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PRESENTATION OF THE PRIVATE
SECTOR WITH REGARD TO THE
POVERTY REDUCTION BUDGET
SUPPORT TO THE DEVELOPMENT
PARTNER’S GROUP FOR PRIVATE
SECTOR DEVELOPMENT
15th august 2007
Introduction
Meaning of MKUKUTA
MKUKUTA stands for a Swahili
acronym which means National
Strategy for Growth and
Reduction of Poverty (NSGRP).
MKUKUTA presents a careful
poverty diagnosis building on
available evidence from the
Household Budget Survey, Labor
Force Survey and the
Participatory Poverty Analysis
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Introduction cont.

MKUKUTA has three major clusters:
1. Growth and reduction of income poverty;
2. Improvement of quality of life and
social well-being; and
3. Governance and accountability.
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Key issues under cluster I.
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Ensuring sound economic management;
promoting sustainable and broad based
growth;
Improving food availability and accessibility;
Reducing income poverty of both men and
women in rural and urban areas and;
Provisional of reliable and affordable energy
to consumers.
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Cluster-wide Indicators
Cluster-wide indicators for MKUKUTA’s cluster I are;
1.Gross Domestic Product (GDP) growth per annum
2.GDP growth of sectors per annum
3.Gini co-efficient
4.Headcount ratio, basic needs poverty line.
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GDP indicators are the mostly used to assess
progress for this cluster.
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Conclusion
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Generally the issues and indicators under
cluster I of MKUKUTA do capture the most
important policy issues for Private Sector
Development in Tanzania.
However the government faces many
challenges in implementing the document
since the involvement of private sector in
matters related to MKUKUTA is still minimal.
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Goal 1: Ensuring sound economic
management
Target
Performance
Measure
Status
Remarks
Maintenance of
Macro Economic
Stability
Monetary/Fiscal
measures
Partly implemented, commended is the
1st & 2nd Financial Sector Reform
Programme
Balance of payment
No significant improvement as the gap
between imports and export figures is
widening with imports ever increasing at
a higher rate at high rate than export,
exchange rate is increasingly weakening
the shilling further
Interest rate
Still very high, lending and saving rates
are too far apart, not encouraging to
borrow nr to save/deposit
External Debt
Target of 50% of GDP not yet achieved,
total national debt is at $7bn and the
GDP is about $10bn. The Debt/GDP ratio
General Improvement
in performance
particularly in reducing
inflation, increasing
GDP growth rate if not
for impact of drought.
Targets are expected to
be achieved when 2nd
Financial Sector
Reform Programme is
implemented
is between 60-70%
Reduce un
Employment
employment from
12.9% (2001) to
6.9% by 2010 and
address
underemployment in
rural areas
No significant
improvement, rural
productivity is very
low
Government
continues with the
efforts to create
environment for
more jobs through
increased
Investment and
skills development
and Community
projects
Goal 2: Promoting sustainable and
broad - based growth
Target
Performance
Measure
Status
Remarks
Accelerated GDP
Growth Rate to
attain a growth
rate of 6-8% per
annum by 2010
GDP Growth
Big improvement noticed
growth rate reached 6.8%
(2005) but last year due to
drought it fell to 5.7%
(2006). This year it is
expected to be over 6.2%
The trend show that the
target will be achieved
or surpassed by 2010
Infrastructure
HIV/AIDs
Improvement noticed on
roads, performance of
ports/airports, railway is at
the final stage of its
privatization
Still very high
Additional efforts and
support required to
boost the sector
Affirmative action and
support required
Scale up the
Trade and
participation of the production
informal sector and
SMEs
No significant
improvement
mainly due to poor
business
environment and
credit
Programme to
enhance SME
competitiveness
underway through
the Private Sector
competitiveness
Project
Increase growth of
the manufacturing
sector from 8.6%
to 15% by 2010
Slight improvement
in new
manufacturing
investments, the
power shortage
inhibited
production in 2006
Efforts to attract
new investments
and to improve
productivity are
under way
Manufacturing
Increased
Agricultural growth
from 5% in 2002/3
to 10% by 2010
Agricultural growth
Very little
improvement in
agriculture
Not been able to
attract commercial
investors in the
agricultural sector
and productivity
remained very low
Increased Growth
Rate for life stock
sub-sector from
2.7% in 2001 to
9% by 2010
Livestock
development
No significant
improvement, rural
productivity is very
low
Not been able to
attract commercial
investors in the
agricultural sector
and productivity
remained very low
Target
Performance
Measure
Status
Remarks
Increased technological
innovation upgrading and
use of technologies
Science and
Technology
No significant
improvement
Programme to
enhance SME
competitiveness
underway through
the Private Sector
competitiveness
Project
Promoted regional equity
and development and
capacity for growth and
infrastructure that enables
investments and livelihoods
diversification
Equity
No significant
improvement
Repaired 15,000
kms of rural
roads annually
by 2010 from
4,500 kms in
2003
Rural roads
Reduce negative Sustainability
impact on
environment and
peoples
livelihood
Environment
Significant
improvement
noticed on
implementation
and the budget
allocation
No environment
measures are
incorporated in
national plans
Big improvement
Target likely to
be achieved
Reduce land
degradation and loss
of biodiversity
Land Management
No significant
improvement
Plans are underway
but no
implementation yet
Increase Export
proportional of
value added
minerals from the
current 0.5% to 3%
by 2010
Information
No significant
improvement
No master plan to
add value to the
vast gemstone &
minerals available in
Tanzania
Growth
Yes
Mineral Value
Addition
No significant
improvement
If value addition is
planned well can
reduce poverty in
Tanzania by over
75%
Goal 3: Improved Food availability and accessibility
at household level in urban and rural areas
Target
Performance
Measure
Increased food crops
Food security
production from 9 m
tons in 2003/04 to 12 m
tons in 2010
Research and
Development
Maintain strategic grain
reserve of at least 4
months of national food
requirements
Status
Remarks
No significant
improvement
Government should
encourage food production
by promising to buy all
excess production from
farmers at a predetermined
price
No substantial R&D
and little budget
Investment in R&D required
Slight Improvement this
year
The Budget to be increased
Goal 4: Reducing income poverty of
both men and women in rural areas
Target
Performance
Measure
Status
Remarks
Reduced proportion of rural
population (men and women)
below the basic needs poverty
line from 38.6% in 2000/01 to
24% in 2010
Rural basic needs
Negative results noted, rural
people are becoming poorer
and more poverty is forcing
migration to urban areas
Alternative strategies
need to be developed to
address the problem
Reduced proportion of rural food
poor (men and women) from 27%
in 2001/01 to 14% by 2010
Rural Food poverty
Same as Above
Same as Above
Increased productivity and
profitability both within agriculture
and outside agriculture sector
Productivity and
Agriculture
Productivity has declined by
big margins
Increased off farm income
generating activities
Microfinance
Productivity
Very little financial
support in rural areas
Secure and
facilitated
marketing of
agricultural
products
Marketing
Agricultural marketing
programmes is in place but no
improvement is being
witnessed
Rural energy
Water resources
Very little achievement
Community development
There is improvement
particularly the TASAF
initiative
Laws and regulation
There is improvement in
revision of laws that deny
women in accessing financial
assets and personal property
Transformed
subsistence sector
into smallholder
commercial
farming
Increased
contributions from
wildlife, forestry,
and fisheries, to
incomes of rural
communities
Child labour
Improvements
noted
Local
tourism/SMEs
Improvements
noted
Natural resources
Taking place
though little impact
due to
mismanagement
Goal 5: Reducing income poverty of
both men and women in urban areas
Target
Performance
Measure
Status
Reduced proportion of
urban population (men
and women) below the
basic needs poverty line
from 25.8% in 2000/01 to
12.9% in 2010
Reducing the proportion of
urban food poor (men and
women) from 13.2% in
2001/01 to 6.6% by 2010
Urban basic needs
poverty
Not achieved because of i)increased
rate of migration from rural areas ii)
employed in industries due to little
new investment in the industries
Settlements
Some improvements noted
Skills training
Some improvements noted
Utility/Energy
Some improvements noted
High quality skills and
profession
Very little achieved
Remarks
Additional
Goal 6: Provision of reliable and
affordable energy to consumers
Target
Performance
Measure
Status
Libelization of the
power sub-sector
effected by 2010
Energy: Electricity
Policy in place but little
implimenatation
particularly in rural
electrification
Sustainability &
Environment
Environmental
conservation underway
Reforms
Restructuring of power
sector underway
Remarks
At least three Energy
(3) Production resources
Sharing
Agreements
(PSA)
negotiated,
concluded
and signed by
June 2010
Other
sources of
energy like
coal, gas
and biogas
identified:
Plans to
attract
investment
underway
Foreign
Investment
required and
Increased
Budget
Support
Thank you for Your attentive listening.
THE
END
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