalised market. As a result, inequity and the emergence of a middle class and wealthy business community occurred alongside rising poverty in rural areas. National strategies during Mwinyi’s era aligned with the structural adjustment programmes advocated by the Bretton Woods institutions which cannot be said to have aided poverty reduction.

Phase 3: Benjamin Mkapa (1995–2005)

Building on Mwinyi’s liberalisation drive, Mkapa focused on solidifying economic reforms, particularly in fiscal and monetary governance. His presidency was characterised by the privatisation of state-owned enterprises which were draining government resources, and the establishment of regulatory frameworks to manage both the state and private sectors. Regulation aimed to enforce ethical and fair competition and equitable distribution of wealth generated from a liberalised economy and politics. Mkapa’s efforts earned the confidence of international donors and lenders, positioning Tanzania on a path towards sustained economic development.

Phase 4: Jakaya Kikwete (2005–2015)

With the economy and governance structures more stable, Kikwete turned his attention to social services, particularly health services, education and social protection programmes. Arguably, the era was one of a refocus to direct investments to address ‘access-to-services’ poverty. His presidency sought to address Tanzania’s human development needs, leveraging the achievements of previous administrations to build a more inclusive society with a focus on improving living standards and hence poverty reduction. A challenge to this work was the existence of entrenched corruption scandals in the country.

Phase 5: John Magufuli (2015–2021)

The fifth phase was anchored on the belief that embezzlement and corruption were vices that prevented the country from tapping into its economic growth for poverty reduction. Magufuli was known for his strong anti-corruption stance and his emphasis on development that benefits marginalised groups.4 He aimed to build on what Kikwete had achieved by continuing to clean up government operations especially the nascent crony capitalism, ensuring that public funds are used effectively for large-scale infrastructure projects and other development initiatives that serve people living in poverty. Magufuli is known for his repression of Tanzania’s political opposition, civil society and media, and his alienation of foreign businesses and isolationist stance (Harris 2021). He also gained attention for his stance on Covid-19, of which he denied the spread and opposed vaccinations. He died during the pandemic and the leadership passed to then vice-president Samia Suluhu Hassan.

Phase 6: Samia Suluhu Hassan (2021–present)

The first female president, Dr Samia Suluhu Hassan, assumed office after the sudden passing of President Magufuli. She introduced the ‘4Rs’ strategy6 and has continued the emphasis on major infrastructure projects, while steering the country through the socio-political challenges of the post-Magufuli era. She has maintained the need for growth to benefit poor and rural areas. Her policy drives strongly feature rural roads, schools, rural electrification, heavy investment in agriculture infrastructure (irrigation dams and rural roads), the environment and sustainable energy, rural vocational training centres and health services focus on women’s needs.

In understanding Tanzania’s progress and challenges in reducing poverty, it is essential to recognise the distinct approaches taken by each president. As the country moves forward, lessons from each phase provide valuable insights into how political will, economic policy and governance can be harnessed to further improve poverty reduction efforts.

The executive and legislative institutions and power

Despite the recent dispersion of power in Tanzania compared to earlier periods and neighbouring countries, the central government continues to hold a disproportionate amount of power, and by extension, responsibility in the shaping and implementation of policies and programmes including those aimed at reducing poverty. These powers are particularly concentrated among:

The Executive Branch:

The president, cabinet ministers and their respective ministries who, especially the president, hold significant power in initiating, drafting and implementing policies.

The Legislative Branch:

The National Assembly, while formally holding legislative power, can often be seen as deferential to the executive, particularly as the ruling party (Chama Cha Mapinduzi, or CCM) usually holds a strong majority.

The CCM Party:

Given its long history and dominance in the political landscape, CCM exercises significant influence on policy direction, shaping priorities and often blurring the lines between party and state. The incumbent government consistently refers to the ruling party’s election manifesto. This is a benchmark for monitoring and evaluating government performance. Over time, however, Tanzania’s poverty reduction between 2000 to 2011 has been attributed, in part, to the dispersion of power over the period, leading to more unfettered growth (Golooba-Mutebi 2019). Ulriksen (2019) argued that ‘opposition parties in Tanzania have gained strength, and factions within the ruling party (CCM) have become more pronounced, which might indicate a move towards a ‘competitive clientelism’ political settlement.’

Civil servants and judiciary

Other political actors that influence the shaping and especially the implementation of policies to address extreme poverty, though with less power, are:

Civil servants:

operating within key ministries, civil servants play a crucial role in shaping, refining and advocating for specific policy instruments within the accepted socio-political paradigm (Ulriksen 2019). Observed challenges in this area include bureaucracy and inefficiency where protracted or complete lack of decision-making delays crucial poverty reduction programmes. There are capacity gaps, civil servants often lack training on how to plan and implement poverty addressing programmes, as well as resources and technical skills to manage programmes effectively. There are also concerns about limited accountability. Weak oversight systems may lead to poor performance and reduced motivation, affecting the quality of service delivery. Weak coordination between government ministries and agencies often leads to overlaps, redundancies or gaps in programme and project implementation. Mergers and break-ups of ministries and agencies is common once such challenges are noted. This lack of coordination can cause delays or failures in delivering services at national and local levels. Political interference is common where political interests overshadow poverty reduction leading to misaligned resource allocation. Finally, low pay and motivation affect civil servants by way of low salaries and limited opportunities for career growth. All these lead to low morale and reduced commitment to their roles. Mdee and Thorley (2016) provide an illustrative analysis.

Judiciary:

though theoretically independent, the judiciary’s influence on policy is often limited. It is important that the judiciary effectively fights corruption, upholds rights, enables people living in poverty to access justice, and facilitates disputes resolution, and that is does so impartially without appearing to favour the wealthy and elites. Since early 2023, President Samia Suluhu Hassan has led reforms in Tanzania’s legal sector,7 focusing on fairness, efficiency, and human rights. These reforms include integrating ICT and ‘one-stop’ justice centres, reducing bureaucratic delays, promoting transparency, and improving access to justice for marginalised communities. In addition, more affordable legal services, particularly in family law, benefit women and vulnerable populations, contributing to socioeconomic stability and poverty reduction by enhancing the judicial process.

Development partners

Aid can play a crucial role in a country’s poverty reduction efforts, and Tanzania, being a major recipient of aid from diverse sources, is no exception. Aid can support infrastructure development and services provision; it can influence supportive policies, promote reforms and enhance political stability. Conversely, the absence of aid can lead to deprivation and potentially result in instability.

There are notable differences in how the diverse range of development partners have influenced policies and poverty reduction strategies in Tanzania. Bretton Woods institutions, such as the World Bank and International Monetary Fund (IMF), have done so primarily through monetary and fiscal policies, and their conditionalities can affect poverty positively or otherwise. Bilateral donors, particularly the development agencies of Northern countries, have focused on providing financial support, including budgetary aid often with policy and strategy guidance. Meanwhile, UN agencies and international non-governmental organisations (NGOs) have contributed mainly through technical assistance, though they also provide financial aid. South–South aid, for example from China, has mostly helped with infrastructure development, such as the Tanzania-Zambia Railway and oil pipe lines. These variations in the type of assistance have shaped policies and strategies in different ways across the country.

The economic impact of bilateral donors’ aid has decreased over the past 20 years, with the proportion of GNI from official development assistance falling to 3.7% in 2021 (World Bank 2024). Many development partners have also increasingly worked more closely with the governments’ own agenda. One area where development partners have been influential is the promotion and financing of social protection (see section below, ‘The political economy of social protection policy’).

Analysts highlight key aspects of Tanzania’s political economy as aid dependency, weakened institutions and governance, embezzlement of funds, corruption and the challenges of navigating international relations as regimes align with donor demands (Tanzania Corruption Tracker, various years; Thirkildsen 2000).

The economic impact of bilateral donors’ aid has decreased over the past 20 years, with the proportion of GNI from official development assistance falling to 3.7% in 2021 (World Bank 2024).

Tanzania shifted to ‘growth from above’ between 2011 and 2018, primarily driven by mineral exports, mainly gold, that had minimal impacts on poverty.

Mismanagement and embezzlement of development funds, including corruption, remain a significant challenge in Tanzania’s political economy. Corruption disproportionately harms people living in poverty, undermining efforts to reduce poverty and improve the wellbeing of marginalised groups while benefitting the more privileged segments of society. The Controller and Auditor General (CAG) consistently highlights these issues in annual reports, and development partners have frequently raised concerns about the government’s management and use of aid. For instance, the Tanzania Corruption Tracker System (CTS), Transparency International’s Corruption Perceptions Index (CPI) and the AfDB Integrity and Anti-Corruption Department Report (2015) all point to these issues. (CAG Tanzania, various years; Tanzania Corruption Tracker, various years; Transparency International 2023).

Decentralisation policy and local governments

Decentralisation in Tanzania can be evaluated in four key areas: political, financial, administrative and central-local relations. Its aim has been to enhance governance at grassroots level and reduce poverty where it is prevalent. It should be noted that in 2020, the Decentralisation by Devolution Policy (D-by-D), focusing more on service delivery – health, education and water – was replaced by the Decentralisation Policy of 2020 which added an emphasis on local economic development. However, several studies (Likwelile et al. 2018; REPOA 2019) highlight persistent challenges in achieving these goals. These include lack of a shared vision for decentralisation at national and subnational levels, inconsistent policy and legal frameworks, unequal distribution of financial resources between central and local governments, and inadequate capacity within local government authorities (LGAs) and lower authority levels (wards and villages) to effectively implement decentralisation as stipulated by the policy.

Moreover, central government ministries, departments and agencies demonstrate lack of a common understanding of decentralisation, viewing it as the responsibility of LGAs and the President’s Office – Regional Administration and Local Government alone. Further, some ministries, departments and agencies have overlapping and contradictory mandates, further complicating their roles. Such functional ambiguities limit LGAs’ ability to deliver essential services and promote local economic development for addressing poverty. Ultimately, the undermining of principles and the spirit of decentralisation creates a barrier to achieve the intended reforms for poverty reduction. In addition, resources have been a big challenge for LGAs to address poverty. The tax base for LGAs is narrow and central government has faced challenges acquiring revenue sources identified by LGAs (Kimaro 2014). Moving forward, Tanzania will need to strengthen local economic development planning and adopt a bottom-up approach to shaping its national vision, mission and priorities. It is crucial to foster a stronger sense of ownership of poverty reduction strategies among the people.

Civil society organisations

Broadly, civil society organisations (CSOs) are expected to advocate for the rights of people living in poverty and lobby the government for pro-poor policies. It is within their mandate to drive policy change. While their influence varies depending on their expertise and networks, well-established CSOs in Tanzania are often able to mobilise public opinion, advocate for specific causes, and contribute meaningfully to policy debates. By nature, therefore, CSOs’ tasks require them to work within the political, socioeconomic and legal frameworks. In the Tanzanian context, CSOs have achieved mixed results in their efforts to reduce poverty, depending on the regime phase. For most of the first to fourth phases, the operating environment was relatively welcoming but lacked resources and expertise. However, it is argued that political imperatives and the comprehensive anticorruption drive during the fifth phase of government affected CSO activities in Tanzania by tightening regulations (Harris 2021; IPP Media 2016; Collord 2018). This limited their operational freedom and particularly

those focused on governance, human rights and advocacy. CSOs faced increased scrutiny, registration challenges and reduced access to funding. All this reduced their capacity to effectively implement poverty reduction initiatives. However, those working in non-political sectors, such as health and education, were less affected. This dynamic created a challenging environment for grassroots engagement.

Overall, CSOs (e.g. Tanzania Civil Society Foundation, HakiElimu, TWAWEZA, Tanzania Women Lawyers Association) have made meaningful contributions to policy advocacy for poverty reduction. According to assessments, for example by Duhu (2005) and Amijee et al (2017), CSOs have pursued grassroots engagements and advocacy for marginalised groups with mixed results. There is scope for greater impact if they are better funded, achieve improved political support and enhance their internal capacities while demonstrating political neutrality and adopting anticorruption stances. Their role can feature prominently in poverty reduction strategies going forwards, and they are uniquely positioned to liaise with local communities at grassroots level.

Non-governmental organisations (non-state think tanks)

Tanzania has a vibrant academic and civil society community that plays a crucial role as think tanks in poverty reduction and promoting accountability between the government and citizens. Key institutions include REPOA, established in 1994, and the Economic and Social Research Foundation (ESRF), which conducts research to inform policy and build human resource capacity for development across East Africa. Meanwhile, the Tanzania Association of Non-Governmental Organisations (TANGO) represents over 485 national and subnational NGOs, advocating for justice, peace and good governance, while amplifying civil society’s voice in national discussions. The University of Dar es Salaam (UDSM), the largest public university, provides critical research and advice on policies related to poverty reduction, with alumni such as the former presidents John Magufuli and Jakaya Kikwete holding influential roles in the government.

Other NGOs, such as Oxfam International – Tanzania and ActionAid Tanzania, actively work to empower marginalised communities by addressing issues such as gender equality, land rights and food security. The relationship between these NGOs and the state has been both collaborative and, at times, contentious. While institutions like REPOA and TANGO often work closely with the government to support national development goals, others such as TWAWEZA and HakiElimu critique the government, especially on the levels and forms of pro-poor investments in social services. Meanwhile, Oxfam and ActionAid, which focus on social justice, occasionally challenge state policies and carry political connotations that can lead to friction. Yet these NGOs remain crucial in holding the government accountable, advocating for reforms, and pushing for improved socioeconomic and poverty redressing outcomes. Together, these organisations form a robust framework for addressing poverty and enhancing governance in Tanzania. One aspect that needs to be improved is to enhance collaboration between NGOs and reduce tendencies of working in isolation and often in parallel. Such collaboration will ease their integration with the government, leading to more meaningful results and outcomes.

Media

Like CSOs, the media operates in a complex political, socioeconomic and governance environment, and this determines its effectiveness. Numerous assessments have praised the Tanzanian media’s role in addressing poverty. Despite its limitations, media outlets in Tanzania have often held institutions accountable on poverty-related issues.

However, it faces significant challenges, including limited reach in rural areas where extreme poverty is most pronounced, insufficient resources, and a lack of investigative depth. Moreover, restrictions on press freedom and a restrictive regulatory environment further hinder the media’s ability to hold government and other actors fully accountable for ending poverty. There have been numerous complaints about Tanzania’s restrictive media regulatory framework. The Media Services Act (2016) and the Electronic and Postal Communications (Online Content) Regulations (2018) are notable legislative frameworks that stakeholders argue have limited media freedom, particularly in discussing sensitive issues such as poverty and inequality (Human Rights Watch 2019; Public Media Alliance 2019; see also ICNL et al. 2019).

The main challenge lies in the media’s inability to separate political motivations from constructive development critiques.8 Any criticism directed at the government is often perceived as a hostile campaign against the ruling party and its elites. Similarly, the reverse is true for opposition parties, where critiques are viewed as attacks rather than objective feedback. The media is, nonetheless, a powerful tool for educating the masses, raising awareness of the actions of agencies working to reduce poverty, and advocating for change. It is the principal agent for informing both the public and policymakers. The media can also influence policy and facilitate dialogue, especially when society is contemplating reforms and investment decisions. It is imperative that Tanzania fully harnesses the media’s potential in its efforts to address poverty going forward.

Private sector apex organisations

Business and industry associations in Tanzania are expected to play a critical role in reducing poverty by advocating for inclusive policies, supporting small and medium-sized enterprises, promoting ethical practices, and fostering public–private partnerships. Their collective influence should help to create sustainable economic opportunities and improve living standards in low-income communities. Some of the most active private sector organisations in Tanzania are the Tanzania Private Sector Foundation (TPSF), Confederation of Tanzania Industries (CTI), Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA), Tanzania Exporters Association (TANEXA), Association of Tanzania Employers (ATE), Agricultural Council of Tanzania (ACT), Tanzania Bankers Association (TBA), Tanzania Chambers of Mines (TCM) and Tanzania Women Miners Association (TAWOMA). These groups lead efforts that significantly impact poverty reduction by investing in agriculture, manufacturing and skills development, driving job creation and economic empowerment. In a special arrangement, they converge under the Tanzania National Business Council (TNBC) to create a public–private partnership platform for direct exchange of views and establishing joint plans with the government.

For these initiatives to reach their full potential, they must overcome challenges such as limited advocacy and dialogue capacity, inadequate human and financial resources, the need for streamlined regulatory processes for industry associations, and improved outreach to rural areas. Besides the challenging business environment, a thorny political economy issue in the country is the ethno-political division, and this hinders private sector organisations’ effectiveness. Political power is dominated by Tanzanians of African origin, while business leadership and wealth is largely in the hands of Asians, Arabs and expatriates (Booth et al. 2014). This fosters anti-capitalist sentiments among the ruling elites, obstructing the desired liberal economic and political reforms, especially in commercialised agriculture and rural development initiatives. Addressing ethno-political divisions and strengthening collaboration between the private sector and government is crucial for enhancing poverty reduction efforts. Tanzania should focus on developing a private sector that is ethnically inclusive, as this will not only support economic growth but also significantly contribute to reducing poverty. By working towards a more diverse and united private sector, Tanzania can optimise the impact of its poverty reduction strategies.

Key policies relating to poverty reduction

Tanzania’s core strategy for poverty reduction – the National Strategy for Growth and Reduction of Poverty (NSGRP) – is popularly known as MKUKUTA. Before MKUKUTA, the country implemented several poverty reduction programmes and strategies, each evolving to address the socioeconomic challenges of a particular time. MKUKUTA was introduced in 2005 and implemented to 2015. It was seen as a refined and holistic poverty reduction strategy because it focused on a more broad-based growth aiming to directly reduce income poverty. Its second phase, MKUKUTA II, began in 2015 and was eventually succeeded by the Tanzania Development Vision (TDV) 2025 (URT 2000). Aligning with the overarching agenda of the Sustainable Development Goals, this set broader and more ambitious goals for sustainable development and poverty reduction. Overall, TDV 2025 aimed to transform the country into a middle-income economy by enhancing overall quality of life and reducing poverty. There have been comprehensive evaluations of TDV 2025 by various organisations, notably the UN Development Programme, the World Bank and the President’s Office Planning Commission (2020; World Bank 2017; ESRF et al. 2018).

While TDV 2025 has recorded some achievements, such as improvements in infrastructure and health care, poverty reduction has been less consistent. As noted earlier, despite economic growth, significant disparities remain including those between rural and urban areas, and between growth from above and from below, with many people still living in poverty. The progress made in reducing poverty has thus been uneven, and the vision’s goals have been only partly met. Further targeted efforts are needed to ensure more equitable development and substantial poverty alleviation. The key lesson is that macro-economic stability, sustainable growth and equitable distribution of resources are paramount for achieving the goal of poverty reduction. Future strategies should focus on bridging the rural–urban divide, generating more growth from below, more effectively leveraging the benefits of natural resource wealth, enhancing job creation and improving access to markets. It is still important to ensure that social safety nets fill inequity gaps and allow for broader economic participation while at the same time providing a buffer for marginalised groups (see the next section for more details).

The political economy of agriculture and the rural economy

Poverty in Tanzania is predominantly rural: while almost 60% (59.5%) of Tanzania’s 60 million people live in rural areas (URT 2022), over 80% of those living in poverty do. The poverty rate in rural areas is 31.3%, compared to 15.8% in urban areas (World Bank 2019 NBS 2019; NBS et al. 2018). Given this picture, politicians and ruling elites need to prioritise rural constituencies to secure electoral support and achieve poverty reduction. And in doing so they must prioritise agriculture, including livestock, crop production and fisheries, which forms the backbone of rural livelihoods. It is apparent in Tanzania that vote-seeking and patronage politics in rural areas often revolve around agricultural policy, investments in infrastructure (such as irrigation), extension services and markets. Rural relevant forms of social protection, like subsidies for seed, fertilizers and transportation, is another key aspect that appeals to rural political constituencies.

However, Tanzania’s political economy of agriculture has varied across its leaders. Julius Nyerere emphasised Ujamaa (socialism) and rural collectivisation, but these efforts suffered from productive inefficiency and hence had low output. Ali Hassan Mwinyi’s economic liberalisation in the 1980s reduced state control over agriculture, leading to some recovery, though without deep structural change. Benjamin Mkapa promoted privatisation and market-oriented reforms, inviting private investments, also with mixed results. Jakaya Kikwete’s ‘Kilimo Kwanza’ (Agriculture First) policy aimed to modernise agriculture but had inconsistent impact. John Magufuli’s focus was on infrastructure development, indirectly benefitting agriculture, though direct reforms were limited. Samia Suluhu Hassan has made agriculture a major priority, investing in mechanisation, research, irrigation and value addition, with a focus on modernising the sector and integrating smallholders into broader markets. During her three years the government’s annual agriculture sector budget has increased fourfold. The May 2024 sector budget speech reported a 1.2 trillion shillings annual budget representing a 24% increase from the previous year (see Msangi 2024).

The role of donors in Tanzania’s agriculture sector has been substantial, yet limited in success. Analysts (Poulton 2012; Cooksey 2012b) argue that donor-driven initiatives often fail to account for the country’s political economy, where policies are shaped more by political interests than economic logic. Domestic elites and governance challenges dilute donor efforts, resulting in fragmented programmes that lack the political will for effective implementation. This has often led to poor outcomes, highlighting the need for donor strategies to align more closely with Tanzania’s political realities.

The political economy of social protection policy

As a key policy instrument to promote sustained escapes from poverty and prevent impoverishment, the formation and implementation of social protection policy is of special interest. Up until 2009, Tanzania spent 0.29% of GDP on social safety nets, much less than neighbouring countries (World Bank 2015). At the beginning, social protection, specifically conditional cash transfers, were driven by multilateral institutions in collaboration with domestic policymaking and implementing institutions, specifically Tanzania Social Action Fund (TASAF). In 2012, a renewed emphasis on social protection emerged with the implementation of the Productive Social Safety Net (PSSN) programme, a nationwide conditional cash transfer initiative targeting people in extreme poverty.

An in-depth study by Ulriksen (2019) offers a critical overview of the shaping of social protection policy to date. The author argues that the programmes have been tactical in their approach and promoted favoured policy solutions to social protection (Ulriksen 2019). Commitment to the PSSN has demonstrated how a social protection policy provides a solution to some of Tanzania’s main social problems as expressed by the elite. The social protection system in Tanzania, however, has not escaped the criticism of weak targeting, or at times excluding certain sections of society. Political influence has been found to result in exclusionary targeting based on geographic location, ethnicity and gender, thus failing to protect marginalised households and individuals at risk of poverty.

Upcoming elections and political commitments to poverty reduction

Tanzania’s next election is expected to be held in October 2025. Political parties have listed a set of demands to be met before the 2025 election that could shape the future political economy landscape, including amending the Political Parties Act10 to promote democracy within parties, restarting the process of obtaining a new supreme law based on the opinions of the people, and implementing changes to the Constitution to promote democracy and ensure free and fair elections (Mirondo 2024).

A review of leading party manifestos revealed the following priorities with respect to poverty reduction:

(a) CCM emphasises individual responsibility and hard work for personal and national development while acknowledging the government’s role in providing opportunities for people to overcome poverty and reduce inequality. CCM aims to bridge the gap between rich and poor people, with ending poverty a key objective. The party also maintains that using human and natural resources (land, minerals etc.) can significantly empower development and combat poverty. CCM suggests Tanzania’s abundant resources hold the potential for widespread prosperity if managed effectively, implying poverty reduction can be achieved through resource use. The party promotes two slogans, ‘Just Work!’ and ‘Stop Business as Usual Scenario!’.

(b) The Party for Democracy and Progress – Chama cha Demokrasia na Maendeleo (CHADEMA)’s 2020 manifesto was titled ‘Freedom, justice and people’s development’. It is built around four priorities: strengthening Tanzania’s economy through tax reforms, support to the private sector and improved government resource management; strengthening the rule of law and human rights; improving social services, particularly education, healthcare and water and sanitation; eradicating poverty and empowering Tanzanians through social safety nets, rural development, and women and youth empowerment programmes.

(c) The Alliance for Change and Transparency – Umoja wa Mabadiliko na Uwazi’s 2020 manifesto opts for a more pragmatic approach based on the financial constraints and technological weaknesses of Tanzania’s state-owned companies. It emphasises more equitable benefit sharing and community consent for mining projects, restarting oil and gas projects to boost foreign exchange and industrial development, increasing energy production, and connecting all regions to the grid including renewable energy sources (Jacob 2020).

For activists, the agenda appears to be fostering movements that challenge the preference many politicians have for short-term, visible projects aimed at justifying their re-election within the five-year electoral cycle. This cycle often impairs long-term planning by politicians. The current focus on quick wins may not benefit people living in poverty in a sustainable way, as short-term plans divert attention from more enduring poverty reduction strategies.

Regarding predictions for the upcoming election, the opposition is expected to argue that the electoral reforms have not been comprehensive. In such an environment, CCM will encounter electoral challenges, especially in urban areas. However, the possible outcomes strongly favour a CCM victory. The achievements of the sixth phase government, particularly under Dr Samia Suluhu Hassan’s leadership and her impactful 4Rs strategy, including major infrastructure investments (the Julius Nyerere Hydropower Project (JNHEP) dam and the Standard Gauge Railway (SGR) railway and train services) coupled with CCM’s well-established political machinery, leave minimal chances for any opposition party to displace it. CCM’s track record and organisational strength positions it firmly as the frontrunner in the election.

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