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Understanding Poverty Dynamics and Vulnerability in Tanzania 2012–2018

Tanzania’s overall poverty rate has remained stubbornly stable, falling by just 6% between 2012 and 2018 (compared with 18% over the previous four years) despite strong economic growth. In this paper, we provide new insights into household-level movements into and out of different states of poverty and vulnerability during this period using national survey data from 2012 and 2018. Our findings reveal a much more precarious reality beneath the country’s seemingly steady net poverty rate. According to these new estimates, more than 12% of Tanzania’s population were poor in both 2012 and 2018 (persistent poverty) – meanwhile a much larger share of households (30%) were poor in either period. In other words, the ‘poor’ or ‘not poor’ status of almost a third of all Tanzanians changed in just six years. 

Ordinarily, detailed insights into poverty dynamics would require panel data (repeated observations on the same households over time), which is not readily available and is expensive to collect. Instead, our analysis employs innovative statistical approaches to create a ‘synthetic panel’ from cross-sectional household survey data (repeated observations on different households over time). This approach allows us to look at how the situation of different households might change over time and the characteristics associated with that change. 

Our analysis finds that persistent poverty and continual downward mobility were more strongly associated with households living in rural areas, engaged in farm work and where the household head has lower or no education. These households may not be the worst affected by the pandemics first-order economic impacts (which, according to early analysis by the World Bank, has mostly affected those in urban settings and the services sector). However, they are likely to be harder hit by its consequences longer term, as the crisis disrupts pathways out of poverty. This suggests that, while there is an urgent need to provide a tailored policy response to people directly affected by the current crisis, this must not come at the expense of efforts to improve the situation of Tanzanians facing persistent poverty and vulnerability. 

 

Available at: https://doi.org/10.1111/rode.12829

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