Bridging the Gap between Economic Growth and Poverty Reduction: The case of Tanzania

Abstract

Most of the developing countries have experienced impressive economic growth over two decades since 1990 with more than 50 percent poverty reduction whilst most of the Sub-Saharan African (SSA) countries are facing the challenge of little poverty reduction over this period, in which poverty on average has been reduced by 30 percent. Tanzania as part of SSA is facing the same, with poverty having declined by 31.6 percent from 1991 to 2018. This research has investigated Tanzanian economic growth, and how does such growth translates into monetary poverty reduction. To accomplish such a task, I have used data from National Panel Surveys. I employed panel data analysis to assess how large is the impact of growth and inequality on poverty. Also, I did other regression analyses to investigate the demographic and socioeconomic factors contributing to the movement of households from poverty. Based on the analysis, it shows that the increase of mean expenditure (GDP per capita) correlates with the reduction of monetary poverty. The findings have also revealed that some of the demographic and socioeconomic factors have shown positive contribution in the movement out of poverty among households.