Accelerating Progress in Reducing Extreme Poverty in Tanzania – May 31, 2013
Tanzania is off track to halve poverty by 2015…
 Poverty reducing slowly, from around 38% in 1991 to 33 % in 2011.
 Chronic malnutrition decreased from 38 percent in 2004 to 35 percent in 2010.
…in spite of a decade-long GDP growth at 6-7 percent per annum
 Most of the growth has occurred in capital intensive formal sectors (telecom, banking,
mining, retail trade, construction), with relatively little impact on employment and on
poverty.
 The agricultural sector production has been growing only marginally faster than
population growth. This means limited income growth for the rural population where 89
percent of the extreme poor reside.
Existing and new policies and programs are critical.
 Sound macro policies, efforts to improve the business environment, improving electricity
access and infrastructure, improving social services, are all essential enablers for
inclusive growth and increasing incomes of the poor over time.
 Targeted investment programs focused on improving incomes and livelihoods of the poor
are also essential. An example is irrigation where much success has been achieved in
recent years. Irrigation programs should be intensified through collaborative efforts
involving the FAO, IFAD, and several bilateral DPs and MFIs. Other initiatives would
need to be implemented including the proposed SAGCOT program, the Agriculture
Sector Development Program, the plan developed in the agriculture lab of the Big Results
Now initiative, and other interventions focused on urban livelihoods.
To accelerate progress in the shorter term, and to address the specific needs of populations
living in extreme poverty, the Government of Tanzania is interested to explore scaling up
the existing program of Conditional Cash Transfers (CCT) for the extreme poor
CCTs in Tanzania: approach and partners
 CCTs have proven effective by experience around the world, including the Bolsa Familia
program of Brazil, and similar programs in Mexico, Columbia, Malaysia, Ghana, Kenya,
and other countries. While numerous challenges and design options exist regarding such
programs, their track record has been strong in a number of very different country
contexts.
 The approach is to provide bi-monthly cash transfers to extremely poor households. Cash
transfers help the most vulnerable households to get out of extreme poverty and food
deprivation. At the same time conditionality encourages households to invest in
themselves to improve their health and education status, and livelihoods. There is
verification of school attendance, of regular check-up visits to health providers for
growth monitoring of young children and for pregnant women, and of regular attendance
to workshops to improve nutrition, child care, and hygiene.
 Several Development Partners already play an important role in supporting the existing
Tanzania CCT program, including by funding the program, supporting the health service
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providers involved in the program, supporting workshops for target families, supporting
targeting of food-insecure households, etc.
Scale and affordability:
 There are about 45 million people in Tanzania, with 15 million under the poverty line,
and about 7.5 million in extreme poverty, or food-insecure. This translates into 1.2
million households living in extreme poverty.
 For about $300m per year, cash transfers could reduce extreme poverty in Tanzania from
about 20 percent today to somewhere between 10 and 12 percent, depending on the
quality of targeting. $300m represents about 10 percent of yearly aid flows to Tanzania,
or about 1.2% of GDP. Subject to Government interest, cash transfers of $300m per year
could be fiscally affordable and sustainable over the medium-term. Scaling up the
existing program could be possible by disbursing faster than planned the $220m that have
already been approved for this program. .
 The existing program plans to gradually scale up cash transfers from the pilot phase scale
(about 20,000 households), to reach 275,000 households over 5 years. The option under
consideration is to attempt to accelerate scaling up, aiming to reach all 1.2m extreme poor
households as early as possible. This would be a stretch target, and the aim would be to
get as close to it as possible.
Delivery challenge:
 The real challenge will be one of delivery, for which a strong collaborative framework
would be needed between government, TASAF and interested DPs, to help Tanzania
achieve the challenge.
 There are reasons to consider this option as worth exploring:
o Tanzania has infrastructure and institutions in place to facilitate financial transfers
to the extreme poor. Tanzania is second in the world in terms of penetration of
mobile money, with more than half of Tanzanian adults already using mobile
money. Transfers can be made either through mobile phone or through bio-metric
cards with payment agents in post offices or in other retail outlets as is being done
in the existing Kenya CCT program.
o The main implementing agency is a proven organization with a solid track record
of delivery on a large scale: the Tanzanian Social Action Fund (TASAF). TASAF
has been supporting community groups for more than 10 years for local
infrastructure and services, working through local government bodies across the
country.
o The existing network of community groups, connected with local government
bodies, is a significant asset making it possible to envisage rapid scale-up. In this
model, targeting is done by community groups themselves using standard criteria.
The list of eligible households is later verified by a survey. And a grievance
mechanism allows excluded households to appeal and to request being included in
the program.
Next steps
 The technical team already working with TASAF (World Bank, United Nations, USAID,
DfID) would work with TASAF to prepare technical options and costing for an
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expansion of the Conditional Cash Transfer (CCT) program. This work would include a
review of the operational aspects of increasing the scale, such as capacities at the local
government authority level and the availability of systems to support the program.

In a second step, and involving potentially interested development partners, a joint
mission would take place in July 2013 (dates to be confirmed) once the Tanzania budget
process is completed. The mission would review with the Ministry of Finance, and
develop further, the options prepared by TASAF, and would begin to converge on policy
decisions to support rapid expansion of the program.
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