Growth, inequality and simulated poverty paths for Tanzania, 1992-2002

This paper assesses the likely trajectory of poverty rates in Tanzania between 1992 and 2002. To this end, it uses unit-record household survey data from 1992 and 2001 and national accounts growth rates. The projection approach of Datt and Walker (2002) is applied and an extension presented, which is better suited to taking into account distributional changes observed between the two household surveys. The simulations suggest that following increases in poverty during the economic slowdown of the early 1990s, recent growth in Tanzania has brought a decline in poverty, particularly in urban areas. Growth in urban areas will only make a relatively small dent in poverty, and to achieve the 2015 Millennium Development Goal for poverty, Tanzania will need high and accelerated per capita rural growth rates.